136 N.Y.S. 367 | N.Y. App. Div. | 1912
Lead Opinion
Defendant was employed by plaintiff as a salesman upon a drawing account and commission. His employment was to sell underwear in a specified territory, and he agreed to give his services exclusively to plaintiff, except that he was permitted to sell for his own account hosiery, which did not compete in ' any way with the goods he was to sell for plaintiff. In violation of his agreement to give plaintiff his exclusive services, and without the knowledge of plaintiff, he carried for sale and sold for his own account a line of underwear similar to that sold by plaintiff. This action is brought to recover the profits made by defendant through selling this competing line of merchandise. The complaint is framed in a double aspect, and
If the plaintiff, under the facts proven, is entitled to recover the profits realized by defendant, there is no doubt that an action for moneys had and received is an appropriate remedy. “ The action for money had and received to the use of another is the form in which courts of common law enforce the equitable obligation * * Whenever one person has in his possession money which he cannot conscientiously retain from another, the latter may recover it in this form of action, subject to the restriction that the mode of trial and the relief which can be given in a legal action are adapted to the exigencies of the particular case, and that the transaction is capable of adjustment by that procedure, without prejudice to the interests of third persons. Ho privity of contract between the parties is required, except that which results from the circumstances. * * * The right on the one side, and the correlative duty on the other, create the necessary privity and justify the implication of a promise by the defendant to do that which justice and equity require.” (Roberts v. Ely, 113 N. Y. 128.) If we disregard the allegation of a loss of profits, as we may do since the plaintiff has abandoned that claim, the complaint sets forth a good cause of action for money had and received, if its mam contention be justified that the profits realized by defendant in selling goods in violation of his agreement are moneys which in equity and good conscience- belong to plaintiff. There is nothing, therefore, in the form of the complaint to prevent a recovery of the profits as such.
On the main proposition for which plaintiff contends there seems to be no direct authority in this State. The rigid rules, however, which bind an agent to the utmost faimdss in his
“And, within-the prohibition of this rule of law, every relation in which the duty of fidelity to each other is imposed upon the parties by the established rules of law is a relation of trust and confidence. The relation of trustee and cestui que trust, principal and agent, client and attorney, employer and employee, who through the employment gains either -an interest in or a knowledge of the property or business of his master, are striking and familiar illustrations of the relation. From the agreement which underlies and conditions these fiduciary relations, the law both implies a contract and imposes a duty that the-servant shall be faithful to his master, the attorney to his client, the agent to his ■ principal, the trustee to his cestui que trust, that each 'shall work and act with an eye single to the interest of his -correlate, and that no one of them shall use the interest or knowledge which he acquires through the relation so as to defeat or hinder the other party to it in accomplishing any of the purposes for which it was created.”
The attempts on the part of agents and Others" engaged in a
It is also said that the rule contended for by plaintiff is limited to' cases in which the agent is in receipt of a fixed salary. Without conceding that there is any logical reason for such a limitation, it is a sufficient answer to the objection to point out that defendant was in receipt of a fixed and certain salary. It is called a drawing account, and was chargeable against his commissions if he earned so much. But he was not to repay anything even if the commissions fell short of the amount stipulated to be drawn, so that his compensation really amounted, to a fixed salary, which might be augmented by commissions. The case as we find it, therefore, is that an agent who for a fixed and irreducible compensation has agreed to devote his entire services to the selling of a certain line of goods for his principal, has surreptitiously engaged for his own profit in selling a similar line of goods in competition with his principal’s business. In our opinion he cannot be permitted to
The judgment appealed .from is, therefore, reversed and a new trial granted, with costs to appellant to abide the event.
Ingraham, P. J., McLaughlin and Clarke, JJ., concurred; Dowling, J., dissented.'
Dissenting Opinion
I dissent, upon the ground that plaintiff has neither proved any damage sustained by reason of defendant’s acts, nor are the sales of other goods made by him proven to have been made to plaintiff’s prejudice nor as a substitute for possible sales of plaintiff’s goods.
Judgment reversed and new trial ordered, costs to appellant" to abide event.