Court Opinion

ID: 3612092
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:55:57.892275+00
Date Added: 2024-06-11T14:07:32.367713
License: Public Domain

We must assume upon this appeal that the allegations of the answer are true; we may not draw from these allegations any inference of fact which does not follow from them as a necessary and irrefutable conclusion. It may be true that the defendant at the time it made the contract knew of the terms and conditions of the plaintiff's contract of passage on the Graf Zeppelin, and conspired with the plaintiff to avail itself of expected benefits from that contract and to disregard the restrictive conditions without which those benefits could not be obtained. If the defendant had alleged knowledge of that contract, then upon proof of facts from which knowledge might be inferred a trial court might find a wrongful conspiracy. The court may consider upon a motion for judgment on the pleadings only the allegations of the pleadings, and may not make any findings of fact to supplement these allegations, particularly where, as in this case, the pleader has carefully refrained from alleging that it is a party to an alleged wrong against a third person. (de Cordova v.Sanville, 165 App. Div. 128; revd. on dissenting opinion of INGRAHAM, J., 214 N.Y. 662.) The questions presented here are whether the plaintiff has wronged the third party through the performance of his contract with the defendant and whether the defendant, who has, even though innocently, obtained benefits flowing from such wrong, must pay to the wrongdoer the stipulated compensation for such benefits. *Page 263 
General duties imposed by the statute or common law restrict at many points the freedom of the individual. These duties have their roots in some public policy of the State, and the same public policy out of which they arise refuses to sanction any contract or act in breach of such duties. Additional duties not rooted in any public policy may be assumed by the individual through voluntary contract. Such duties are narrow. They are limited by contract and are owed only to parties to the contract, and concern these parties rather than the State. The courts grant redress for failure to perform a contractual duty through award of damages and in some cases may decree specific performance of a contractual obligation; but denial of the benefit which would be derived from performance of a contractual obligation voluntarily assumed concerns the public policy of the State remotely, if at all. At least until the present time, the courts of this State have not held that a breach of such obligation in itself contravenes the public policy of the State or carries with it other consequences than liability for damages for breach of contract.
The situation may be different where from relations arising out of the contract the law imposes a duty upon one party more general than the duty assumed by contract. The plaintiff could not obtain passage upon the Graf Zeppelin except by concealing himself as a stowaway upon the dirigible or entering into a contract for passage upon terms and conditions acceptable to those in charge. If he had obtained passage by concealment he would not have been under any contractual duty to refrain from giving out reports of the passage. None the less the giving out of such reports would have constituted an additional wrong to those in charge of the Zeppelin for which he would have been liable. The situation is not materially different because he chose to go on the dirigible as a passenger, accepting the conditions and restrictions attached to his status. Failure to abide by those conditions *Page 264 
was more than the denial of a stipulated benefit. He used the contract to obtain a benefit for himself. The restrictions were imposed to prevent the plaintiff from availing himself of that benefit in a manner which might work injury to the party that furnished the transportation. Though the State imposes no duty upon a passenger to refrain from sending reports of the passage, it does impose a general duty upon all to refrain from doing willful injury to others. Exceptions to the general rule are difficult to formulate and classify, but the rule itself is firmly established in the public policy of the State. "At common law there was a cause of action whenever one person did damage to another wilfully and intentionally, and without just cause and excuse." (Skinner  Co. v. Shew  Co., [1893] 1 Ch. 413.) "Nor does the mere fact that a wilful injury does not fall within the four corners of some known form of action seem to be included in any natural meaning of `just cause or excuse.'" (Pollock on the Law of Torts [13th ed.], p. 22.) The problem here is whether, in the circumstances arising from the contract of passage, the law imposes a general duty upon a person, in the situation of the plaintiff, to refrain from injuring the parties controlling theGraf Zeppelin, by using the benefit derived from his contract with them and disregarding the restrictions imposed by that contract for the very purpose of avoiding such injury.
That problem should not be complicated by questions of the form of action for breach of such duty or of whether the narrow contractual duty supersedes the more general duty, if it exists. Determination of public policy must rest upon broad principles. If the plaintiff is seeking to recover compensation for an act which constitutes a breach of a general duty to refrain from willful, intentional injury to another without just cause or excuse, then public policy must deny him recovery. The public policy of the State is no less outraged by willful injury caused to another by the act of the plaintiff, though the defendant *Page 265 
was not a party to a conspiracy, and the wrong to the injured party and the State is not mitigated by the fact that the instrument of injury was a contract.
In considering distinctions between a narrow contractual duty and a general common-law duty, this court, through CARDOZO, Ch. J., has said: "If conduct has gone forward to such a stage that inaction would commonly result, not negatively merely in withholding a benefit, but positively or actively in working an injury, there exists a relation out of which arises a duty to go forward. * * * The query always is whether the putative wrongdoer has advanced to such a point as to have launched a force or instrument of harm, or has stopped where inaction is at most a refusal to become an instrument for good." (Moch Co. v.Rensselaer Water Co., 247 N.Y. 160, 167.) There we considered a general liability in tort to any person injured by failure to perform a contract. Here we are considering whether the wrong to a party to a contract arises solely from the contract. In the final analysis the determinative factor in both cases is whether performance of the contract has advanced to a point where refusal or failure to go further launches an instrument of injury.
Doubtless matters of degree may often enter into the final determination. The test proposed in Moch Co. v. RensselaerWater Co. (supra) may not always be applicable. Perhaps eventually the more elastic rule may be evolved that a breach of contract is against public policy whenever it shocks the conscience of the court and falls below the general moral standards of business affairs. Even now the law has evolved at least to the point where on grounds of public policy it should refuse to a suitor all remedy upon a contract which could be performed only by the suitor's using a contract made with a third party as an instrument of injury to the third party.
In such cases the performance of the contract between the plaintiff and the defendant is possible only through *Page 266 
performance, partial or complete, of an earlier contract by a third party, and such performance by the third party could be obtained only upon the assumption that the plaintiff would on his part comply with the conditions upon which performance by the third party could be required. If at the time when such performance was rendered, the plaintiff had already entered into a contract which could be performed only by repudiation of those conditions, then it may be said that there was fraudulent concealment. (See Roberts v. Criss, 266 Fed. Rep. 296; FoleyMfg. Co. v. Sierra Nevada Lumber Co., 172 Fed. Rep. 197.) Nothing more need be decided in this case than that a contract is against public policy where performance is possible only through inducement to a third party to proceed with the performance of another contract by fraudulent concealment of the fact that the other party to that contract intends to repudiate the terms and conditions upon which that performance is rendered; thus causing intentional injury to the third party. Any broader rule indicated in this opinion is intended only as a warning that other contracts or acts, in breach of contracts made with third parties, may similarly outrage public policy. The contract in suit may have been made before the contract of passage on theGraf Zeppelin, yet performance of the contract in suit could be made only through fraudulent concealment of the fact that the plaintiff would repudiate the stipulations of the contract of passage. The injury might be no less, and the breach of duty analogous if, after the earlier contract was performed wholly or in part by one party, the other party causes intentional injury by repudiation of the conditions which he agreed to observe in order to give assurance against such injury. Disregard of a contractual duty after performance of the contract has been begun may be a source of injury to the other party. The contract itself may fashion the instrument by which such harm is wrought. Where that instrument is used *Page 267 
to cause injury willfully, intentionally and without just cause or excuse, the wrong is more than failure to perform a contractual duty, it constitutes a breach of a general duty imposed by law.
O'BRIEN and CROUCH, JJ., concur with HUBBS, J.; POUND, Ch. J., CRANE and LEHMAN, JJ., concur in result in separate opinions; KELLOGG, J., not sitting.
Order affirmed, etc.