249 A.D. 764 | N.Y. App. Div. | 1936
Action to recover compensation for services rendered under an agreement of employment by which plaintiff was to receive certain fixed compensation and, in addition thereto, two per cent of the net profits of the defendant for the period January 1, 1916, to June 3, 1918. Final judgment, entered upon the report of an official referee in favor of the plaintiff against the defendant, reversed on the law and a new trial granted before an official referee in the phase of this action which is within the purview of the amended interlocutory judgment entered June 30, 1933, with costs of this appeal to the defendant-appellant to abide the event. We are of opinion: (1) That there was fundamental error on the part of the referee in his refusal to abide by the binding stipulation dated June 14, 1933, limiting the proofs upon the hearing before him, which stipulation should have been, but was not, enforced. (.2) That it was error for the referee to allow, as part of the award to plaintiff, two per cent of $5,403,520, the aggregate of items representing an illegitimate profit as a result of illegal operations of the defendant to which illegality the plaintiff was a party, by reason of which operations the defendant charged to certain customers, including the United States, the cost of capital improvements of the defendant, such charges being made by the defendant as for work done upon ships of such customers in its yard. Public policy forbids such an award to the plaintiff. (3) That the record shows other errors, discussion and disposition of which, however, we deem unnecessary now and which may not be repeated on the new trial which, in our opinion, the interests of justice require. The stipulation was in due form (Rules Civ. Prac. rule 4). Courts look with favor upon such a stipulation, which becomes the law of the case. (Cohn v. Cohn, 120 Misc. 731; Lee v. Rudd, Id. 407, and cases therein cited.) It is competent for parties to waive their statutory or even constitutional rights by stipulation and to agree upon the procedure they will follow. (Twin Realty Corp. v. Glens Falls Portland, Cement Co., 225 App. Div. 515; Matter of Cushman, 177 id. 127; Matter of Di Donato v. Rosenberg, 230 id. 538.) If the agreement be not unreasonable nor against good morals or sound public policy, a party may thus stipulate away his rights, both statutory and constitutional, and make the law applicable to the action, and such agreement will be enforced. (Lee v. Rudd, supra; Vose v. Cockcroft, 44 N. Y. 415; Cox v. N. Y. C. & H. R. R. R. Co., 63 id. 414; Matter of Pet. of N. Y., L. & W. R. R. Co., 98 id. 447, 453; Cowenhoven v. Ball, 118 id. 231, 235; Dubuc v. Lazell, Dalley & Co., 182 id. 482, 486.) The stipulation in this case is not unreasonable, nor against good morals or sound public policy. That part of the award to plaintiff, included in the judgment, which represents two per cent of items of alleged profits aggregating $5,403,520 is erroneous for the reasons related to public policy; such claim is illegal and unenforcible on plaintiff’s own showing. (Primeau v. Granfield, 193 Fed. 911; cert. denied, 225 U. S. 708; Fidelity & Deposit Co. v. Grand Nat. Bank of St. Louis, 2 Fed. Supp. 666; Stewart v. Wright, 147 Fed. 321; Holman v. Johnson, 1 Cowp. 341; Leonard v. Poole, 114 N. Y. 371, 378; McMullen v. Hoffman, 174 U. S. 639, 654; Sprague v. Webb, 168 App. Div. 292; O’Brien v. Shea, 208 Mass. 528.) Young, Carswell and Taylor, JJ., concur; Davis, J., concurs in