Donemar, Inc. v. Molloy

• Decision Date: 07 January 1930
• Citation: 169 N.E. 610,252 N.Y. 360
• Parties: DONEMAR, Inc., v. MOLLOY et al.
• Court: New York Court of Appeals Court of Appeals

252 N.Y. 360

169 N.E. 610

DONEMAR, Inc.,

v.MOLLOY et al.

Court of Appeals of New York.

Jan. 7, 1930.

Action by Donemar, Incorporated, against James Molloy and another. Judgment of the trial term entered upon the verdict of a jury in favor of plaintiff for nominal damages only was affirmed by the Appellate Division (226 App. Div. 653, 233 N. Y. S. 738), and plaintiff appeals.

Reversed, and a new trial granted.

Appeal from Supreme Court, Appellate Division, First Department.

Charles H. Kelby, Thomas E. O'Brien, John B. Doyle, and Robert A. Huddleston, all of New York City, for appellant.

Denis O'L. Cohalan and John H. Waters, both of New York City, for respondent Molloy.

Charles Chambers, of New York City, for respondent Cafferky.

POUND, J.

Briefly stated, the claim of the plaintiff is that defendant Molloy corrupted defendant Cafferky, an employee of plaintiff, when acting for his employer in the adjustment of a disputed claim for merchandise sold which Molloy had against plaintiff, with the result that plaintiff was induced to pay $57,500 in settlement of the claim, of which $4,555.05 went to Cafferky as a gratuity or compensation for Cafferky's efforts to obtain a settlement favorable to Molloy. Judgment is demanded against defendants for this sum. The complaint contains the following allegation:

‘Eighth. Pursuant to said secret, corrupt, unlawful and fraudulent promises and agreements by and between the defendants they represented to the plaintiff on and prior to January 23, 1923 at the City, County and State of New York that the aforesaid sum of $57,500 was the minimum net amount which the defendant Molloy would accept from the plaintiff in full settlement and discharge of the aforesaid claims, and believing and acting upon said representation the plaintiff, induced thereby and relying thereon, agreed to said amount and made said cash payment and executed and delivered said notes to the amount of $57,500; but in truth and in fact the defendant Molloy was willing to and did accept in full settlement said sum of $57,500 less the said sum * * * which he corruptly, unlawfully and fraudulently promised and agreed to pay the defendant Cafferky, as aforesaid.’

This claim was denied by defendants. In particular, it is denied that Cafferky had anything to do with making the settlement. Merchants' Line v. Baltimore & O. R. Co., 222 N. Y. 344, 118 N. E. 788. The jury found a verdict in favor of plaintiff against both defendants for the sum of 6 cents. The appellant claims that this was a verdict in favor of plaintiff on the question of the corrupt agreement and Cafferky's part in the settlement; that upon the facts found the plaintiff was entitled to recover from both defendants the sum of $4,555.05, with interest from November 20, 1923, and that the verdict was due to erroneous instructions, properly excepted to, on the subject of nominal damages.

The instructions of the court were to the effect that, even if they found that the corrupt bargain was entered into between Molloy and Cafferky, and that Cafferky, was instrumental in bringing about the settlement, unless the plaintiff established some disparity between the value of the goods received by it from Molloy and the consideration paid by plaintiff in settlement of Molloy's claim against it, nominal damages only could be awarded. In other words, if Molloy's merchandise was paid for at fair prices, the plaintiff has had a just return for every dollar it parted with, and defendants can keep the money paid in settlement with a good conscience. The principle relied on is stated in Schank v. Schuchman, 212 N. Y. 352, 359,106 N. E. 127, 129, as follows: ‘The law may at times refuse to aid a wrongdoer in getting that which good conscience permits him to...