Bohlen Industries of North America, Inc. v. Flint Oil & Gas, Inc.

• Decision Date: 14 December 1984
• Docket Number: No. 1,1
• Citation: 483 N.Y.S.2d 529,106 A.D.2d 909
• Court: New York Supreme Court — Appellate Division
• Parties: BOHLEN INDUSTRIES OF NORTH AMERICA, INC., Carl C. Franzen, Manfred Gazon, Ulrich V. Varnbuler, Arthur Koser, Herbert Heidorn and Paul Eckler, Respondents, v. FLINT OIL & GAS, INC., Templeton Energy, Inc., Ralph J. Argen, Michael C. Geraci and Joseph T. Perna, Appellants. Appeal

Page 529

483 N.Y.S.2d 529

106 A.D.2d 909

BOHLEN INDUSTRIES OF NORTH AMERICA, INC., Carl C. Franzen Manfred Gazon, Ulrich V. Varnbuler, Arthur Koser Herbert Heidorn and Paul Eckler, Respondents, v. FLINT OIL & GAS, INC., Templeton Energy, Inc., Ralph J Argen, Michael C. Geraci and Joseph T. Perna Appellants. Appeal No. 1.

Supreme Court, Appellate Division, Fourth Department.

Dec. 14, 1984.

Kavinoky & Cook by Guy Agostinelli, Buffalo, for appellants.

Phillips, Lytle, Hitchcock, Blaine & Huber by Paul Stecker, Buffalo, for respondents.

Before DILLON, P.J., and HANCOCK, DENMAN, BOOMER and O'DONNELL, JJ.

MEMORANDUM:

Plaintiffs, several of whom are citizens and residents of West Germany, are the limited partners, and the corporate defendant Flint Oil & Gas, Inc., is the general partner of a limited partnership formed to explore for oil and gas. The principal dispute between plaintiffs and defendants is whether certain oil and gas leases upon properties in the Town of Marilla, Erie County, were, according to the limited partnership certificate, to be contributed to the partnership by the general partner. The action seeks dissolution of the partnership, the appointment of a liquidating trustee and a determination of title to the oil and gas leases.

Settlement negotiations conducted by attorneys for the parties resulted in the draft of an instrument purporting to be an agreement settling the lawsuit. While all parties signed copies of the instrument, defendants' attorney has not physically delivered to plaintiffs copies of the instrument which were signed by his clients. Defendants disavowed the settlement, claiming that no agreement was ever made, and plaintiffs, by motion, sought enforcement of the agreement. Special Term granted the motion, and defendants appeal.

The pertinent paragraphs of the agreement are as follows:

"15. The Parties agree to approve, adopt and execute all documents necessary to effectuate the implementation, in its entirety, of this settlement agreement.

"16. This document may be signed in several counterparts, all of which when attached together shall constitute a single, complete agreement.

"IT IS FURTHER AGREED, by and among the Parties, that none of the provisions contained herein shall be deemed to have any effect upon any party, even a signatory, until this agreement has been duly executed by all of the Parties."

Defendants contend that delivery of a contract instrument is, as a matter of law, essential to its effectiveness; that the settlement agreement, by its terms, required such delivery as the final act of acceptance of the contract; and lastly, that the parties orally agreed that closing of the settlement agreement was a condition precedent to its effectiveness and that the court erred in refusing to receive parol evidence of such oral agreement.

Initially, we reject defendants' argument that a written contract does not become effective until delivery (1 Corbin, Contracts, § 32). "A binding contract * * * may be made without a physical delivery of the instrument evidencing the contract." (Birch v. McNall, 19 A.D.2d 850, 244 N.Y.S.2d...