Case ID: keyes_3/html/0492-01.html
Source: Caselaw Access Project
Author: {"author": "Grover, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John W. Mattice, Respondent, v. William G. Allen and others, Appellants.
    A verbal agreement to purchase merchandise .exceeding fifty dollars in value, and, further, that an existing debt of the seller to the purchaser should be applied as a payment upon the price, does not take the transaction out of the statute of frauds. The agreement is wholly void, the verbal understanding that the debt should be applied in payment not being a payment at the time of making the contract, within the last clause of section 3, 2 S. S. 136. •
    This action was brought to recover damages of the defendants for the breach of an alleged agreement made by them with the plaintiff to purchase of him a quantity of barley for a price exceeding fifty dollars. ' The only question involved is, whether the contract was valid, or whether made void by the statute of frauds. The only ground upon which it is claimed there was a compliance with the statute is, that a part of the purchase-money was paid upon the making of the contract. The facts upon which this claim is based are, that before the making of the contract, the plaintiff borrowed of the defendants’ agent forty dollars of the money of the agent, and agreed that if he thereafter sold his barley to him, the money so borrowed should apply upon the purchase price, and if he did not sell, he would repay the money. Several days afterward the agreement to sell the barley was made by the plaintiff with this agent, and they at the same time agreed, verbally, that the forty dollars so borrowed should be applied as payment upon the price. The defendants’ counsel, upon trial before the referee, moved for a nonsuit, upon the ground, among others, that the contract was void by the statute of frauds, no part of the purchase-money having been paid at the time of making the contract. The motion was denied by the referee, who afterward made a report in favor of the plaintiff, which was affirmed upon appeal by the Supreme Court, sitting in the seventh district, from which judgment the defendants appealed to this court.
    
      
      A. P. Ferris, for the respondent.
    
      D. Rumsey, for the appellants.
   Grover, J.

The precise question presented by the defendants’ motion for a nonsuit was decided against the plaintiff by this court, in Brabin v. Hyde (32 N. Y. 519). In that case, the purchaser had a debt of upward of $200 against the seller, and made a verbal contract to purchase from him a mare and colt for $175, and to apply the purchase-money in payment of the debt. This court held, that the agreement so to apply the purchase price was not a payment at the time of making the contract within the last clause of section three, 2 Eevised Statutes, 136. In the present case, the defendants’ agent, who made the agreement to purchase of the plaintiff his barley, had a debt against him of forty dollars, and agreed at the time that this debt should apply as payment upon the barley. It is manifest that the circumstance of the debt being due the agent instead of the defendants, can make no difference, at least, favorable to the plaintiff. The referee should therefore have held that the contract was void by the statute of frauds, and on this ground granted the motion for a nonsuit. There was no proof given subsequent to the denial of the motion tending in any respect to show the contract valid, and therefore the defendants’ exception to the erroneous ruling was not obviated. ■ The reason of the rule held in Brabin v. Hyde is that mere words will not satisfy the requirement of the statute. That in addition some act of the parties is required, showing by such act their assent to the contract. The delivery of the note of a third person or any thing.else agreed to be received in payment, in whole or in part, is such act as is required when a debt due the purchaser from the seller is to apply as payment, the delivery by the former to the latter of the evidence of the debt for cancellation or the delivery and acceptance of a discharge of the debt will constitute such act and render the' contract valid. The counsel for the respondent-insists that the agreement of the parties to apply the debt in. payment discharges the debt,.and therefore, it must he regarded as a payment upon the contract, and r cites Davis v. Spencer (24 N. Y. 386) in support of the position. It is true that when mutual debts exist an agreement by the parties to apply the same in satisfaction of each other will operate as satisfaction of both, as held in Davis v. Spencer. But that doctrine has no application to the present case, for the reason that the statute makes void the entire agreement when there was nothing but mere words. That is clearly the present case.

■ The judgment appealed from must be reversed and a- new rial ordered, costs to abide the event.

All the judges concurring,

Judgment reversed.