Edward B. Kelley, Appellant, v. T. L. Smith Company, Respondent

Edward B. Kelley, Appellant, v. T. L. Smith Company, Respondent. First Department, May 3, 1912. Pleading — action for breach of contract of employment — defense of Statute of Frauds. Where, in an action for breach of contract of employment, the plaintiff alleged that he was employed by the defendant on or about March 1, 1908, for a term of one year' from said date, and was unlawfully discharged on September 4, 1908, and the answer set up several defenses, including the Statute of Frauds of the State of Illinois, which was not applicable, and it Was conceded that the contract was verbal and made on February 11, 1908, and to be performed in Mew York, the plaintiff having made out a prima facie case and the defendant not having pleaded the Statute of Frauds of Mew York, the dismissal of the complaint was error. The defense of the Statute of Frauds must be'pleaded to be available. Appeal by the plaintiff, Edward B. Kelley, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 25th day of November, 1911, upon the dismissal of the complaint by direction of the court at the close of the plaintiff’s case on a trial at the New York Trial Term; L. Laflin Kellogg of counsel [ William K. Hartpence with him on the brief], Kellogg & Rose, attorneys, for the appellant. Albert H. Gleason of counsel [Hastings & Gleason, attorneys], for the respondent. [MAJORITY — Clarke, J.:] Clarke, J.: This action was for breach of contract of employment.. The complaint alleged: “ That heretofore and on or about the 1st day of March, 1908, this plaintiff was employed by the defendant to render services to the defendant in the sale of concrete mixers and other machinery manufactured by the defendant for the term of one year from March 1st, 1908, for which services the defendant promised and agreed to pay the plaintiff Four Thousand dollars ($4,000), and also to reimburse the plaintiff for all necessary disbursements and expenses incurred by him in said business,” and alleged an unlawful discharge on September 4, 1908. The answer set up several defenses, including. the Statute of Frauds of the State of Illinois, but not that of the State of New York. It was conceded in the record that the contract was verbal, was made on the 11th day of February, 1908, and was to be performed in New York. It was conceded upon the argument, therefore, that if any Statute of Frauds applied it was that of the State of New York. At the close of the plaintiff’s case the complaint was dismissed.' In Crane v. Powell (139 N. Y. 379) the Court of Appeals held that the Statute of Frauds is a shield which a party may use or not for his protection, and said: “ The statute may he used as a defense to actions on certain agreements. A defense must now be presented, either by demurrer or answer. (Code, § 487.) When the defect in the plaintiff’s cause of action appears on the face of the complaint, the defense must be interposed by demurrer. (§ 488.) When the complaint does not, as in this case, disclose an invalid agreement upon its face, but it is, in fact, invalid for some reason, the defendant must take the objection by answer (§ 498), and if the objection is not taken in either way, the defendant is deemed to have waived it. (§ 499.) The conclusion is thus reached that the defendant waived the benefit of the statute in this case by omitting to plead it.” In Matthews v. Matthews (154 N. Y. 288) the complaint did not show whether the alleged contract was oral or written. The answer contained a general denial, but did not.set up the Statute of Frauds. Andrews, Oh. J. (referring to Crane v. Powell), said: “The question was distinctly decided in that case, and it was held that the statute was a defense, and unless pleaded was not available to the defendant to defeat the action. The case must be regarded as settling the law of this State upon a question upon which courts of different jurisdictions have differed in ©pinion. This court regardéd the rule adopted in Crane v. Powell as sound in principle and as supported by the rule applied in .analogous cases. It is plain, upon the view that the Statute of Frauds does not make an oral contract within its terms illegal, but only voidable at the election of the party sought to be charged, that such election must be manifested in some affirmative way. * * * The mere denial in the .answer in the present case of the contract alleged .in the complaint did not, therefore, raise any question under the Statute of Frauds, and it could not be raised by objection on the trial to the proof of the oral contract for the very conclusive reason that the statute must be pleaded before the validity of the contract on that ground can be assailed. ” In Bennett v. Mahler (90 App. Div. 22) the complaint alleged that on or about the 1st day of January,, 1902, the parties entered into an agreement wherein plaintiff agreed to work for defendants for and during the calendar year 1902. This court said: “Under this pleading the plaintiff might prove and recover thereon for a contract entered into on the 30th day of December, 1901, for employment during the ensuing year, and recover thereon in the absence of a plea of the Statute of Frauds as a defense thereto. "" * "x" The complaint * * * gave the defendants notice- that the contract relied upon was made on or about the 1st day of January, 1902. Proof of the conversation was on the 30th day of December, 1901, and this time was within the averments of the complaint. ' Of such facts the defendants were bound to take notice, and if they desired to raise the Statute of Frauds as a defense to the contract thus. averred they were required to plead it, consequently not pleading it, they were bound by such contract, even though it fell within- the statute.” In the case at bar the complaint did not show upon its face an invalid contract, because it was not alleged that it was not in writing and it did allege that it was made on or about the first of March, to begin on the first of March and to continue for one year thereafter. Under those allegations it was possible that the contract might be invalid, and the defendant had such information or knowledge in regard thereto that it undertook specificially to plead the Illinois statute, but it did not prove said statute upon the trial and, upon the conceded facts, it was inapplicable. Therefore, not having set up the New York Statute of Frauds and the plaintiff having made out a prima facie case, the dismissal of the complaint was error. The judgment appealed from should be reversed and a new trial ordered, with costs to the appellant to abide the event. Ingraham, P. J., McLaughlin, Scott and Dowling, JJ., concurred. Judgment reversed, new trial ordered, costs to appellant to abide event.