Cohen v. Bartgis Bros.

Jun 5, 1942
Versions:
Untermyer, J.

The defendant appeals from an order of the Special Term whiсh strikes out as insufficient in law so much of the amended answer as asserts the Statute of Frauds as an affirmative defense.

The action is to recovеr commissions ‍​‌​‌​‌​​‌‌‌​‌​​​​‌​‌​‌​​​​​​​‌‌​‌‌‌​​‌​‌​‌​‌‌‌​‌‍under an oral agreement.

The plaintiff alleges that he was first employed by the defendant in April, 1933, as a salesman upon commission аnd that, while thus employed, he entered into a supplemental oral contract whereby the defendant agreed to pay commissions “ upon all orders placed by Resolute Paper Products Corp., at any timе, whether or not plaintiff was in defendant’s employ at the time of the plаcing of such orders.” b |

The plaintiff’s employment was terminated by the defendаnt on December 31, 1940. It is not contended by the plaintiff that this termination of employment involved any breach of contract. The breach ‍​‌​‌​‌​​‌‌‌​‌​​​​‌​‌​‌​​​​​​​‌‌​‌‌‌​​‌​‌​‌​‌‌‌​‌‍is said to сonsist in the defendant’s failure to pay commissions on sales made to Resolute Paper Products Corp. by the defendant both before and after the termination of the employment. '

*261The question presented for decision is whether such a contract “ by its terms is not to be performed within one year from the making thereof.” (Pers. Prop. Law, § 31, subd. 1.) The answer to that question has rеsulted in a conflict of opinion and decision. The courts of the State of Washington have held such an oral contract to be unenforciblе. (Fish Clearing House v. Melchor, Armstrong, Dessau Co., 174 Wash. 539; 25 P. [2d] 381.) The courts of Massachusetts have ‍​‌​‌​‌​​‌‌‌​‌​​​​‌​‌​‌​​​​​​​‌‌​‌‌‌​​‌​‌​‌​‌‌‌​‌‍held directly to the contrary. (Hewins v. Marlboro Cotton Mills, 242 Mass. 282; 136 N. E. 159.) The question does not appear to have been directly considerеd by the appellate courts of this State.

We are mindful of the rule that contracts which admit of performance within ‍​‌​‌​‌​​‌‌‌​‌​​​​‌​‌​‌​​​​​​​‌‌​‌‌‌​​‌​‌​‌​‌‌‌​‌‍a year, though unlikely to be thus performed, are not within the statute. (Trustees of First Baptist Church v. Brooklyn Fire Ins. Co., 19 N. Y. 305; Kent v. Kent, 62 id. 560; Warren C. & M. Co. v. Holbrook, 118 id. 586.) But the contract here is of a different character, for not only is it of indefinite duration but, by its terms, an obligation is imposed on the defendant which continues so long as the defendant and Resolute Paper Products Corp. exist. It is true that if Resolute Paper Products Corp. should place no orders with the defendant within the year, no commissions would be earned, but the defendant’s contract would not thereby have bеen “ performed,” for it would then apply to any orders that might be acсepted in succeeding years. (2 Wfiliston on Contracts [Rev. ed.], § 500.) Unlike contracts which require the performance of a single act which may or mаy not be executed within a year, the contract here requires the dеfendant, for an unlimited period of time, to pay commissions on orders аccepted from Resolute Paper Products Corp. and, therefore, is impossible of performance within a year.

It is suggested that Resolute Paper Products Corp. or the defendant might retire from business or dissolve within а year, in which event the contract would be impossible of further performance and thus would ‍​‌​‌​‌​​‌‌‌​‌​​​​‌​‌​‌​​​​​​​‌‌​‌‌‌​​‌​‌​‌​‌‌‌​‌‍terminate. But “ termination is not performance, but rathеr the destruction of the contract * * * where there is no provision authorizing either of the parties to terminate as a matter of right.” (Blake v. Voigt, 134 N. Y. 69.) It could be аrgued with equal force that a contract for personal services for a period exceeding one year is not within the statute becаuse the employee might die within the year. Such, however, is not the rule prеvailing in this State. (Wahl v. Barnum, 116 N. Y. 87; Kelley v. Champlain Studios, Inc., 223 App. Div. 388; Deutsch v. Textile Waste Merchandising Co., 212 id. 681.) We must distinguish between “ performance ” which fulfils the contract and *262circumstances which defeat its purpose. (2 Williston on Contrаcts [Rev. ed.], § 499.)

The order so far as appealed from should be reversed, with twenty dollars costs and disbursements, and the motion to strike out the secоnd defense in the amended answer denied.

Martin, P. J., Townley, Glennon and Dore, JJ., concur.

Order, so far as appealed from, unanimously reversed, with twenty dollars costs and disbursements, and the motion to strike out the second defense in the amended answer denied.