
    George M. C. Ryers, Assignee. App’lt, v. David S. Tuska, Resp’t.
    
      (New York Common Pleas, General Term,
    
    
      Filed June 1, 1891.)
    
    Statute op frauds—Not to be annulled by rules op stock exchange.
    In an action brought to recover on a contract for the sale of stocks, when no note or memorandum in writing was subscribed by the parties, no part of the purchase price paid and none of the property delivered, but both parties were members of a stock exchange whose constitution and by-laws provided that “any member who may fail to comply with his contracts, or who shall become insolvent, shall be suspended until he has settled with his creditors,” and that “ all offers to buy and sell stocks shall be binding,” Held, that such a contract is void under the statute of frauds, and no rule or by-law created by any association of individuals can circumvent or annul the statute.
    Appeal by plaintiff from a judgment of the eighth district court.
    Action by George M. G. Byers, as assignee oi Franklin B. Torrey, against David S. Tuska, in which the following opinion was filed by Jeroloman, J.: “ This case is brought to recover $127.10 on an alleged stock transaction. It appears by the evidence that on the 19th day of September, 1888, one Franklin B. Torrey requested the defendant in this action to purchase for him, through the name of. Norman J. Murray, thirty shares of the common stock of the Chicago, Milwaukee & St. Paul Bailway, at 64§ per share, amounting to $1,931.35. Mr. Torrey states that he made a memorandum on his book of the transaction, and that the defendant Tuska made a memorandum on his book also. There is no. evidence in the case showing that Tuska subscribed his name to any memorandum of that alleged transaction, and delivered the same to either Torrey or Murray. The statute of frauds provides that every contract for the sale of any goods, chattels, or things in action, for the price of $50 or more, shall be void, unless a. note or memorandum of such contract be made in writing, and be subscribed by the parties to be charged thereby, or unless the buyer shall at the time pay some part of the purchase money. In this case no memorandum of the contract was subscribed by the defendant Tuska, nor did Torrey pay any part of the purchase money to the defendant, Tuska. No part of the purchase money was paid, none of the property was delivered, and there was no note or memorandum of such contract made and signed between the parties. Such a contract the statute declares to be void, and no by-law or constitution created or established by any association or society of individuals -can circumvent or annul an express statute. No rule or by-law can be established by the Consolidated Exchange to take this case out of the statutes. The by-laws and constitution of an association, incorporated or otherwise, so far as the members are concerned, -can -only punish them by fines and penalties, and ex-pel them, and deny unto them all rights and privileges -of -the association provided by their constitution and bylaws. Article 15, § 1, of the ¡constitution of the 'Consolidated Exchange provides: 1 Any member who may fail to comply with his contracts, or who shall become insolvent, shall be suspended until he has settled with his creditors.’ So far as the association is concerned, that is binding between the members, and the courts will give full force and effect to it; but, wherein their constitution and by-laws conflict with <or assume to override express provisions of law, in that case the courts take no cognizance of' such constitution and by-laws. Until a paper writing is signed by the party to be charged thereby, and duly delivered, it does not become a - contract, within the statute-of ¡frauds. In the-case of Johnson v. Brook, 31 Miss., 17, the court say: ‘We have been able to find no case in which a writing signed by a party, and kept in ,his possession, without -delivery to the -other, ■has 'been held to be a compliance -with 'the statutes.’’ Also, in the case of Freeland v. Charnley, 80 Ind., 134, the court say,: ‘ Until delivery, there is not a spark of vitality in the instrument; it is -no '-more -than a mere piece -of paper, -covered with written or printed characters,-and possesses no more force than a poem or an historical essay, -locked in the desk «of the person described as -grantor.-’ Judgment is therefore rendered in favor of the defend■ant, dismissing the.complaint, with seven dollars-costs."
    
      Joseph M. Williams, for app’lt; Benjamin Tuska, for resp’t.
   Bookstaver, J.

—We have examined this ¡case with • care, but do mot find that the justice committed any error «either in his findings of fact or Ms application of the law to the -facts as found, and deem it necessary to add but little to what he has said concerning'the law governing the case.

It is clear there was no memorandum made-or signed by the parties -sufficient to -take the -transaction out -of the -statute of frauds at the time the verbal agreement was made. It is true that later in'the day the defendant handed up a notice that he would havO'to suspend, which was signed by him ; but ‘the evidence was entirely insufficient to warrant "the justice in finding that the memorandum Showing his contracts for the day, which was handed to the clearing ¡committee, was made by him or given to the committee by his authority. Consequently the case cannot be brought within Peabody v. Speyers, 56 N. Y., 230.

The contention that although the contract was void-under the statute of frauds, yet that it was binding between the parties under the constitution and regulations of !the-Consolidated Exchange, is based upon § 1 of art. III. of the by-laws governing dealings in railroad and -other securities, which provides that “ all offers to buy and sell securities shall be binding.” But this by-law was not introduced in evidence, and even if it had been, we do not think it would have availed the appellant.

In Shapley v. Abbott, 42 N. Y., 443, Earl, Ch. J., delivering the opinion of the court, said: “A party may, undoubtedly, without trenching upon public policy, waive the defense of usury, or -of the statute of frauds, or of the statute of limitations, by omitting to set up the defense when sued. And he may waive his statute exemption by turning out exempt property when the officer comes with the execution. But no case has occurred to me in which a party can in advance make a valid promise that a statute founded in public policy shall be inoperative. ’’

The same case is also conclusive of the appellant’s contention that the defendant is estopped from pleading the statute of frauds. If there is an estoppel at all, it is an estoppel in pais. This is used to preclude a party from obtaining by evidence that which he has before expressly or positively denied, or disproving that which he has expressly or tacitly admitted, when the other party has acted on the faith of the admission or denial in such a man* ner that he will be injured unless the same is held conclusive. An admission by a person as to the law, or as to the legal effect of his contract, is never held to estop him. It is also necessary that the fact should be one of which the party claiming the benefit of the estoppel was ignorant. There can be no such contention in this case. Both parties knew all the facts of the transaction at the time it occurred, and the admission, if any, was in regard to the law and not the facts.

The contention that the contract of sale had been executed and the statute of frauds could not be pleaded against it, as well as the contention that the defendant is liable for money paid out and expended at his request, are both founded upon the theory that the defendant was bound by the constitution and by-laws, and that the action of the proper committee of the Consolidated Exchange in completing the contract had a valid basis in law. But, as before shown, this was not the case, and therefore they cannot prevail.

The judgment should be affirmed, with costs.

Bischoff, J., concurs.  