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Buckley v. 112 Central Park South, Inc.

Supreme Court of New York, Appellate Division

December 31, 1954

Buckley
v.
112 Central Park South, Inc.

Page 332

APPEAL from an order of the Supreme Court at Special Term (NATHAN, J.), entered February 23, 1954, in New York County, insofar as it denied a motion by defendant-appellant for dismissal of the second cause of action in the amended complaint.

COUNSEL

William Jay Lippman of counsel (McLaughlin & Stern, attorneys), for appellant.

Joseph J. Jacobs for respondent.

BASTOW, J.

The individual defendant, Jerome Minskoff, appeals from an order denying a motion under rule 106 of the Rules of Civil Practice to dismiss the second cause of action in the amended complaint. In the first cause of action the plaintiff seeks to recover from the corporate defendant, 112 Central Park South, Inc., for commissions due for services rendered as a broker in effecting the sale of realty owned by the corporation.

The second cause of action, in substance, alleges that the plaintiff was employed by the corporate defendant acting through its representative, the appellant, to find a purchaser for certain premises owned by the defendant corporation; that he discovered certain prospective customers who were the individual defendants conducting a partnership under the name of Navarro Associates. It is alleged that the plaintiff brought together the appellant, as the representative of the defendant corporation, and one of the prospective purchasers in an effort to bring about a mutual understanding and meeting of the minds between the owner of the property and the prospective purchaser; that thereafter the latter negotiated with the plaintiff for the sale and purchase of the realty and agreed upon all terms and conditions.

Page 333

It is further alleged that the defendants for the purpose of depriving plaintiff of his commissions conspired and agreed among themselves to conduct the negotiations in secret and, for the purpose of deceiving plaintiff, the defendants informed him that one of the prospective purchasers was not interested in buying the property; that for the purpose of carrying out the conspiracy and to deprive plaintiff of his commissions the prospective purchaser, with the knowledge and consent of the appellant and the corporate defendant, employed the defendant, Reynolds, to act as the ostensible broker, receive the broker's commission and divide the amount among all the defendants. Plaintiff alleges that subsequently the premises were sold to the members of the partnership and the commission paid to Reynolds with the intent and purpose of depriving plaintiff of his commissions.

The appellant contends that this cause of action is legally insufficient because no liability may be imposed upon him since in this alleged transaction he was acting as a corporate officer.

The New York decisions holding that an officer or director of a corporation may not be held liable for inducing the corporation to violate a contractual relation are largely based upon the English decision in 1920 of Said v. Butt ([1920] 3 K. B. 497). It becomes important, therefore, to determine what the holding was in that decision. It appeared that the plaintiff desired to be present at the first performance of a play in a theatre of which the defendant was managing director. The plaintiff knew that because of certain charges he had made against the management his application for a ticket would be refused. Therefore, he had a friend purchase a ticket but when plaintiff appeared at the theatre he was denied admission by the defendant. The action was based upon the alleged act of the defendant in procuring the proprietors of the theatre to breach a contract for the admission of the plaintiff to the theatre. The court held that the nondisclosure of the fact that the ticket was purchased for the plaintiff prevented the sale of the ticket from constituting a contract as alleged and that the action must fail. The court then proceeded to discuss other legal points on the assumption that a valid contract had been established. The court concluded its obiter dictum with the statement (p. 506) 'that if a servant acting bona fide within the scope of his authority procures or causes the breach of a contract between his employer and a third person, he does not thereby become liable to an action of tort at the suit of the person whose contract has thereby been broken.' It is to be noted that the immunity stated in this

Page 334

dictum was only granted to one acting 'bona fide' within the scope of his employment.

The decision in Greyhound Corp. v. Commercial Cas. Ins. Co. (259 App.Div. 317) is authority for the general proposition that an agent acting generally within the scope of his authority, who induces his principal to breach a contract, is not liable in damages to the other party to the contract. The opinion contains an extensive quotation from the dictum expressed in Said v. Butt (supra). We were careful to point out that this exemption from liability did not extend to separate and independent torts committed by the agent. The problem has never been a simple one (see 54 Harv. L. ...


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