Hadden v. Consolidated Edison Co. of New York, Inc.

• Decision Date: 26 October 1978
• Citation: 45 N.Y.2d 466,410 N.Y.S.2d 274,382 N.E.2d 1136
• Parties: , 382 N.E.2d 1136 Gerald R. HADDEN, Respondent, v. CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 274

410 N.Y.S.2d 274

45 N.Y.2d 466, 382 N.E.2d 1136

Gerald R. HADDEN, Respondent, v. CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Appellant.

Court of Appeals of New York.

Oct. 26, 1978.

James M. Leonard, New York City, for appellant.

Victor Josiah Herwitz, New York City, for respondent.

OPINION OF THE COURT

COOKE, Judge.

We face the question of whether plaintiff's misrepresentation as exerted upon defendant employer was of such a character as to vitiate a waiver of the latter's right to discharge plaintiff before he retired on a pension.

Plaintiff Hadden, a former vice-president of defendant Consolidated Edison Company of New York, Inc. (Con Edison), instituted this action in which he seeks to recover damages and secure a declaration of entitlement to monthly retirement benefits under defendant's pension plan. Defendant counterclaimed for a contrary pronouncement and for disgorgement by plaintiff of moneys and other things of value received from persons connected with certain construction firms doing business with defendant during a period when plaintiff was in charge of its construction. Upon appeal from a previous summary judgment determination, this court remanded for resolution of the issue of whether "Con Edison's waiver of its right to discharge Hadden before his retirement (was) knowingly induced by Hadden through material misrepresentation" (34 N.Y.2d 88, at p. 100, 356 N.Y.S.2d 249, at p. 258, 312 N.E.2d 445, at p. 451). ¹

Trial Term, upon remand, entered judgment dismissing the complaint and declaring that the action of defendant rescinding the pension rights granted to plaintiff was approved and that said pension rights are and have been without force and effect since said rescission. A majority of the Appellate Division, viewing the matter differently, vacated the complaint's dismissal and declared that plaintiff is entitled to pension payments in addition to those already received, that defendant's rescission of those benefits was disapproved and that said rights are in full force and effect. ²

Based on testimony, the trial court found that Hadden had received, admittedly, a total of $16,000 in bribes from Fried, and a secret gift of $14,750 and approximately $1,000 in expenses from Benesch, all of which he had concealed and at trial conceded to be wrong. As a consequence of the affirmative misrepresentation that he had received no such gifts or payments, Con Edison forebore from discharging Hadden. The Appellate Division majority (58 A.D.2d 154, 158, 396 N.Y.S.2d 210, 213), in modifying, found: "Proof of concealment there was, but not of an agreement not to discharge", and concluded: "It is a contradiction in terms to permit rescission of an agreement that never was."

It was not necessary that the misrepresentation or concealment result in a discrete "agreement not to discharge" in order to be the pivot for legal redress. Generally and excepting instances where there would be transgressions of public policy, all rights and privileges to which one is legally entitled, Ex contractu or Ex debito justitiae, may be waived (Matter of Hills, 264 N.Y. 349, 354, 191 N.E. 12, 13; People ex rel. McLaughlin v. Board of Police Comrs. of City of Yonkers, 174 N.Y. 450, 456, 67 N.E. 78, 79; Matter of Moore, 165 Misc. 683, 685, 1 N.Y.S.2d 281, 283, affd. 254 App.Div. 856, 6 N.Y.S.2d 364, affd., 280 N.Y. 733, 21 N.E.2d 512). A waiver, the intentional relinquishment of a known right (Matter of Meachem v. New York Cent. R. R. Co., 8 N.Y.2d 293, 299, 206 N.Y.S.2d 569 574, 169 N.E.2d 913, 917), may be accomplished by express agreement or by such conduct or failure to act as to evince an intent not to claim the purported advantage (Matter of City of Rochester, 208 N.Y. 188, 197, 101 N.E. 875, 877; People ex rel. McLaughlin v. Board of Police Comrs. of City of Yonkers, supra, 174 N.Y. at pp. 456-457, 458-459, 67 N.E. at pp. 79-80).

The conceded acceptance of bribes and gifts by the servant, Hadden, from those doing business with his employer and in contravention of the master's rules constituted such grave misconduct and dishonesty ³ as to justify the servant's discharge (Graves v. Kaltenbach & Stephens, 205 App.Div. 110, 111, 199 N.Y.S. 248, 249, affd., 237 N.Y. 546, 143 N.E. 737; cf. Berg v. Just Because, 205 App.Div. 31, 32-33, 199 N.Y.S. 66, 67; see Restatement, Agency 2d, §§ 380, 381). This general right to discharge was subject to waiver by words or conduct manifesting an election to forego the power or privilege to terminate (cf. Twentieth Century-Fox Film Corp. v. Lardner, 9th Cir., 216 F.2d 844, 850, 852-854, cert. den. 348 U.S. 944, 75 S.Ct. 365, 99 L.Ed. 739; 5 Williston, Contracts (3d ed.), § 725); but any relinquishment of the option to dismiss induced by such deceit and device as to constitute fraud would be ineffective and not...