Reiner v. North American Newspaper Alliance

• Decision Date: 01 June 1932
• Parties: REINER v. NORTH AMERICAN NEWSPAPER ALLIANCE.
• Court: New York Court of Appeals Court of Appeals

259 N.Y. 250

181 N.E. 561

REINER

v.NORTH AMERICAN NEWSPAPER ALLIANCE.

Court of Appeals of New York.

June 1, 1932.

Action by Robert Reiner against the North American Newspaper Alliance. From an order of the Supreme Court, Appellate Division (233 App. Div. 736, 250 N. Y. S. 843), affirming an order of the Special Term denying a motion of the plaintiff to strike out a separate defense set up in the answer, the plaintiff appeals. On certified question.

Order affirmed, and certified question answered.

The following question was certified:

‘Is the separate defense set out in paragraphs Third, Fourth and Fifth of the answer sufficient in law on the face thereof?’

Appeal from Supreme Court, Appellate Division, First department.

John A. Kelly, of New York City, for appellant.

Charles E. Kelley and Christian S. Lorentzen, both of New York City, for respondent.

HUBBS, J.

The plaintiff-appellant in this action on contract alleges that in October, 1928, he engaged passage to fly from Germany to New York as a passenger on the Graf Zeppelin; that he entered into a contract to send ‘radio messages from the said Graf Zeppelin to friends in the United States in reply to messages sent to plaintiff by his friends and the defendant promised and agreed to pay the plaintiff $5,000 therefor’; that ‘the defendant agreed to make all necessary arrangements for the sending of messages to plaintiff by his friends, and for the collection of the reply messages sent by the plaintiff.’

The complaint further alleges that plaintiff, while a passenger on the Graf Zeppelin, sent messages to his friends in the United States in reply to messages received by him from them; that he has fully performed the contract on his part; but that the defendant has failed to pay him according to the terms of the contract and demands judgment for the amount unpaid.

The answer sets up as a defense:

‘Third. The contract alleged in the complaint was made in violation of the terms of the contract by which the plaintiff engaged passage to fly from Friedrichshafen, Germany, to New York upon the dirigible Graf Zeppelin, in that the plaintiff knew that the exclusive news rights of the flight of the said dirigible had been acquired by a third party and the plaintiff, accordingly, had agreed, as a condition of being given passage on the said dirigible, that he would give no interviews and send no reports of the said passage while en route and for eight days after the completion of the flight.

‘Fourth. The messages sent by the plaintiff, as alleged in the complaint, were reports of the flight of the said dirigible and constituted news thereof to be distributed by the defendant to newspapers for publication as news all over the United States.

‘Fifth. The contract alleged in the complaint and the performance thereof by the plaintiff was, therefore, a fraud upon the owners, managers and operators of the said dirigible and upon the owner of the exclusive news rights of the passage of the said dirigible from Friedrichshafen to New York, and a fraud upon the public, and was illegal, void, and against public policy and unenforceable at law or in equity.’

Reading the complaint and answer together, the fair import is that the plaintiff entered into the contract with defendant with full knowledge that the exclusive news rights of the flight had ben acquired by a third party by contract; that, knowing such fact, the plaintiff had agreed as a condition of obtaining passage on the dirigible that he would not send any reports of the flight; that the plaintiff, in violation of the contract between the owners of the Graf Zeppelin and a third party and in violation of the contract between himself and the owners of the Zeppelin, contracted and arranged that, through a pretense of answering messages from his friends, he would secretly and in violation of the terms of those contracts send news messages to be used by the defendant for publication in newspapers in the United States.

The plaintiff moved to strike out the separate defense contained in the answer. The motion was denied, and the order was affirmed at the Appellate Division by a divided court. The Appellate Division has certified the following question to this court: ‘Is the separate defense set out in paragraphs Third, Fourth and Fifth of the answer sufficient in law on the face thereof?’

Assuming, as we must, the truth of the allegations contained in the answer, it appears that the conduct of the plaintiff was unconscionable, in violation of his contract of passage, and in violation of the exclusive privilege which, to his knowledge, had been granted to a third party.

Plaintiff, when he entered into the agreement with the defendant, was seeking to obtain for himself the promised advantage which had been contracted to another. That his conduct was vicious and has an evil tendency cannot be questioned. Did it have the effect of rendering his contract with the defendant unenforceable?

It has become the settled law of this state that an action will lie for intentionally and knowingly, and without reasonable justification or excuse, inducing a breach of contract. Hornstein v. Podwitz, 254 N. Y. 443, 173 N. E. 674;Lamb v. S. Cheney & Son, 227 N. Y. 418, 125 N. E. 817;Campbell v. Gates, 236 N. Y. 457, 141 N. E. 914.

The law endeavors to protect the interest of parties in existing contractual relations from intentional and wrongful interference by strangers. The principle constitutes a limitation upon the doctrine of freedom of contract, which courts have imposed in an attempt to promote justice and fair dealing and to prevent wrongs.

The plaintiff is undoubtedly liable to the parties in the exclusive rights contract for all damages caused by his wrongful conduct. Such an action would sound in tort. The gravamen of the action would be plaintiff's wrongful conduct in making it impossible for the third party to reap the full benefits of the contract with the owners of the Graf Zeppelin.

Plaintiff caused the failure of that contract, not by persuading the owners of the Graf Zeppelin to refuse to carry it out, and by entering into a like contract with him, as is usual in cases of this natrue, but by his conduct making it impossible for the third party to receive the full benefits of the exclusive contract rights, as the news of the voyage could no longer be exclusive after he had caused the publication of the news items through his contract with the defendant. By such conduct he became liable to the same extent as he would if he had induced the breach of the third party contract by other means.

‘Under these authorities, if the Omaha Company had, by its wrongful conduct, simply induced the Portage Company to break its contract with Angle, it would have been liable to him for the damages sustained thereby. A fortiori, when it not only induces a breach of the contract by the Portage Company, but also disables it from performance.’ Angle v. Chicago, St. Paul, M. & O. Ry. Co., 151 U. S. 1, 15, 14 S. Ct. 240, 245, 38 L. Ed. 55.

We do not mean to say that in all cases one who knowingly causes a breach of contract between others is liable for the damage caused by such breach. Whether liability will attach for causing such a breach of contract depends upon whether there exists sufficient justification. For a detailed discussion of that question, see 36 Harvard Law Review, 663. It is sufficient for the decision of this case that no such justification exists.

The exclusive privilege contract with a third party vested in the parties thereto rights which the law protects, contract rights. It would be strange indeed if the law should protect such contract from wrongful interference by a stranger, but after such interference assist the stranger in reaping the fruits of his unjust and illegal act.

The wrongful acts of the plaintiff constituted a tort. The contract between plaintiff and defendant was a part of the scheme which resulted in the breach of the contract of passage entered into by plaintiff and interfered with the contract between the owner of the Graf Zeppelin and the third party. It was in effect a contract to commit a tort.

The plaintiff's act in entering into the contract cannot be said to have been negligent, incidental, or foreign to the purpose of the contract with the third party. It was made with full knowledge of the third party contract. Not only did plaintiff have knowledge of that contract, but in his contract of passage he had expressly agreed not to do anything to prevent the carrying out of that contract. In utter disregard of both contracts, he entered into the agreement with defendant, knowing that the effect of the contract would be to nullify the third party contract and make its fulfillment impossible and at the same time breach his contract of passage. By his contract with the defendant, the plaintiff robbed the third party of the exclusive right to the news rights of the voyage and attempted to take for himself the advantage which had been contracted to the third party.

A court will not lend aid to a party who has committed a tort to enable him to recover from another the price agreed to be paid for his wrongful act. The defense is allowed, not as a protection to a defendant, but as a disability to the plaintiff. Beekman v. Marsters, 195 Mass. 205, 80 N. E. 817,11 L. R. A. (N. S.) 201, 122 Am. St. Rep. 232,11 Ann. Cas. 332;Roberts v. Criss (C. C. A.) 266 App. 296, 11 A. L. R. 698, with note; Woodstock Iron Co. v. Richmond & Danville Extension Co., 129 U. S. 643, 9 S. Ct. 402, 32 L. Ed. 819; 27 Harvard Law Review, 273;Rhoades v. Malta Vita Pure Food Co., 149 Mich. 235,112 N. E. 940; 3 Williston on Contracts, § 1738; Proposed Final Draft of the Restatement of Contracts by The American Law Institute, § 571; Wanderers Hockey Club v. Johnson, [Brit. Col.] 25 Western Law Rep. 434.

The principle involved is somewhat analogous to that involved in a contract which constitutes a fraud upon a third party. Horbach...