Court Opinion

ID: 5333319
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:23:44.195136+00
Date Added: 2024-06-11T08:29:28.250188
License: Public Domain

Untermyer, J.
(dissenting). The facts to which the plaintiff testified plainly reveal a situation in which the plaintiff entered into a contract with the defendant which required him ruthlessly to violate his existing contract of employment with the Racing Form. I find no evidence to sustain the claim that Budd was justified in disregarding that contract because he had been assigned to work in California. Hi's contract with the Racing Form does not specify where he "shall render services. When instructed to assume his duties in California he seems to have complied some*147what reluctantly, but he did, comply. If those instructions were not in accordance with his contract of employment, it was his right to refuse then to work in California. He could not, however, comply with the instructions and then make use of that compliance as an excuse for terminating the employment. (Imperator Realty Co. v. Tull, 228 N. Y. 447.) Indeed, it is entirely clear that this contention is an afterthought. Budd testified that in the telephone conversation with Mr. Schneider he told him that “ I am employed here now, and have a contract with the Racing Form. * * * It is a three-year contract, which has about two years to go.” Referring to the same conversation, he also testified: “Well, to Mr. Schneider I says that ‘ Everything is satisfactory so far, and I would like to go further into this thing in regard to in case the Racing Form wants to take any action against me, will I be protected? ’ He says, ‘ Just a minute, Mr. Jeans will talk to you.’ And I went on with the same story with Mr. Jeans, and he said, ‘ absolutely guarantee everything. You have nothing to fear or nothing to worry about. The Telegraph will protect you in every which shape, manner and form.’ ” From the inclusion in their contract of the provision that the defendant would indemnify Budd against the consequences of his act, it is obvious that both parties recognized the validity of Budd’s contract with the Racing Form. It was upon this covenant of indemnity that Budd relied. He testified that he was “ not interested,” that Mr. Burkan had advised that his contract with the Racing Form was not binding. What interested him was “ that the Telegraph will assume remainder of contract at the same terms, and legal expenses, if any ” and, as he said, in “ the Telegraph assuming the responsibilities.”
The contention cannot be made that the Racing Form indicated by word or act that it acquiesced in this deliberate violation of its rights, even if that were material here. When informed that Budd had concluded to accept other employment, it did not allow its position to remain in any doubt. It promptly wrote urging Budd to report for duty, saying: “ Under date of February 16, 1928, you entered into a contract with this corporation, whereby you agreed to work for us until February 28, 1931. Please take notice that we propose to insist on our rights under the above contract. We her-'by demand that you immediately report for duty at our New York office and render services pursuant to said contract.”
The question then which is directly presented by this appeal is whether a contract, the performance of which to the knowledge of both contracting parties necessarily involves the breach of an earlier contract with another party, is against public policy and unenforcible. I agree with . Mr. Justice Glennon that this *148question was not decided in Reiner v. North American Newspaper Alliance (259 N. Y. 250), nor am I able to find that it has ever been decided by the Court of Appeals. It has, however, been directly held by this court and by several other courts that such a contract is not enforcible, because resulting in the infliction of a civil wrong upon another. This is not a case where an employee, after breaking a contract of employment, has secured employment - or entered into a contract of employment elsewhere. The contract' which is to be enforced here is the very instrument of wrong. : The', effect of allowing it to be enforced is to encourage "these delinquencies-by assisting a plaintiff in such a situation to secure the proceeds of his breach of faith. In accomphshing this undesirable result, it also constrains a defendant to continue in the commission of a tort. (Hornstein v. Podwitz, 254 N. Y. 443; Lamb v. Cheney & Son, 227 id. 418; Campbell v. Gates, 236 id. 457),'by awarding damages against him if he does not perform. Moreover, if valid now, the contract is equally valid and enforcible before the employee has severed relations with his previous employer. It follows that in such cases damages will be recoverable against whichever party, even then, refuses to proceed with the performance of a contract ' which both are under a legal duty to repudiate.
Public policy forbids the interposition of courts to lend their aid to purposes. like these. We should leave the parties to this contract as we find them, in order to repress such acts by competitors and employees alike. They will be more likely to refrain from such transactions if they know that their contract will not be enforced. The defense of illegality is allowed “ not as a protection to a defendant, but as a disability to the plaintiff.” (Reiner v. North American Newspaper Alliance, supra.) (See, also, the many authorities cited in the Reiner cáse.) AThe rights of the parties here do not depend on any calculation of their relative iniquity, for ' both were equally at. fault. The plaintiff’s contract required him to render services to the Racing Form and to no one else. The defendant’s duty required it to abstain from interference with that contractual relation. In measuring the degree of culpability, it, seems to me without significance that the defendant made the offer, and that the plaintiff only accepted the offer, which resulted in this contract. Both joined in the commission of the final act which deprived the rightful employer of the plaintiff’s services.
Our attention is directed to no decision, and none is cited in the prevailing opinion in this case, which has sustained a cause of action of this character. On the contrary, in Hocking Valley R. Co. v. Barbour (190 App. Div. 341) this court. refused the enforcement of a contract having such a tendency, and in Attridge v. Pembroke *149(235 App. Div. 101) the Appellate Division of the Fourth Department in a well-reasoned opinion followed the same principle. In Roberts v. Criss (266 Fed. 296) the Circuit Court of Appeals for the Second Circuit refused enforcement of a contract which necessarily-involved the breach of .a contract by one of the parties and a third. Two other jurisdictions have adhered to this rule (Rhoades v. Malta Vita Pure Food Co., 149 Mich. 235; Wanderers Hockey Club v. Johnson, [Brit. Col.] 25 West. L. Rep. 434). It is significant that the three 'cases last referred to are cited with approval in the Reiner Case (p. 256)."~' Professor Williston expresses a similar view (3 Williston Cont. § 1738)' as does also Wald’s Pollock on Contracts ([3d Am. ed.] 376). Indeed the tendency in this direction is the. subject of comment in 83.'American Law Reports, 32, where the decisions are collated and reviewed. ' Perhaps the growing recognition of the principle is due to the increased importance of contracts of, all lands in modern fife and the necessity,' at times, of protecting them against premeditated- violation by something more than an award of damages, which, we know, are often not collectible. (See Barbour’s, The “ Right ” to Break a Contract, 16 Mich. L. Rev. 106.) Finally, as strongly indicative of what I think is the prevailing view, section 576 of the American Law Institute’s Restatement of the Law of Contracts provides that “ A bargain, the making or performance of which involves breach of a contract with a third person, is illegal.” ,
¡Li consonance with decisions in this and other courts, with the opinions of leading commentators and with the salutary public policy to be served, I think we should hold this contract to be unenforcible. For these reasons I favor affirmance of the judgment.
Merrell, J., concurs.
Judgment reversed and a new trial ordered, with costs to the appellant to abide the event.