Berman Stores Co. v. Hirsh

• Decision Date: 05 May 1925
• Citation: 148 N.E. 212,240 N.Y. 209
• Parties: BERMAN STORES CO., Inc., v. HIRSH et al.
• Court: New York Court of Appeals Court of Appeals

240 N.Y. 209

148 N.E. 212

BERMAN STORES CO., Inc.,

v.HIRSH et al.

Court of Appeals of New York.

May 5, 1925.

Action by the Berman Stores Company, Inc., against Abraham Hirsh and others, as executors of Morris Lichtenstein, deceased. From a judgment of the Appellate Division (208 App. Div. 622, 203 N. Y. S. 815), affirming a judgment dismissing plaintiff's complaint, plaintiff, by permission, appeals.

Reversed, and new trial ordered.

Crane and Andrews, JJ., dissent.

Appeal from Supreme Court, Appellate Division, First Department.

L. B. Boudin, of New York City, for appellant.

Harold R. Medina, I. Gainsburg and Leander I. Shelley, all of New York City, for respondents.

LEHMAN, J.

The plaintiff has brought an action to recover damages for the failure of the defendants to manufacture and deliver 2,250 men's suits of various sizes and models, in accordance with a contract which the plaintiff claims was made between the parties. The defendants pleaded as a defense the statute of frauds. At the close of the plaintiff's case the complaint was dismissed on the ground that the plaintiff had failed to show that a memorandum in writing of the contract was signed by the defendants as required by the statute of frauds (section 85 of the Personal Property Law [Consol. Laws, c. 41]).

According to the testimony produced by the plaintiff, the defendants are engaged in the business of manufacturing men's suits and overcoats. They have in their place of business models of garments which they manufacture, samples of cloth used, and a quantity of ‘piece goods.’ They take orders to manufacture garments like the models, from cloth like the samples shown. They accepted an order from the plaintiff for 2,250 suits to be manufactured by them, and they signed memoranda which show the number of suits ordered, their size, and price. The style and materials of the suits are identified by letters, figures, and lot numbers used by the defendants in their business, and the memoranda contain all the terms which ordinarily enter into a contract to manufacture and sell, except that they contain no statement as to the time of shipment or delivery. Concededly no goods were delivered and no payments made under the alleged contract. The defendants contend and the courts below have that the contract is unenforceable because the memoranda signed by the defendants do not embody the entire contract, which it is said included a definite date for shipment or delivery.

[1] According to the terms of section 85 of the Personal Property Law, its provisions do not apply ‘if the goods are to be manufactured by the seller especially for the buyer and are not suitable for sale to others in the ordinary course of the seller's business.’ When the Legislature enacted article 5 of the Personal Property Law, popularly known as the Sales Act, it destroyed the old rule previously applied in this state that a contract for the delivery of goods not then in existence but to be manufactured, was not a contract of sale within the provisions of the statute of frauds. Parsons v. Loucks, 48 N. Y. 17, 8 Am. Rep. 517. Under the provisions of the Personal Property Law a contract to sell goods is ordinarily any contract ‘whereby the seller agrees to transfer the property in goods to the buyer for a consideration called the price’ (section 82), and the statute of frauds applies even to goods not then in existence, unless it is shown both that the goods are to be manufactured by the seller especially for the buyer and that they are not suitable for sale to others in the ordinary course of the seller's business.

[2] In the present case, though undoubtedly the goods were to be manufactured by the seller especially for the buyer, the evidence does not establish that after manufacture they would not be suitable for sale in the ordinary course of the seller's business. The seller's business is to manufacture and sell goods of similar character. The evidence that the defendants had in their place of business models for the suits ordered, samples, and even pieces of the materials from which they were to be made, and that they were described by defendants' lot numbers, letters, and figures, lead to the inference that in the ordinary course of the defendants business such goods were ordered to be manufactured and bought by the defendants' customers. The evidence further establishes that they had a market value. Under these circumstances there is no ground for any inference that the defendants' customers, who in the regular course of defendants' business bought such goods when manufactured upon their order, would not likewise buy them if already manufactured at the time the order was given. The somewhat unsatisfactory evidence that the defendants agreed to place upon the goods plaintiff's labels and lot numbers is insufficient to show that the goods could not be sold to others. For these reasons, the plaintiff has failed to show that the alleged contract comes within the exception to the statute of frauds. The question remains whether the statute has been complied with.

[3] We have pointed out that the memoranda signed by the defendants contain no provision for the time of shipment or delivery, except perhaps that they were to be delivered ‘when ready.’ It does not fix any time when the goods were to be ready. The complaint alleges that the...