Case Name: Robert Reiner, Appellant, v. North American Newspaper Alliance, Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1932-06-01
Citations: 259 N.Y. 250
Docket Number: 
Parties: Robert Reiner, Appellant, v. North American Newspaper Alliance, Respondent.
Judges: 
Reporter: New York Reports
Volume: 259
Pages: 250–267

Head Matter:
Robert Reiner, Appellant, v. North American Newspaper Alliance, Respondent.
(Argued March 24, 1932;
decided June 1, 1932.)
John A. Kelly for appellant.
Plaintiff’s contract with the defendant or its performance is not a fraud upon the public or any one else, is not illegal or immoral, and is not contrary to public policy. (Johnston v. Fargo, 184 N. Y. 379; Converse v. Sharpe, 161 N. Y. 571; Moss v. Cohen, 158 N. Y. 240; Hollis v. Drew Theological Seminary, 95 N. Y. 166.)
Charles E. Kelley and Christian S. Lorentzen for respondent.
A contract which is contrary to public policy and good morals is unenforceable. (Holman v. Johnson, 1 Cowp. 341; Gray v. Hook, 4 N. Y. 449; Atcheson v. Mallon, 43 N. Y. 147; Da Costa v. Jones, 2 Cowp. 729; Grudberg v. Midvale Realty Co., 119 Misc. Rep. 558; Bell v. Leggett, 7 N. Y. 176; Arnot v. Pittston & Elmira Coal Co., 68 N. Y. 558; Sirkin v. Fourteenth Street Store, 124 App. Div. 384; Materne v. Horwitz, 101 N. Y. 469; Southard v. Jump Co., 43 Misc. Rep. 104; Sprague v. Webb, 168 App. Div. 292; 225 N. Y. 685; Ridgely v. Keene, 134 App. Div. 647; Barry v. Mulhall, 162 App. Div. 749.) A contract which involves the breach of a contract made by the plaintiff with a third person is against public policy and good morals, and is, therefore, unenforceable. (Jackson v. Duchaire, 3 T. R. 551; Coventry v. Barton, 17 Johns. 142; Stone v. Hooker, 9 Cow. 154; Bolton v. Amsler, 95 N. Y. Supp. 481; Sayres v. Decker Automobile Co., 239 N. Y. 73; Hocking Valley Ry. Co. v. Barbour, 190 App. Div. 341; Woodstock Iron Co. v. Richmond & Danville Extension Co., 129 U. S. 643.)

Opinion:
Hubbs, J.
The plaintiff-appellant in this action on contract alleges that in October, 1928, he engaged passage to fly from Germany to New York as a passenger on the Graf Zeppelin; that he entered into a contract to send " radio messages from the said Graf Zeppelin to friends in the United States in reply to messages sent to plaintiff by his friends and the defendant promised and agreed to pay the plaintiff $5,000 therefor;" that " the defendant agreed to make all necessary arrangements for the sending of messages to plaintiff by his friends, and for the collection of the reply messages sent by the plaintiff."
The complaint further alleges that plaintiff, while a passenger on the Graf Zeppelin, sent messages to his friends in the United States in reply to messages received by him from them; that he has fully performed the contract on his part but that the defendant has failed to pay him according to the terms of the contract and demands judgment for the amount unpaid.
The answer sets up as a defense:
" Third. The contract alleged in the complaint was made in violation of the terms of the contract by which the plaintiff engaged passage to fly from Friedrichshafen, Germany, to New York upon the dirigible Graf Zeppelin, in that the plaintiff knew that the exclusive news rights of the flight of the said dirigible had been acquired by a third party and the plaintiff, accordingly, had agreed, as a condition of,being given passage on the said dirigible, that he would give no interviews and send no reports' of the said passage while en route and for eight days after the completion of the flight.
" Fourth. The messages sent by the plaintiff, as alleged in the complaint, were reports of the flight of the said dirigible and constituted news thereof to be distributed by the defendant to newspapers for publication as news all over the United States.
" Fifth. The contract alleged in the complaint and the performance thereof by the plaintiff was, therefore, a fraud upon the owners, managers and operators of the said dirigible and upon the owner of the exclusive news rights of the passage of the said dirigible from Friedrichshafen to New York, and a fraud upon the public, and was illegal, void, and against public policy and unenforcible at law or in equity."
Reading the complaint and answer together, the fair import is that the plaintiff entered into the contract with defendant with full knowledge that the exclusive news rights of the flight had been acquired by a third party by contract; that, knowing such fact, the plaintiff had agreed as a condition of obtaining passage on the dirigible that he would not send any reports of the flight; that the plaintiff in violation of the contract between the owners of the Graf Zeppelin and a third party and in violation of the contract between himself and the owners of the Zeppelin, contracted and arranged that, through a pretense of answering messages from his friends, he would secretly and in violation of the terms of those contracts send news messages to be used by the defendant for publication in newspapers in the United States.
The plaintiff moved to strike out the separate defense contained in the answer. The motion was denied and the order was affirmed at the Appellate Division by a divided court. The Appellate Division has certified the following question to this court: "Is the separate defense set out in paragraphs Third, Fourth and Fifth of the answer sufficient in law on the face thereof ? "
Assuming, as we must, the truth of the allegations contained in the answer, it appears that the conduct of the plaintiff was unconscionable, in violation of his contract of passage, and in violation of the exclusive privilege which, to his knowledge, had been granted to a third party.
Plaintiff, when he entered into the agreement with the defendant, was seeking to obtain for himself the promised advantage which had been contracted to another. That his conduct was vicious and has an evil tendency cannot be questioned. Did it have the effect of rendering his contract with the defendant unenforceable?
It has become the settled law of this State that an action will lie for intentionally and knowingly, and without reasonable justification or excuse, inducing a breach of contract. (Hornstein v. Podwitz, 254 N. Y. 443; Lamb v. Cheney & Son, 227 N. Y. 418; Campbell v. Gates, 236 N. Y. 457.)
The-law endeavors to protect the interest of parties in existing contractual relations from intentional and wrongful interference by strangers. The principle constitutes a limitation upon the doctrine of freedom of contract, which courts have imposed in an attempt to promote justice and fair dealing and to prevent wrongs.
The plaintiff is undoubtedly fiable to the parties in the exclusive rights contract for all damages caused by his wrongful conduct. Such an action would sound in tort. The gravamen of the action would be plaintiff's wrongful conduct in making it impossible for the third party to reap the full benefits of the contract with the owners of the Graf Zeppelin.
Plaintiff caused the failure of that contract, not by persuading the owners of the Graf Zeppelin to refuse to carry it out, and by entering into a like contract with him, as is usual in cases of this nature, but by his conduct making it impossible for the third party to receive the full benefits of the exclusive contract rights, as the news of the voyage could no longer be exclusive after he had caused the publication of the news items through his contract with the defendant. By such conduct he became liable to the same extent as he would if he had induced the breach of the third party contract by other means.
" Under these authorities, if the Omaha Company had by its wrongful conduct simply induced the Portage Company to break its contract with Angle, it would have been liable to him for the damages sustained thereby. A fortiori, when it not only induces a breach of the contract by the Portage Company, but also disables it from performance." (Angle v. Chicago, St. Paul, etc., Ry. Co., 151 U. S. 1, 15.)
We do not mean to say that in all cases one who knowingly causes a breach of contract between others is hable' for the damage caused by such breach. Whether liability will attach for causing such a breach of contract depends upon whether there exists sufficient justification. For a detailed discussion of. that question see 36 Harvard Law Review, 663. It is sufficient for the decision of this case that no such justification .-xists.
The exclusive privilege contract with a third party vested in the parties thereto rights which the law protects, contract rights. It would be strange indeed if the law should protect such contract from wrongful interference by a stranger, but after such interference assist the stranger in reaping the fruits of his unjust and illegal act.
The wrongful acts of the plaintiff constituted a tort. The contract between plaintiff and defendant was a part of the scheme which resulted in the breach of the contract of passage entered into by plaintiff and interfered with the contract between the owner of the Graf Zeppelin and the third party. It was in effect a contract to commit a tort.
The plaintiff's act in entering into the contract cannot be said to have been negligent, incidental or foreign to the purpose of the contract with the third party. It was made with full knowledge of the third party contract. Not only did plaintiff have knowledge of that contract, but in his contract of passage he had expressly agreed not to do anything to prevent the carrying out of that contract. In utter disregard of both contracts, he entered into the agreement with defendant, knowing that the effect of the contract would be to nullify the third party contract and make its fulfillment impossible and at the same time breach his contract of passage. By his contract with the defendant, the plaintiff robbed the third party of the exclusive right to the news rights of the voyage and attempted to take for himself the advantage which had been contracted to the third party.
. A court will not lend aid to a party who has committed a tort to enable him to recover from another the price agreed to be paid for his wrongful act. The defense is allowed not as a protection to a defendant, but as a disability to the plaintiff. (Beekman v. Marsters, 195 Mass. 205; Roberts v. Criss, 266 Fed. Rep. 296; s. c., 11 A. L. R. 698, with note; Woodstock Iron Co. v. Richmond & Danville Extension Co., 129 U. S. 643; 27 Harvard Law Review, 273; Rhodes v. Malta Vita Pure Food Co., 149 Mich. 235; 3 Williston on Contracts, § 1738; Proposed Final Draft of the Restatement of Contracts by The American Law Institute, § 571; Wanderers Hockey Club v. Johnson, [Brit. Col.] 25 Western Law Rep. 434.)
The principle involved is somewhat analogous to that involved in a contract which constitutes a fraud upon a third party. (Horbach v. Coyle, 2 Fed. Rep. [2d] 702.)
The fact that plaintiff might be able to establish a prima facie case without requiring the disclosure of the elements which made the contract void would not prevent the defendant from proving that the contract in issue resulted from, was directly connected with, and was entered into for the purpose of enabling plaintiff to destroy the two contracts previously entered into with the owners of the Graf Zeppelin. (Horbach v. Coyle, supra; 3 Williston on Contracts, § 1753.)
The order should be affirmed, with costs, and the question certified answered in the affirmative.