Full opinion text
OPINION EDELSTEIN, Chief Judge: I. INTRODUCTION Plaintiff commenced this action on February 6, 1964 by filing a complaint charging defendant with wrongfully excluding him from a joint venture or partnership. Plaintiff contends that he and defendant entered into an oral agreement in April, 1963 to acquire and thereafter operate as a joint venture the assets of the Potentiometer Division of the DeJur-Amsco Corporation [hereinafter referred to as DeJur]. The complaint further alleges that the parties agreed that if plaintiff would use his “peculiar, unique and close relationship with DeJur Amsco Corporation and its officers and directors to initiate, influence, arrange and facilitate the said acquisition, defendant would supply the entire cash consideration.” Additionally, plaintiff asserts that the parties agreed to operate their joint venture through a corporation to be formed in Connecticut, and that they agreed that the Corporation would be called Samarius, Inc. Plaintiff alleges that defendant, after long and protracted negotiations, eventually acquired the DeJur Potentiometer Division on or about September 30, 1963; that plaintiff was excluded from the acquisition; and that defendant thereby breached their joint venture agreement. The first cause of action seeks one-half of all sums received by defendant through his acquisition and operation of the DeJur Potentiometer Division. The second cause of action seeks recovery of one-half of the value of the Potentiometer Division or $25,000.00 at plaintiff’s option, for services performed by plaintiff in initiating and arranging for defendant’s acquisition. Upon agreement of the parties an order was entered pursuant to Fed.R.Civ. P. 42(b) providing for a separate trial on the issue of liability. At the same time all discovery sought by plaintiff with respect to the operations of Samarius, Inc., which was aimed at eliciting damages, was held in abeyance pending determination of the liability issue. Thereafter, on plaintiff’s motion this action was assigned to the commercial non-jury calendar for purposes of trial on the issue of liability. After much delay, trial was commenced on April 15, 1970 and was concluded on the following day. Decision was reserved. The parties were instructed to prepare post-trial memoranda and to submit proposed findings of fact and conclusions of law. The court was provided with these items by midsummer 1970. II. MOTION FOR SUBSTITUTION While this case was sub judice, defendant served a suggestion of death pursuant to Fed.R.Civ.P. 25(a)(1), indicating for the record that the plaintiff, Harry Yonofsky, died on October 25, 1970. On February 25, 1971, Charles Winter, in his capacity as executor of plaintiff’s estate, moved to be substituted as party plaintiff. Since the time to move for substitution under Rule 25(a)(1) had expired, Winter also moved for an enlargement of time in which to make the motion. Fed.R.Civ.P. 6(b) (2). Defendant opposed the motion for substitution on the ground that it was untimely. Rule 25(a)(1) provides as follows: If a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties. The motion for substitution may be made by any party or by the successors or representatives of the deceased party and, together with the notice of hearing, shall be served on the parties as provided in Rule 5 and upon persons not parties in the manner provided in Rule 1 for the service of a summons, and may be served in any judicial district. Unless the motion for .substitution is made not later than 90 days after the death is suggested upon the record by service of a statement of the fact of the death as provided herein for the service of the motion, the action shall be dismissed as to the deceased party, [emphasis added]. In his papers opposing the motion for substitution, defendant states that, “The motion to substitute plaintiff’s Executor is dated 118 days following the serving and filing of the suggestion of plaintiff’s death upon the record.” From this he concludes that the motion is untimely and requests that the motion be denied and that the action be dismissed as provided for in Rule 25(a). In support of this position, defendant relies on Johns Hopkins University v. Hutton, 297 F.Supp. 1165 (D.Md.1968) and Graham v. Pennsylvania Railroad, 119 U.S.App.D.C. 335, 342 F.2d 914 (1964), cert. denied, 381 U.S. 904, 85 S.Ct. 1446, 14 L.Ed.2d 286 (1965). In the Johns Hopkins case four of the original defendants had died after the commencement of the action. Suggestions of death were duly filed with respect to each of the deceased defendants. As to two of the defendants no motion for substitution was made by anyone connected with the litigation. The court dismissed the complaint with respect to those defendants. Regarding the other two deceased defendants, motions to substitute their executors were made and the executors concerned were duly served with the motions for substitution. There was no opposition to these motions. The court, therefore, entered an order substituting the executors for these deceased defendants. In Graham the United States Court of Appeals for the District of Columbia Circuit, with one member of the panel dissenting, affirmed per curiam the dismissal of an action with respect to a deceased plaintiff by the district court. The lower court predicated its dismissal on the ground that plaintiff had failed to comply with Rule 25(a)(1) by not moving for substitution within the ninety-day period provided for after a suggestion of death is filed. On appeal the issue was whether the district judge had abused his discretion in refusing to extend the time in which a motion for substitution could be made. Plaintiff’s attorney moved for an enlargement of time under Rule 6(b). Upon a showing of “excusable neglect,” Rule 6(b)(2) permits a party to move for enlargement of a time period that has expired. In Graham plaintiff’s attorney predicated his “excusable neglect” argument on two grounds: (1) that he was unfamiliar with the 1963 Amendment to Rule 25, which mandated the ninety-day period for filing a motion for substitution; and (2) that he was engaged in the preparation of seven appellate proceedings and one extensive trial during the period after he filed the suggestion of death. After a hearing the district court refused to extend the time to move for substitution and dismissed the action with regard to the deceased plaintiff. In affirming the decision below, the Court of Appeals found that the trial judge had not abused his discretion. Responding to these contentions, plaintiff’s executor asserts that the suggestion of death served by defendant was defective and that the application for enlargement under Rule 6(b)(2) is meritorious. Plaintiff’s executor contends that the suggestion of death served by defendant was defective for two reasons. First, because it was only served on plaintiff’s attorney and secondly, because it failed to identify plaintiff’s representative. The two points are related. In relevant part Rule 25(a)(1) provides that a “motion for substitution may be made by any party and, together with the notice of hearing, shall be served on the parties as provided in Rule 5 and upon persons not parties in the manner provided in Rule 4 for the service of a summons .” Additionally, it provides for the service of the suggestion of death in the same manner as provided for with respect to the motion for substitution. Consequently, plaintiff’s executor contends that defendant should have served the suggestion of death on someone beside plaintiff’s former counsel. The “someone,” however, was not identified. In general, the executor or administrator of a deceased party’s estate is the individual substituted and upon whom service is effected. In the case at bar, it was defendant who suggested the death of plaintiff. He did so only two days after the plaintiff died. Under these circumstances it would be difficult for defendant to know whom else to serve beside plaintiff’s former counsel. With regard to the second point —i. e., that the suggestion of death was defective for failure to identify plaintiff’s representative — the executor cites Rende v. Kay, 134 U.S.App.D.C. 403, 415 F.2d 983 (1969). In that case a suggestion of death was filed by the defendant’s counsel indicating for the record that the defendant had died. The suggestion of death did not identify the deceased defendant’s representative. Reversing the court below, the Court of Appeals held that the failure to name a successor or representative for the deceased defendant rendered the suggestion of death ineffective for purposes of triggering the ninety-day requirement. It should be noted, however, that in Rende, the attorney who filed the suggestion of death represented the deceased party, and, therefore, was in a position to know who would be the decedent’s representative. It is precisely for this reason that the court felt that defendant’s counsel was under an obligation to name a successor for the deceased party. Otherwise, the surviving party would be under the “burden of locating the representative of the [deceased party’s] estate within 90 days.” 415 F.2d at 986. In the case sub judice, it was the surviving party who suggested plaintiff’s death. Therefore he would not be in the same position as was counsel for the deceased defendant in Rende. In general, he would not know who would be the representative or successor for the deceased party. Hence, by inverse analogy, the Rende case cuts against plaintiff’s argument. Having rejected movant’s argument that the suggestion of death was defective, it is necessary to focus on the application for enlargement of time under Rule 6(b)(2). If the Rule 6(b)(2) motion is not granted, this action must be dismissed for failure to comply with the ninety-day limitation of Rule 25(a)(1). In relevant part Rule 6(b)(2) provides: When by these rules or by notice given thereunder ... an act is required ... to be done . within a specified time, the court for cause shown may at any time in its discretion . . . upon motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect It should be noted that Rule 6(b) explicitly commits to the discretion of the court rulings on motions for enlargements. Regarding how courts view their discretion under Rule 6(b), Professor Moore has observed: In accordance with the mandate of Rule 1, that the Rules should be construed “to secure the just, speedy and inexpensive determination of every action,” the courts generally have given Rule 6(b) a liberal interpretation in order to work substantial justice. The burden is on movant to establish that the failure to act timely was “the result of excusable neglect.” Professors Wright and Miller are of the view that the party moving for an extension must demonstrate good faith and must show “some reasonable basis for noncompliance within the time specified in the rules.” In his affidavit in support of Charles Winter’s motion for substitution, plaintiff’s attorney offers two reasons for his failure to act within the time limitation provided for in Rule 25(a)(1). The first reason is that there were numerous “time consuming problems proceeding [sic] the appointment of Mr. Winter as Executor. . . .” His second explanation concerns what he characterizes as a “diary oversight by deponent’s firm.” With respect to the first point, counsel related a series of events following plaintiff’s death which he contends are, at least in part, responsible for the delay. He asserts that he contacted Mrs. Yonofsky immediately after receiving defendant’s suggestion of death, but was unable effectively to communicate with her because she was emotionally upset. But he did tell her it was necessary to bring estate proceedings so that a representative could be substituted for purposes of the instant ease. A short time later he again called plaintiff’s widow. At this time he was told that plaintiff had left no will and that there were no assets in plaintiff’s estate. Believing that plaintiff had died intestate, counsel began preparing papers to secure Letters of Administration. After completion of these papers, but before they were filed, Mrs. Yonofsky “discovered the existence of some U. S. Treasury Bonds and three hundred and nine shares of DeJur-Amsco Corporation stock. . . . ” This necessitated amending the previously completed papers. After these papers were redrawn and ready to be filed, Mrs. Yonofsky informed counsel that she had found a Last Will and Testament dated December 21, 1962, which named Charles Winter as Executor of plaintiff’s estate. Needless to say, counsel abandoned the completed application for Letters of Administration, and began to prepare a petition and supporting papers for probate. The situation was further complicated when a second, earlier will was discovered. This, of course, required amendment of the prior probate papers. Finally, on February 5, 1971, Letters Testamentary were issued to Charles Winter, the Executor named in plaintiff’s Last Will and Testament. As to the “diary oversight” argument, counsel alleged that immediately after receiving the suggestion of death served by defendant, the ninety-day period, prescribed by Rule 25(a)(1) was calculated to terminate on “January 27, 1971, and said date was entered in the reserve section for 1971 at the rear of our office New York Lawyers Diary and Mannual [sic] for 1970.” Subsequently, when counsel’s office received the 1971 edition of the New York Lawyers Diary and Manual, the deadline for mailing the substitution motion was erroneously entered on the February 27, 1971 page instead of the January 27, 1971 page. It is asserted that the error was not uncovered until March 1, 1971, when this court notified counsel that it had set a date for argument on the substitution motion. Defendant responded to these arguments in two ways. He relied on the Graham and Johns Hopkins cases, which were discussed earlier, as authority precluding the court from granting the motion for substitution. His other response, by way of supplemental papers, called to the attention of the court that he had contacted Mrs. Yonofsky and that she had informed him that she had always known of the existence of plaintiff’s will. This seems flatly to contradict the sworn statement in the affidavit of plaintiff’s counsel that he was told no will existed. Thereafter, piammi’s counsel questioned the propriety of defendant’s contacting Mrs. Yonofsky and in having their telephone conversation transcribed without permission or warning. The court held a hearing to inquire into the facts surrounding the telephone call to Mrs. Yonofsky. The secretary who transcribed the conversation appeared and produced both her shorthand notes and a longhand transeription of the conversation. At the hearing it was established that except for the last few seconds the secretary had transcribed the entire conversation between Mr. Stull (defendant’s attorney) and Mrs. Yonofsky. The transcript does not indicate that Mr. Stull advised plaintiff’s widow that their conversation was being transcribed. In an affidavit filed the day after the hearing, Mr. Stull stated that before he closed his telephone conversation with Mrs. Yonofsky, he informed her that he “had notes made of [their] conversation,” that he “would bring [their] discussion to the Judge’s attention,” and that he “suggested that she call Mr. Friedman” (plaintiff’s counsel). At the close of the hearing the court stated that it would study all papers bearing on the motion for substitution and would determine whether grievance consideration was indicated in regard to the conflicting affidavits. After carefully considering this matter, the court, is of the view that grievance proceedings are not indicated. The conflict is between the statement in Mr. Friedman’s affidavit that Mrs. Yonofsky informed him that there was no will, and the statement in the affidavit of Mr. Stull, that Mrs. Yonofsky always knew of the existence of plaintiff’s will. It should be noted that when Mr. Friedman inquired with respect to a will and was told there was none, it was early November 1970. This was only a short time after plaintiff’s death on October 26, 1970. Mr. Stull revealed that when he asked Mrs. Yonofsky at what time she had sent plaintiff’s will to Mr. Friedman’s office, she answered, that it was about a month after her husband’s death — i. e., sometime after November 26, 1970. Mrs. Yonofsky explained that she waited a month before sending the will to Mr. Friedman for religious reasons. The ctmflict between what Mr. Friedman was told — that there was no will — and what Mr. Stull was told — that Mrs. Yonofsky always knew that there was a will — appears to be irreconcilable. It might be that Mrs. Yonofsky was mistaken when she indicated to Mr. Friedman that there was no will. This is not improbable since the alleged conversation took place only a short'time after her husband’s death. Hence, she might have been under severe mental and emotional strain at that time. Nevertheless, based on the facts as presented it is impossible to conclude that Mr. Friedman’s affidavit was either false or not made in good faith. Accordingly, the court will decide the application for an extension of time in which to move for substitution under the assumption that both sides have acted in good faith. The executor seeking to be substituted for Yonofsky has offered two excuses for the failure to comply with the ninety-day provision of Rule 25(a)(1): (1) that there were significant difficulties in bringing about his appointment as executor; and (2) the “diary oversight” by plaintiff’s counsel. In view of the wide discretion granted to the court in determining 6(b) motions, and the liberal view of that discretion taken by most courts and commentators, the court believes that the instant motion should be granted. The movant has made the requisite showing of excusable neglect to justify this ruling. There have been at least two eases in this district in which clerical errors or similar inadvertent actions were the cause' of untimely acts under the rules. Vandervelde v. Put and Call Brokers and Dealers Ass’n, 43 F.R.D. 14 (S.D.N.Y.1967); Colgate-Palmolive Co. v. North American Chemical Corp., 238 F.Supp. 81 (S.D.N.Y.1964). In both of these cases motions under Rule 6(b)(2) were granted. The 6(b) motion in Vandervelde, moreover, even arose in the same procedural posture — i. e., an untimely motion for substitution — as the instant case. Defendant’s reliance on the previously discussed Graham and Johns Hopkins cases is unpersuasive. In the latter case the court reasoned as follows: A suggestion of . death was filed . . . .No motion for substitution was made by any of the parties to this case, or by the successors or representatives of either such deceased defendant, within the ninety day period after the filing of the suggestion of death as provided in Rule 25. Therefore, in accordance with the provisions of that rule, the complaint in this case is dismissed as to each of said two deceased defendants. 297 F. Supp. at 1165. The court’s language does not indicate whether any motion for substitution was filed after the ninety-day period. The court apparently was not faced with a decision under Rule 6(b)(2). The instant case is thus distinguishable on this ground. Consequently, the Johns Hopkins case is not authority for denying the instant motion under Rule 6(b)(2). Although the court in Graham was faced with a motion under Rule 6(b), which it denied, there was a strong dissent by Judge J. Skelly Wright. This court shares the' view articulated by Judge Wright that the opinion of the majority was incorrect. The leading case in this circuit, which discusses extensions of time for making motions under Rule 25(a)(1), is Staggers v. Otto Gerdau Co., 359 F.2d 292 (2d Cir. 1966). In that case the court rejected appellees’ argument that the district judge was required to dismiss the action when no motion for sub-' stitution was made within the ninety-day period. The court stated that the “history of the 1963 amendment to Rule 25 makes clear that the 90 day period was not intended to act as a bar to otherwise meritorious actions.” 359 F.2d at 296 (citation omitted). In this case the delay in making the motion to substitute was only two days. Although the court found “excusable neglect” for the short delay, it was also careful to point out “that the appellees suffered no prejudice” from the delay. Id. (emphasis added). It is not unreasonable to conclude from Staggers that “lack of prejudice” to a party opposing substitution is a key element to factor into a Rule 6(b) determination. This approach was approved in Vandervelde, in which another judge of this court attached “ ‘crucial importance’ ” to the absence of prejudice in granting a motion to extend the time in which a party could move for substitution. 43 F.R.D. at 20. In the case under consideration there can be no prejudice to the party opposing the motion for substitution. The trial was completed before the plaintiff died. Under Staggers and Vandervelde this court must attach significant weight to this factor. When the “no prejudice” factor is added to the other elements discussed, the balance unequivocally tips in favor of granting the motion. Accordingly, the motion for enlargement of time in which to move for substitution is granted. The motion to substitute Charles Winter, executor of .the deceased plaintiff’s estate, is likewise granted. III. CHALLENGES TO JURISDICTION During argument at trial and in his trial and posttrial memoranda defendant has attacked the subject matter jurisdiction of this court on three grounds: (1) plaintiff has not established diversity of citizenship; (2) the requisite jurisdictional amount is not in issue; and (3) plaintiff has failed to join an indispensable party, namely, Samarius, Inc., the corporation under which defendant has been operating the assets of the DeJur Potentiometer Division. It should be noted that defendant never formally moved for dismissal on jurisdictional grounds prior to trial. He did, however, deny the jurisdictional allegations of the complaint in his answer. For the reasons stated below all of defendant’s jurisdictional objections are rejected. Defendant’s allegation that plaintiff has failed to establish diversity of citizenship is totally without merit and frivolous. Defendant seems to predicate this assertion on plaintiff’s failure to submit a proposed finding of fact or conclusion of law with respect to the existence of diversity of citizenship. Proposed findings of fact or conclusions of law do not limit the power of a court to make findings and conclusions of its own. Additionally, plaintiff has provided supplemental findings of fact and conclusions of law on the jurisdictional questions. The complaint states that plaintiff was a “resident” of New York and that “[u]pon information and belief, defendant ... is and was a resident of . Connecticut.” Although defendant never specifically attacked the jurisdictional allegation on the ground that it averred “residence” rather than “citizenship,” it is well settled that an allegation of diversity of residence does not satisfy the requirements of federal diversity jurisdiction. Nevertheless, it is also settled that a defect of this sort does not require dismissal if it is otherwise clear that diversity of citizenship exists. See, e. g., DeVries v. Starr, 393 F.2d 9, 11 (10th Cir. 1968); Pattiz v. Schwartz, 386 F.2d 300, 301 (8th Cir. 1968); Humphrey v. Fort Knox Transit Co., 58 F.Supp. 362, 363-364 (W.D.Ky.), aff’d, 151 F.2d 602 (6th Cir. 1945). It is firmly established that the question of citizenship is controlled by domicile. Professor Wright has succinctly summarized the “elusive concept of ‘domicile’ ” as follows: “A person’s domicile is that place where he has his true, fixed, and permanent home and principal establishment, and to which he has the intention of returning whenever he is absent therefrom.” In the case at bar, the record viewed in its collective significance, unequivocally reveals that plaintiff and defendant were domiciliaries of New York and Connecticut at the time that this action was commenced. Since citizenship is determined by domicile, it is clear that the requirement of diverse citizenship has been satisfied. The second basis on which defendant challenges subject matter jurisdiction is that plaintiff has failed to prove the required jurisdictional amount. As noted earlier, the trial in this case was limited to the issue of liability; the question of damages was not litigated. Hence, the court will analyze this branch of defendant’s attack on jurisdiction as if made in a pretrial motion to dismiss. From the face of the complaint it is evident that plaintiff has properly pleaded the requisite jurisdictional amount as required by Fed.R.Civ. P. 8(a)(1). The complaint states: “This is an action of a civil nature and the amount in controversy exceeds the sum or value of $10,000.00, exclusive of interest and costs.” Since defendant challenged this assertion, it is necessary to evaluate plaintiff’s allegation under the rules governing determination of the amount in controversy. When defendant puts in issue the validity of plaintiff’s allegation with respect to the jurisdictional amount, it is incumbent on plaintiff to establish that the requisite amount is in controversy. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1935); Nelson v. Keefer, 451 F.2d 289, 296 (3d Cir. 1971); Breault v. Feigenholtz, 380 F.2d 90, 92 (7th Cir.), cert. denied, 389 U.S. 1014, 88 S.Ct. 591, 19 L.Ed.2d 660 (1967); Post v. Payton, 323 F.Supp. 799, 804 (E.D.N.Y.1971); National Audubon Society, Inc. v. Johnson, 317 F.Supp. 1330, 1335 (S.D.Tex.1970). Since the trial in the case under consideration was limited to liability, and since plaintiff had no discovery on damages, his burden in demonstrating that the amount in controversy comported with the statutory requirement was rendered more difficult. Plaintiff did, however, submit a post-trial Reply Memorandum addressed to this issue. It should be noted that although federal law is looked to in determining whether the amount claimed by plaintiff will withstand challenge by defendant, state law is considered in assessing the nature of the right asserted in a diversity action. Horton v. Liberty Mutual Insurance Co., 367 U.S. 348, 352-353, 81 S.Ct. 1570, 6 L.Ed.2d 890 (1961). In general a court will rule on this issue by considering the pleadings and other papers submitted. C. Wright, Federal Courts § 33 at 112 & n. 9 (2d ed. 1970). The guiding principles in evaluating disputes with respect to the amount in controversy were articulated by the Supreme Court in Saint Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938). Speaking for the Court, Mr. Justice Roberts stated: The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that, unless the law gives a different rule, the sum claimed by the plaintiff controls, if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal. The inability of plaintiff to recover an amount adequate to give the court jurisdiction does not show his bad faith or oust the jurisdiction. Nor does the fact that the complaint discloses the existence of a valid defense to the claim. But if, from the face of the pleadings, it is apparent, to a legal certainty that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction, the suit will be dismissed. 303 U.S. at 288-289, 58 S.Ct. at 590 (footnotes omitted). When a claim is made for liquidated damages a court’s task in applying the “good faith” and “legal certainty” tests of Saint Paul is relatively simple. Difficulty arises when the claim is for unliquidated damages. In the case under review plaintiff, in his first cause of action, demands “one-half of all sums received by defendant by reason of defendant’s acquisition and operation of the former Potentiometer Division of DeJur-Amsco Corporation.” (emphasis added). His second cause of action seeks “one-half of the value of the Potentiometer Division . . - . or $25,000.00 at plaintiff’s option, which consideration the defendant promised to pay to the plaintiff for his work, labor and services.” (emphasis added) Both causes of action seek liquidated rather than unliquidated damages. The first claim seeks damages that are susceptible to calculation. The second claim has alternative requests. The request for one-half of the value of the assets acquired by defendant from DeJur is subject to reasonably certain calculation. The alternative demand of $25,000.00 is, needless to say, a claim for liquidated damages. Defendant asserts that for plaintiff to establish the requisite jurisdictional amount with respect to the first cause of action it would be necessary to establish a profit by Samarius, Inc., or at least to defendant, above reasonable salaries and return on a capital investment, rightfully made upon the allegations of the complaint. The profit would need to exceed $20,000, because plaintiff’s claim is to an “equal” share of Samarius, Inc., or the alleged joint venture . . .' , Since plaintiff has not had discovery on the question of damages, it is quite obvious that he cannot establish what defendant suggests he must demonstrate in order to confer jurisdiction on this court. Although the damages claimed by plaintiff fall within the definition of liquidated damages set out in the margin, it is'not possible to calculate actual damages because as stated earlier the damage issue was separated from the question of liability. It should be noted, however, that the alternative demand for $25,000.00 in plaintiff’s second cause of action brings that claim squarely within the requisite jurisdictional amount. As to plaintiff’s first cause of action — i. e., for one-half of the profits defendant has derived from the acquisition and operation of the Potentiometer Division — the court must evaluate this claim under the Saint Paul test and the case law authority that has evolved therefrom. Our task in this regard is not dissimilar from that of a court when faced with a claim for unliquidated damages. From the Saint Paul case it might be said that “a district court has the power to dismiss diversity suits when the court can conclude either that the sum claimed was not claimed in good faith or that the plaintiff cannot recover the amount demanded.” Deutsch v. Hewes Street Realty Corp., 359 F.2d 96, 99 (2d Cir. 1966). But as Judge Waterman noted in Deutsch, “The end of clarity will be furthered, however, if the first test is seen to be but a linguistic variant of the second. . . .” Id. This analysis stems from Professor Wright’s often cited query: “[U]nless it appears to a legal certainty that plaintiff cannot recover the sum for which he prays, how can it be held that his claim for that sum is not in good faith?” C. Wright, Federal Courts § 33, at 113 (2d ed. 1970). It follows then, as one Circuit has concluded, that the “test is not what amount the plaintiff claims in the ad damnum clause of his complaint, but rather, whether it appears to a ‘legal certainty’ that he cannot recover an amount above the jurisdictional minimum.” Jaconski v. Avisun Corp., 359 F.2d 931, 934-935 (3d Cir. 1966) (citations omitted). Accord, Jeffries v. Silvercup Bakers, Inc., 434 F.2d 310, 311312 (7th Cir. 1970). In the area of unliquidated damages, which is applicable by analogy to the instant case, two approaches to the “legal certainty” determination have evolved. The first allows a district court to value plaintiff's claim and dismiss the case if from all the facts and circumstances it appears that the plaintiff cannot recover an amount in excess of the jurisdictional minimum. See, e. g., Nelson v. Keefer, 451 F.2d 289 (3d Cir. 1972); Leehans v. American Employers Insurance Co., 273 F.2d 72 (5th Cir. 1959); Turner v. Wilson Line, 242 F.2d 414 (1st Cir. 1957). The Nelson case exemplifies this approach. It was a persona] injury action for unliquidated damages in which the court of appeals declared that a district court may evaluate the expenses of the plaintiff and the nature of his injury in determining that the jurisdictional amount is not legally certain. The court held that the “district court did not err in concluding that the statutory jurisdictional minimum could not be gleaned from the facts averred in support of the complaint. And since plaintiffs’ legally recoverable ceiling did not at its apex reach the federal jurisdictional floor, the judgment of the district court [dismissing the action] will be affirmed.” 451 F.2d at 298. The other approach, often attributed to Wade v. Rogala, 270 F.2d 280 (3d Cir. 1959), would permit all but the most flagrant cases to proceed to trial when an unliquidated damage claim is challenged on jurisdictional grounds. The rationale expressed for this view is that since the amount in controversy question is often closely linked to the merits, it would permit a court to decide the case under the guise of determining the jurisdictional issue and thus deny a litigant the ordinary incidents of trial. Wade v. Rogala, 270 F.2d 280, 285 (3d Cir. 1959). In adopting the latter more liberal view for the Second Circuit, the court of appeals utilized a two pronged analysis. First, it was persuaded that to allow valuation of a claimant’s unliquidated damage allegation when the jurisdictional issue was closely related to the merits, would be “tantamount to depriving the plaintiff of his present statutory rights to a jury trial.” Deutsch v. Hewes Street Realty Corp., 359 F.2d 96, 99-100 (2d Cir. 1966). Secondly, the court attempted to balance competing interests while recognizing that federal courts are •courts of limited statutory jurisdiction. The reasoning of the court was as follows : The choice is essentially between a rule on the one hand that allows some cases involving inflated claims for relief to be brought in a federal forum in order to insure access to that forum for all those cases that properly may be brought there, and, on the other hand, a rule that closes the doors to the federal forum in the face of some claims that properly could be brought there in order to insure the denial of the forum to cases involving inflated claims. The present statutory pattern requires that we choose between these alternatives, we feel the wiser choice is to choose the . . . more liberal rule, as typified by the decision in Wade v. Rogala. ... If access to federal district courts is to be further limited it should be done by statute and not by court decisions that permit a district court judge to prejudge the monetary value of an unliquidated claim. 359 F.2d at 100 (footnote omitted). Under the rule in this circuit it appears that a district court can dismiss an action for failure to meet the prescribed jurisdictional amount only if the law governing the plaintiff’s cause of action proscribes recovery above $10,000. In a diversity case a district court must be guided by state law in assessing the nature and scope of the right asserted by the claimant. Horton v. Liberty Mutual Insurance Co., 367 U.S. 348, 352-353, 81 S.Ct. 1570, 6 L.Ed.2d 890 (1961). In the instant case the right asserted by plaintiff is controlled by the substantive law of New York. It is clear that New York law permits an equitable action for accounting between joint adventurers. Moreover, under New York law, when a joint venture transaction is completed and there is nothing to be done except to divide profits or share losses an action at law will lie. See, e. g., Cole v. Forman, 274 App.Div. 818, 80 N.Y.S.2d 350 (2d Dept. 1948); Bigelow v. McMillin, 251 App.Div. 456, 458, 296 N.Y.S. 533, 536 (1st Dept. 1937). An action at law will also lie when there is a breach of a joint venture agreement and no business has been transacted under the agreement — i. e., when one joint adventurer is excluded by another. Crownshield Trading Corp. v. Earle, 200 App.Div. 10, 192 N.Y.S. 304 (1st Dept. 1922); Glenmark, Inc. v. Carity, 30 Misc.2d 1065, 221 N.Y.S.2d 330 (Sup.Ct.N.Y.County 1961). Thus we may conclude that plaintiff is accorded both equitable and legal remedies under the substantive law of New York. These remedies are granted without any specific limitation with respect to the amount that may be recovered. Hence, there is no legal prohibition preventing plaintiff from recovering an amount in excess of the jurisdictional limit. Moreover, since there has been no discovery on damages, the court can not conclude that the facts adduced preclude plaintiff from recovering damages equal or in excess to the requisite amount. Consequently, the court must reject defendant’s second challenge to the jurisdiction of this court. The third and final ground on which defendant challenges subject matter jurisdiction concerns the failure of plaintiff to join an alleged indispensable party. In both his trial memorandum and at trial, at the close of plaintiff’s case, defendant has asserted that Samarius, Inc. is an indispensable party to this litigation. The failure to join Samarius, Inc. is deemed “fatal to this action” by defendant. At the outset it should be noted that “in a diversity case the question of joinder is one of federal law.” Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 125 n. 22, 88 S.Ct. 733, 746, 19 L.Ed.2d 936 (1968) (citation omitted). The Supreme Court has recognized, however, that “state-law questions may arise in determining what interest the outsider actually has [citation omitted] but the ultimate question whether, given those state-defined interests, a federal court may 'proceed without the outsider is a federal matter.” Id. One noted authority has heartily endorsed this view: This is in accord with the better earlier decisions, and is a sound resolution of the question. It seems not inconsistent with that rule to say that if, as a matter of substantive law, a state does not recognize that a plaintiff has a particular right of action unless he joins with him certain others, then the federal court in a diversity action is precluded from giving a plaintiff who fails to join those others an opportunity to proceed as though alone he had the substantive right. Under New York substantive law a joint venture may not be carried on by individuals through a corporate form. Weisman v. Awnair Corp. of America, 3 N.Y.2d 444, 165 N.Y.S.2d 745, 144 N.E.2d 415 (1957); Lauto v. Muller, 36 Misc.2d 208, 231 N.Y.S.2d 947 (Sup.Ct.N.Y.County 1962); Loverdos v. Vomvouras, 23 Misc.2d 464, 200 N.Y.S.2d 921 (Sup.Ct.N.Y.County 1960); Marathon Motors, Inc. v. Atlas Buick Co., 150 N.Y.S.2d 289, 292 (Sup.Ct. Kings County 1956); cf. Lester v. Ennis, 25 Misc.2d 334, 202 N.Y.S.2d 878 (Sup.Ct.N.Y.County 1960), aff’d, 12 A.D.2d 921, 212 N.Y.S.2d 1000 (1st Dept. 1961). When joint adventurers carry on their business through a corporate entity they cease being joint adventurers and assume the rights, duties and obligations of stockholders. Weisman v. Awnair Corp. of America, 3 N.Y.2d 444, 165 N.Y.S.2d 745, 144 N.E.2d 415 (1957); Hochen v. Rubin, 24 A.D.2d 254, 265 N.Y.S.2d 554 (1st Dept. 1965), aff’d, 18 N.Y.2d 866, 276 N.Y.S.2d 119, 222 N.E.2d 737 (1966). In the instant case, plaintiff contends that he and defendant entered into a joint venture agreement to acquire and thereafter operate the assets of the DeJur Potentiometer Division. Plaintiff claims that he was excluded form the alleged joint venture at the point when defendant acquired the DeJur assets. Had plaintiff not been excluded, and had the parties operated the DeJur Potentiometer Division in a corporate form with each of them owning a one-half interest in the corporation, they would not have been joint venturers, but rather, would have been shareholders in the corporation. It is not unusual for parties to enter into a joint venture agreement, and thereafter to operate their business in corporate form. But when the corporation is formed the joint venture relationship ceases. Farber v. Romano, 232 N.Y.S.2d 285 (Sup.Ct. Suffolk County 1962). In the instant case plaintiff was excluded from the alleged joint adventure prior to the formation of the corporation by defendant. When plaintiff was excluded, therefore, the only relationship that could have existed between the parties was that of a joint venture. Hence, it appears that plaintiff’s cause of action, if any, is against defendant and not against the corporation that defendant formed. Cf. Krendell v. Moscow, 20 Misc.2d 551, 194 N.Y.S.2d 154 (Sup.Ct.N.Y.County 1959). In any event, it seems clear that New York substantive law does not mandate that a claimant, excluded from a joint venture, join as a party defendant, a corporation formed to operate the business which was the subject of the joint venture, in bringing an action against his alleged coadventurer. Since the substantive law which defines the nature and scope of plaintiff’s cause of action does not require joinder of Samarius, Inc., the court can evaluate defendant’s assertion — that Samarius is an indispensable party — free from considerations of state law and the concomitant difficulties in a diversity action of applying state substantive law, as required by Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and federal procedural law, as mandated by Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). Whether joinder of a nonparty is compelled — i. e., necessary for a just adjudication — is determined by Fed.R. Civ.P. 19(a). Notwithstanding the enumerated factors in Rule 19(a), which a court must, of course, take into account, there is no definite method for determining whether a nonparty must be joined. See Bixby v. Bixby, 50 F.R.D. 277, 280 (S.D.Ill.1970) (emphasizing “the necessity of weighing the factual cause in light of the factors enumerated in Rule 19 and all other relevant factors”). Any decision must, therefore, consider the overall policy considerations underlying the rule. Three basic policy objectives fostered by the rule are: (1) avoidance of unnecessary or multiple litigation; (2) providing complete relief to the parties before the court; and (3) protection of the rights and interests of any absent parties. See generally 7 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1602 (1972). Additionally, it should not be overlooked that “the philosophy of present Rule 19 is to avoid dismissal whenever possible . ” Heath v. Aspen Skiing Corp., 325 F.Supp. 223, 229 (D.Colo.1971). After carefully weighing the specific elements set out in Rule 19(a), the policy factors that the rule seeks to foster and other relevant considerations, the court concludes that the joinder of Samarius, Inc., is not necessary for a just adjudication of the instant controversy. Under Rule 19(a)(1) a court must consider whether complete relief can be accorded to the parties in the absence of the nonparty. In this case plaintiffs cause of action is against defendant for wrongfully excluding plaintiff from the alleged joint adventure. Plaintiff asserts that the joint venture came into existence long before the nonparty (Samarius, Inc.) was formed. The function of the court is to decide whether plaintiff’s cause of action is meritorious. That the subject matter of the alleged joint venture — i. e., the DeJur Potentiometer Division — was operated by defendant through the corporate entity of the nonparty is wholly irrelevant to that function. Plaintiff seeks nothing from the nonparty. His first cause of action seeks an accounting from defendant. As stated earlier, New York law provides for an equitable accounting in an action between joint adventurers. It also permits an action at law for damages when one party to a joint venture breaches the agreement before any business is transacted by excluding another party. This is exactly what plaintiff claims happened in the case at bar. Plaintiff asserts that he entered into a joint venture agreement with defendant to acquire and thereafter operate the assets of the DeJur Potentiometer Division. He further alleges that after defendant acquired these assets he excluded plaintiff from the venture. The wrong, if any, was committed by defendant. Hence, the court can grant complete relief without the presence of Samarius, Inc. This conclusion is given added support because the trial in this case was limited to the question of liability. Certainly with respect to this issue, it is clear that complete relief can be accorded without the presence of any absentee party. As to the second factor set out in Rule 19(a), from the above analysis it can be concluded that Samarius, Inc. claims no interest in the subject matter of the action between plaintiff and defendant. Whether plaintiff seeks an accounting in equity or damages at law against defendant, Samarius, Inc., has no interest in the controversy. It might be otherwise had plaintiff brought an action for specific performance of the joint venture agreement and sought a fifty-percent interest in Samarius, Inc. But the court need not consider this point since plaintiff only seeks monetary relief against defendant. From this analysis the court concludes that Samarius has no interest that might be prejudiced if it is not joined. Fed.R.Civ.P. 19 (a) (2) (i). The last factor explicitly contemplated by Rule 19(a) in evaluating joinder of persons needed for a just adjudication, is whether the failure to join an absentee party may “leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the . . . [absentee’s] claimed interest.” Fed.R.Civ.P. 19(a) (2) (ii). Since it has been determined that the nonparty has no interest, there is no “substantial risk” that a party will incur multiple or inconsistent obligations by virtue of the failure to join Samarius, Inc. From the analysis of the factors-enumerated in Rule 19(a), it can be concluded that Samarius, Inc. is not a party needed for a just adjudication. In view of this disposition it is unnecessary to apply the pragmatic considerations of Rule 19(b) to determine whether the action should go forward without the absentee party. IV. DEFENDANT’S AMENDMENTS TO THE PLEADINGS Defendant was given leave during the pretrial stage by Judge Tyler to apply at trial for “leave to amend [his] answer. . ” At the start of the trial defendant moved to amend the answer by adding a second, third and fourth defense. These requested amendments are set out in the margin. The application to add the second defense was expressly denied at trial. The court was of the opinion that the matter raised in the second defense was amply covered by the general denial of the contract. The third defense was also considered at trial and it too seemed to be covered by the general denial regarding the existence of an oral joint venture contract. Nevertheless, since it is not absolutely clear from the transcript whether the third defense was disposed of, the court rules that it, like the second defense, is covered by the general denial of the contract. Leave to add the fourth proposed defense — that the agreement, if any, violated the statute of frauds — was expressly granted at trial. Accordingly, the court will analyze the statute of frauds défense. The parties devoted a substantial amount of time to argument of the statute of frauds issue. It has been plaintiff’s contention that the statute of frauds is inapplicable to a joint venture. Defendant on the other hand, relying in large part on the opinion of this court in Backus Plywood Corp. v. Commercial Decal, Inc., 208 F.Supp. 687 (S.D.N.Y.1962), modified, 317 F.2d 339 (2d Cir.), cert. denied, 375 U.S. 879, 84 S.Ct. 146, 11 L.Ed.2d 110 (1963), asserts that the alleged oral contract is squarely within the statute of frauds. Defendant’s reliance on Backus Plywood is misplaced and his citation to other authority is likewise unpersuasive. The law is clear in this area. It is well settled that the statute of frauds is generally inapplicable to a joint adventure agreement. This view is shared by the treatise writers, other commentators and the courts of almost every jurisdiction. New York law is in accord with this view. See e. g., Dayvault v. Baruch Oil Corp., 211 F.2d 335 (10th Cir. 1954) (applying- both New York and Wyoming law); In re Taub, 4 F.2d 993 (2d Cir. 1924) (applying New York law); Wooten v. Marshall, 153 F.Supp. 759 (S.D.N.Y.1957) (applying both New York and Alaska law); Eidelberg v. Zellermayer, 5 A.D.2d 658, 174 N.Y.S.2d 300 (1st Dept. 1958), aff’d, 6 N.Y.2d 815, 188 N.Y.S.2d 204, 159 N.E.2d 691 (1959); Weisner v. Benenson, 275 App.Div. 324, 89 N.Y.S.2d 331 (1st Dept. 1949), aff’d, 300 N.Y. 669, 91 N.E.2d 325 (1950); Clyde v. Schaller, 263 App.Div. 844, 31 N.Y.S.2d 686 (2d Dept. 1941); Glenmark, Inc. v. Carity, 30 Misc.2d 1065, 221 N.Y.S.2d 330 (Sup.Ct.N.Y.County 1961). Cf. Sanger v. French, 157 N.Y. 213, 51 N.E. 979 (1898); Cohen v. Bass, 138 App.Div. 504, 123 N.Y.S. 395 (2d Dept. 1910). In the Eidelberg case Judge (then Justice) Breitel declared: On appeal in the Appellate Division, in a very carefully prepared brief, plaintiff was at pains to urge that he was not suing upon a sale but upon a joint venture. He pointed out, correctly, that the statute of frauds did not apply to joint ventures. 5 A.D.2d at 662, 174 N.Y.S.2d at 303 (emphasis added). In Wooten v. Marshall, 153 F.Supp. 759 (S.D.N.Y.1957), Judge Bryan found that, “No particular form of expression is required to create ... [a joint venture] agreement apart from the requirements generally applicable to simple contracts.” Id. at 763. There the court specifically rejected a motion for summary judgment, Fed.R.Civ.P. 56, by defendant on the basis that the alleged joint venture violated the statute of frauds. Many of the cases cited for the proposition that the statute of frauds is inapplicable to joint ventures concerned joint ventures to purchase real property. E. g. Wooten v. Marshall, 153 F.Supp. 759 (S.D.N.Y.1957); Weisner v. Benenson, 275 App.Div. 324, 89 N.Y.S.2d 331 (1st Dept. 1949), aff’d, 300 N.Y. 669, 91 N.E.2d 325 (1950); Glenmark, Inc. v. Carity, 30 Misc.2d 1065, 221 N.Y.S.2d 330 (Sup.Ct.N.Y.County 1961). This court has previously stated the rationale for this line of cases as follows: The distinction is drawn between oral contracts for the sale, transfer or creation of an interest in real property and a venture to deal in realty. As to the latter the realty is viewed as personal property among the partners to the venture, and the requirements of the statute of frauds relating to real property are not applicable. Backus Plywood Corp. v. Commercial Decal, Inc., 208 F.Supp. 687, 694 (S.D.N.Y.1962) (citations omitted), modified, 317 F.2d 339 (2d Cir.), cert. denied, 375 U.S. 879, 84 S.Ct. 146, 11 L.Ed.2d 110 (1963). That the instant action did not, at least with regard to the DeJur Potentiometer Division, concern an agreement of joint venture to acquire real property is of no moment. An agreement between parties to engage in a joint venture is what is outside the scope of the statute of frauds. Whether the object of that joint venture agreement is the acquisition of real property or something else is irrelevant. See, e. g., Clyde v. Schaller, 263 App.Div. 844, 31 N.Y.S.2d 686 (2d Dept. 1941) (oral joint venture agreement to divide profits from a contract for the alteration of a building) ; Montenegro v. Roxas, 141 N.Y.S.2d 681 (Sup.Ct.N.Y.County 1955) (oral agreement to purchase goods and sell them to customers solicited by a coadventurer held to constitute a joint venture) . It should be noted, however, that courts will not countenance attempts to circumvent the statute of frauds by allowing a party to claim that a transaction was a joint venture when the facts do not support a finding of joint venture. See e. g., Weisner v. Benenson, 275 App.Div. 324, 89 N.Y.S.2d 331 (1st Dept. 1949), aff'd, 300 N.Y. 669, 91 N.E.2d 325 (1950) Furthermore, the inapplicability of the statute of frauds to joint venture agreements does not protect transactions between coadventurers that are otherwise subject to the statute. Hence, if in furtherance of an alleged joint adventure one party to the agreement transfers real property to a coadventurer, the transaction is subject to the statute of frauds. Backus Plywood Corp. v. Commercial Decal, Inc., 317 F.2d 339, 342 (2d Cir.), cert. denied, 375 U.S. 879, 84 S.Ct. 146, 11 L.Ed.2d 110 (1963). But if coadventurers agree to combine their financial resources to acquire property from a third party, the agreement to join together in this venture is not subject to the statute. Nevertheless, when the parties, after joining together, actually effectuate their purchase from a third party, that transaction if otherwise subject to the statute of frauds must be in writing. To illustrate these concepts, assume that A and B agree to engage in a joint adventure. The object of the joint venture is to acquire Blaekacre from the XYZ Corporation, to subdivide Blaekacre, sell the subdivided tracts and split the expected profits from the sales. The agreement to engage in this venture is not subject to the statute of frauds. But the actual transfer of Blaekacre to A and B from the XYZ Corporation is a transaction that is subject to the statute of frauds and must, of course, be in writing. The case law discussed establishes that generally a joint venture agreement is not subject to the statute of frauds. One rationale for this conclusion has already been discussed — i. e., contracts of joint venture to acquire real property from third parties. But this is not the sole ground on which the courts have pitted their analysis that the statute of frauds is inapplicable to joint ventures. Generally, parties seeking to invoke the statute of frauds as a defense to an action brought by a coadventurer have pointed to the section of the statute of frauds that requires a writing for transactions that cannot be completed within one year as precluding oral joint venture agreements. See, e. g., Backus Plywood Corp. v. Commercial Decal Inc., 208 F.Supp. 687 (S.D.N.Y.1962), modified, 317 F.2d 339 (2d Cir.) cert. denied, 375 U.S. 879, 84 S.Ct. 146, 11 L.Ed.2d 110 (1963), in which defendant asserted this defense. Id. at 693-695. There is authority indicating that when the duration of a joint venture is not fixed by agreement and when the venture is not formed for a particular purpose to be accomplished by an agreed upon method, then the joint venture is terminable at will by any party to the adventure. See, e. g., Weisman v. Awnair Corp. of America, 3 N.Y.2d 444, 450, 165 N.Y.S.2d 745, 750, 144 N.E.2d 415, 418 (1957); Bing v. Morgan Guaranty Trust Co., 17 A.D.2d 132, 232 N.Y.S.2d 832 (1st Dept. 1962); Deeb v. Goryeb, 258 App.Div. 93, 15 N.Y.S.2d 617 (1st Dept. 1939); cf. Armstrong v. Rickard, 199 App.Div. 880, 192 N.Y.S. 502 (1st Dept. 1939). Hence, since a joint venturer, under certain circumstances may terminate the agreement at any time, he may do so within a year from the time that the agreement was consummated. Accordingly, the statute of frauds provision requiring a writing for agreements that cannot be performed within one year is deemed inapplicable. See Glenmark, Inc. v. Carity, 30 Misc.2d 1065, 1068-1069, 221 N.Y.S.2d 330, 333-334 (Sup.Ct.N.Y.County 1961). Earlier it was stated that defendant’s reliance on Backus Plywood was misplaced. Discussion of this point seems appropriate. Briefly, the operative facts Backus Plywood are as follows : Plaintiff alleged that one of its officers (Alfred H. Sachs, its secretary-treasurer) discussed the feasibility of reorganizing the corporate defendant (Commercial Decal, Inc.) with Alfred Duhrssen, president of the corporate defendant. Duhrssen was also the holder of a substantial stock interest in the corporate defendant. Although no agreement on Sach’s proposals was ever reduced to writing, there was a significant amount of discussion by both parties regarding these proposals. Plaintiff asserted that the negotiations resulted in the consummation of an oral agreement, which it described as a “joint venture agreement.” The alleged agreement contemplated the formation of a new corporation to “acquire certain assets from Decal, continue its business, lease its buildings and improvements, and employ Duhrssen as president and general manager at a fixed salary plus a share of the profits.” 208 F.Supp. at 689. It was further contended that plaintiff was to be sole owner of the stock of the new corporation. The agreement was supposed to be reduced to writing within a month from the time of the alleged oral agreement. When the asserted agreement failed to materialize, plaintiff brought suit against both Commercial Decal and Duhrssen. The complaint asserted three causes of action. Two against the corporate defendant and one against Duhrssen. On defendant’s motion for summary judgment with respect to the claims against the corporate defendant, this court found that the transactions asserted fell within the statute of frauds and dismissed those claims. On appeal the court of appeals upheld this conclusion. In analyzing plaintiff-appellant’s theory that the alleged oral agreements constituted a joint venture to which the statute of frauds was inapplicable, Judge Hays reasoned as follows: [Ajppellant urges that the agreement alleged is a “joint venture” agreement, and cites such decisions as [citations omitted] for the proposition that the statute of frauds does not apply to such agreements. Passing the dubious question of whether the alleged agreement constituted a joint venture . . ., it is clear that the principle of the cases cited applies only to joint ventures to make purchases from or transact business with third parties. In such situations it is held that the fact that the agreement contemplates future purchases by the' venturers from third parties does not bring it within the statute of frauds. Dayvault v. Baruch Oil Corp., supra, 211 F.2d at 339, and cases there cited. But the label “joint venture” will not remove the bar of the statute when, as here, the very essence of the asserted venture is a sale from one “venturer” to the other. See Murnane v. Maxson Electronics Corp., 221 N.Y.S.2d 1015, 1017 (Sup.Ct.Suffolk County 1961). 317 F.2d at 342 (emphasis in original) (footnote omitted). In the case at bar, the alleged joint venture contemplated purchase of property from a third party, namely DeJur. It was not an agreement, as in Backus Plywood, between the asserted coadventurers. Accordingly, the statute of frauds analysis presented in Backus Plywood is inapplicable to the instant controversy. The other cases cited by defendant in support of his statute of frauds argument are not in point. In one of these cases, although an oral contract was asserted, there was a written memorandum that was never reduced to a formal contract. It was contended that the memorandum satisfied the statute of frauds. But the court found that an essential term of the asserted contract — i. e., price — was not contained in this memorandum. Therefore, the memorandum did not comply with the statute of frauds. General Overseas Corp. v. Republic Pictures International Corp., 74 F.Supp. 698 (S.D.N.Y.1947). Accordingly, this case is distinguishable from the controversy under consideration and does not support defenda