known as a "switching," whereby a party having sugar ready for delivery is willing to exchange it for sugar to arrive later. By this practice those who need the goods at once are able to get them at a fixed price, mutually agreeable, without going into the market, and the return of a similar amount of goods at the same price is insured.

De Waal delivered his 10,000 bags of sugar to the defendants upon arrival and the defendants paid him for it. But when the defendants' 10,000 bags arrived on a later steamer they refused to deliver it to

sugar

De Waal. The price of by that time jumped to 512 cents a pound, and De Waal alleged that he lost $105,000 by the transaction.

When De Waal brought suit for this amount he was met with the defense of the statute of frauds. He advanced the argument that his delivery of 10,000 bags to the defendants constituted a payment for the sugar which the defendants agreed to deliver, and made the defendants' obligation binding.

The court held that this argument was not sound, saying: "If that sale (by De Waal ) had been at a price less than the market price a different question might arise, which it is not necessary here to consider; but when that sale was made at the market price at which the goods could have been bought by the purchaser from other vendors, or at which the goods could have been sold to other purchasers, it is inconceivable that such sale could in any way be deemed "the giving of something in earnest to bind the defendants' contract,' or "in payment thereof.'"

It was

held that this was not such a payment as would satisfy the statute of frauds, and that the broker could, therefore, have no damages from the defendant. The court said: "The appellant's (broker's) (broker's) investigations, however expensive they may have been to him, could in no sense be anything of value given to the other parties."

The case of Hewson v. Peterman Mfg. Co., Wash., 136 Pac. Rep. 1158, also holds that to constitute a payment something of value must pass to the seller.

Hewson entered into a verbal contract with the Peterman Mfg. Co., by which the company agred to employ him as secretary and treasurer at a salary of $150 a month. The company also agreed to increase its capital stock and to sell him 50 shares of the increase at par value, $100 per share. Hewson resigned the position which he held at the time and tendered to the company his services and $5,000 in cash to pay for the stock. The company rejected both and refused to deliver the stock,

The question was whether in resigning from his work and tendering his services and the money to the company Hewson had made a part payment so as to rescue the contract from the operation of the statute of frauds. The court held that those acts on the part of Hewson did not constitute a part payment.

Said the court: "The statute obviously contemplates that something of value shall pass to the promisee (seller); that is, that something of value must be really given and received toward payment. There must be an actual payment of money or something of value in the eye of the law."

Therefore, it was held that the contract was invalid and that Hewson could not recover damages because of the company's failure to carry out its agreement.

Another case on this point is Manufacturers Light & Heat Co. v. Lamp, Pa., 112 Atl. Rep. 679.

The defendants, who were the owners of gas leases, agreed to sell to the plaintiff company gas from wells, which were then being drilled, at a specified rate. The company constructed a pipe line to the field in which the wells were located in order to enable it to handle the product of the wells. The defendants refused to carry out their contract, and the company sought, by an action in equity, to compel them to do

9

idated by the statute of frauds. The court held that this was no part payment, saying:

"The building of the pipe line was for the benefit of the company and was to be used by it in transporting gas from the entire field in which the defendants, as well as others, were operating. The cost of the line was not to be credited as part of the price to be paid for the product when finished; its construction was merely a necessary act of preparation, made by the company, so that it could utilize the property purchased when delivered. This was not such a payment as to take the contract out of the statute."

A case in which it was held that there had been a valid part payment in property is W. R. Grace & Co. v, Nagle, 275 Fed. Rep. 343.

W. R. Grace & Co. had many tons of steel slabs which it wished to have turned into steel plates. L. F. Nagle, doing business as the Nagle Steel Co., was a manufacturer of steel plates. An arrangement was entered into by which W. R. Grace & Co. was to ship slabs to Nagle at one price and Nagle was to convert them as ordered into steel plates and bill the plates to W. R. Grace & Co. at another price.

Pursuant to this arrangement Grace & Co. shipped 400 tons of steel slabs to Nagle. The company later gave directions for the making of 76 tons of plates, but refused to give directions as to the conversion of the balance of the slabs into plates.

Nagle brought suit against Grace & Co. and was allowed to recover damages on the theory that the de

livery of the slabs to Nagle had been a part payment sufficient to make the contract valid under the statute of frauds.

Here the court said: "There is no sort of doubt that Grace made a part payment for the plates by delivering 400 tons of slabs, and it is equally certain that Grace accepted from Nagle 76 tons of plates made out of some of those slabs. This was enough."

In Weir v. Hudnut, Ind., 18 N. E. Rep. 24, the plaintiff sold to the defendant by a verbal contract 5,000 bushels of corn at a stipulated price. As part of his agreement the defendant furnished and delivered to the plaintiff the sacks necessary to be used in transporting the corn. The use of the sacks was considered as part of the purchase price of the corn. If the defendant had not provided the sacks the price of the corn would have been greater.

The plaintiff endeavored to deliver the corn, but the defendant refused to accept and pay for it. So the plaintiff sued for damages. It was held that the delivery of the sacks constituted a part payment within the meaning of the statute of frauds and that the defendant was liable on his contract.

The court said: "They agreed what should be taken in part payment, and what was agreed upon was in part actually paid. What the parties agree shall constitute payment the law will adjudge to be payment. It is competent for parties to designate by their contract how, and in what, payment may be made. It is by no means true that payment can only be made in money; on the contrary, it may be made in prop

erty or in services. In short, whatever the parties agree shall constitute payment will be regarded by the courts as payment, provided the thing agreed upon is of some value." § 12. Payment by check

A check given in part payment for goods has been held to be a sufficient compliance with the statute. Hunder v. Wetsell, 84 N. Y. 549, where it was said: "It is quite true that a check, in and of itself, is not payment, but it may become so when accepted as such and in due course regularly paid. While not money, it is a thing of value, and is money's worth when drawn against an existing deposit which remains until the check is presented."

But it is different where the drawer stops payment of his check before the same is paid by the drawee bank. Hessberg v. Welsh, 147 N. Y. Supp. 44. In this case, Welsh bought some goods from Hessberg and gave a check for $50 on account of the purchase price. But before the check was presented he directed his bank not to pay it.

Hessberg sued to recover the purchase price. It was held that, under the circumstances, the giving of the check was not a part payment. Judgment was, therefore, given in favor of the defendant, Welsh.

Where the seller receives the buyer's check in part payment, but does not collect, it and afterwards tears it up and refuses to go on with the contract, the question whether there has been a part payment depends on whether it was expressly agreed that the check was to be taken as an absolute payment. Groomer v. McMillan, Mo., 128 S. W. Rep. 285.