Court Opinion

ID: 9755102
Source: CourtListenerOpinion
Date Created: 2023-08-28 20:25:12.657685+00
Date Added: 2024-06-11T07:28:02.665886
License: Public Domain

Heher, J.
(dissenting). The complaint is vague and uncertain in its allegations and fundamentally incongruous in the right of action pleaded and the relief sought.
The first count alleges that the defendants, “as individuals and as officials” of the city, “did steal and did unlawfully, fraudulently, corruptly and with gross breach of trust, extort and appropriate to themselves property of the City, to wit, money * * *, accomplished by the means of the extortion from employees of the City of 3% of the annual salary of each said employee during each year from 1917 to 1949,” “in such manner and at such times as to have constituted, in law, thefts, defrauds and extortions from the city payroll funds, which were the property of the City, in that the 3% of salary of each city employee was extorted by threats and force by the defendants from the said city employees on a systematic annual basis,” amounting “in law to an unlawful charge upon, and theft, defraud and extortion from, the City’s treasury and budgeted appropriations for each such year,” to the extent of “3% of City treasury funds and budgeted appropriations set aside or held or appropriated for salaries of City employees.”
The second count, repeating these allegations by reference, asserts that “All such moneys extorted by the defendants from City employees under defendants’ 3% extortion scheme were and are subject to be forfeited to the City for its own use and benefit, or as trustee for the use and benefit of the defrauded employees (or their heirs and administrators) from whom such moneys were extorted,” and defendants “are required to forfeit all such moneys to plaintiff, in the amount of” 15 million dollars.
There is a demand for judgment in the sum stated and “the impressment of a trust” in that amount “upon the property and assets” of defendants “for the use and benefit *607of the plaintiff as beneficiary, or in the name of plaintiff as trustee for the use and benefit of all employees (or their heirs and administrators) of the plaintiff from whom” the moneys were “extorted.”
There is no specification whatever of the acts and conduct constituting, “in law, thefts, defrauds and extortions from the city payroll funds.” It is pleaded that the “extortion” was accomplished “in such manner and at such times” as to fall into the foregoing category of misconduct; there is no particularization of the “threats and force” by which the moneys were allegedly “extorted.” A mere charge of extortion cannot be made to import the means by which it was accomplished. The crucial averment is a bare conclusion of law. And recovery of the money is demanded as the city’s own or as trustee for the use and benefit of the employees or their legal representatives.
But the city cannot enforce such right as the employees or their heirs or administrators may have, as their trustee. It bears no such relation to them; and, as a branch of the State Government for local administration, limited in its powers to those expressly conferred or reasonably implied to effectuate the authority given in express terms, it is not endowed with capacity to act as a trustee for the individual employees or their legal representatives to enforce a trust in invitum against the defendants.
It was conceded on the oral argument that the moneys in question were earned by the employees by service actually rendered the city, and were paid to them by the city in the usual course, and the employees themselves, individually, made the disposition constituting the basis of this action; and that if there be the liability thus charged to the defendants, the employees themselves may enforce it, unless they were pariiceps criminis, and there is no such allegation. It became the peremptory duty of the city to appropriate the moneys needed to compensate its employees for services rendered, and to make payment accordingly; and, upon payment, title to the moneys passed to the employees, and they were free to use it as they chose, conformably to law.
*608Such being the case, the city has no right of action to recover the money as its own property. The defendants cannot be under a liability both to the city and to its employees, past and present, who made to defendants the asserted payments now in controversy. This would seem to be axiomatic.
Reading v. Attorney General (1951), A. C. 507, 1 All E. R. (1951) 617, is radically different. There, a sergeant attached to the Royal Army Medical Corps stationed in Egypt, while in uniform, boarded a private lorry and escorted it through Cairo, thus enabling it to pass the civilian police without being inspected. The lorry was loaded with cases, the contents of which were unknown. On each occasion the sergeant received from a civilian a large sum of money of which the military authorities later took possession. The moneys paid, it seems, were bribes to facilitate the operation of a smuggling ring engaged in transporting drugs and liquor across the Egyptian border. The Crown seized the money paid the sergeant and he, after court-martial, interposed a petition of right for the restitution of money alleged to have been had and received by the Crown to his use, or for the payment to him of money taken possession of on behalf of the Crown.
The holding was that the sergeant was using his position in the Army, and the uniform to which his rank entitled him, to obtain the money which he received and therefore the Crown, his master, was entitled to the money. The moneys represented part of the proceeds of bribery. Lord Porter accepted the view of Bowen, L. J. in Boston Deep Sea Fishing & Ice Co. v. Ansell, 39 Ch. D. 367 (1888), that “the money which is sought to be recovered must be money had and received by the agent for the principal’s use; but the use which arises in such a case, does not depend on any privity between the principal and the opposite party with whom the agent is employed to conduct business — it is not that the money ought to have gone into the principal’s hands in the first instance; the use arises from the relation between the principal and *609the agent himself. It is because it is contrary to equity that the agent or the servant should retain money so received without the knowledge of his master. Then the law implies a use, that is to say, there is an implied contract, if you put it as a legal proposition — there is an equitable right, if you treat it as a matter of equity — as between the principal and agent that the agent should pay it over, which renders the agent liable to be sued for money had and received, and there is an equitable right in the master to receive it, and to take it out of the hands of the agent, which gives the principal a right to relief in equity.” In response to the argument that, even so, this right to recover is subject to the qualification that “the sum obtained must have been obtained in the course of the sergeant’s employment,” Lord Porter said that it is “often convenient to speak of money obtained as received in the course of the servant’s employment, but, strictly speaking, I do not think that expression accurately describes the position where a servant receives money by reason of his employment, but in dereliction of his duty.” Such is not the case pleaded here.
Nor is United States v. Carter, 217 U. S. 286, 30 S. Ct. 515, 54 L. Ed. 769 (1910), in point. There, an Army captain and procurement officer entered into a profit-making arrangement with two contractors which involved the exercise of his official discretion in such a way as to give the contractors abnormal profits. The captain’s illicit gain was traced into the hands of third persons, and made the subject of a constructive trust. And in City of Boston v. Santosuosso, 307 Mass. 302, 30 N. E. 2d 278 (Sup. Jud. Ct. 1940), the Mayor of Boston compromised a claim against the city in Teturn for one-half of the proceeds of the settlement.
The Restatement, Agency, section 403, declares the rule to be that if an agent “receives anything as a result of his violation of a duty of loyalty to the principal, he is subject to a liability to deliver it, its value, or its proceeds, to the principal.” And there is also the rule, Ibid., section 380, that unless otherwise agreed, an agent is subject to a duty *610“not to conduct himself with such impropriety that he brings disrepute upon the principal or upon the business in which he is engaged.” But for a breach of this duty only actual damages would be recoverable.
There is no showing of disloyalty here. The circumstances under which the alleged payments were made, and the use to which they were to be put, are not pleaded; and there is no way of determining from the complaint whether there was, in fact and in law, a betrayal of the city’s interest giving rise to a cause of action. Wrongdoing is not to be implied.
The essence of the declared cause of action, as elaborated on the oral argument, is the “extortion” on the given pro raid basis of moneys actually paid as salary to the city’s employees which, if well founded in fact, would give rise to a right of action in the latter alone, for the money was theirs and not the city’s. But on the hypothesis of a cause of action in the city also, the complaint is basically insufficient in particularization of the facts supporting the strictly legal conclusion of extortion.
It is fundamental in pleading that the facts be stated with reasonable definiteness and certainty to show the constituents of the pleaded cause of action and to apprise the adversary party of the case he is called upon to meet. Grobart v. Society for Establishing Useful Manufactures, 2 N. J. 136 (1949). It is not enough “To refer to matters in an uncertain, doubtful, and ambiguous manner, as a kind of general dragnet to meet whatever evidence maj>' be presented.’” Estabrook v. Webber Motor Co., 137 Me. 20, 15 A. 2d 25, 28 (Sup. Jud. Ct. 1940). Simplicity of pleading has relation to the form and not the substance. And a party “ ‘cannot be heard * * * to contend for two diametrically opposed sets of facts.’ ” Flint Frozen Foods, Inc., v. Firemen’s Insurance Company of New Jersey, 8 N. J. 606, 611 (1952).
I would affirm the judgment, as grounded upon a complaint deficient in the statement of a cause of action.
Mr. Justice Oliphant and Mr. Justice Waohenfeld join in this opinion.
*611For reversal — Chief Justice Vanderbilt, and Justices Burling, Jacobs and Brennan — 4.
For affirmance — Justices Heher, Oliphant and Wachenfeld — 3.