Case Name: William H. Parsons et al., Respondents, v. Jacob Loucks et al., Appellants
Court: New York Commission of Appeals
Jurisdiction: New York
Decision Date: 1871-09
Citations: 48 N.Y. 17
Docket Number: 
Parties: William H. Parsons et al., Respondents, v. Jacob Loucks et al., Appellants.
Judges: 
Reporter: New York Reports
Volume: 48
Pages: 17–26

Head Matter:
William H. Parsons et al., Respondents, v. Jacob Loucks et al., Appellants.
A parol contract to manufacture and deliver a quantity of paper, such paper to be thereafter manufactured at the contractor’s mills, is not within the provisions of the statute of frauds. (Gray, C., dissenting.)
(Argued May 11,1871;
decided September term, 1871.)
Appeal from judgment of the General Term of the Superior Court, in the city of New York, affirming a judgment in favor of plaintiffs, entered upon the report of a referee.
The action is to recover damages for an alleged breach of contract to manufacture and deliver a quantity of paper.
The referee to whom this case was referred found, and reported as matter of fact:
1st. That on or about the 30th day of October, 1862, it was agreed between the plaintiffs and the defendants, who then were and still are copartners as paper manufacturers, that the defendants should manufacture and deliver to the plaintiffs, at the city of ¡New York, ten tons, to wit, 20,000 pounds of book paper, similar to other paper which the defendants had previously made for the plaintiffs, as soon as they, the defendants, should finish certain other orders for paper, which they stated they had on hand, and would take about three weeks from said date last mentioned, with a fair supply of water, to finish; and that the plaintiffs on such delivery should pay the defendants therefor thirteen cents a pound, less a discount of five per cent.
2d. That in the month of January, 1863, and in or about the middle of that month, the defendants stated to the plaintiffs that they would not perform the said agreement, or manufacture or deliver said paper, and refused to perform the said agreement, although thereto requested by the plaintiffs, and that the plaintiffs were at all times ready and willing to receive said paper and pay for the same, pursuant to the terms of the said agreement, and that said defendants have never delivered to said plaintiffs said ten tons of paper, or any part thereof, but have refused so to do.
3d. That by reason of the breach of the said agreement the plaintiffs have sustained damage to the amount of $1,930, as of the time when such breach occurred, the difference between the contract price (thirteen cents, less five per cent discount) per pound, and the market price of such paper (twenty-two cents per pound) at the time of such breach, on 20,000 pounds, amount, to said sum of $1,930.
As matter of law: That the plaintiffs are entitled to recover of the defendants said sum of $1,930, with interest thereon since the 1st day of January, 1863, that is to say, the sum of $2,301.51, with costs.
Augustus F. Smith for the appellants.
The contract was void under the statute of frauds. (2 R. S., 136, § 3; Chitty on Con., 66; Rondeau v. Wyatt, 2 H. Black., 63; Downs v. Ross, 23 Wend., 272, 273; Seymour v. Davis, 2 Sand.; S. C., 239; Garbutt v. Watson, 5 B. & A., 613; Smith v. N. Y. C. R. R. Co., 4 Keyes, 200; Smith v. Surman, 9 B. & C., 561; Courtright v. Stewart, 19 Barb., 456, 458; Watts v. Friend, 10 B. & C., 446; Wilkes v. Atkinson, 6 Taunt., 11; dissenting opinion, Smith, J., in Mead v. Case, 33 Barb., 202; Story on Sales, § 260 a, and notes, pp. 270, 274; Gardner v. Joy, 9 Metcalf, 177; Lamb v. Crafts, 12 Metcalf, 353-6; Robertson v. Vaughan, 5 Sand. S. C. R., 1; Donavan v. Willson, 26 Barb., 138; Crookshank v. Burrill, 18 J. R., 58; Stevens v. Santee, 51 Barb., 532, 545.)
John F. Rarsons for the respondents.
The contract was for work and labor, and not within the statute of frauds. (Crookshank v. Burrill, 18 J., 58; Sewall v. Fitch, 8 Cow., 215; Robertsons v. Vaughan, 5 Sand., 1; Bronson v. Wiman, 10 Barb., 406; Donovan v. Wilson, 26 Barb., 138; Parker v. Schenck, 28 id., 38; Mead v. Case, 33 Barb., 202; Towers v. Osborn, 1 Str., 506; Rondeau v. Wyatt, 2 H. Black, 63; Cooper v. Elston, 7 T. R., 17; Clayton v. Andrews, 4 Burr., 2101; Buxton v. Bedell, 3 East., 305; Macklow v. Mangles, 1 Taunt., 318, 320; Emerson v. Heelis, 2 Taunt., 42; Groves v. Buck, 3 M. & S., 178; Clay v. Yates, 36 Eng. L. & E., 540; Mixer v. Howarth, 21 Pick., 205; Spencer v. Cone, 1 Met., 283; Eight v. Ripley, 19 Maine, 137; Cummings v. Denoltt, 26 id., 397; Abbott v. Gilchrist, 38 id., 260; Edwards v. G. T. Railway, 48 id., 379; Allen v. Jarvis, 20 Conn., 38; Eichelberger v. McCauley, 5 Har. & J., 213; Bird v. Muhlinbrink, 1 Richardson, 199; Cason v. Cheeky, 6 Geo., 554; Phipps v. McFarlan, 3 Min., 109; Bennett v. Nye, 4 Greene, Iowa, 410.)

Opinion:
Hunt, C.
The paper to be delivered was not in existence
at the time of the making of the contract in October, 1862. It was yet to be brought into existence by the labor and the science of the defendants. Of the 20,000, pounds to- be delivered, not an ounce had then been manufactured. It was all of it to be created by the defendants, and at their mill. In such a case it is well settled, that the statute of frauds, does not apply to the contract. The distinction is between the sale of goods in existence, at the time of making the contract, and an agreement to manufacture goods. The former is within the prohibition of the statute, and void unless it is in writing, or there has been a delivery of a portion of the goods sold or a payment of the purchase-price. The latter is not. The statute reads, " every contract for the sale of any goods, chattels or things in action, for the price of fifty dollars or more, shall be void unless," etc. (2 R. S., 136, § 3.) The statute alludes to a sale of goods, assuming that the articles are already in existence. This distinction was settled in this State in 1820, by the case of Crookshank v. Burrell (18 John. R., 58), and has been followed and recognized in many others. (Sewell v. Fitch, 8 Cowen, 215; Robertson v. Vaughan, 5 Sand. S. C. R., 1; Bronson v. Wiman, 10 Barb., 406; Donovan v. Willson, 26 Barb., 138; Parker v. Schenck, 28 id., 38; Mead v. Case, 33 id., 202; Smith v. N. Y. Central R. R., 4 Keyes, 194.)
The present is not one of the border cases, in which an embarrassing or doubtful question is presented, as where wheat is sold, but the labor of thrashing remains to be done (Downs v. Ross, 23 Wend., 270), or a sale of flour which has yet to be ground from the wheat (Garbutt v. Watson, 5 B. & Ald., 613), or the sale of wood or timber which requires to be cut and corded (Smith v. N. P. Central R. R., supra), nor where the defendants might procure other parties to manufacture the paper. (3 Pars, on Contracts, 52.) It was a simple naked agreement to manufacture at their own mills, and deliver at a specified price, 20,000 pounds of paper of specified sizes, no part of which was in existence at the time of making the contract. Indeed, there is no evidence that the rags and other materials from which it was to be manufactured were owned by the defendants, or were in existence, except so far as it may be argued that matter is indestructible, and that in some form they must necessarily have then existed. As to cases of this character, the course of decisions in this State has been uniform. If we desired to do otherwise, we have no choice; we must follow them.
The judgment must be affirmed with costs.