Large v. Wire Wheel Corp.

223 A.D. 134, 227 N.Y.S. 449, 1928 N.Y. App. Div. LEXIS 6149
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMarch 14, 1928
StatusPublished
Cited by8 cases

This text of 223 A.D. 134 (Large v. Wire Wheel Corp.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Large v. Wire Wheel Corp., 223 A.D. 134, 227 N.Y.S. 449, 1928 N.Y. App. Div. LEXIS 6149 (N.Y. Ct. App. 1928).

Opinion

Clark, J.

This action was brought to recover damages for the breach of an alleged oral contract claimed to have been made by defendant, acting through its vice-president and general manager, and the Johnson Rim and Parts Company, a corporation formed subsequently to the making of the alleged contract to purchase of the Johnson Company 750 detachable rims for automobile wheels per day until such time as the rims defendant then had on hand or had contracted to purchase were exhausted, and that after such time it would purchase of the Johnson Company the entire output of the plant which it was to erect, buying 1,500 rims per day during the period covered by the Johnson patent for said rims, which would be seventeen years.

The contract was entirely oral and its only basis is found in certain conversations between Oscar J. Rhode, vice-president and general manager of the defendant, and Preston T. Large and Hamilton R. Large, two of the organizers of the Johnson Rim and Parts Company, and sons of the plaintiff.

These conversations took place before the incorporation of the Johnson Rim and Parts Company, during the months of June and July, 1919.

The defendant was then and had been for some time a manufacturer of wire wheels for use upon automobiles.

Preston and Hamilton Large had come in contact with Charles E. Johnson, who had worked out an improvement in the rim of an automobile wheel, especially adapted for use with wire spokes. Preston and Hamilton Large at this time were in negotiations with Johnson for the purchase of his invention and of the patents on the same for which he had already made application. In fact, the acquisition of those rights by Messrs. Large, was then practically assured. The invention had already been brought to the attention of Mr. Rhode by Johnson himself. Rhode was impressed with Johnson’s improvement, and without question encouraged Preston and Hamilton Large to go into the business of manufacturing rims [136]*136under the Johnson patent, and assured them of his aid. Preston and Hamilton Large had under consideration the incorporation of the company to manufacture such rims, the co-operation of other members of their family in the business, the building of a factory and the organization of the operating force.

While this project was being discussed with Mr. Rhode according to the evidence given by Preston and Hamilton Large, Rhode said to them that the defendant would take from the company to be organized by the members of the Large family 750 rims a day until such time as the supply of other types which the defendant had on hand and on order was exhausted, and then after that defendant would take the entire output of the factory, that is, from 1,000 to 1,500 rims per day for the life of the Johnson patent, and that the defendant would take these rims at a price which would be the same as was charged for the rim of a certain other manufacturing concern which was named.

The patent was issued in December, 1920. The Johnson Rim and Parts Company, Inc., was incorporated in August, 1919. Preston and Hamilton Large, their mother, the plaintiff and two other brothers were directors. A factory was built and the building was completed in March, 1920. In May the Johnson Company was ready to make its first rims. It first supplied to the defendant a limited number of rims for experimental purposes. In August, 1920, the defendant gave the Johnson Company a written order for 11,000 rims. These were delivered over a period from August, 1920 to June, 1921, and were all paid for by the defendant. The rim proved unsatisfactory in use, and defendant declined to buy more rims. Later the Johnson Company was adjudicated a bankrupt, and the trustee in bankruptcy assigned to this plaintiff the demands of the bankrupt against the defendant for breach of the comtract to purchase rims. The claim for damages does not grow out of the order for 11,000 rims. They were fully paid for by defendant.

Recovery has been awarded plaintiff for a breach of the executory promise to take or purchase rims under a verbal contract which the plaintiff claims was made for the Johnson Rim and Parts Company by two of its incorporators before its incorporation.

Although the contract is alleged in the complaint substantially in the form given above, on the trial plaintiff urged a recovery only in respect to that part of Rhode’s alleged promise relating to the rims which were to be taken before those of other types on hand and on order should be exhausted.

The plaintiff thus seeks to cut the promise into two contracts, one to last until the exhaustion of the rims of other types, and the [137]*137other to begin upon the exhaustion of such other rims and to last throughout the life of the patent.

The defendant not only denies that any such promise was made on its behalf, but sets up as a defense tho provisions of the Statute of Frauds making an agreement, promise or undertaking void which by its terms is not to be performed within a year from the making thereof, unless it or some note or memorandum thereof be in writing and subscribed by the party to be charged therewith, or by his lawful agent. (Pers. Prop. Law, § 31, subd. 1.)

The defendant also urges, among other things, that Rhode was without authority to bind the defendant by such a promise as it is claimed he made.

If defendant had contracted to purchase at a definite price a definite number of rims per day until such time as rims of other types which he might have on hand, or on order, on a certain date were exhausted, there would not have been an agreement which by its terms was not to be performed within a year from the making thereof. In such case the terms of the agreement would contemplate no certain length of time for the completion of the contract because the exhaustion of the rims of other types might occur almost immediately, or only after a very long period. The period would be indefinite, and by the terms of the contract not necessarily longer than one year. (International Ferry Co. v. Am. Fidelity Co., 207 N. Y. 350; Kent v. Kent, 62 id. 560.) Even if we assume that was part of Rhode’s promise it was not the whole of it.

Equally important is the promise thereafter to take the entire output of the factory from 1,000 to 1,500 rims per day during the life of the patent. As the patent was not then issued this contemplated a period which would not expire for more than seventeen years from the day when the promise was made. (See U. S. R. S. § 4884; now U. S. Code, tit. 35, § 40.)

If a patent is issued its life is not uncertain, but continues during the statutory period. If it is declared invalid it has had no fife at all. So the life of a patent is a definite period, and this part of the alleged promise of Rhode was clearly within the Statute of Frauds.

There were not two contracts; at best there was but one contract. When deliveries were made under it payment was earned, and as in the case of any continuous contract for service or the delivery of goods, upon partial performance it would have been severable so as to entitle the performing party to recover for goods delivered. But as long as it was executory, as in this case, it was not divided and not separated, but was either good or bad as a whole.

[138]*138“ A contract though within the statute as to some portion of the performance promised by the defendant, may not be as to the remainder.

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Bluebook (online)
223 A.D. 134, 227 N.Y.S. 449, 1928 N.Y. App. Div. LEXIS 6149, Counsel Stack Legal Research, https://law.counselstack.com/opinion/large-v-wire-wheel-corp-nyappdiv-1928.