Opinion ID: 296717
Heading Depth: 2
Heading Rank: 2

Heading: Insufficiency in the Record Regarding Plaintiffs' Substantial Performance

Text: 62 Although defendant clearly breached the contract we are compelled to remand for the purpose of allowing further findings — and evidence, if the district court so decides — on the issue whether plaintiffs performed each and every obligation required of them to be performed (Finding of Fact 8; Conclusion of Law 3). Our concern is directed at certain warranties of title made by plaintiffs which were not fully complied with. 63 In the partnership contract, plaintiffs made the following representations: 64 Second, Fagerberg and Friedman represent and warrant that they own full and complete rights, title and interest in and to a number of children's fairy tale short subjects (35 mm. color negative), and that such completed pictures are free and clear of all liens or other claims of every kind (Ex. 2). 65 The plaintiffs purchased the seven short films from VEB DEFA Aussen Handel, Berlin, an East German Producer (DEFA). Paragraph 10 of that agreement between plaintiffs and DEFA provided that the seller (DEFA) retained the right to declare the sales contract rescinded if Friedman and Fagerberg failed to meet various obligations, the one pertinent in this context being the obligation to pay for the materials purchased. 66 It is undisputed that at the time of trial, plaintiffs had failed to completely satisfy their obligation to DEFA although the time for payment had elapsed; indeed, at that time $20,000 of the $40,000 purchase price was still unsatisfied. The court below made no mention of this factor; rather, it concluded that plaintiffs were free from any impropriety in their obligations to defendant. 67 In order to justify a judgment in favor of plaintiffs, there must be a finding of fact as to whether there were any defects in their performance and that if there were, performance was substantial in spite of them; there must also be evidence sufficient to sustain such a finding. Villhauer v. Gross, 138 App.Div. 10, 122 N.Y.S. 520 (1910). 68 On appeal, plaintiffs seek to diminish the effect of this lien by noting that there was evidence to demonstrate that DEFA notified Friedman and Fagerberg that a moratorium would be permitted on the $20,000 debt. Friedman testified that DEFA twice extended the time for payment; nevertheless, the terms of this agreement were indefinite. The fact remains that DEFA did not cancel the debt but, rather, retained the right to rescind its agreement and reacquire the films. 69 Judge Palmieri's finding that plaintiffs performed every obligation required of them fails to reflect the above circumstance. Upon remand, the trial court is directed to ascertain whether plaintiffs substantially performed their duties despite this alleged defect in title. If the district court in its discretion wishes to allow further evidence on this limited issue, it is, of course, free to do so.