North Shore Bottling Co. v. C. Schmidt & Sons, Inc.

CourtNew York Court of Appeals
Writing for the CourtFULD; BURKE, BERGAN, KEATING, BREITEL and JASEN, JJ., concur with FULD; SCILEPPI
Citation22 N.Y.2d 171,292 N.Y.S.2d 86
Decision Date29 May 1968
Parties, 239 N.E.2d 189 NORTH SHORE BOTTLING CO., Inc., Respondent, v. C. SCHMIDT AND SONS, INCORPORATED, Appellant, et al., Defendants.

Page 86

292 N.Y.S.2d 86
22 N.Y.2d 171, 239 N.E.2d 189
NORTH SHORE BOTTLING CO., Inc., Respondent,
v.
C. SCHMIDT AND SONS, INCORPORATED, Appellant, et al., Defendants.
Court of Appeals of New York.
May 29, 1968.

Page 87

[239 N.E.2d 190] [22 N.Y.2d 172] Jerome K. Walsh, Jr., and Eric M. Dreyfus, New York City, for appellant.

[22 N.Y.2d 173] David O. Kuh and Everett Frooks, New York City, for respondent.

[22 N.Y.2d 174] FULD, Chief Judge.

This appeal, here by permission of the Appellate Division on a certified question, calls upon us to determine the validity, under the one-year provision of the Statute of Frauds, of an oral agreement which entitled the defendant to terminate its contractual arrangement with the plaintiff within one year of its making.

In October of 1960, plaintiff bottling company entered into an oral agreement with defendant Schmidt and Sons, a manufacturer of beer in Pennsylvania, 'whereby', the complaint recites, 'plaintiff became the exclusive wholesale distributor in Queens County of Schmidt beer

Page 88

* * * For as long as Schmidt sold beer in the New York metropolitan area in which Queens County is located.' According to the plaintiff, there 'was practically no sale of Schmidt beer' in Queens County prior to the time the agreement was made. And, in the words of the pleading, at Schmidt's 'special request' and 'in reliance on (its) representation and promises' with respect to its exclusive distributorship, the plaintiff had vigorously exerted itself and 'at large expense * * * developed the sale of Schmidt beer in (Queens) County'--soliciting customers, distributing advertising and granting price concessions--with the result that, in a year's time, 'there was approximately a 100% Increase in plaintiff's sale of Schmidt beer'.

In June, 1962, defendant Schmidt designated defendant Midway Beverage Corporation its distributor in place of the plaintiff. The latter thereupon brought this suit for breach of contract, seeking damages of $200,000 (first cause of action). In another cause of action (the third)--in which damages of $500,000 were sought--the plaintiff alleged that defendant Schmidt and several other defendants entered into a conspiracy pursuant to which Schmidt breached and repudiated its agreement with the plaintiff by making Midway its exclusive agent in Queens and that, in addition, all of the defendants conspired together 'to defraud and cheat plaintiff out of its said business and the just fruits of its labors and expenditures'.

Defendant Schmidt was successful at Special Term both upon its motion for summary judgment--pursuant to CPLR 3212--dismissing the first and third causes of action on the ground that the agreement asserted was void under the Statute of Frauds and upon its further motion to dismiss the third cause of action--[22 N.Y.2d 175] pursuant to CPLR 3211 (subd. (a), par. 7)--for failure to state a cause of action. The Appellate Division, however, reaching a different conclusion, modified the order appealed from. It denied the defendant's motion for summary judgment and in so doing, observed that 'the contingency, i.e., defendant Schmidt's discontinuance of its sales in the New York metropolitan area, was expressly stated to terminate the distributorship.' Consequently, continued the court, since '(i)t was within the control of and dependent upon the will of said defendant and performable within a year of its making', the agreement 'is outside the Statute of Frauds.' 1 We agree with this reasoning and conclusion.

Page 89

[239 N.E.2d 191] The Statute of Frauds requires an agreement to be in writing if '(b)y its terms (it) is not to be performed within one year from the making thereof' (General Obligations Law, § 5--701, subd. 1 (formerly Personal Property Law, § 31, subd. 1)). According to the complaint before us, the plaintiff and the defendant Schmidt 'entered into an agreement whereby plaintiff became the exclusive wholesale distributor in Queens County of Schmidt beer * * * for as long as Schmidt sold beer in the New York metropolitan area', and the question presented is whether the defendant's power under the agreement itself to put an end to it within the year--by discontinuing its sales of beer in the New York area--took the agreement out of the operation of the statute.

It was long ago stated, and frequently repeated, that '(i)t is not the meaning of the statute that the contract must be performed within a year. * * * if the obligation of the contract is not, by its very terms, or necessary construction, to endure for a longer period than one year, it is a valid agreement, although it may be capable of an indefinite continuance.' (Trustees of First Baptist Church v. Brooklyn Fire Ins. Co., 19 N.Y. 305, 307; see also Nat Nal Serv. Stas. v. Wolf, 304 N.Y. [22 N.Y.2d 176] 332, 336, 107 N.E.2d 473, 475; Ward v. Hasbrouck, 169 N.Y. 407, 419, 62 N.E. 434, 438; Blake v. Voigt, 134 N.Y. 69, 72, 31 N.E. 256, 257; Fairchild v. City & County Contract Co., 153 App.Div. 277, 282--283, 138 N.Y.S.2d 133, 138; Dresser v. Dresser, 35 Barb. 573, 576; Warner v. Texas & Pacific Ry., 164 U.S. 418, 434, 17 S.Ct. 147, 41 L.Ed. 495.) In other words, as another court expressed the matter, 'the statute only applies to agreements which are, by express stipulation, not to be performed within a year. It does not apply to an agreement which appears by its terms to be capable of performance within the year; nor to cases in which the performance of the agreement depends upon a contingency which may or may not happen within the year.' (Dresser v. Dresser, 35 Barb. 573, 577, supra.) And in Blake v. Voigt (134 N.Y. 69, 31 N.E. 256, supra), in which the plaintiff promised 'to cause to be consigned all the goods that I could influence to' the defendant, with an option in either party to give notice of termination after seven months, this court wrote (p. 72, 31 N.E. 256):

'The ultimate question, therefore, is whether a contract, which by the terms applicable to the leading subject thereof is not to be performed within a year, is taken out of the statute by the fact that it was a part of such contract that either party might rightfully terminate it within the year. It is contended that termination is not performance, but rather the destruction of the contract, and this is true where there is no provision...

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199 practice notes
  • Abernathy-Thomas Engineering Co. v. Pall Corp., Civil Action No. 96-CV-5315(DGT).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • June 27, 2000
    ...performance within one year of their making within the meaning of § 5-701(a)(1). See North Shore Bottling Co. v. C. Schmidt & Sons Inc., 22 N.Y.2d 171, 177-78, 292 N.Y.S.2d 86, 90-91, 239 N.E.2d 189 (1968); Agee v. Read Q Sys., Inc., 70 A.D.2d 805, 805, 417 N.Y.S.2d 494, 495 (1st Dep't 1979......
  • Netzer v. Continuity Graphic Associates, Inc., No. 93 Civ. 5870 (RWS).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • April 7, 1997
    ...to, the breach of a contract.'" Niagara Mohawk, 725 F.Supp. at 662, quoting North Shore Bottling Co., Inc. v. C. Schmidt & Sons, Inc., 22 N.Y.2d 171, 179, 292 N.Y.S.2d 86, 239 N.E.2d 189 (1968). "[A] simple breach of contract is not to be considered a tort unless a legal duty independent of......
  • Applied Equipment Corp. v. Litton Saudi Arabia Ltd., No. S030637
    • United States
    • United States State Supreme Court (California)
    • March 31, 1994
    ...the other for conspiring to breach the contract or for inducing the breach"]; North Shore Bottling Co. v. C. Schmidt & Sons, Inc. (1968), 22 N.Y.2d 171, 292 N.Y.S.2d 86, 239 N.E.2d 189, 193 [" '[O]ne does not have a cause of action against another contracting party for conspiracy to breach ......
  • Landon v. Kroll Lab. Specialists, Inc.
    • United States
    • New York Supreme Court Appellate Division
    • November 22, 2011
    ...York Univ. v. Continental Ins. Co., 87 N.Y.2d at 316, 639 N.Y.S.2d 283, 662 N.E.2d 763; see North Shore Bottling Co. v. Schmidt & Sons, 22 N.Y.2d 171, 179, 292 N.Y.S.2d 86, 239 N.E.2d 189; Bandier v. Tim Blenk Tree Care, Inc., 57 A.D.3d 595, 596, 869 N.Y.S.2d 215; International Fid. Ins. Co......
  • Request a trial to view additional results
199 cases
  • Abernathy-Thomas Engineering Co. v. Pall Corp., Civil Action No. 96-CV-5315(DGT).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • June 27, 2000
    ...performance within one year of their making within the meaning of § 5-701(a)(1). See North Shore Bottling Co. v. C. Schmidt & Sons Inc., 22 N.Y.2d 171, 177-78, 292 N.Y.S.2d 86, 90-91, 239 N.E.2d 189 (1968); Agee v. Read Q Sys., Inc., 70 A.D.2d 805, 805, 417 N.Y.S.2d 494, 495 (1st Dep't 1979......
  • Netzer v. Continuity Graphic Associates, Inc., No. 93 Civ. 5870 (RWS).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • April 7, 1997
    ...to, the breach of a contract.'" Niagara Mohawk, 725 F.Supp. at 662, quoting North Shore Bottling Co., Inc. v. C. Schmidt & Sons, Inc., 22 N.Y.2d 171, 179, 292 N.Y.S.2d 86, 239 N.E.2d 189 (1968). "[A] simple breach of contract is not to be considered a tort unless a legal duty independent of......
  • Applied Equipment Corp. v. Litton Saudi Arabia Ltd., No. S030637
    • United States
    • United States State Supreme Court (California)
    • March 31, 1994
    ...the other for conspiring to breach the contract or for inducing the breach"]; North Shore Bottling Co. v. C. Schmidt & Sons, Inc. (1968), 22 N.Y.2d 171, 292 N.Y.S.2d 86, 239 N.E.2d 189, 193 [" '[O]ne does not have a cause of action against another contracting party for conspiracy to breach ......
  • Landon v. Kroll Lab. Specialists, Inc.
    • United States
    • New York Supreme Court Appellate Division
    • November 22, 2011
    ...York Univ. v. Continental Ins. Co., 87 N.Y.2d at 316, 639 N.Y.S.2d 283, 662 N.E.2d 763; see North Shore Bottling Co. v. Schmidt & Sons, 22 N.Y.2d 171, 179, 292 N.Y.S.2d 86, 239 N.E.2d 189; Bandier v. Tim Blenk Tree Care, Inc., 57 A.D.3d 595, 596, 869 N.Y.S.2d 215; International Fid. Ins. Co......
  • Request a trial to view additional results

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