Court Opinion

ID: 5355832
Source: CourtListenerOpinion
Date Created: 2022-01-08 07:01:41.265481+00
Date Added: 2024-06-11T08:29:47.970831
License: Public Domain

Johnston, J.
(dissenting in part). I vote to reverse and dismiss the complaint as to the defendants Diefendorf, Lord, Rand and Van Alstyne for the reasons stated in the prevailing opinion and for the further reason that at no time did they know nor was it intimated by counsel that the corporation had a claim for restitution against Presley, nor did counsel know of any such claim. In fact, the first time counsel heard of it was months later, when he received a letter from the attorneys for the plaintiff in the instant action. While the above-named defendants admit they never discussed among themselves the claim from which Presley sought and obtained a release, they did rely, as they had a right to, on the advice of the *672attorney for the corporation, who negotiated for the settlement of the Richards judgment. It is not even suggested that the attorney for the corporation at all times was not acting in good faith and, as he believed, for the best interest of the corporation.
As to defendant Presley, I dissent and vote to affirm the judgment as to him. In my opinion we may treat the complaint as setting forth a cause of action against Presley individually for the damage which the corporation suffered by reason of his wrong. That was the underlying issue which was tried and determined. It was clearly established, and the learned Special Term found, that the corporation had a claim for restitution against Presley by reason of the fraud which this court held he practiced upon Mrs. Richards and which resulted in casting the corporation in judgment. The settlement of the Richards judgment was not a joint settlement. There is evidence that Mrs. Richards would have released the corporation upon the payment of $100,000 without Presley contributing anything. It is true that when the attorneys for Mrs. Richards, the corporation and Presley first discussed settlement, Mrs. Richards’ attorney said if $200,000 were paid Mrs. Richards would settle her judgment and it was a matter of indifference to her who paid the total amount. But as the negotiations progressed the situation changed and on December 8, 1936, it was agreed between the attorney for the corporation and the attorney for Mrs. Richards that the corporation was to pay $100,000 in return for a release from Mrs. Richards. Both attorneys so testified. On December 9, 1936, the corporation paid $100,000 to Mrs. Richards and obtained a release (or releases), which contained a reservation of all rights against Presley. The attorney for the corporation testified the effect of this release was in no way to be impaired by any failure of Presley to make any payment and it was to be final and complete and was not delivered conditionally and the corporation was to be “ out, whether Presley paid another cent or not.” In the light of this evidence, in my opinion, the settlement was not a joint one and Presley was free either to settle the Richards judgment against him or appeal from it. He chose to settle and paid $100,000 on January 12, 1937, and obtained a release from Mrs. Richards. On the same day lie delivered his release to the corporation and the corporation delivered its release to him.
I disagree with the holding of the majority that the latter release is valid because it was predicated upon a good consideration. As already indicated, it was given at a time when neither the directors — other than Presley — nor the corporation’s attorney' knew the corporation had a claim against Presley for restitution. It is stated in the prevailing opinion that as Presley withdrew his appeal *673at the time he paid Mrs. Richards $100,000, there was a good consideration for the corporation’s release to him. I think not. Undoubtedly a waiver of the right to appeal is sufficient consideration to support a release; and, as between Mrs. Richards and Presley, the withdrawal of the latter’s appeal was a good consideration for the settlement of the Richards judgment for a lesser sum. But the withdrawal of his appeal was not a detriment which Presley suffered at the request of the corporation or for its benefit. The corporation, having made its settlement about one month previously, was no longer interested in the Richards judgment.
I agree that, for the reasons stated in the prevailing opinion, there is no merit in the plaintiff’s appeal.
For the foregoing reasons I vote to reverse the judgment and dismiss the complaint except as to appellant-respondent Presley, as to whom I dissent and vote to affirm, and also dissent as to the dismissal of the appeal from the order fixing and allowing counsel fee and disbursements, and vote to affirm said order.
Carswell, J., concurs.
Judgment reversed upon the law, with one bill of costs to appellants-respondents Presley, Diefendorf, Lord, Rand and Van Alstyne, and complaint dismissed, with costs. Findings of fact and conclusions of law reversed. The appeals from the order fixing and allowing counsel fee and disbursements and from the decision are dismissed. [See amended decision, 256 App. Div.-.]