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Hearn v. Schuchman

Supreme Court of New York, Appellate Division

May 3, 1912

GEORGE A. HEARN and Others, Copartners Trading under the Firm Name and Style of JAMES A. HEARN & SON, Respondents,

Page 477

APPEAL by the defendant, George Schuchman, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 29th day of January, 1912, granting the plaintiffs' motion for judgment on the pleadings.


Lawrence B. Cohen, for the appellant.

H. Snowden Marshall, for the respondents.


The plaintiffs are merchants having occasion to use in their business delivery wagons and automobiles. The defendant is and has been between the dates mentioned in the complaint a builder and repairer of such vehicles. Between June 4, 1907, and February 28, 1911, plaintiffs had in their employ George Reinemann and Frank Kelsey who were authorized to purchase and contract for plaintiffs and to employ service and labor for them. It is alleged that between the dates aforesaid a corrupt, illegal and criminal agreement was made, without plaintiffs' knowledge, between said Reinemann and Kelsey on the one hand and defendant on the other wherein and whereby the said defendant offered and agreed to give to said Reinemann and Kelsey, for themselves, a commission, discount and bonus upon the price and amount paid for all materials, supplies and other articles which should be purchased by said Reinemann and Kelsey for the plaintiffs, and upon the amount and price paid for services and labor employed from said defendant by the said Reinemann and Kelsey for the plaintiffs, and said Reinemann and Kelsey agreed to receive for themselves

Page 478

such commission, discount and bonus. It is then alleged that between the dates specified said Reinemann and Kelsey, for the plaintiffs, procured and purchased wagons, automobiles, materials and supplies, and had work and labor done by way of repairing amounting in the aggregate to $41,469.46, which plaintiffs paid to said defendant, and thereupon said defendant, in fulfillment of said corrupt agreement, paid to said Reinemann and Kelsey a commission, bonus or discount amounting to about $4,146.95. There are numerous other allegations in the complaint designed to bring the case within the terms of section 439 of the Penal Law which makes such an agreement as is set forth in the complaint unlawful and criminal. The theory of the complaint is that, because defendant's act in paying bribes to plaintiffs' servants was unlawful, and, if known to plaintiffs before they had paid anything to defendant, would have furnished a defense to an action by him ( Sirkin v. Fourteenth Street Store, 124 A.D. 384), therefore, plaintiffs may now recover the sum so paid in an action for money had and received, which defendant in equity and good conscience ought to return. Plaintiffs, therefore, seek to recover the whole amount which they have paid to defendant between the dates named in the complaint. The Sirkin case, upon which plaintiffs rely, does not go to the extent of justifying a recovery of all the money paid. It went no further than to hold that the courts would not aid a seller who had been guilty of violating the law, but would leave him where he had put himself.

An action to recover back moneys already paid rests upon a wholly different foundation. Its gravamen is that the plaintiff has been damaged by the unlawful acts of the defendant, and the most that the plaintiff can recover is the amount of his damage, being the difference between what he ought to have paid and what he did in fact pay, for of course in the present case the plaintiffs cannot return what they have received from defendant and rescind the contract. The plaintiffs cannot, therefore, recover the whole amount paid to defendant. The demurrer, however, is to the effect that the complaint states no cause of action, and it cannot prevail if there be any cause of action stated, even if it be for a less amount

Page 479

than that for which plaintiffs pray judgment, for the prayer does not determine the sufficiency of the complaint. ( Wetmore v. Porter, 92 N.Y. 76.) It is alleged that, as an incident to and embraced in the corrupt and unlawful agreement above recited, it was further agreed, and the agreement was carried out, that unnecessary materials and work should be ordered and purchased, that excessive and extravagant prices should be charged, and that false charges should be made against plaintiffs for supplies and materials never furnished, and in divers other ways by collusion and conspiracy between the said employees and defendant, the plaintiffs were cheated and defrauded. These allegations in my opinion set forth a cause of action justifying a recovery, although doubtless not for the full amount claimed in the complaint. If a complaint sets out a good cause of action it is proof against a complaint for insufficiency, notwithstanding it may be inartificially framed or might have been obnoxious to a demurrer on other grounds. For this reason the order appealed from should be affirmed, with ten dollars costs and disbursements, with leave to defendant to withdraw his demurrer and answer within twenty days upon payment of costs in this court and in the court below.

MCLAUGHLIN and CLARKE, JJ., concurred; INGRAHAM, P. J., and DOWLING, J., dissented.

INGRAHAM, P. J. (dissenting):

The defendant demurred to the complaint in this action upon the ground that it did not state facts sufficient to constitute a cause of action. Upon the complaint and the demurrer the plaintiffs made a motion at Special Term for judgment on the pleadings which motion was granted with leave to the defendant to withdraw the demurrer and answer. The nature of the action is stated in the opinion of Mr. Justice SCOTT. The action is not brought to recover damages caused to the plaintiffs by a violation of section 439 of the Penal Law, but is distinctly brought for the purpose of recovering from the defendant the amount of money that plaintiffs had paid to it for the work, ...

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