Organ v. Stewart — 8 N.Y. Sup. Ct. 411

Majority

p. 411

PATRICK ORGAN and another, Respondents, v. NEIL STEWART, Appellant.

Headnote

Compromise—when sustained— Conditional delvoefry—Matute of frauds.

Defendant being the owner of three lots of wool, the plaintiffs entered into an agreement with him for the purchase thereof, in pursuance of which, two lots were delivered, and payment therefor was demanded by the defendant, and refused by the plaintiffs, who claimed that the third lot was included in the agreement,which was denied by the defendant. Subsequently, an agreement was entered into by the parties, embracing the third lot of wool, which was to be handled and delivered by the defendant, at Troy, at the original contract price, in pursuance

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of which, the plaintiffs paid the defendant $18,357.60, the price of the wool already delivered, as part of the purchase-price of the whole of the wool. The defendant having refused to deliver the third lot of wool, this action was brought by the plaintiffs to recover damages therefor. Held, that the second agreement was valid as a compromise of doubtful and conflicting claims, and that, by the payment of the $18,357.60, as part of the purchase-price of the whole of the wool, the contract was taken out of the statute of frauds.

Appeal from a judgment, in favor of the plaintiffs, entered upon the report of a referee.

The plaintiffs were wool dealers, residing in Troy; the defendant, a farmer, residing in York, Livingston county. In January, 1871, the plaintiff, Organ, went to Livingston county to buy wool. The defendant had two lots of wool at his residence, and a third lot at Fowlerville, about three miles from his residence. Negotiations were entered into between the parties, which resulted in the parol sale of the two lots of wool at defendant’s residence, and the conditional sale of the Fowlerville lot, if the parties could agree upon the manner in which it should be shrunk. The two lots of wool were subsequently delivered to the plaintiffs, but a dispute having arisen as to the shrinkage of the Fowlerville lot, the defendant refused to let them have the wool stored there, and claimed that it was not included in the sale; the plaintiffs, claiming that it had been and was included in the sale, and that it was to be shrunk by them and sold by the defendant at their shrinkage, demanded its delivery, and this being refused, they refused to pay for the wool already delivered. Subsequently an agreement was entered into, by which the Fowlerville wool was to be delivered by the defendant at the store of one Ranken, in Troy, and sorted and shrunk by the said Ranken’s assorters, and delivered to the plaintiffs, who were to accept the same at the shrinkage as made by them, at the price just agreed upon. The plaintiffs thereupon paid to the defendant $18,357.60, the price of the wool already delivered, as part of the purchase-price of the whole of the wool.

. Subsequently, Ranken refused, at the request of the defendant, to receive the wool, and the defendant having refused to deliver it to the plaintiffs, this action was brought.

The answer denied the contract, and set up as a counter-claim, a balance due upon wool sold.

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Samuel Hand, for the appellant.

The second agreement was void for want of consideration. (Converse v. Kellogg, 7 Barb., 590 ; Crosby v. Wood, 2 Seld., 369; Hunt v. Bloomer, 5 Duer, 202 ; Van Allen v. Jones, 10 Bosw., 369 ; Gibson v. Renne, 19 Wend., 389 ; Bridgman v. Dean, 7 Exch., 199). Nor could it be sustained as a compromise. (Morey v. Town of Newfane, 8 Barb., 645 ; Bunge v. Koop, 48 N. Y., 225 ; Thomas v. McDaniel, 14 Johns., 185 .)

Irving Browne, for the respondents.

The second agreement was simply a modification of the original contract, and need not be in writing. (Goss v. Lord Nugent, 5 Barn. & Adol., 65 ; Stead v. Dawber, 10 A. & E., 57; Cuff v. Penn, 1 M. & S., 21; Blanchard v. Trim, 38 N. Y., 227 ; Boutwell v. O'Keefe, 32 Barb., 434 ; McKnight v. Dunlop, 5 N. Y., 537 ; Allis v. Read, 45 N. Y., 142 .) The defendant is estopped from denying that the payment was made on account of the three lots of wool. (Dezell v. Odell, 3 Hill, 215 ; Gregg v. Wells, 11 Ad. & El., 90; Lowry v. Tew, 3 Barb. Ch., 413 ; Wetmore v. White, 2 Cai. Cases, 87; Cox v. Cox, 5 Rich. S. C. Eq., 365; Ryan v. Dox, 34 N. Y., 311 .)

At the time the parties met at Troy, serious matters of difference existed between them. The plaintiffs claimed that the original contract of sale embraced the Eowlerville wool, and they insisted upon its delivery, and refused to pay for the wool, already delivered, unless their claim was acceded to, and the agreement performed on the part of the defendant, according to its terms, as they asserted the contract to be. On the other hand, the defendant insisted that the contract did not embrace this lot of wool, and claimed pay for the wool delivered. Under this condition of affairs, the parties entered into a new, or substituted agreement, embracing the Eowlerville wool, which was to be “ handled ” and delivered at Troy; all at the original contract price of forty-five cents per pound; and the plaintiffs were then to pay for the two lots already delivered. Thereupon, the plaintiff paid the defendant $18,357.60, the price of the wool already delivered, which payment, as the referee finds, was made upon the new or substi

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tuted contract, “ as part of the purchase-price of the whole of the wool.” The defendant then refused to deliver the Fowlerville wool, and the action is brought to recover damages therefor.

The contract was not in writing, and it is claimed, on the part of the defendant, that it was void by the statute of frauds. This position is based on the hypothesis that the original contract of sale did not embrace the Fowlerville wool; and that the payment made to the defendant was in satisfaction of the othei wool already delivered; thus leaving the contract for the Fowler ville wool to rest in parol, with no part of the property delivered, and without payment of any part of the purchase-money. This view -of the case is, I think, unsound. It is at least ques tionable whether the defendant should not be held to be estopped from asserting or claiming any advantage from the former or original agreement, inasmuch as he accepted the plaintiffs’ money on the new or substituted agreement, and in part payment of the entire purchase-price agreed to be paid for all the wool, by that contract agreed to be delivered. But be that-as it may, there were substantial matters of difference between the parties, at the time the new agreement was made, susceptible of being compromised, and proper to be adjusted and settled by them. There was a question whether the original contract did or did not include the Fowlerville wool. The plaintiff insisted that it did; and refused payment for any of the property until the defendant made delivery of that lot according to the terms of the purchase, as he claimed the contract to' be. The Fowlerville wool was certainly considered in their first negotiation, for the parties commenced to “ handle ” it, with a view to its delivery, as the plaintiffs claimed, pursuant to the original contract of sale, when a disagreement arose in regard to the “ handling” of it, and delivery was refused. The defendant, on the other hand, denied all obligation to deliver this lot of wool; insisted that it was not embraced within the contract of sale; and demanded payment for what had been delivered. There is nothing in the case showing that these claims by the parties, respectively, were not made in good faith, and under the full belief by each that the other was in the wrong in regard to the matters of disagreement. Their assertions and claims were not put forward, evi-. dently, without any ground to support them, as a ruse or fraud.

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Indeed, they respectively vindicated their views and claims by their own testimony on the trial of this case; and the fact that it was then decided that one was in error, does not show that the compromise was without ground of support. At the time of the agreement at Troy, the claims of the respective parties, as to the terms of the original contract of sale, • were, to say the least of them, doubtful, and it could only be determined which was right, by actual trial, and then could only be decided on conflicting evidence. A compromise of a doubtful claim will be upheld, and when an action is brought upon such agreement of compromise, it is no defense to show that the claim was not a valid one.^[2] In the last case cited, Cowen, J., says : “ In such cases it matters not on which side the right ultimately turns out to be. The court will not look behind the compromise.” In another case, it was said that any matter that may be litigated, may be settled. There are numerous decisions to the same effect as the above. Now, it must not be understood that a groundless claim, put forward without any show of right, a mere pretense, urged as a ruse or fraud, can be deemed a doubtful claim. There must be a real and substantial matter of dispute and controversy. Such was this case, and only by a judicial examination and a decision on»a conflict of evidence, could the claims of the respective parties be determined. But this is not all of the case, for it appears, on the face of the record, that the defendant also had a claim against the plaintiffs for damages, growing out of the original contract of sale, which, of course, was covered and extinguished by the compromise effected by the new agreement. This claim is set forth in his verified answer herein. Besides, if it be true, as the defendant claimed, and still claims, that there was no ground for the pretense on the part of the plaintiffs, that the Fowlerville wool was embraced in the original contract of sale, and that he was entitled to demand, and have payment for the wool actually delivered; then and in that case he had not, in fact, parted with his title to the wool delivered, and he might, then, at Troy, have reclaimed his property, on refusal by plaintiffs to pay, as they had agreed, on delivery. According to the proof in this case, he had waived nothing, and was not barred the right of reclamation by the

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delivery, under the expectation of payment, according to the contract, which called for payment on delivery. He lost no time in seeking payment. If the wool was delivered on the faith of the promise to pay on delivery, and with the expectation that the promise would be fulfilled, the fact that the plaintiffs had immediately run it off to Troy, would not prevent the defendant from obtaining reclamation of it, if payment was refused. In Leven v. Smith,^[2] the goods having been sold, to be paid for on delivery, Jewett, J., saysPayment and delivery were to have been simultataneous. Ho credit was given, and there is no evidence that the delivery to the defendant was intended to be absolute, or that the condition of payment was waived; and the mere handing over of the goods under the expectation of immediate payment, did not constitute an absolute delivery. The defendant, after such delivery, held the goods in trust for the plaintiffs until payment was made or waived.”^[3] The defendant, therefore, had not lost his right to the property, and could have reclaimed it at the time of entering into the new contract of sale, in case he was right in his position that the original agreement did not embrace the Fowlerville wool. This right was .barred by the new contract, and his acceptance of the sum of $18,357.60 thereon. How it is quite apparent that the new contract of sale wras brought about by mutual concessions, and this constitutes the very essence of compromise. All points of difference and conflicting claims, including right of property, were adjusted and settled by the new contract, in pursuance of which, a large amount of money was paid by the plaintiffs and accepted by the defendant. In effect, the agreement at Troy, and the action of the parties under it, amounted to a new contract of sale of the three lots of wool, with delivery of two lots, and payment down of the principal part of the purchase-price. The agreement, therefore, became, and was, valid and binding on the parties.

The breach by the defendant is well found, and the referee,

* 1 Denio, 571 .

† † See also Fleeman v. McKean, 25 Barb., 474 ; Hays v. Currie, 3 Sandf. Ch., 638 ; Van Neste v. Conover, 8 Barb., 509 ; Smith v. Lynes, 5 N. Y., 41 ; Hammett v. Linneman, 48 id., 399.

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in so far as is made to appear, committed no error in awarding damages.

Boardman J., concurred.

Judgment affirmed, with costs.

Footnotes

* Crans v. Hunter, 28 N. Y., 389 ; Russell v. Cook, 3 Hill, 504 .