Wagner v. Derecktor, 306 N. Y. 386, 118 N. E. 2d 570 (1954)

Dombrowski, Frank, Jr.

English

Digital Commons @ University at Buffalo School of Law

Buffalo Law Review Volume 4 Number 1 Article 29 10-1-1954 Contracts—Conditions Precedent Frank Dombrowski Jr. Follow this and additional works at: https://digitalcommons.law.buffalo.edu/buffalolawreview  Part of the Contracts Commons Recommended Citation Frank Dombrowski Jr., Contracts—Conditions Precedent, 4 Buff. L. Rev. 58 (1954). Available at: https://digitalcommons.law.buffalo.edu/buffalolawreview/vol4/iss1/29 This The Court of Appeals Term is brought to you for free and open access by the Law Journals at Digital Commons @ University at Buffalo School of Law. It has been accepted for inclusion in Buffalo Law Review by an authorized editor of Digital Commons @ University at Buffalo School of Law. For more information, please contact lawscholar@buffalo.edu. BUFFALO LAW REVIEWsix days,5 and' in the meantime, accepted invoices for some ofthe goods and received actual delivery of part of the goods.This latter delivery satisfied the Statute of Frauds,20 since itwas found that the goods were not sent for approval and werenot rierely samples of the subject matter of the sale. -7The finding of an agreement to arbitrate was also supportedby the fact of the retention of the contracts and by the buyernever objecting to their inclusion, and indeed, by his signing oneof the three contracts containing this provision. 28  The fact thattho buyer had never signed two of the contracts, although it wasfound to have accepted them, was found to be without legal ef-fect, since the statute, in terms merely provides that an agreementto arbitrate a future controversy must be contained in a writtencontract, which as shown above, may in certain circumstances beaccepted without signing it. 29The dissenters felt that since no mention of arbitration wasmade at the original meeting, the "contracts" containing an arbi-tration clause were not acknowledgments of a contract, but werecounter-offers adding a provision for arbitration.The interpretation of the arbitration statute seems to besound, since the court declined to go farther than the Legislatureprovided when it modified the common law rule. Arbitration byentrapment need not be feared, because the instances of findingan acceptance of a written contract without a signing of same arerare.Conditions PrecedentThe liability of a party to perform his promise is frequentlymade dependent upon a condition precedent, and, generally, un-less such a condition precedent is performed no liability attaches25. "A party by receiving and retaining under certain circumstances a writtenagreement signed by another party may be bound by the terms of such writing, thoughhis signature does not appear thereon." Murray v. Cunard Steamship Co., 235 N. Y. 162,167, 139 N. E. 226, 228 (1923). See Atlantic Dock Co. v. Leavitt, 54 N. Y. 35 (1873) ;Schnurr v. Quinn, 83 App. Div. 70, 82 N. Y. Supp. 468 (2d Dep't 1903) ; 1 WILLISTON,CoNTRAcrs, § 90A (Rev. ed. 1936).26. PERSONAL PROPERTY LAW § 85.27. Samples are never regarded as part of the subject matter of the sale. Cleve.land Worsted Mills Co. v. J. C. Brownstone & Co., 190 N. Y. Supp. 601 (Sup. Ct. 1921).28. The court mentioned that its own experience proves that arbitration clauses arecommonly used in the textile industry.29. Japan Cotton Trading Co. v. Farber, 233 App. Div. 354, 253 N. Y. Supp. 290(1st Dep't 1931); Exeter Mfg. Co. v. Narrus, 254 App. Div. 496, 5 N. Y. S. 2d 438(1st Dep't 1938) reached this result in interpreting the statute on similar facts. TheCourt of Appeals indicated that it favored this rule in Gantt v. Felipe y Carlos Hurtado& Cia, 297 N. Y. 433, 79 N. E. 2d 815 (1948), but declined, at that time, to expressly sohold.THE COURT OF APPEALS, 1953 TERMand a discharge of the contract but no breach occurs. 30 Where thenon-occurrence of a condition precedent to the promisor's dutyhas been caused by his own act, he is usually deemed to havewaived the condition,3' and a breach of contract results, on thetheory that he has promised expressly or impliedly, not to preventthe occurrence of the condition."2In Wagner v. Derecktor,33 buyers of meat products informedtheir agents that they could secure a contract with some sellers,but must look to the sellers for their compensation. Sales con-tracts were executed with the sellers for the purchase of Mexicanbeef and an ancilliary agreement was made between the buyersagent's and the sellers.3 The sellers did not perform, allegingthat a Mexican embargo on all meat products made compliance im-possible. Plaintiff agents sued the sellers. The trial judge in-structed the jury that if an employment relationship was estab-lished plaintiffs were entitled to judgment, but if the parties en-tered into a joint venture, defendant should win. The AppellateDivision reversed a judgment for plaintiff holding that as a matterof law, a joint venture had been created.35 The Court of Appealsreversing both judgments, held that the agreement made actualearning and receipt of a net profit a condition precedent to plain-tiff's recovery, unless failure to earn such a profit was causedby the defendants. 6 Since the applicable Mexican law was neitherproved by the parties, nor was judicial notice taken of it below,and since counsel had not requested judicial notice by this court,the court declined to exercise the discretionary power vested init," and the case was ordered to retrial.The court, in analzing the agreement made between the par-ties, found it to be similar in import to previous agreements whichwere held to make an earning of a net profit or a fund a conditionprecedent to a party's right to share in it.:' If based on considera-30. Corbin, Conditions in the Law of Contract, 28 YALE L. J. 739 (1919).31. Young v. Hunter, 6 N. Y. 203 (1852); Risley v. Smith, 64 N. Y. 576 (1876);Clark v. West, 137 App. Div. 23, 122 N. Y. Supp. 380 (2d Dep't 1910), aff'd 201 N. Y. 569,95 N. E. 1125 (1911).32. Patterson v. Meyerhofer, 214 N. Y. 96, 97 N. E. 472 (1912).33. 306 N. Y. 386, 118 N. E. 2d 570 (1954).34. "It is our (defendant's) agreement with you (plaintiffs) that the differencebetween the gross proceeds of the Letter of Credit and the applicable expenses shallconstitute 'net profit' and shall be divided equally between yourselves and ourselves,such division to be made at the time the proceeds of the Letter of Credit are madeavailable to us."35. See generally, Nichols, Joint Ventures, 36 VA. L. RZM. 425 (1950).36. Young v. Hunter, supra note 31; 2 CLAmm, NEW YORK LAW OF CONTRAcTS,§ 961.37. C. P. A., § 344-a; Pfleuger v. Pfleuger, 304 N. Y. 148, 106 N. E. 2d 495 (1952).38. Illum, Inc. v. American Mach. & Foundry Co., 226 App. Div. 5, 234 N. Y.Supp. 161 (1st Dep't 1929) ; Hart v. L. D. Garrett Co., 93 App. Div. 145, 87 N. Y. Supp.574 (1st Dep't 1904).BUFFALO LAW REVIEWtion, such an agreement is valid and binding. Since there is noallegation that a net profit was earned, only defendant's ownwrong resulting- in non-performance would entitle plaintiff to re-cover. If on retrial it is found that the embargo prevented per-formance, defendant is entitled to judgment, since he may provenon-performance was not caused by himself.The case indicates with considerable force the distinction be-tween the failure of the occurrence of an event deemed a conditionprecedent and the failure to perform a promise in a contract. Al-though the rule has been subject to criticism,39 New York Courtshave continued to hold that the imposition of a foreign embargowill not prevent a breach of a contractual duty, even where itrenders performance impossible.40Employment AgreementIn Wilson Sullivan Co. v. International Paper Makers RealtyCorp.,41 a building owner entered into a written agreement with arealty firm whereby the former "employ[ed] 'and appoint[ed]"the latter as exclusive renting and managing agent of the build-ing. The agreement was to continue until a stipulated time,and if not then terminated, it would continue from year toyear until terminated by either party at the end of any extendedyearly term by giving of thirty days prior notice in writing.Three months after an annual renewal period began, the ownergave notice of his intention to sell the building. The agent suedfor damages resulting from an alleged breach of contract.The granting of authority to an agent is often accompanied bya contract with the agent for services. The parties are principaland agents; they are also contractors. If this dual relationshipis kept in mind, the legal effects of a revocation are clear.2  Al-though suitable notice by the principal revokes the agent's power,the principal cannot revoke the contract.43The court, in the instant case, observing that it is limited togiving effect only to the parties express intent,4 held (4-3) that39. 6 WILLISTON, CONTRACTS, § 1938, (Rev. ed. 1938) ; RESTATEMENT, CONTRACTS,§ 46L40. Richards v. Wreshner, 174 App. Div. 484, 158 N. Y. Supp. 1129 (1st Dep't1916); Vanetta Velvet Corp. v. Kakunaka & Co., 256 App. Div. 341, 10 N. Y. S. 2d270 (1st Dep't 1939).41. 307 N. Y. 20, 119 N. E. 2d 573 (1954).42. FERsox, PRINcIPLxs OF AGENCY § 189 (1954) ; ECHEM, OUTLINES oF AGENCY§ 23 (4th ed. 1952).43. Star Fire Insurance Co. v. Ring, 118 App. Div. 107, 103 N. Y. Supp. 137(1st Dep't 1907) ; 1 WILLISTON, CONTRACTS § 279 (Rev. ed. 1938).44. Friedman v. Handelman, 300 N. Y. 188, 194, 90 N. E. 2d 31, 34 (1949) ; Rosen-thal v. American Bonding Co. of Baltimore, 207 N. Y. 162, 168-169, 100 N. E. 716, 718,(1912) ; 3 WILLISTON, op. cit., § 610.

Contracts—Conditions Precedent

https://digitalcommons.law.buffalo.edu/cgi/viewcontent.cgi?article=4056&context=buffalolawreview

Contracts—Conditions Precedent

Abstract

Similar works

Full text

Available Versions

Digital Commons @ University at Buffalo School of Law