Radix Organization, Inc., and MacY International Corp. v. Mack Trucks, Inc., and Mack Trucks Western Hemisphere Trade Corporation, 602 F.2d 45, 2d Cir. (1979)

602 F.
2d 45
RADIX ORGANIZATION, INC., and Macy-Cutler

International
Corp., Plaintiffs-Appellants,
v.
MACK TRUCKS, INC., and Mack Trucks Western
Hemisphere Trade
Corporation, Defendants-Appellees.
No. 1051, Docket 79-7133.
United States Court of Appeals,

Second Circuit.
Argued May 14, 1979.
Decided July 5, 1979.
Michael A. Lacher, P.C., New York City (Jill C. Lesser, New York City,
of counsel), for plaintiffs-appellants.
Jeffrey N. Gordon, New York City (Clearly, Gottlieb, Steen & Hamilton,
New York City, George Weisz, New York City, of counsel), for
defendants-appellees.
Before OAKES and VAN GRAAFEILAND, Circuit Judges, and
CARTER, District Judge.*
VAN GRAAFEILAND, Circuit Judge:
On May 5, 1977, appellants commenced this action seeking money damages

for appellees' breach of an oral contract. The complaint alleged that on April 1,
1975, "plaintiffs and defendants entered into an agreement whereby at the
specific instance and request of the defendants, the plaintiffs undertook to make
arrangements for the lease financing of a quantity of motor buses To be
manufactured and sold by defendant to plaintiffs for the lease-sale by the
plaintiffs of the buses to an agency of the municipality of Santo Domingo, the
Dominican Republic." (emphasis supplied).1 This allegation was denied by
appellees, who also raised the affirmative defense of the Statute of Frauds.
Judge Metzner of the United States District Court for the Southern District of
New York granted appellees' motion for summary judgment because of the
absence of any contract document satisfying the requirements of the Statute.
We affirm.
2
Section 2-201(1) of the Uniform Commercial Code, adopted by New York in

1962, provides in substance that a contract for the sale of goods for the price of
$500.00 or more is not enforceable unless an authorized agent of the defendant
has signed a writing indicating the existence of the contract. Appellants do not
contend that such a writing exists in this case. They argue instead that, so far as
they were concerned, the alleged transaction did not involve a sale within the
meaning of the section but only the performance of services. This argument is
squarely contradicted by the allegations of the complaint and by appellants'
statement of material facts made pursuant to Rule 9(g) of the United States
District Court for the Southern District of New York. In their Rule 9(g)
statement, appellants assert that they entered into an oral agreement with
appellees whereby they were employed to facilitate a transaction between
appellees and a municipal authority of Santo Domingo for the sale of buses by
appellees to the municipal authority. The statement continues:
3
Because
the defendants would not finance the transaction themselves, the transaction
was to be structured as a sale-lease. Plaintiffs, it was agreed, would obtaining
financing for the transaction from a third-party lender and then would act as an
intermediary in the sale-lease, purchasing the buses from Mack and leasing them to
the municipal authority as a part of defendants' plan to consummate the transaction.
4
Approximately five months after the alleged making of the oral agreement,
appellants formed a Panamanian corporation, Radix-Cutler Leasing, S.A., "as
the vehicle for (appellants') participation in the transaction which is the subject
of the complaint herein." (Appellants' Rule 9(g) Statement, P 5). They now
assert that the sale covered by the oral contract was to be made to Radix-Cutler,
not to them, and that therefore section 2-201(1) is not applicable.2 This
argument does not withstand inspection. As of April 1, 1975, Radix-Cutler, a
corporation not yet in existence, could neither contract for itself nor appoint an
agent to contract on its behalf. 1 Fletcher, Cyclopedia of the Law of Private
Corporations 205 (1974). If an oral contract for the sale of buses was entered
into on that date, the parties to the agreement were appellants and appellees.
Appellants' argument, made for the first time in this Court, that the alleged oral
contract is enforceable under section 2-201(3)(b) is equally without merit.
Section 2-201(3)(b) permits enforcement of an oral contract if the defendant
admits in his pleading, testimony, or otherwise in court that the contract was
made. Appellants contend that appellees made such an admission in their Rule
9(g) statement. Paragraph 10 of that statement begins, "(t)he following facts are
alleged by plaintiffs and assumed solely for purposes of this summary judgment
motion." There follows a recital of the allegations in paragraphs 6 through 11
and 13 through 15 of appellants' Rule 9(g) statement, including appellants'
allegations concerning the making of an oral contract. By this recital, appellees
did not admit the making of a contract. They simply repeated appellants'
allegations as a predicate for their own defense of the Statute of Frauds. The
assertion of that defense would be somewhat meaningless in the absence of an
assumed-for-the-argument oral agreement. See Federal Advertising Agency,
Inc. v. Rubber & Celluloid Harness Trimming Co., 172 N.Y.S. 186 (App. Term
1st Dep't 1918). In any event, an admission under section 2-201(3)(b) is not
enforceable beyond the quantity of goods admitted, and paragraph 10 of
appellees Rule 9(g) statement contains no reference whatever to quantity.
6
Pursuing their argument under section 2-201(3)(b), appellants assert that they
are entitled to proceed to trial in order that they may attempt to secure from a
defense witness an admission that an oral contract was made. Appellants have
had ample opportunity for full discovery, and there is no indication that such an
admission has been made or is likely to be made. Indeed, appellees' consistent
position has been that there was no contract. Appellants' unsubstantiated hope
that, if permitted to go to trial, they can turn appellees' denials into admissions
is not sufficient to preclude summary judgment. See Modern Home Institute,
Inc. v. Hartford Accident and Indemnity Co., 513 F.2d 102, 110 (2d Cir. 1975).
Concluding, as we do, that section 2-201 of the Uniform Commercial Code

precludes appellants' recovery, we need not consider Judge Metzner's
alternative ground for dismissal, section 5-701(a)(10) of the New York General
Obligations Law. That statute requires that contracts to pay compensation for
services rendered in negotiating a loan be in writing.
Appellants' final argument for reversal is that appellees are equitably estopped
from relying upon the Statute of Frauds because of their alleged unconscionable
conduct in inducing appellants to rely on the oral agreement and to incur
substantial expense in the consequent belief that a binding commitment had
been made. Appellants did not allege estoppel in their pleadings, See
Fed.R.Civ.P. 8(c), and did not assert it in the district court. We will not reverse
a summary judgment on the basis of arguments not presented below unless our
failure to do so will result in a possible miscarriage of justice. Adato v. Kagan,
599 F.2d 1111, 1116 (2d Cir. 1979); River Plate and Brazil Conferences v.
Pressed Steel Car Co., 227 F.2d 60, 63 (2d Cir. 1955). Although appellants
have incurred out-of-pocket expenses in their efforts to bring the Santo
Domingo deal to fruition, the possibility that a miscarriage of justice will result
from affirmance is not sufficiently apparent that it warrants a departure from
our established rule. See Philo Smith & Co., Inc. v. Uslife Corp., 554 F.2d 34,
36 (2d Cir. 1977).
9
Affirmed.
Hon. Robert L. Carter of the United States District Court for the Southern
District of New York, sitting by designation
Appellees were attempting to sell some buses to Santo Domingo, but the deal
was in danger of collapsing because Santo Domingo did not want to pay cash
and appellees did not want to finance the transaction. After appellants had made
arrangements for outside financing, Santo Domingo decided to pay cash and
purchased the buses from appellees' distributor in Venezuela
"The solution plaintiffs devised was to create a new Panamanian corporation,

Radix-Cutler, Leasing, S.A. (Radix-Cutler). Radix-Cutler would buy the buses
from Mack with a loan obtained for Radix-Cutler by the plaintiffs from
Manufacturers Hanover Leasing Corporation (Manufacturers). Radix-Cutler
would then lease the buses to Santo Domingo." (Appellees' brief at 12)

Radix Organization, Inc., and MacY International Corp. v. Mack Trucks, Inc., and Mack Trucks Western Hemisphere Trade Corporation, 602 F.2d 45, 2d Cir. (1979)

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602 F.

RADIX ORGANIZATION, INC., and Macy-Cutler

United States Court of Appeals,

On May 5, 1977, appellants commenced this action seeking money damages

Section 2-201(1) of the Uniform Commercial Code, adopted by New York in

Concluding, as we do, that section 2-201 of the Uniform Commercial Code

"The solution plaintiffs devised was to create a new Panamanian corporation,

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