Court Opinion

ID: 5786546
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:59:59.25348+00
Date Added: 2024-06-11T08:42:07.176893
License: Public Domain

Stevens, P. J.
(dissenting). I dissent, vote to reverse and order a new trial. Plaintiff instituted this action to recover royalties allegedly due under a written agreement and for an accounting of sales of the Illustrated World Encyclopedia, a work published by defendant.
In its affirmative defense defendant pleaded breach of contract in that plaintiff sold to another much of the same subject matter or material purchased by defendant and used in its publication, for which defendant was paying royalties to plaintiff. This material was sold to and for publication in the Illustrated Columbia Encyclopedia, owned and published by a competitor of the defendant. The trial court found nothing in the agreement which prohibited such acts and rendered judgment for the plaintiff. In the course of the trial defendant, in my view, was unduly limited in the presentation of its proof.
It is correct that there is no specific limiting language in the agreement which forbade a double sale. However, implicit in every contract is .the obligation of fair dealing. Plaintiff, while being paid royalties, undertook by Ms acts to destroy the source or, at the very least, to substantially impair and diminish the value of the material sold and for which plaintiff was receiving royalties. This should not be permitted (Underhill v. Schenck, 238 N. Y. 7; Kirke La Shelle Co. v. Armstrong Co., 263 N. Y. 79; April Prods. v. Harms, Inc., 165 Misc. 883).
In Van Valkenburgh, Nooger & Neville v. Hayden Pub. Co. (33 A D 2d 766, order resettled 36 A D 2d 947, affd. 30 N Y 2d 34), to which the majority refers, we found no fiduciary relationship, and stated that .the transaction was a purely commercial one for which damages afforded adequate relief. In that case the publisher was bound by agreement to use its ‘1 best efforts' ’ ’ in promotion of the author’s books. When the publisher was *195unsuccessful in obtaining a reduction in royalties it hired others to prepare a new group of electronic books, and did not disclose that fact to the author. While the books produced were similar in organizing, presenting and publishing of material, there was nothing to indicate that the publisher appropriated the work product of the author, only that it failed to use its “ best efforts ” to promote the sale of the author’s books. A measure of damages could readily be calculated.
In the case before us, plaintiff sold again much of the identical material for which plaintiff was paid and for which he was receiving royalties. In Van Valkenburgh (supra), the Court of Appeals reaffirmed that there is implicit in all contracts a covenant of fair dealing and good faith (p. 45). The court observed, “ although a publisher has a general right to act on its own interests in a way that may incidentally lessen an author’s royalties, there may be a point where that activity is so manifestly harmful to the author, and must have been seen by the publisher so to be harmful, as to justify the court in saying there was a breach of the covenant to promote the author’s work ” (supra, p. 46; emphasis supplied). It noted there was evidence of no great variation in sales of the author’s works for an 18-month period prior to and after the publication of the second work, noted that the Appellate Division did not find a breach of the covenant of fair dealing, and decided that certain findings, as were made by the Appellate Division, could have been made as a matter of law.
In the case now on appeal, plaintiff deliberately resold the identical material with what only reasonably could have been the objective of undermining defendant’s product while reaping dual benefits from his own wrong. There is no sound reason why, in equity or in law, plaintiff should continue to be enriched by his own wrong. Damages in this type of case cannot be reasonably calculated and would afford a totally inadequate remedy.
Lane and Capozzoli, JJ., concur with Kitpperman, J.; Stevens, P. J., and McGtvern, J., dissent in opinion by Stevens, P. J.
Judgment, Supreme Court, New York (bounty, entered on February 10,1972, affirmed. Respondent shall recover of appellant $60 costs and disbursements of this appeal.