Minichiello v. Royal Business Funds Corp.

• Decision Date: 03 February 1966
• Citation: 266 N.Y.S.2d 570,25 A.D.2d 502
• Parties: Angelo MINICHIELLO and Stanton L. Pressman, Plaintiffs-Respondents, v. ROYAL BUSINESS FUNDS CORPORATION, Defendant-Appellant, Small Business Investment Company of New York, Inc., and Jayark Films Corporation, Defendants.
• Court: New York Supreme Court — Appellate Division

Page 570

266 N.Y.S.2d 570

25 A.D.2d 502

Angelo MINICHIELLO and Stanton L. Pressman, Plaintiffs-Respondents, v. ROYAL BUSINESS FUNDS CORPORATION, Defendant-Appellant, Small Business Investment Company of New York, Inc., and Jayark Films Corporation, Defendants.

Supreme Court, Appellate Division, First Department.

Feb. 3, 1966.

Maurice J. Gilchrist, Jr., New York City, of counsel (John H. Falsey, New York City, with him on the brief; Lewis, MacDonald & Varian, New York City, attorneys), for respondents.

Morton L. Ginsberg, New York City, of counsel (Hollman, Temkin & Ginsberg, New York City, attorneys), for appellant.

Before BREITEL, L. P., and VALENTE, McNALLY, STEVENS and STEUER, JJ.

PER CURIAM.

Order, entered on June 29, 1965, appealed from affirmed, with $50 costs and disbursements to respondents. The facts are sufficiently set forth in the dissenting opinion so it is unnecessary to repeat them here, the single question being, as indicated, whether the statute of frauds is a complete defense to the action and as such warrants a dismissal of the complaint. We are in agreement that if the cause of action alleged had arisen subsequent to the amendment of Personal Property Law, Section 31, subdivision (10) as reconsolidated and transferred to General Obligations Law, Sections 5-701, that the action could not be maintained. However, it has been held under the old Section 31, Personal Property Law, prior to the amendment and its transfer to the General Obligations Law, that while the statute of frauds might be a bar to an action brought on an express contract, it would not constitute a defense to an action brought in quantum meruit to recover for services rendered. Gibson v. Archer Productions, Inc., 281 App.Div. 661, 117 N.Y.S.2d 438 (1952); Wells v. Dent, 4 A.D.2d 307, 309, 164 N.Y.S.2d 646, 648 (1957). All concur except STEUER, J., who dissents in a dissenting opinion.

STEUER, Justice (dissenting):

While the complaint alleges causes of action against several defendants, only those against the moving defendant are considered. And though there are two plaintiffs, only one alleges causes of action against this defendant.

Plaintiff sues for the reasonable value of the services rendered in procuring an investment opportunity, namely, the purchase of all of the stock of a corporation. No writing evidencing the hiring is claimed. The question presented is whether the statute of frauds is a complete defense to the action.

It is indisputable that suit on an agreement to perform these services not substantiated by a memorandum in writing would not be actionable (General Obligations Law, § 5-701(10)). ¹ In 1964, admittedly after the date these actions arose, the statute was amended to include the following language: 'This provision shall apply to a contract implied in fact or in law to pay reasonable compensation * * *.' It is therefore not open to dispute that under the existing law this action could not be maintained. Of course, the fact that the statute so provides at this time would not affect the disposition of this action if the statute constituted a change in the law. But the statute effected no change at all. It merely clarified the existing law, and its purpose was to remove any ground for a contrary contention (see Report, Law Revision Commission. 1964 Leg.Doc. No. 65(F), quoted in McKinney's 1964 Session Laws of New York, p. 1796).

It must be apparent that in the original enactment in 1949 (Personal Property Law, § 31(10)), the evil that the legislature sought to avoid was the bringing of unfounded claims for finding or procuring business opportunities. That is the purpose of all statutes requiring a degree of proof greater than the sworn word of the claimant. It is patent that this purpose would be frustrated if the claimant could maintain his action by merely changing the allegations from an oral contract to one implied in fact or law. It is also beyond dispute that the proposers of the 1949 statute understood that the statute precluded such actions. 'Regardless of the form, it seems now to be uniformly held that the broker's full performance does not entitle him to recover commissions without complying with the statutory requirement of a memorandum. Nor may he recover the...