Larme Estates, Inc. v. Omnichrome Corp. , 294 N.Y.S. 861 ( 1937 )

O’Malley, J.

Plaintiff sues to recover damages accruing subsequent to September 15, 1935, by virtue of an alleged unlawful discharge on that date of Joseph S. Friedman, its assignor, under a contract between him and one Von Fraunhofer. The latter assigned the contract to the defendant, who assumed all its terms and conditions.

A prior action was brought in the City Court by Friedman against this defendant and the Photo-Chemical and Dye Corporation (hereinafter called Photo-Chemical). The latter was an affiliate of the present defendant, and Friedman’s services had been assigned to it for a limited period. By this assignment, however, he was entitled to payment from either corporation.

In the City Court action two causes were pleaded. The first was solely against the present defendant upon an express contract in writing (as modified) for a balance of salary in the amount of $1,400 for the period from June 1, 1935, to September 15, 1935, the date of discharge. The second was in quantum meruit and was brought not only against the present defendant but also the Photo-Chemical. This cause of action was also for a balance due in like amount for services rendered during the same period.

While not part of the record on appeal, the judgment roll in the City Court may and should be here considered. (People v. Flack, 216 N. Y. 123; Dunham v. Townshend, 118 id. 281, 286.) Judgment in that action was entered by consent in favor of plaintiff for $500.

So far as the issues in the City Court action are concerned, the estoppel by this consent judgment as to the matters involved and those which might have been litigated is as conclusive as if that judgment had been entered after a full trial. (Canfield v. Harris & Co., 252 N. Y. 502; Crouse v. McVickar, 207 id. 213.) The issues which were, or might have been, decided must be determined, not from the face of one, but from all of the pleadings.

Both in the City Court and in the present action the plaintiff and this defendant relied upon an express contract. The answer of this defendant in the City Court admitted the existence of such agreement between these parties by failing to deny the allegations of the complaint pleading it.

Where there is an express contract there may be no recovery upon the theory of an implied contract. (Miller v. Schloss, 218 N. Y. 400, 406, 407; Ætna National Bank v. Fourth National Bank, 46 id. 82; Kreitner v. Burgweger, 174 App. Div. 48, 51.) Hence the estoppel of the City Court judgment applies to the express contract between the parties in writing — the basis of the present action.

The defenses herein interposed are substantially similar to those interposed by the defendant in the City Court action, or which might have been litigated therein. Summary judgment, therefore, was properly granted in favor of plaintiff, save for the admeasurement of damages. The issues between the parties in this action were compassed by the consent judgment in the City Court.

Eurthermore, the defenses (similar in the two actions) were pleaded in the City Court action, not only with respect to the first, but also to the second cause of action upon quantum meruit. Plaintiff’s assignor was charged in the City Court action, as here, with having disregarded his duties and having divulged for the benefit of others trade secrets and secret processes of manufacture. This defense, if proved in the City Court, would have precluded recovery on the second as well as the first cause of action.

The defense of payment here pleaded may not be sustained in so far as it might be predicated upon payment made in the settlement of the City Court action. Such payment was for a different cause of action — to recover for services already rendered. The damages here sought are for the unlawful discharge and those accruing subsequently.

The defense interposed in this action, to the effect that plaintiff’s assignor failed to carry out his express agreement to deposit with the defendant a full and complete set of formulae, might have been litigated as a defense to both causes in the City Court.

It is further to be noted that this defendant itself seeks to defend the present action on the theory of estoppel, predicated upon the consent judgment. In its brief it urges that the claim here sued upon “ is merged in the judgment obtained in the City Court.” Upon the whole record, moreover, there seems to be no showing of merit entitling the defendant to defend, save for the admeasurement of damages.

Motion for summary judgment, therefore, was properly granted.

It follows, therefore, that the order appealed from should be affirmed, with twenty dollars costs and disbursements.

Martin, P. J., and McAvor, J., concur; Dore and Cohn, JJ., dissent and vote to reverse and deny the motion.