287 F. 785 | 3rd Cir. | 1923
The plaintiff, a corporation of Minnesota, and the defendants, citizens of Pennsylvania, entered into a contract for the sale and purchase of flour. The plaintiff shipped the flour, but before it reached Philadelphia the market fell and the defendants declined to pay for it. The plaintiff brought this suit in assumpsit to recover the difference between the contract price and the market price upon the date payment was refused. The defendants, by an affidavit of defense, pleaded the Pennsylvania statute of frauds. Uniform Sales Act of Pennsylvania of May 19, 1915, § 4 (P. L. 543; Pa. St. 1920, § 19652). The plaintiff moved for judgment for want of a sufficient affidavit of defense — a proceeding in Pennsylvania similar to demurrer when a question of law is raised. The court, however, entered judgment for the defendants. The case is here on the plaintiff’s writ of error, presenting the single question whether the court erred in applying the Pennsylvania statute to the case as made in the plaintiff’s statement of claim. The applicable provisions of this statute are the following:
“A contract to sell or a sale of any goods or choses in action of the value of $500 or upwards shall not be enforceable by action unless the buyer shall accept part of the goods or choses in action so contracted to be sold or sold, and actually receive the same,' or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the 'contract or sale be signed by the party to be charged or his agent in that behalf.”
Doubtless apprehending trouble from this statute, the plaintiff pleaded the contract as an express contract and then stated it in two forms: First, as written, thus taking it wholly outside the statute; and, second, as oral, attempting by specific averments to bring it within an exception of the statute. It now urges with equal confidence that each of these positions is right.
In determining whether under both aspects of the contract recovery is harred by the statute of frauds, we shall discuss the case as though on demurrer and regard as true all facts properly pleaded in the statement of claim.
While conceding that the memorandum of agreement was not signed by the defendants — the parties to be charged — the plaintiff maintains that the written application for a permit to ship flour, signed by the defendants, though addre°sed to the warehousing company, bears internal reference to the unsigned memorandum and that, taken together, they constitute “a memorandum in writing” and "satisfy the requirement of the statute of frauds. The plaintiff bases this contention mainly on the coticluding sentence of a paragraph in the opinion in Manufacturers L. & H. Co. v. Lamp, 269 Pa. 517, 520, 112 Atl. 679, 681, where the Supreme Court of Pennsylvania, discussing-the statute of frauds of that state, said:
“Statutes, such as the one with which we are dealing, do not provide mere rules of evidence, but are limitations upon the judicial authority to afford remedies. * * * If, then, there has been a failure to properly comply with the legislative requirements, relief cannot be granted. , The contract of sale must be evidenced by a written note or memorandum. This means, as has been so frequently declared, in the case of contracts dealing with real estate, that all of the essentials of the agreement must appear in the writing to be signed by the party to be charged. * * * If not complete in itself, and oral evidence be required to supply omissions, then the whole is reduced to parol, and though equity might reform, it can no longer specifically enforce. * * * It is true that the statute may be satisfied where the memorandum is made up of several papers, which together will furnish the essential terms; but the separate writings must bear internal reference one to the other. In such case, oral testimony may be offered to identify and show the connection between them, * * * but such evidence cannot be used to supply proof of the terms of the contract itself. * * *51
The trouble with the plaintiff’s reliance upon this authoritative statement of law is that while “the statute may be satisfied where the memorandum is made up of several papers,” the defendants’ application for a permit, addressed to a third party, is not a paper which in any sense can be regarded as a memorandum of the agreement with the plaintiff. In it no terms are contained, promises made, obligations assumed, or anything done-charging the defendants. Although it may be probable that the permit applied for and obtained had to do with the shipment of flour which the parties had in mind, it contains no “internal reference” to the unsigned memorandum. While parol testimony may in a proper case be offered to identify and show the connection between separate writings which bear internal reference one to the other (Title G. & S. Co. v. Lippincott, 252 Pa. 112, 97 Atl. 201, Manufacturers’ L. & H. Co. v. Lamp, 269 Pa. 517, 520, 112 Atl. 679), and which together constitute the memorandum in writing required by the statute, this rule does not apply here because, first, neither writing bears internal reference to the other, and, second, parol testimony would have to be admitted not merely to identify and show the connection between the two instruments but to show that each instrument, the one unsigned and the other signed, is a part of the oral agreement
We are of opinion, therefore, that the plaintiff’s statement of claim fails to show a memorandum in writing that satisfies the requirements of the Pennsylvania statute of, frauds.
“It will already have been perceived that in many of the cases the test for determining whether there has been an actual receipt by the purchaser has been to inquire whether the vendor has lost his lien. Receipt implies delivery, and it is plain that so long as vendor has not delivered there can be no actual receipt by vendee. The subject was placed in a very clear •light by Holroyd, J., in the decision in Baldey v. Parker, 2 B. & G. 37: ‘Upon a sale of specific goods for a specific price by parting with the possession, the seller parts with his lien. The statute contemplates such a parting with the possession, and therefore, as long as the seller preserves his control over the goods so as to retain his lien, he prevents the vendee from accepting and receiving them as his own within the meaning of the statute.’ ” Cases in 20 Cyc. 249, 250 ; 27 Cyc. 244 ; 25 R. C. L. 620-622.
In examining the provisions of Uniform Sales Acts, enacted in many states, it is clear that legislatures, following the English Statute of Frauds as a model, intended to prevent frauds, invited by the size and complexity of modern commercial transactions, by requiring that agreements above a named sum, to be enforcible, must be reduced to writing. This is a rigid requirement, rigidly enforced by the courts. A sensible exception is made when goods have been accepted and actually received by the buyer, for then the opportunity for fraud has largely disappeared and all intendments of law are in favor of making the buyer who has actually received the goods pay for them. And this is so whether the contract is written or oral, express or implied. After receipt by the buyer, the statute no longer serves a purpose. As the plaintiff failed to make a sufficient averment that the defendants had actually received the goods, and, moreover, as the plaintiff showed that by retaining control of the goods pending payment of its draft, it had, except upon payment, prevented the defendants from actually receiving them, we are constrained to hold that the learned trial judge could have done nothing else than enter judgment for the defendants.
The judgment below is affirmed.