Court Opinion

ID: 3579649
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:30:59.271583+00
Date Added: 2024-06-11T07:41:11.953658
License: Public Domain

Plaintiff sues as an administratrix to recover judgment for a
sum of money only. The complaint alleges that her intestate at the time of his death was the *Page 271 
real and actual owner of the capital stock of a domestic corporation which had been issued to one Vogel as his dummy and agent. Three causes of action are set forth: (1) That after the death of the intestate the defendant, by the subterfuge of a pretended purchase thereof, acquired the corporation's capital stock, with knowledge that it belonged to the plaintiff; (2) that through his control of this stock the defendant prevented payment to the plaintiff of an indebtedness of the corporation to the intestate for cash he had advanced to it; and (3) that by the same means the defendant also caused the corporation to procure and file an instrument of satisfaction of a mortgage for $280,000 which the corporation had given to a third party for the benefit of the intestate.
No argument against the sufficiency of the complaint has been made.
In his answer the defendant sets forth a defense which alleges that the corporation mentioned in the complaint made and sold beer and ales in premises known as the Yonkers Brewery, under permits secured by it from the Federal and State liquor authorities; that the grant of like permits had theretofore been withheld because of the rumored ownership of the Yonkers Brewery by plaintiff's intestate; that the organization of the corporation and the issuance to Vogel of its capital stock "were part and parcel of a fraudulent plan, contrivance and scheme to keep secret from the Federal and State authorities the identity of plaintiff's intestate as the true undisclosed owner and operator of said brewery * * * for the purpose of inducing Federal and State authorities to issue permits for the manufacture and sale of beer and ales at said brewery"; and that at the times in issue "the defendant had no knowledge of the interest of plaintiff's intestate in said brewery or in the capital stock of the corporation or corporations owning same, or of his interest, if any, in said $280,000 bond and mortgage, or said cash advances, or of the aforesaid plan or scheme." *Page 272 
Plaintiff moved for an order striking out this defense for invalidity apparent on the face thereof. The motion was granted at Special Term and denied at the Appellate Division where the plaintiff was given leave to present to us the question whether this defense is sufficient in law.
In her capacity as administratrix plaintiff merely continues the personality of her intestate before the law for the purposes of the general administration of his estate. Her present motion is a constructive admission that the foregoing allegations of the challenged defense are true. She so admits that the property upon which she now makes claim through her intestate had been clandestinely devoted by him to ends that were radically contrary to the Alcoholic Beverage Control Law (Cons. Laws, ch. 3-B, §§ 110, 111, 118, subd. 2, 130). In effect, then, this action is one brought by an alleged secret owner to vindicate his assertion of beneficial title to property he had parted with in order to perpetrate a fraud upon the statute which regulates and controls traffic in alcoholic beverages.
Conceding all this, plaintiff replies that her intestate's unlawful use of his property did not empower defendant to convert it. She makes the defendant's allegation of his own good faith the basis for an argument that he may not question the legality of transactions in which he had no part.
But our primary concern is not with the position of the defendant. The immediate question is whether on the presently admitted facts a recovery by the plaintiff should be denied for the sake of public interests. This is a question of public policy in the administration of the law. "The principles of public policy remain the same, though the application of them may be applied in novel ways. The ground does not vary. As it was put by TINDAL, C.J., in Horner v. Graves (7 Bing. 735, 743), `Whatever is injurious to the interests of the public is void, on the grounds of public policy.'" (Naylor, Benzon  Co. v.Krainische Industrie Gessellschaft, [1918] 1 K.B. 331, 342, 343.) *Page 273 
The transactions of plaintiff's intestate were clearly destructive of the purpose of a statute which was enacted "for the protection, health, welfare and safety of the people of the state." (Alcoholic Beverage Control Law, § 2.) We think those transactions were so far against the public good as to disable the plaintiff from invoking the aid of the court in her endeavor to disengage herself (as administratrix) from the unlawfulness of the conduct of her interstate. (See American Law Institute, Restatement of the Law, Restitution, § 140; Robertson v.Sayre, 134 N.Y. 97. Cf. Pers. Prop. Law, § 19 [Cons. Laws, ch. 41]; Real Property Law, § 268 [Cons. Laws, ch. 50].)
The order should be affirmed, with costs, and the question certified should be answered in the affirmative.