Silverstein v. Keane

Decision Date06 June 1955
Docket NumberNo. A--146,A--146
Citation19 N.J. 1,115 A.2d 1
PartiesNathan SILVERSTEIN and Julian Silverstein, trading as Silco Cigarette Service, Plaintiffs-Respondents, v. Patrick KEANE, Defendant-Appellant. Nathan SILVERSTEIN and Julian Silverstein, trading as Silco Cigarette Service, Plaintiffs-Respondents, v. Frankie NELSON, Individually and trading as Nelson's Marine Grill, Defendant-Appellant. Nathan SILVERSTEIN and Julian Silverstein, trading as Silco Cigarette Service, Plaintiffs-Respondents, v. Charles ROVEGNO and Frank Palmierl, Individually and trading as Rovegno& Palmierl, Defendants-Appellants. Nathan SILVERSTEIN and Julian Silverstein, trading as Silco Cigarette Service, Plaintiffs-Respondents, v. Anthony PALMIERI, Defendant-Appellant.
CourtNew Jersey Supreme Court

Abraham J. Slurzberg, Jersey City, for appellants (Francis P. Morley, Jersey City, attorney for defendant-appellant Patrick Keane; Gottlieb & Gottlieb, Hoboken, attorneys for defendants-appellants Frankie Nelson and Anthony Palmieri; Irving I. Vogelman, Jersey City, attorney for defendants-appellants Charles Rovegno and Frank Palmieri; Irving I. Vogelman, Jersey City, of counsel).

Maurice C. Brigadier, Jersey City, for respondents (Sol Schulman, Jersey City, attorney; Seymour Margulies, Jersey City, on the brief).

The opinion of the court was delivered by

BURLING, J.

There is a civil action grounded in breach of a specific contract which is the gist of each of the four actions involved in these consolidated appeals. The plaintiffs, Nathan Silverstein and Julian Silverstein, trading as Silco Cigarette Service initiated the actions by individual complaints filed in the Hudson County District Court, against the defendants, respectively, Patrick Keane; Frankie Nelson, individually and trading as Nelson's Marine Grill; Charles Rovegno and Frank Palmieri, individually and trading as Rovegno and Palmieri; and Anthony Palmieri. The Hudson County District Court without a jury entered judgment of dismissal on motion of the respective defendants made before the close of the reception of evidence on the plaintiffs' cases. The plaintiffs' appeals were consolidated for argument in the Superior Court, Appellate Division, which reversed the judgments and remanded the several matters for new trial. Silverstein v. Keane, 35 N.J.Super. 303, 114 A.2d 307 (1954). This court allowed certification in the present matters on the defendants' joint petition therefor, Silverstein v. Keane, 17 N.J. 252, 111 A.2d 321 (1955).

The alleged agreements upon which the plaintiffs instituted suit in the four matters Sub judice are substantially similar. As an example we quote the text of the Keane agreement:

'In consideration of $1.00 and for other good and valuable consideration, lawful money of the United States of America to me/us in hand paid, receipt of which is hereby acknowledged, I/we do hereby lease to the Silco Cigarette Service of Hudson County, New Jersey, and the said Silco Cigarette Service does hereby rent so much space of the permises owned and/or operated by me/us, as is necessary to permit the installation of a cigarette vending machine or machines for the sale of cigarettes, which premises known as Keane Tavern, Pat Keane, and located at No. 304 River St. Hob. New Jersey; the said cigarette vending machine or machines to remain upon the premises for the sale of cigarettes exclusively for a period of three years, and during that time I/we agree to and with the Silco Cigarette Service, that no other cigarette vending machines except those owned by the Silco Cigarette Service shall be permitted on or within the premises.

'The term of this Agreement is for three years from the date hereof, and thereafter for a like period until this Agreement is cancelled by either party by notice in writing given to the other thirty (30) days before the annual termination date.

'I/we also agree not to sell or allow to be sold any cigarettes in any other manner on the premises, either directly or indirectly, for the period of this lease, excepting through machines owned and operated by the Silco Cigarette Service and I/we do further agree that the said machines above referred to are not and shall not be subject to any liens or mortgages covering the premises, and that the said Silco Cigarette Service may remove the machine or machines from the above mentioned premises at any time, day or night, without obligation or liability.

'As a further consideration for this letting, the Silco Cigarette Service agrees to pay any and all commissions for sales of cigarettes through the said machines and the said commissions earned are to be paid directly to the lessor herein every month during the running of this Agreement.

'In Witness Whereof, the parties hereto have set their hands and seals this 23 day of Jan. 1953.'

In addition the Nelson agreement contained the following language:

'If I/we breach this contract by violation of any provisions agreed to, I/we agree to pay Silco liquidated damages in an amount of two and one half times the average monthly commission usually received by lessor as determined by averaging the last six monthly commission payments, or if there are less than six, by averaging the exact number previously paid for the balance of the unexpired term.'

Each agreement bore a different date, but the dates have not become material at the present stage of the cases.

It was stipulated at the trial that the legal issues were the same in each case and the issue of damages was reversed by the trial court pending the disposition of the defendants' motions for dismissal on the issues of law. See R.R. 4:42--2(b). As is apparent, the respective agreements contained no specification of the rate of commission to be paid by the plaintiffs to the defendants respectively. The trial court sustained the defendants' objections, asserted on the ground that the rate of commission could not be shown by parol evidence, to the plaintiffs' offers of proof. See R.R. 4:44--3.

Upon the defendants' motions for dismissal prior to completion of the plaintiffs' case the trial court ruled that the respective agreements were terminable at will by the plaintiffs and lacked mutuality of obligation. The motions for judgment of dismissal were granted. The resulting judgments were reversed by the Superior Court, Appellate Division, as hereinbefore noted, on the determination that parol evidence was admissible to demonstrate the rate of commission under the respective agreements involved in these actions, and on the conclusion of law that the agreements were mutually obligatory upon the respective parties thereto.

The questions involved on these appeals include (A) whether parol evidence is admissible to supply the rate of commission to be paid by the plaintiffs to the respective defendants under these agreements, within the statute of frauds and the parol evidence rule; and (B) whether the respective agreements evince mutuality of obligation.

I. Parol Evidence and the Statute of Frauds.

The plaintiffs contend that the absence of a stated rate of commission is not destructive of the agreements involved in these actions. The plaintiffs rely, in part, upon the provision of the Statute of Frauds, R.S. 25:1--8, N.J.S.A., which reads as follows:

'The consideration of any promise, contract or agreement required to be put in writing, by sections 25:1--1 to 25:1--7 of this title, need not be set forth or expressed in such writing, but may be proved by any other legal evidence.'

The statutory exception contained in R.S. 25:1--8, N.J.S.A., supra, has existed since 1874 and it has been decided that the cases which previously hold the expression of consideration in writing in a contract a requisite of a valid contract under the Statute of Frauds must be read in the light thereof. Nibert v. Baghurst, 47 N.J.Eq. 201, 208, 20 A. 252 (Ch.1890). The Nibert case, supra, has been cited by the former Court of Errors and Appeals as authority for the holding that by the express terms of the Statute of Frauds consideration need not be stated in the memorandum or writing purporting to contain the terms of agreement. Cavanna v. Brooks, 97 N.J.Eq. 329, 334, 127 A. 247, 37 A.L.R. 361 (E. & A.1925).

The question whether a rate of commission may be proved absent specific expression in the writing is in itself of substantially novel impression in New Jersey. The pertinent decisions however direct the conclusion that under the circumstances of this case the Rate of commission need not be set forth in the agreement since the type of consideration is expressed.

In Atlantic Northern Airlines, Inc., v. Schwimmer, 12 N.J. 293, 305, 96 A.2d 652, 657 (1953) this court held:

'Where the statement of a consideration is in itself 'an operative part of a contractual act,--as when in the same writing the parties set out their mutual promises as considerations for each other,' the word "consideration' signifies a term of the contract, and hence the writing alone can be examined'; a recital of consideration received is, like other admissions, disputable so far as concerns the thing actually received, but 'so far as the terms of a contractual act are involved, the writing must control, whether it uses the term 'consideration' or not, and therefore the terms are not disputable.' Wigmore on Evidence, section 2433.'

Further in the Atlantic Northern Airlines, Inc., case, supra, we approved the expression of the law in Baum v. Lynn, 72 Miss. 932, 18 So. 428, 430, 30 L.R.A. 441 (Sup.Ct.1895), that (see 12 N.J. at page 306, 96 A.2d at page 658):

"The true rule is that a consideration recited to have been paid Or contracted for may be varied by parol, while the terms of a contract may not be, though the contract they disclose may be the consideration on which the act or obligation of the other party rests." (Emphasis supplied.)

In the present matters the agreements expressed consideration in the following terms:...

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