Court Opinion

ID: 5401538
Source: CourtListenerOpinion
Date Created: 2022-01-08 10:44:07.081171+00
Date Added: 2024-06-11T08:30:27.349760
License: Public Domain

Beldock, J.
(dissenting). The facts in this case must be reviewed in the light of the rule that “ Direct and positive proof of a conspiracy to cheat and defraud * * * is seldom, if ever, attained. Conspiracies of this nature ordinarily are not conceived and executed openly but in secret. Usually the only evidence available is that of disconnected acts on the part of the individual conspirators, which acts, however, when taken together in connection with each other, show the conspiracy to secure a particular result quite as satisfactorily and conclusively *418as more direct proof.” (Keviczky v. Lorber, 290 N. Y. 297, 302.)
The jury was free to find from the evidence presented that respondent was employed as a broker by the agents for the stockholders of Monument Mills and was to be paid a commission of $3 a share if he procured a buyer at a satisfactory price; that respondent thereafter made an agreement with Diamond that, if respondent or Diamond obtained a purchaser, they would divide equally the commission of $3 a share; that $50 a share net to the sellers was a satisfactory price; that a proposed deal in April, 1948, at that net price was not completed because respondent “ held out for his $3 ”; that on September 14, 1948, defendants Horvath contracted to purchase the outstanding shares at $51 a share; that the agreement of September 14, 1948, did not provide for a commission to either respondent or appellants, despite the fact that appellants brought about the sale to defendants Horvath; that, instead, the agreement provided for compensation of $1 a share to Myers, one of the agents for the selling stockholders. In my opinion, this evidence is sufficient to justify the affirmance of this judgment.
In Keviczky v. Lorber (supra) plaintiff, a broker, had an agreement with defendant bank for commissions if he procured a purchaser. The purchaser procured by plaintiff refused to complete the purchase through plaintiff as broker because plaintiff refused to ‘ ‘ kick back ’ ’ part of the commission to the purchaser. The sale was thereafter completed through a dummy broker. The Court of Appeals affirmed a judgment for plaintiff against the solvent seller, the purchaser, and the dummy broker for conspiracy which prevented plaintiff from procuring the purchaser and -earning his commission.
In the case at bar, appellants knew, as the result of the transaction in April, 1948, that respondent refused to waive any part of his commission. Therefore, Horvath, who was an intimate social and business friend of appellants for fifteen years, completed the written agreement of sale without naming respondent or appellants as brokers. Instead, by paying Myers a commission of $1 a share, Horvath, in effect, received a rebate of $2 of the commission of $3 a share, with the sellers receiving the same net price of $50 a share, whether Myers received the commission of $1 a share by the purchaser completing the sale through Myers at $51 a share, or purchasing through respondent at $53 a share and being required to pay respondent a commission of $3 a share. On this evidence, the jury was free to find that the deal would have been closed and that respondent would *419have received his commission had not appellants, by means of this conspiracy, prevented him from earning his commission.
Nevertheless, the majority prefers to reverse this judgment and dismiss the complaint because, in its view, respondent has not made out a case as a matter of law. In my opinion, none of the reasons presented by the majority is sufficient upon which to predicate reversal.
The prevailing opinion states that there is no evidence that the agents for the Monument Mills stockholders knew of the agreement between respondent and Diamond to share commissions and, therefore, there is no proof that the agents were required to pay respondent a commission if his coadventurers produced the purchaser. There are at least two answers to this statement: (1) the agents knew that respondent and appellants were coadventurers with respect to the written offer of April 6, 1948, and the jury had the right to find that the agents knew they continued as coadventurers as to future prospective purchasers ; (2) even if the agents did not know that respondent and appellants continued as coadventurers, the agents would be obliged to pay respondent a commission if in fact he and appellants were coadventurers and if in fact defendants Horvath were produced by respondent’s coadventurers (Sussdorff v. Schmidt, 55 N. Y. 319; Lloyd v. Matthews, 51 N. Y. 124) were it not for the facts already mentioned which prevented respondent from being deemed the procuring cause of the sale.
The majority states that there is no evidence that appellants conspired with Horvath to repudiate the agreement between appellants and respondent to share commissions because respondent had no contract with appellants which required them to collect commissions or to pay respondent commissions earned by them but not collected. In my opinion, appellants owed respondent as a coadventurer a fiduciary obligation which prevented them from waiving respondent’s share of any commissions to which they might become entitled. (Meinhard v. Salmon, 249 N. Y. 458.)
The majority states that there is no evidence that appellants induced Myers, one of the agents of the stockholders, to violate the agreement to pay respondent and appellants commissions. The direct results of the sale to Horvath at the gross price of $51 a share under the terms of the contract of September 14, 1948, were (a) to disable respondent and appellants from procuring a buyer under the terms of respondent’s employment by the agents, namely, at a gross price of $53 a share, and thus *420to prevent any right to a commission from accruing either to respondent or appellants under the terms of respondent’s said employment; (b) Horvath was thus enabled to obtain a rebate of $2 a share of the commission of $3 a share which the sellers had agreed to pay, but which respondent had refused to split, Horvath being able to accomplish this purpose by paying a commission of $1 a share to the agent of the sellers as an inducement; (c) the net price to the sellers of $50 a share remained the same whether the sale was consummated at $53 a share with a commission of $3 had the contract named respondent or appellants as brokers or $51 a share with a commission of $1 a share to the sellers’ agent. The jury was free to find that these facts amounted to guilty conduct on the part of appellants and the stockholders’ agent. I do not agree with the holding of the majority that, as a matter of law, this combination of facts points only to innocence, having in mind the admonition of the Court of Appeals that usually the only evidence of conspiracy available is that of disconnected acts on the part of the conspirators, which, when taken together, show a conspiracy as satisfactorily and conclusively as more direct proof.
That appellants conspired to bring about the payment by Horvath of the commission of $1 a share to Myers might be found by the jury, not only from the evidence stated in the foregoing paragraph, but also from Diamond’s promise in October, 1948, to pay respondent his share of the commission when he, Diamond, received his money.
The majority states that it does not understand the verdict because there is no proof either that Diamond received any compensation for his services in bringing about the sale of the stock or that he concealed his participation in the transaction by the substitution of a dummy broker. In my opinion, the proof of those two factors is plain. Horvath benefited by the connivance of appellants to the extent of $2 a share. Horvath was appellants’ social and business friend for fifteen years. He rewarded appellants through the years, both before and after September, 1948, with profitable business transactions. In addition, there is the mentioned evidence of Diamond’s promise in October, 1948, to pay respondent his share of the commission when he, Diamond, received his money. The majority admits that the jury could find from the evidence that Diamond brought about the sale of the stock to Horvath, The jury was free to find that the provision in the agreement of sale for the payment to Myers of $1 a share commission, when Myers did not bring *421about the sale, was the substitution of Myers as the dummy broker for appellants or their coadventurer, the respondent.
Finally, the majority states that respondent has not proved damage by reason of the conspiracy, i.e., he still has a cause of action against the seller and there is no proof of the insolvency of the seller. It should be noted that such insolvency of the seller must be proved only in an action to induce a breach of contract between the broker and the seller where the seller has earned his commissions. (Shapiro v. Greenwich Sav. Bank, 266 App. Div. 359, affd. 293 N. Y. 724.) Although the action may have been misnamed in several places in the record as one to induce the breach of a contract, it is clear that the action was not tried on that theory. Appellants did not move to dismiss the complaint on the ground that there was no proof of damage, nor was any request to charge made as to the necessity of proof of insolvency of the seller. On the contrary, the action was tried as one in conspiracy not to deal with respondent or appellants as brokers, but to substitute Myers as broker and to pay Myers a commission of $1 a share, and thus to cheat respondent out of his commission. That was the theory on which the case was submitted to the jury, without exception by any of the parties. In an action of this kind for damages resulting from conspiracy which prevented respondent from earning a commission, it is not necessary that he prove the insolvency of the seller in order to recover. (Keviczky v. Lorber, 290 N. Y. 297, supra.)
Although I favor affirmance, if the judgment is to be reversed, there should not be a dismissal of the complaint but rather a new trial on the ground that appellants are liable to respondent because of breach by them of the fiduciary obligation which rested on them as joint venturers with respondent to develop every possible business opportunity for the benefit of all, and not to prevent or frustrate respondent’s earning a commission by instigating another to take advantage of the opportunity for the sole benefit of that other. (Meinhard v. Salmon, 249 N. Y. 458, supra.)
The judgment should be affirmed.