Macias v. Klein
| Decision Date | 09 April 1953 |
| Docket Number | No. 10870.,10870. |
| Citation | 203 F.2d 205 |
| Parties | MACIAS v. KLEIN et al. Appeal of OAKLAND TRUCK SALES, Inc. |
| Court | U.S. Court of Appeals — Third Circuit |
John A. Metz, Jr., Pittsburgh, Pa. (Metz & Metz, Pittsburgh, Pa., on the brief), for appellant.
Harry Alan Sherman, Pittsburgh, Pa. (Joseph M. Wapner, Los Angeles, Cal., on the brief), for appellee.
Before MARIS, McLAUGHLIN and KALODNER, Circuit Judges.
This is an appeal by Oakland Truck Sales, Inc., one of the defendants, from a judgment entered against it on a special verdict in the District Court for the Western District of Pennsylvania in an action brought by the plaintiff, Henry Macias, to recover the price of truck parts alleged to have been sold to the defendant and which it refused to accept. Morris Klein and David Rosenzveig had also been joined as defendants but the district court directed a verdict in their favor. The motion of Oakland Truck Sales, Inc. for judgment n. o. v. or a new trial was denied by the district court. 106 F.Supp. 107. From the evidence and the special verdict the facts appear to be as follows:
On September 13, 1948, a verbal contract was entered into in Los Angeles between Henry Macias, as seller, and Oakland Truck Sales, Inc., as buyer, acting by its president, Morris Klein, for the sale of truck parts for a price of $7,800 and the buyer then and there delivered to the seller a check for $2,000 as part payment. In October 1948 the seller telephoned Klein from Los Angeles and suggested the modification of the sale agreement so as to change and increase the parts purchased to a total of $13,236.50. Over the telephone Klein verbally agreed to the modification on behalf of the buyer and requested the seller to credit the buyer on the new purchase price with the $2,000 paid on account of the original purchase price. At the same time he requested that the parts be shipped by rail to an address in Detroit. The seller believed that Klein was either in Pittsburgh or Detroit at the time of this telephone conversation but the evidence did not establish the fact.
About October 19, 1948 the seller shipped the truck parts covered by the modified agreement of sale to the Detroit address and forwarded a sight draft and bill of lading accompanied by an invoice for $13,236.50, on which invoice was credited "Deposit $2000.00" leaving a balance of $11,236.50. The truck parts were not accepted by the buyer and the sight draft was not paid. Subsequently the seller ordered the parts returned by rail to Los Angeles where he permitted them to be sold by the railroad for freight and demurrage charges. He then brought this suit to recover the balance due on the modified contract of sale. The buyer denied the making of the modified contract and also set up the statute of frauds as a defense. The rejection of that defense by the district court raises the question presented for our decision.
The applicable Pennsylvania statute of frauds is to be found in section 4 of the Uniform Sales Act, 69 P.S. § 42, which in pertinent part reads as follows:
"A contract to sell or a sale of any goods * * * of the value of five hundred dollars or upwards shall not be enforceable by action unless the buyer shall accept part of the goods * * * 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."
We have heretofore had occasion to point out that this particular Pennsylvania statute of frauds has been held by the Supreme Court of Pennsylvania to have procedural rather than substantive effect. Continental Collieries v. Shober, 3 Cir., 1942, 130 F.2d 631; Rothenberg v. H. Rothstein & Sons, 3 Cir., 1950, 183 F.2d 524, 21 A.L.R.2d 832. It operates to deny enforcement in the Pennsylvania courts of all contracts wherever made which do not comply with its requirements and not merely to render void such nonconforming contracts as may be made in Pennsylvania. It is nonetheless a statute which under the doctrine of Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, must be applied in a federal district court sitting in Pennsylvania in a case of diverse citizenship to deny enforcement to such a contract. For from the Erie standpoint it must be regarded as substantive since its application will significantly affect the result of the litigation. See Sampson v. Channell, 1 Cir., 1940, 110 F.2d 754, 128 A.L.R. 394, certiorari denied 310 U.S. 650, 60 S.Ct. 1099, 84 L.Ed. 1415; Palmer v. Hoffman, 1943, 318 U.S. 109, 63 S.Ct. 477, 87 L.Ed. 645; Guaranty Trust Co. v. York, 1945, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079; Angel v. Bullington, 1947, 330 U.S. 183, 67...
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