author: Dye, J. Froessel, J.

text:
    Cadman Memorial Congregational Society of Brooklyn et al., Suing on Behalf of Themselves and Other Congregational Christian Churches Similarly Situated, Appellants, v. Helen Kenyon, as Moderator of The General Council of the Congregational Churches of the United States, Respondent.
    Argued April 21, 1953;
    decided December 3, 1953.

      Kenneth W. Oreenawalt, Joseph Diehl Fachenthal, Martin A. Schench and John H. Barber for appellants.
    I. The allegations of the complaint, admitted in the answer, establish that defendant, acting in breach of fiduciary relationship toward plaintiffs, imminently threatens to divert to alien control and uses the national denominational agencies and instrumentalities of the Congregational Christian Churches and some $60,000,000 of their assets. (Paige v. Willet, 38 N. Y. 28; Horan v. Hastorf, 223 N. Y. 490; Jones v. Morehead, 1 Wall. [U. S.] 155; Moffatt v. Fulton, 132 N. Y. 507; Meinhard v. Salmon, 249 N. Y. 458;
      Chelrob, Inc., v. Barrett, 293 N. Y. 442; Munson v. Syracuse. G. & C. R. R. Co., 103 N. Y. 58; City Bank Farmers Trust Co. v. Cannon, 291 N. Y. 125; Matter of People [Bond & Mtge. Guar. Co.], 303 N. Y. 423; Helm v. Zarecor, 222 U. S. 32.) II. The General Council, a representative body of the several independent and autonomous Congregational Christian Churches, was without power to unite or merge such churches or their denominational boards and agencies or itself into the proposed United Church of Christ or any other such church or denomination. The General Council not only exceeded its powers and authority in adopting the “ Basis of Union ”, but disregarded the vote of the churches and their members thereon and the procedural representation to them that no action would be taken by it without the approval of 75% of said churches and members voting. III. The several national boards, corporations and societies are agencies and instrumentalities of the churches, were created or acquired by the churches, have been and are supported by the churches, and are controlled by the churches through defendant General Council for the uses, purposes and benefit of those churches. As supported agencies of the churches, clearly these boards have a fiduciary obligation to these churches. By virtue of this relationship, plaintiffs have vested and inchoate rights requiring recognition and protection by a civil court. Plaintiff’s complaint for declarations of “ rights and other legal relations ” clearly presented justiciable issues. (Moffatt v. Fulton, 132 N. Y. 507; Helm v. Zarecor, 222 U. S. 32; Barkley v. Hayes, 208 F. 319; United States v. Reading Co., 253 U. S. 26; Blaustein v. Pan American Petroleum & Transport Co., 174 Misc. 601, 293 N. Y. 281.) IV. Congregational Christian Churches possess rights in the national denominational organizations and agencies, such rights are endangered by the “ Basis of Union ”, and any Congregational Christian Church that does not enter the new denomination, United Church of Christ, will lose such rights. Such vested civil and property rights in the beneficial use and control of the national agencies and instrumentalities warrant the court’s taking jurisdiction to prevent their transfer by defendant to the new denomination. (Helm v. Zarecor, 222 U. S. 32; Sharpe v. Bonham, 224 U. S. 241; Barkley v. Hayes, 208 F. 319; Duvall v. Synod of Kansas

      of Presbyt. Church, 222 F. 669; Purcell v. Summers, 34 F. Supp. 421, 126 F. 2d 390, 317 U. S. 640; Schell v. Leander Clark Coll., 2 F. 2d 17.) V. The proposed new church and denomination provided for in the “ Basis of Union ” and ‘ ‘ Interpretations ” to be called United Church of Christ is radically and fundamentally different in type and character and in principles, polity and faith from that of the Congregational Christian Churches. VI. In protecting civil and property rights of churches a court has jurisdiction to enjoin the unlawful exercise of power by a religious association having no power or authority over said churches and prevent the unlawful diversion of the agencies of said churches and the funds and properties thereof from their intended uses, purposes and control. (Trustees of Presbytery of N. Y. v. Westminster Presbyt. Church, 222 N. Y. 305; Rector, Churchwardens & Vestrymen of Christ’s Church v. Collett, 208 App. Div. 695; Miller v. Gable, 2 Denio 492; Bouldin v. Alexander, 15 Wall. [U. S.] 131; Kniskern v. Lutheran Churches of St. John’s & St. Peter’s, 1 Sandf. Ch. 439; Field v. Field, 9 Wend. 394; Westminster Presbyt. Church v. Trustees of Presbytery of N. Y., 211 N. Y. 214; Crawford v. Freeman, 189 Misc. 882; First Ref. Presbyt. Church v. Bowden, 10 Abb. N. C. 1; St. Nicholas Cathedral v. Kedroff, 302 N. Y. 1, 344 U. S. 94.) VII. The Appellate Division erred in limiting the protection of plaintiffs’ rights to an action by the Attorney-General. (Female Assn. of N. Y. v. Beekman, 21 Barb. 565; Trustees of Sailors’ Snug Harbor v. Carmody, 158 App. Div. 738, 211 N. Y. 286; St. Joseph’s Hosp. v. Bennett, 281 N. Y. 115.) VIII. The declaratory judgment awarded by the trial court was entirely proper as rights and legal relations were involved. No indispensable parties whose rights would be inequitably affected by the judgment, or whose presence was required for the court to make an effective determination of the controversy, were omitted. (Kovarsky v. Brooklyn Union Gas Co., 279 N. Y. 304; County of Westchester v. Department of Health of City of N. Y., 297 N. Y. 491; James v. Alderton Dock Yards, 256 N. Y. 298; Woollard v. Schaffer Stores Co., 272 N. Y. 304; New York Foreign Trade Zone Operators v. State Liq. Authority, 285 N. Y. 272; Blaustein v. Pan American Petroleum & Transport Co., 293 N. Y. 281; Shanik v. Aller,
      268 App. Div. 1007; Chelrob, Inc., v. Barrett, 293 N. Y. 442; Rigas v. Livingston, 178 N. Y. 20; People ex rel. Stearns v. Marr, 181 N. Y. 463; Manhattan Stor. & Warehouse Co. v. Movers & Warehousemen’s Assn., 289 N. Y. 82; Wood v. City of Salamanca, 289 N. Y. 279.) IX. Injunctive relief is proper to prevent usurpations of power or acts in violation of civil and property rights which are threatened, probable or imminent. (Exchange Bakery & Restaurant v. Rifkin, 245 N. Y. 260; People v. Canal Bd. of State of N. Y., 55 N. Y. 390; 1130 President St. Corp. v. Bolton Realty Corp., 300 N. Y. 63; Sivakoff v. Sivakoff, 280 App. Div. 106; Cuppy v. Ward, 187 App. Div. 625, 227 N. Y. 603.)

      Charles H. Tuttle, Loren N. Wood, Truman H. Luhrman and Loren T. Wood for respondent.
    I. This action for declaratory judgments could, in a legal sense, serve no “ legitimate purpose ”; and this case fell within the line of decisions holding that, under circumstances even less compelling than the present, ‘ ‘ a court may, and ordinarily must, refuse to render a declaratory judgment ”. (Manhattan Stor. & Warehouse Co. v. Movers & Warehousemen’s Assn., 289 N. Y. 82; Wood v. City of Salamanca, 289 N. Y. 279; Post v. Metropolitan Cas. Ins. Co., 227 App. Div. 156; New York Foreign Trade Zone Operators v. State Liq. Authority, 285 N. Y. 272; Gilligan v. Cunningham, 273 App. Div. 1046; Bach v. Grabfelder, 233 App. Div. 773; Delaware, L. & W. R. R. Co. v. Slocum, 299 N. Y. 496; Woollard v. Schaffer Stores Co., 272 N. Y. 304.) II. There are many persons, churches, corporations and organizations who are not parties to the action but who are “ interested in the outcome ” and whose rights and legal relations the issues involve. The judgment entered at Special Term, directed against the General Council as the sole defendant, nevertheless affected and determined the rights, interests and duties of everybody and everything connected with the denomination, without regard to due process of law. The dismissal of the complaint was required by section 193 of the Civil Practice Act which requires that an action cannot be maintained and a judgment cannot be entered, where there are other parties 6 ‘ whose absence will prevent an effective determination of the controversy or whose interests are not severable and would be inequitably affected by a judgment rendered between the parties before the court ”. (Realty Associates v. Stoothoff, 258 App. Div. 462; Mahr v. Norwich Union Fire Ins. Soc., 127 N. Y. 452; First Nat. Bank of Amsterdam v. Shuler, 153 N. Y. 163.) III. Under the common law, and under the First and Fourteenth Amendments to the United States Constitution and under section 3 of article I of the New York Constitution, the court was without jurisdiction over these religious and ecclesiastical matters and without lawful power to make the judgment. (Shelley v. Kraemer, 334 U. S. 1; Watson v. Jones, 13 Wall. [U. S.] 679; Board of Educ. v. Barnette, 319 U. S. 624; Everson v. Board of Educ., 330 U. S. 1; Zorach v. Clauson, 343 U. S. 306; Kedroff v. St. Nicholas Cathedral, 344 U. S. 94.) IV. The terms of the judgment were not limited to “ property rights ”, or capable of being sustained by being analogized to statutory mergers of business corporations. V. Special Term was without jurisdiction or power in this action, by direction or indirection, to place injunction or restraint against the twelve nondefendant missionary and charitable corporations not before the court, and against their religious liberties, their funds and their charters; or to hamper, amend or nullify their respective powers, rights and functions conferred by the Public Acts of other States. VI. Except for any express trusts, these corporations held their properties under no trust except in the general sense of the execution of their corporate purposes, and there is no proof that any violation of charter restrictions is threatened or imminent. (Corporation of Chamber of Commerce of State of N. Y. v. Bennett, 143 Misc. 513.) VII. The “Basis of Union” did not invade either the free autonomy of plaintiff or other Congregational Christian Churches over their spiritual or temporal matters. On the contrary, all such autonomous rights, “ all trusts ”, and “ the property rights of all bodies ”, were reserved and preserved with meticulous care. VIII. The effort to base these sweeping and perpetual adjudications on a theory of “ implied trust ” was erroneous in point of jurisdiction and law and factual predicates, and breached the constitutional and traditional separation of Church and State. IX. Plaintiff for twenty years has contributed nothing to the General Council and yet now sues the Council on the theory of a property right in its funds.

      Orrin G. Judd, Clarence L. Sager, Ruth I. Wilson and Saul A. Shames for International Convention of Disciples of Christ, and Walter Bruchhausen for New York Congregational Christian Conference, Inc., amici curiae, in support of respondent’s position.
    I. The law permits and favors merger of denominations. II. The principle of separation of Church and State precludes a civil court from imposing its judgment in matters of church polity. III. The trial court should not have undertaken to deal with the merger of corporations not parties to the action.
   Dye, J.

This controversy, here in an appeal as of right, concerns, the methods and procedures under which the Congregational Christian Churches of the United States and the Evangelical and Reformed Church plan to unite under the name of United Church of Christ. Both are Protestant in faith and polity and both possess a rich heritage from the past.

The Congregational Christian Churches trace their origin to the Reformation in England dating to 1581, and in this country dating tA-the Puritans in 1620. By tradition and usage the approximately fifty-eight Hundred churches in America are_independent. self-governing fellowships without any central ecclesiastical control. They have, however, in order to carry on a religious program commensurate with present day requirements, organized themselves into district associations, State conferences and conventions and a GeneralJMrqncil national iñTscópiT

The {Evangelical and Reformed Church lis a Protestant denomination^ of national scope consisting of congregations. syrrodical~Tlnits and an ecclesiastical governing body having jurisdictionandcontrol over such congregations and tTiMr -members, ministers and organizations. It was founded in 1934 by the union of the Reformed Church in the United States dating to 1725, and the Evangelical Synod of North America dating to 1840. It presently comprises approximately twenty-eight hundred churches having a membership of over seven hundred thousand persons. The two uniting groups thus aggregate about eighty-six hundred churches with a membership of about one million eight hundred and fifty thousand persons.

The action is in equity. It is brought by the CadmanMemorial Congregational Society of Brooklyn, a New York religious corporation, and the Cadman-Memorial^Church, an unincorporated'" religious body affiliated with the Cadman Memorial Congregational Society. The former has"custo"dy"and"control of the temporalities and property-andrthe'Iatter^eoñducts services of worship and other religious activities and meetings in the church edifice located in Brooklyn. For convenience, the plaintiffs will hereinafter be referred to either as the ‘‘ Cadman Church ” or “ plaintiff

According to the record, the Cadman Church occupies a unique place among Congregational Christian Churches being not only one of the oldest in America, but one of the largest. It is a union of the former Central and Clinton Avenue Congregational Churches of Brooklyn in which the members of the Simpson Methodist Church have joined for purposes of worship only. Its name honors the memory of a distinguished former preacher, the Reverend S. Parkes Cadman. It is congregational in polity and, like other Congregational Christian Churches, is concededly independent and autonomous and not subject to the control of any other ecclesiastical authority. It is a member of the New York City Congregational Church Association, Inc., and the ■New York Congregational Christian Conference, Inc., and is represented in the voting membership of the defendant General Council.

The defendant General Council of the Congregational Christian Churches of the United States, sued in the name of its Moderator and Presiding Officer, is an unincorporated association with its principal office and place of business in New York City. Whenever referred to hereinafter it will be called either the General Council ” or defendant ”.

The General Council is a voluntary association, national in scope, having a constitution, lav-laws^rand^innding rules. According to its constitution, membership is made up of both laity and clergy representing individual Congregational Churches, local associations and district conferences or conventions and affiliated colleges and theological seminaries, as well as certain other designated groups or classes of persons, such as ex-officio members of the conferences or conventions, representatives of home and foreign missions, honorary members, ecumenical members and certain others, by invitation, the latter enjoying the privilege of the floor but having no vote.

By constitutional pronouncement it stands ‘ ‘ for the autonomy of the local church and its independence of ecclesiastic control ”, “the fellowship of churches, united in district, state and national bodies for counsel and co-operation ”, “ the unity of the Church of Christ ”. It recognizes such local independence in matters of Christian faith and dogma by declaring that it finds “ in the Bible the supreme rule of faith and life, but recognize [s] wide room for differences in interpretation. We therefore bas.a,.our-u-ni-on upon- t]a^iTccep-faiice--otWCEHstianity as primarily a way of life and not upon uniformity of theological opinion or any uniform practice of ordinances ” (Con-

The General Council has for its purpose: “ to foster and express the substantial unity of the Congregational Christian churches in faith, purpose, polity and work; to consult upon and devise measures and maintain agencies for the promotion of the common interests of the kingdom of God; to co-operate with any corporation or body under control of or affiliated with the Congregational or Christian churches or any of them; and to do and to promote the work of these churches in their national, international, and interdenominational relations, and in general so far as legally possible to perform on behalf of the United churches the various functions hitherto performed by the National Council for the Congregational churches and by the General Convention for the Christian churches, it being understood that where technical legal questions may be involved the action of the separate bodies shall be secured.”

The Basis of Union, with Interpretations constituting the subject matter of this controversy, is the result of several years of study and negotiation between the Commission on Interchurch Eolations and Christian Unity representing the General Council (By-Law, No. Ill, subd. 8) and a committee representing the Evangelical and Beformed Church, its final form being adopted at a joint meeting of the commission and the committee held at Cleveland, Ohio, on January 22, 1947. Thereafter the^Generql Council submitted it to the individual Congregational Christian Churches and State conferences for advice. Notwithstanding that the recommended 75% of the individual chunches entitled to vote did not formally approve, nonetheless more than 12% oFthosiTWtmUlInrapprove, as did 90% of the associations and district conferences. Regarding this as substantially affording the advice which it sought, the General Council, at its meeting held in February, 1949, voted (757 for and 172 against) to consummate the plan and so advised the Evangelical and Reformed Church which likewise approved. Such action by the latter church is mentioned by way of interest, although of no consequence in this litigation as it is not a party to the within action.

According to its express terms, the Basis of Union recognizes the local church as the basis of organization, and that the conferences, conventions and associations shall conduct its business in its own way ” by providing that each congregation, association and conference has the right of retaining nr adopting its own charter, constitution, by-laws and other regulations which it deems essential and proper to its own welfare ”; in other words that thera-AdlUbe no intruaionAn or abridgment of traditional congregational polity .and usage through fellowship of independent autonomous congregations, free of authoritative control.

The plaintiff seeks a judgment declaring that the General CounciHíás no power or authority to cónsummateJhe Basis of Union on its behalf or other Congregational Christian Churches, and that any Congregational Christian Churches uniting with the proposed United Church of Christ, as proposed in the Basis of Union 1 will^efimsjlAnUin_.chuiLcheK-mjL_that [Congregational] fellowship and denomination and cease to have any right or interest in or any connection with the corporations, commission board, agencies and instrumentalities representing or acting for or under the direction and control of the Congregational Christian Churches or the funds and properties thereof ” and that any Congregational Christian Churches who. do.mat-join xvBh-the UnitecTUhiUlm^-Cbnrcb —will -remain_.the — Gongr-egational Christian Churches entitled to all the rights and privileges f¡résently_possessed and enjoyed by such, churches ” including “Urn control and benefit of all the corpauations, commissions, boards, agencies and instrumentalities which now represent and act for or are under the direction of the present Congregational Christian Churches ” and that the United Church and all those who join with it shall have no interest therein.

As an incident thereto it seeks injunctive relief to restrain the General Council, its members and officers, from consummating the Basis of Union and to restrain the General Council, its agencies and instrumentalities from merging or transferring and mingling their funds and assets with the Evangelical and Reformed Church or with the United Church of Christ.

According to its complaint the plaintiff is proceeding upon the theory that the proposed United Church of Christ is and will be so alien and different in structure and polity that fundamental congregational usage and practice will be wholly lost and destroyed. By way of showing such fundamental difference it points out that the United Church of Christ will be a general or authoritative church governed through various ecclesiastical bodies having degrees ofc'sovereignty^as distinct fronTUie existing voluntary and advisory associations, conferences, conventiojis_ajid General Council; that the individual churches and members will be subordinate to control providing, as it does, for a central authority for the engaging and dismissal of ministers, the establishment of a system of churchludicatories and-foya united or uniform confession of faith in.place_of.,.the absolute independence and freedom now and_herelofare-enjoyed in such matters by Congregational Christian Churches. The plaintiff objects also to the prospect of a constitution for or applicable to Congregational Churches as well as other differences which more fully appear in the Basis of Union. This, in sum, is to say that because of the difference in structure and polity of the two uniting bodies such a union will destroy or materially alter the nature of Congregationalism.

The General Council in its answer concedes that under the Basis of Union the plaintiff and any other Congregational Christian Church, association or conference, or their members, would-not be subject in respect-ff to either their...spiritual or temporal affairs to any control by the proposed United Church of Christ ” — that the proposed expression of faith set out in the Basis is not to be considered a substitutioiLfor-.an.v confession of faith which may be used in any congregation and “ shall be regarded as a testimony and not as a test ’ ’ and that freedom of worship and education at present enjoyed “ will be preserved in the United Church * * * [and] not * * * abridged ”. These clear and unequivocal admissions afford assurance that the proposed union will in no way change The historical and traditional pattern of the individual”Congrega? tional Christian Church. They serve to remove all fear that any action taken by the General Council leading to a consummation of the Basis of Union will in any way obligate the individual church to join in the Union except through its own voluntary action. Every possible assurance is given that each member church will continue to possess the same freedom of faith and manner of worship as heretofore enjoyed — that there will be no interference in or abridgment of congregational usage and practice. In short, there is no power and .none-is claimed by which the General Council can compel or intends to compel the plaintiff Cadman or any other nonassenting church to join the^Union unwillingly or impose~uFbh~tEem a~change of faith or doctrine. Union depends on voluntary action freely taken by independent autonomous churches. If any doubt remains, it seems abundantly clear from this record that the very nature of Congregationalism, surviving as it has the vicissitudes of time for nearly four hundred years, assures the integrity of the individual Congregational Christian Church, its faith and independence. Undex_thes.e...circumstances no ecclesiastical question is presented (cf. Watson v. Jones, 13 Wall [U.S.] 679).

We turn then to a consideration of whether the consummation of the Basis ofTTnion will interfere with any alleged property right possessed bv~the plaintiff in and to füñdF^ñffngsets~ñow held andmo.nt.ro.lled-bv-the General Council, its boards, agencies and instrumentalities which, it is estimated, aggregate approximatelv $6Q,QflQ,0Q0. ^

The plaintiff alleges that if the Basis of Union is consummated such funds and other assets will “ be diverted from the uses and purposes for which they were set up, created and established and for which they have heretofore been used ”. The complaint goes on to allege that such diversion will deprive the plaintiffs of~representation in the GeneraTTiouhcil to jwInch theyJare presently entitled; wiíFdepfive them'of their interest in the administration of the funds and assets, by mingling such funds with funds and assets of other and unrelated religious organizations, impose upon them liabilities and burdens alien to and different from those now incident thereto and deprive the plaintiff of its lawful right in the application and use thereof.

Before proceeding to a discussion of the merits of the allegation thus made, we note that the parties agree that funds and properties held by the Cadman Church are in no way involved in or threatened by" the proposed union; that "the funds held by the General Council and any of its agencies, boards and instrumentalities under express tnis.t,v¿Bctudlngi-.L.ensioTi...funAs.-.Yvill not be affected (Basis of Union, art. III, § H; art. IV, § L, subd. 1; art. IX, §§ A, C).

The dispute concerns rather the appellants’ alleged beneficial interest in general funds belonging to and used by various boards and agencies in carrying on their respective functions. Such funds are raised through per capita and apportionment systems applicable to individual churches and their members. No indiyiduaLehurch..o„r .member„is. xequired..to contribute^ anything — it is entirely voluntary and, in fact, the Cadman Church for-years has refused to pay per capita dues on the ground tMFiTl7?^o~1rbbliged and cannoTKe compelled to do so. It bias, however? concededly contributed other amounts “in lieu of ’ ’ the per capita assessment. The apportionment plan is also entirely voluntary and benevolent. The general practice, we are told, is for the individual churches to send their voluntary general contributions to the State Conference and the funds which the State Conference does not use are turned over to the G-eneral Council, its agencies, boards and instrumentalities, who use such funds in carrying on a world-wide program of Christian outreach. This has many aspects and to assure successful results, the work in its various categories is done through boards, agencies and instrumentalities created for the express purpose of performing a specified phase of the program. They are usually corporate in form and while the name “ Congregational ” appears inmost of such agencies, their express purposes are nonetheless very broad and in no way limited to furthering any particular religious viewpoint, dogma or confession of faith. For instance, the American Board of Commissioners for Foreign Missions (a Massachusetts corporation) has for its purpose the extension of Christ’s Kingdom abroad, without making any reference to Congregational Christian Churches, to the General Council or any denomination whatsoever but, on the contrary, and it is significant here, it may unite with others in the manner provided in the by-laws including election by a council, synod * * * representing any churches * * * located within the United States

The Board of Home Missions of the Congregational and Christian Churches (a corporation chartered in New York, Connecticut and Massachusetts) is much the same. It too may carry on its work either directly or through other corporations having similar objects in the United States and in other countries ”. We may note also that the Congregational Board of Ministerial Belief (a Connecticut corporation organized by Special Act in 1885 and amended in 1933) has for its purpose the relief of needy Congregational ministers. In addition, its benevolences are available to “ ministers of other churches affiliated, merged or consolidated with the Congregational Churches and after their decease for the benefit of their needy families, in accordance with resolutions and declarations adopted or made, from time to time, by the General Council * * * or by any body which may succeed to the present functions of that council; and said corporation may cooperate with any other corporation or body which is under the charge and control of the Congregational and Christian churches in the United States or of churches at the time affiliated with them ”.

In fact the Corporation for the General Council of the Congregational Christian Churches of the United States, a financial corporation organized under a Special Charter given I by the Legislature of Connecticut for the purpose of providing! and administering a pension fund for retired Congregational ministers (its principal asset being the Pilgrim Memorial Fund, | a trust which all agree will not be affected by the proposed' union), provides that: If hereafter any other body of Christians shall have united with the Congregational and Christian churches by union, merger, affiliation or otherwise, effected by or with the consent of said General Council, said Corporation may ( exercise its powers for the use and benefit of the churches or other institutions of the united or merged denomination, or of such affiliated body. ’ ’ Other corporations may be mentioned such as The American Missionary Association, The Congregational Home Missionary Society, The Congregational Church Building Society and The Congregational Sunday School Extension Society, all New York corporations, The Congregational Education Society, a Massachusetts corporation, The Annuity Fund for Congregational Ministers and The Retirement Fund for Lay Workers, both New Jersey corporations, but need not be discussed more than to say that in most instances their charters give them very broad and general powers which wnulcLnot^be violated by uniting with any other similar charitable and religious organization. The principle of voluntariness has long been a motivating force in Congregational fellowship.

Notwithstanding that the above-listed boards and agencies are corporations authorized and existing under the laws of several different States, the plaintiffs nonetheless contend that such boards and agencies have in fact no separate and independent status because their boards of trustees, officers and administrators are drawn from the membership of the General Council and that their activities are, for all practical purposes, controlled and supervised by the General Council — that diversion of their funds and assets and mingling of same with the funds of others is an interference to its detriment in a property interest belonging to the Cadman Church and other nonassenting churches. This, however, is not established in fact as the proof shows and, it is conceded, the Cadman Church has not contributed any funds, except as we have seen, for other than a general corporate purpose and these voluntarily and without restriction as to use or application. Under such circumstances it must be assumed that such funds were general gifts for use-by the -pur-general poses. charitable aud_religious purposemreate-mo-prqprietarymr--beneficiair interestwnr r a.n ti n g the civil courts, in interfermg-in--thelr expenditure so long as it appears that such use and application is not violative of charter purposes. As this court has previously observed: “ Gifts to religious and charitable corporations to aid in carrying out the purposes for which they are organized, whether by expending the principal of a bequest, or the income of a bequest to be invested in perpetuity, do not create a trust in any legal sense ” (Bird v. Merklee, 144 N. Y. 544, 550; see, also, Wetmore v. Parker, 52 N. Y. 450; Johnston v. Hughes, 187 N. Y. 446).

Furthermore, and we repeat, all agree that no^trúSt ^unds or assets, including pension funds, held Jbv_.ox, undei — thálcontrol of the General Council-on-any-board or agency or by any non-assenting church are in anyxwav-afEected bv the proposed union. Absent a showing that any fiduciary obligation imposed by the chartersUFcmUficates Ffincorporation of any board or agency will be violated or that such violation is imminent or threatened, there is no basis or necessity forJTdecIaratory judgment enjoining the General Council in any respect, nor may any restraining order issue against the various corporate boards and agencies, the Evangelical and Reformed Church or the United Church of Christ, as they have not been made parties defendant and are not before the court. Such a remedy is available only in an appropriate action, which this is not (Civ. Prac. Act, §§ 193, 473; Manhattan Stor. & Warehouse Co. v. Movers & Warehousemen’s Assn., 289 N. Y. 82; Ivory v. Edwards, 304 N. Y. 949). On this record, the proof having established that the Basis of Union is voluntary and in no way interferes with Congregational faith or manner of worship, and the plaintiffs having failed to establish any direct or beneficial interest in and to the unrestricted funds of the General Council, its various boards, agencies and instrumentalities, and having failed to show that any such general funda are._to be used for other than authorized charter purposes, the complaint wa.s propexly-dismisaerLon the merits.

The judgment appealed from should be affirmed, without costs.

Froessel, J.

(dissenting). This action involves a so-called proposed Basis of Union between the Congregational Christian Churches of the United States and the Evangelical and Reformed Church. Plaintiffs-appellants seek to prevent the proposed union, or, failing in that, ask for a declaratory judgment as warranted by the pleadings and admissions of the parties.

As of January 1, 1949, 54%, or 3,120, of a total of 5,715 Congregational Christian Churches in the United States voted favorably upon the proposal (72.77% of the churches voting gave their approval); 1,433 did not vote, and 1,162 churches voted “No”. Following such approval, defendant, General Council of the Congregational Christian Churches of the United States, deemed itself authorized to proceed with the proposals outlined in the so-called Basis of Union with Interpretations, on its behalf as well as on behalf of those who might become parties to it, although it was originally recommended that it do so if 75% of the churches voting approved.

While professing a desire to preserve scrupulously the free autonomy of the individual churches, “ all trust funds ” and the property rights of all bodies ”, the General Council nevertheless circulated an Analysis of the Basis of Union (under which a general merger of the corporate agencies and instrumentalities of both united churches is planned), in which it is stated that a church which votes against the Union would, naturally, give up its rights [emphasis in original] in * * * United Church ” organizations and agencies, 11 though, if it desired, it could continue to have such relationships with such bodies as would be possible to a church not being a member of the denomination ’ ’, whatever that may mean.

With this immediate background, and the historic setting of the Congregational Christian Churches of the United States over a period of upwards of three centuries, as outlined in the prevailing opinion, plaintiffs applied to the Supreme Court for a declaratory judgment setting forth the declarations which they desired, and for injunctive relief. Defendant in its answer asked for a dismissal of the complaint, or, in the alternative, for a declaratory judgment setting forth the declarations which it desired. After a lengthy trial, Special Term, in accordance with section 473 of the Civil Practice Act, which provides that said court ‘1 shall have power in any action * * * to declare rights and other legal relations on request for such declaration ’ entered a judgment embodying in large measure the very declarations which the parties asked for, and in addition thereto gave to plaintiffs broad and sweeping relief. The Appellate Division, though declaring in the prevailing opinion certain rights of the parties, reversed Special Term and dismissed the complaint, with costs against plaintiffs in the sum of upwards of $6,000.

While, in my opinion, many of the declaratory provisions in the Special Term judgment were clearly warranted, I agree that the entire relief granted was too broad, and that its restraining provisions were not warranted. I also agree that it erred in declaring that defendant had no power to proceed with or carryout the proposals called for in the Basis of Union. In my judgment, however, defendant may not in só doing impinge upon the rights of plaintiffs.

The Appellate Division, in reversing Special Term, held (1) that “ civil courts do not interfere with ecclesiastical matters in which temporal rights are not involved and (2) that as to plaintiffs’ control of their individual properties and funds ”, and “as to funds held under express trusts [which would include pension funds], there is no dispute between the parties ”. (3) “ As to other funds held by or under the control of the defendant ’ ’, it assumed to declare that plaintiffs had not shown any rights therein, but nevertheless held that there should have been no declaration of the rights of plaintiffs with respect to the funds and assets held by the corporate societies and agencies ” until the latter were brought before the court as parties. (4) Finally, it held that a “ declaratory judgment serves a legitimate purpose only ” when the parties affected are before the court; yet it failed to approve Special Term’s declaratory judgment even with respect to the very matters concerning which, as between themselves, both parties had asked for a declaration. (279 App. Div. 1074, 1075, 1076.)

We are all in accord that there is no ecclesiastical question in this case. The parties agree as to the independence and autonomy of the local Congregational Christian Church in all matters temporal and spiritual, and that the Association, through voluntary independent organizations, was devised for fellowship and co-operation, but without ecclesiastical authority. The local Congregational Church, unlike most other religious organizations, is subordinate to no higher earthly spiritual authority. The General Council is a voluntary unincorporated association, and concededly is without 1 ‘ power or authority to enter into or to make any contract or commitment of any kind binding upon plaintiff. Church ”.

The Appellate Division has properly held that plaintiffs may not be disturbed with respect to (1) ownership and control of their own properties, nor (2) as to funds held under express trusts, which include pension funds.

As to any unexpended funds contributed by plaintiffs to defendant or to the Corporation for the G-eneral Council or to the Congregational Board of Ministerial Belief, defendant agreed at the close of the trial that such moneys may be used only for the purposes authorized by its charter or constitution and by-laws as they exist at the date of the trial court’s decree.

We also agree that there should have been no declaration either by Special Term or the Appellate Division as to the rights of plaintiffs with respect to the funds and assets held by the various corporate societies and agencies until the latter were brought before the court as parties. As to such funds, which we are told amount to upwards of $60,000,000, plaintiffs may well have rights in the way of continued service and otherwise, by reason of their contribution of many tens of thousands of dollars over the years. Whatever these rights — which may only be determined when the necessary parties are before the court — they may not be stripped from plaintiffs simply because they choose to remain independent Congregational Churches. Grood faith and Christian understanding on both sides should solve such problems as they actually arise; should such understanding not come to pass, plaintiffs may then urge whatever rights they claim to have, and which they assert are impinged upon, in an appropriate action with all necessary parties before the court. Because we cannot pass upon them at this time is not to say that they have no rights.

For these reasons, I am of the opinion that the Appellate Division erred in dismissing the complaint. This has been a long trial. As a result of the institution of this action, and in the course of the trial, concessions were made resolving many of the issues between the parties. To preserve these concessions and requested declarations — as Special Term has — is a function of a declaratory judgment, and clearly within the scope of Special Term’s powers. The Appellate Division recognized in its opinion that a declaratory judgment serves a legitimate purpose when the persons affected are before the court. Here plaintiffs and defendant are before the court, and a declaratory judgment as to their respective rights, between themselves, is clearly authorized. Plaintiffs should not have been denied any relief whatsoever, but those provisions of the Special Term judgment which both the Appellate Division and the members of this court recognize as proper should have been permitted to stand.

The judgment of the Appellate Division should be reversed and the judgment of Special Term modified as follows:

The first two ordering paragraphs should be stricken.

As to the third ordering paragraph, subdivisions 1 and 2 should be stricken and the following substituted therefor: ‘4 The defendant, The General Council of the Congregational Christian Churches of the United States, has the power and authority to proceed with and carry out the proposals in the Basis of Union for itself and for those who may become parties to it, without the approval of the plaintiffs or those churches for whose benefit the plaintiffs claim to be suing.”

In the same third ordering paragraph, subdivisions 3, 4, 5, 6 and 7 should be allowed to remain, for this relief was asked for in part by plaintiffs in paragraph 3 of their prayer for relief, and consented to altogether by defendant in paragraphs CII-CV of its prayer for relief.

Subdivision 8 of the third ordering paragraph should be stricken.

A further subdivision should be added to said third ordering paragraph embodying paragraph CVI of defendant’s prayer for relief.

An additional declaration should also be added to conform to defendant’s motion made at the close of the trial to add paragraph CVTI(a) to its prayer for relief, reading as follows: Declaring that any unexpended funds contributed by the plaintiff to the defendant or to the Corporation for the General Council or to the Congregational Board of Ministerial Relief, may be used only for the purposes authorized by its Charter or Constitution and By-laws as they exist at the date of this Court’s decree.”

The fourth ordering paragraph granting injunctive relief should be stricken in its entirety.

Subdivisions 1 and 2 of the fifth ordering paragraph should be deleted; subdivision 3 thereof may stand.

The sixth, and last, ordering paragraph should be modified by substituting for the words “ the plaintiffs ” the words “ either Party”. ' . L ■' ¡ t A' .'.i

No costs should be awarded here inasmuch as both parties asked for a declaratory judgment.

Lewis, Ch. J., Desmond and Fuld, JJ., concur with Dye, J.; Fboessel, J., dissents in opinion in which Conway, J., concurs.

Judgment affirmed. [See 306 N. Y. 751, 792, 851.]


source: Caselaw Access Project

author: Lewis, Ch. J.

license: Public Domain

text:
    Duane Jones Company, Inc., Appellant and Respondent, v. Frank G. Burke, Jr., et al., Respondents; Joseph Scheideler et al., Appellants, et al., Defendants.
    Argued October 7, 1953;
    decided January 7, 1954.

      Milton Pollack, Thomas F. Boyle and Samuel N. Greenspoon for appellant-respondent.
    I. Appellants and respondent Hayes were fiduciaries of corporate plaintiff and bore a trust obligation to it until the end of all their ties to corporate plaintiff. (Kavanaugh v. Kavanaugh Knitting Co., 226 N. Y. 185; Lamdin v. Broadway Surface Adv. Corp., 272 N. Y. 133; Byrne v. Barrett, 268 N. Y. 199; Slater v. Detroit Graphite Co., 125 Misc. 183; Sohon System v. Troub, 252 App. Div. 553; Eagle Ind. Co. v. Cherry, 182 F. 2d 298; Robb v. Green, [1895] 2 Q. B. 1; Meinhard v. Salmon, 249 N. Y. 458.) II. The acts of the fiduciaries-defendants violated their trust duty to plaintiff. (Sialkot Importing Corp. v. Berlin, 295 N. Y. 482; Lamdin v. Broadway Surface Adv. Corp., 272 N. Y. 133; Elco Shoe Manu

      facturers v. Sisk, 260 N. Y. 100; Volk Co. v. Fleschner Bros., 273 App. Div. 994, 298 N. Y. 717; McCaskey v. Cumberland Glass Mfg. Co., 188 App. Div. 288; Keiser v. Walsh, 118 F. 2d 13; Eagle Ind. Co. v. Cherry, 182 F. 2d 298; Red Top Cab Co. v. Hanchett, 48 F. 2d 236; Wessex Dairies, Ltd., v. Smith, [1935] 2 K. B. 80; Cook v. G. S. Deeks, [1916] 1 A. C. 554; Beatty v. Guggenheim Exploration Co., 223 N. Y. 294; Murray v. Beard, 102 N. Y. 505.) III. The finding of a conspiracy to commit breaches of trust and to cause intentional harm in breach of fiduciary duty made each defendant liable for the sum of the wrongful acts. (Wechsler v. Bowman, 285 N. Y. 284; Binon v. Boel, 271 App. Div. 505; Irving Trust Co. v. Deutsch, 73 F. 2d 121, 294 U. S. 708; Burgess Bros. Co. v. Stewart, 112 Misc. 347, 194 App. Div. 913; Meredith v. Art Metal Constr. Co., 97 Misc. 69, 176 App. Div. 945; International Longshoremen’s & Warehousemen’s Union v. Juneau Spruce Corp., 189 F. 2d 177, 342 U. S. 237; Lynch v. Magnavox Co., 94 F. 2d 883; Scavenger Service Corp. v. Courtney, 85 F. 2d 825; Winkler-Koch Eng. Co. v. Universal Oil Products Co., 79 F. Supp. 1013.) IV. Property of the corporate plaintiff was tortiously invaded by defendants. (Keviczky v. Lorber, 290 N. Y. 297; Exchange Bakery & Restaurant v. Rifkin, 245 N. Y. 260; Truax v. Corrigan, 257 U. S. 312; Remington Rand, Inc., v. Crofoot, 248 App. Div. 356, 279 N. Y. 635; Truax v. Raich, 239 U. S. 33; Opera on Tour, Inc., v. Weber, 285 N. Y. 348; Advance Music Corp. v. American Tobacco Co., 296 N. Y. 79; American Guild of Musical Artists v. Petrillo, 286 N. Y. 226; Rochette & Parzini Corp v. Campo, 301 N. Y. 228.) V. Respondent Burke knowingly participated in and encouraged breaches of trust and intentional harm by fiduciaries and is liable therefor. (Wechsler v. Bowman, 285 N. Y. 284; Lonsdale v. Speyer, 249 App. Div. 133.) VI. The damages are legally proper. (Fitzpatrick v. International Ry. Co., 252 N. Y. 127; Robinson v. Insurance Co. of North America, 198 N. Y. 523; Bresslin v. Star Co., 166 App. Div. 89; Rhinelander v. Rhinelander, 219 App. Div. 189, 245 N. Y. 510; Brown v. Rattner, 263 App. Div. 395; Blum v. Manhattan Life Ins. Co., 256 App. Div. 785; Mortimer v. Bristol, 190 App. Div. 452; National Concert & Artists Corp. v. Murray, 281 App. Div. 230; Hornstein v. Podwitz, 254 N. Y. 443.)

      Neil P. Cullom, Stanford Schewel and Robert D. Cole for defendants-appellants.
    I. The motions to dismiss the complaint and for a directed verdict should have been granted because no conspiracy was proven as a matter of law. (Carroll Bldg. Corp. v. Greenberg Plumbing Supplies, 216 App. Div. 268, 244 N. Y. 543.) II. There was a complete failure of proof of the allegations of the complaint and a fatal variance between pleading and proof. (Lifton v. Title Guar. & Trust Co., 263 App. Div. 3; Walrath v. Hanover Fire Ins. Co., 216 N. Y. 220; Hanrahan v. New York Edison Co., 238 N. Y. 194; Hull v. Littauer, 162 N. Y. 569; Voorhees v. Unger, 151 App. Div. 35; People v. Tuczkewitz, 149 N. Y. 240; Schultz v. Manufacturers & Traders Trust Co., 254 App. Div. 128, 279 N. Y. 781.) III. On the facts of this case it was error for the Appellate Division to reverse as to some of the defendants and affirm as to others. (City of Buffalo v. Delaware L. & W. R. R. Co., 176 N. Y. 308; United States Print. & Lithograph Co. v. Powers, 233 N. Y. 143; Altman v. Hofeller, 152 N. Y. 498; Bamberg v. International Ry. Co., 121 App. Div. 1; Loomis v. Lehigh Valley R. R. Co., 208 N. Y. 312; Washington Gaslight Co. v. Lansden, 172 U. S. 534.) IV. When the resignations of all defendants as officers and directors were tendered to and accepted by plaintiff, the “ fiduciary relation ” between plaintiff and defendants was dissolved; and thereafter ..they were free to compete with plaintiff. (Hammond Oil Co. v. Standard Oil Co., 259 N. Y. 312; Bayer v. Bayer, 215 App. Div. 454; Washer v. Seager, 272 App. Div. 297, 297 N. Y. 918; Keiser v. Walsh, 118 F. 2d 13; Zeltner v. Zeltner Brewing Co., 174 N. Y. 247; President & Directors of Manhattan Co.v. Kaldenberg, 165 N. Y. 1.) V. Defendants did not unfairly compete with plaintiff. (Delancey Kosher Restaurant & Caterers Corp. v. Gluckstern, 305 N. Y. 250; Washer v. Seager, 272 App. Div. 297, 297 N. Y. 918; Union Car Adv. Co. v. Collier, 263 N. Y. 386; Scott & Co. v. Scott, 186 App. Div. 518.) VI. Plaintiff failed to prove with “ reasonable certainty ” that it was damaged at all by defendants’ conduct. (Associated Flour Haulers & Warehousemen v. Hoffman, 282 N. Y. 173; Washer v. Seager, 272 App. Div. 297, 297 N. Y. 918; 25 Fifth Ave. Management Co. v. Ivor B. Clark, Inc., 280 App. Div. 205, 304 N. Y. 808; Union Car Adv. Co. v. Collier, 263 N. Y. 386;
      Haughey v. Belmont Quadrangle Drilling Corp., 284 N. Y. 136.) VII The Trial Judge committed reversible error in the admission of proof of damages. (Simon v. Noma Elec. Corp., 293 N. Y. 171; Dorville Corp. v. Jackson, 278 App. Div. 796, 305 N. Y. 665; Alexander’s Dept. Store v. Ohrbach’s, Inc., 269 App. Div. 321.) VIII. Plaintiff failed to allege or prove that any false or fraudulent means were used in the employment of former employees of plaintiff, and no damages were proven. (Triangle Film Corp. v. Artcraft Pictures Corp., 250 P. 981; De Jong v. Behrman, 148 App. Div. 37; Biber Bros. News Co. v. New York Evening Post, 144 Misc. 405; Gracie Square Realty Corp. v. Choice Realty Corp., 305 N. Y. 271; Rager v. McCloskey, 305 N. Y. 75; Lowande v. Eisenberg Farms, 260 App. Div. 48; Kezer v. Dwelle-Kaiser Co., 222 App. Div. 350.) IX. The Trial Judge erred in the charge on the question of damages. (Kligman v. City of New York, 281 App. Div. 93; Willis v. S. M. H. Corp., 259 N. Y. 144; Blanchard v. Rome Metallic Bedstead Co., 184 App. Div. 187; Streat v. Wolf, 135 App. Div. 81; Strough v. Conley, 164 Misc. 248, 251 App. Div. 487; Van Der Harst v. Koenig, 249 App. Div. 235; Wiegand v. Fee Bros. Co., 73 App. Div. 139.) X. The court committed reversible error in charging that the basis of liability was a ‘ ‘ conspiracy ’ ’ — not the commission of any wrongful or fraudulent act — and, in effect, that the jury could find against the entire twelve defendants if they found that a conspiracy had been entered into by any two thereof. (Rhodes v. Ocean Acc. & Guar. Corp., 235 App. Div. 340; Kellogg v. Sowerby, 190 N, Y. 370; Brackett v. Griswold, 112 N. Y. 454; Green v. Davies, 182 N. Y. 499; Almirall & Co. v. McClement, 207 App. Div. 320, 239 N. Y. 630; Dalury v. Rezinas, 183 App. Div. 456, 229 N. Y. 513; Bird v. Post, 124 App. Div. 902; Rodriguez v. Western Union Tel. Co., 259 App. Div. 224.) XI. The judgment should be reversed and the complaint dismissed as to defendant Scheideler, Inc., because of a complete failure of proof. The complaint does not allege a cause of action as to it.

      Neil P. Cullom, James E. Freehill and Emmet V. Murray for defendants-respondents.
    I. The complaint against Burke was properly dismissed. By final adjudication the court has held that Manhattan is not a conspirator. Burke cannot, as a matter of law, conspire with a nonconspirator. (Washer v. Seager, 272 App. Div. 297, 297 N. Y. 918; Oakes v. Cattaraugus Water Co., 143 N. Y. 430; Beardsley v. Kilmer, 236 N. Y. 80.) II. Hayes is not liable. He was never associated with the Scheideler Company or with Manhattan; he was never an officer, stockholder or employee of either and entered into no conspiracy.
   Lewis, Ch. J.

The plaintiff corporation, by this action, seeks damages from the ten individual and two corporate defendants alleged to have been sustained as a result of a conspiracy by defendants to deprive plaintiff of its principal customers and its key employees.

The plaintiff, Duane Jones Company, Inc., is an advertising-agency organized in 1942 by Duane Jones who, since its founding, has been its majority stockholder and either president of the corporation or chairman of its board of directors.

The defendant Manhattan Soap Co., Inc.,— of which the defendant Burke was the treasurer and a director — is a soap manufacturer which, prior to August, 1951, had been the principal customer or account ” of the plaintiff advertising agency. The defendant Scheideler, Beck & Werner, Inc. is an advertising agency, organized in circumstances presently to be described, which was incorporated on August 23, 1951 and commenced doing business on September 10, 1951. Defendants Scheideler and Werner are former officers and employees of Duane Jones Company, Inc., who, with defendant Beck — a former employee of the plaintiff corporation — organized the defendant Scheideler, Beck & Werner, Inc. Defendants Hubbard, Hulshizer and Hughes are former officers and employees, and defendant Brooks is a former employee of the plaintiff corporation, who were subsequently employed by the corporate defendant Scheideler, Beck & Werner, Inc. Defendants Gill and Hayes are former officers and employees of the plaintiff corporation who, unlike the individual defendants (except Burke) named above, had no connection with the corporate defendant Scheideler, Beck & Werner, Inc.

At Trial Term the jury returned a verdict dismissing the first and fourth causes of action as to the defendants Gill and Manhattan Soap Company, but gave plaintiff judgment in the amount of $300,000 against the corporate defendant Scheideler, Beck & Werner, Inc., and the individual defendants, Burke, Scheideler, Werner, Beck, Hayes, Brooks, Hubbard, Hulshizer, and Hughes.

Plaintiff did not appeal from the judgment entered upon the jury verdict dismissing the complaint as to the defendants Manhattan (plaintiff’s former customer) and Gill (plaintiff’s ex-officer who had not joined defendant Scheideler, Beck & Werner, Inc.).

Upon appeal by the remaining defendants from the judgment rendered agáinst them the Appellate Division, by a divided court, so modified the judgment on the facts and law as to dismiss the complaint as a matter of law as to the defendant Burke (officer of defendant Manhattan Soap Company which had been exonerated by the jury) and as to the defendant Hayes who, like the defendant Gill, had not become associated with the corporate defendant Scheideler, Beck & Werner, Inc.' The judgment against the corporate defendant and against the other individual defendants as so modified was affirmed by the Appellate Division by a divided court.

The case comes to us on appeal by the individual defendants Scheideler, Beck, Werner, Brooks, Hubbard, Hulshizer, Hughes and the corporate defendant Scheideler, Beck & Werner, Inc., from so much of the judgment entered upon the order of the Appellate Division as affirmed the judgment rendered against them in the amount of $300,000.

A cross appeal by the plaintiff requires us to review so much of the judgment as dismissed the complaint against the defendants Burke and Hayes.

Upon this appeal the defendants-appellants claim that the plaintiff failed, as a matter of law, to establish the conspiracy alleged in the complaint. We think the following facts — supported by substantial evidence of record — dictate a contrary conclusion :

In 1942, Duane Jones, a man of experience in the field of advertising, organized the plaintiff corporation. From the date of its formation, Jones has continued to be the dominating personality and the policy maker of plaintiff corporation, which by 1951 had acquired accounts in such number and quality as produced a gross billing of $9,000,000. Plaintiff’s income was derived from commissions paid to it in the amount of 15% of the sum spent by plaintiff’s customers with advertising media. Plaintiff’s service consisted of originating advertising ideas and campaigns satisfactory to its customers, and of arranging for the execution of such campaigns through various media. To effect that service, plaintiff referred each of its principal customers to one or more ‘ ‘ account executives ’ ’ in its employ who worked in close co-operation with the customer and were directly responsible for the handling of the account thus serviced. Although an advertiser might commit itself to noncancelable contracts with advertising media, it was generally not bound by any agreement with the advertising agency through which it carried on its advertising. In other words, in the case at hand plaintiff’s customers were free at any time to discharge plaintiff as its agency; and similarly, plaintiff had the right at will to resign any of its accounts. Likewise plaintiff’s employees were not under formal contract to it.

We come then to a consideration of evidence of the alleged conspiracy by the defendants wrongfully to deprive plaintiff of its customers and key employees. In July, 1951, plaintiff serviced approximately twenty-five customers or accounts, including the following which the amended complaint alleges were diverted to the defendant Scheideler, Beck & Werner, Inc.: Manhattan Soap Co., Inc., Gr. F. Heublein & Bro., Inc., International Salt Co., Inc., Wesson Oil & Snowdrift Sales Co., C. F. Mueller Co., The Borden Company, The Marlin Fire Arms Co. and Mcllhenny Corp. At that time the number of plaintiff’s employees was one hundred thirty-two, of whom fifteen were described by plaintiff’s president as “ key men.”

During the preceding six months plaintiff had lost three of its accounts — total gross billings of which approximated $6,500,000 — and had received resignations from three executives as well as from certain staff members of the organization. It also appears that Duane Jones, the president of plaintiff corporation, had been guilty of certain behavior lapses at his office, at business functions and during interviews with actual and prospective customers. As a result of those occasions of misbehavior, several of plaintiff’s officers and directors expressed dissatisfaction with conditions — described as “ intolerable ” — which existed at the plaintiff agency in the spring and summer of 1951.

On June 28,1951, a meeting took place at the Park Lane Hotel in Manhattan, which was attended by a number of the plaintiff’s officers, directors and employees, including all the individual defendants named in this action except the defendant Burke. Witnesses called by the plaintiff and the defendants gave accounts which varied in minor particulars as to what transpired at that meeting of June 28, 1951. However, the choice as to which version was accurate, and as to what inferences, if any, could be drawn therefrom, was for the jury, if there was substantial evidence to support that choice. There was substantial evidence of record that at the meeting of June 28th, the defendant Scheideler informed the group that he had spoken to several of plaintiff’s customers whose accounts he serviced from whom he gained favorable reaction to a proposal that the group either buy out Duane Jones’ interest in the plaintiff corporation or that they form a new corporation. It also appears that Scheideler suggested to the others present that they inquire whether the accounts being serviced by them for the plaintiff would favor such a project. Defendants Scheideler and Hayes each admitted that at the June 28th meeting it was decided that Hayes should speak to Duane Jones concerning a possible purchase by the defendants of Jones’ interest in the plaintiff corporation. According to Hayes, he informed Duane Jones on July 3, 1951, that the nine defendants associated with plaintiff were interested in purchasing Jones’ stock in the plaintiff agency. Mr. Jones’ recital of that conversation was that Hayes told him of the group’s intention either to buy him out or to start their own agency, and that if he did not agree to a sale they would resign en masse within forty-eight hours. Duane Jones further testified that Hayes indicated to him that the agency’s customers had been “ already presold ” on the alternative plan and that the group would notify him on July 5th of the price they would pay for the business. According to Jones he said to Hayes: 11 In other words, you are standing there with a Colt .45, holding it at my forehead, and there is not much I can do except to give up? ”, to which Hayes replied: “ Well, you can call it anything you want, but that is what we are going to do.”

Witnesses called by both sides testified that a meeting was held on July 5, 1951, attended by Duane J ones and the defendants who are ex-employees of plaintiff. Again, the record contains conflicting versions of what occurred. The defendants Scheideler and Hayes stated that the defendant employees made an offer to purchase Jones’ stock which was accepted by Jones. Jones testified however that, after hearing the proposal submitted by Hayes as their spokesman, he told them there was nothing I could do but accept if they had the clients all presold ” and agreed to accept the proposal if it could be worked out along the lines of a plan advantageous to him tax-wise. On the following day, Duane Jones issued a statement to plaintiff’s employees that he was retiring from the agency and expressing his appreciation for their past co-operation.

However, despite frequent meetings between representatives of Duane Jones and the individual defendants the proposed sale was never consummated. Negotiations terminated on or about August 6, 1951, the claim of both Duane Jones and the defendants being that the failure to agree was the result of the other’s increased demands and refusal to abide by the terms allegedly decided upon at the meeting of July 5th.

On August 7, 1951, there was held a special meeting of the board of directors of plaintiff corporation, at which there were presented and accepted written resignations by the defendants Scheideler, Werner, Hayes, Gill, Hubbard and Hughes as officers and as directors of plaintiff. The resignations were substantially identical in form; each was a resignation effective only insofar as the writer was a director or officer, or both, of plaintiff; each contained a statement that the writer would continue his duties as an employee of the plaintiff agency, and stated As an employee, I will continue to service those accounts now assigned to me, to the best of my ability,”

Defendant HulsMzer testified that he submitted an oral resignation as officer, director and employee of plaintiff corporation at the meeting held August 7, 1951, but that, at the request of Jones, he agreed to stay on “ in a nominal capacity” because if he resigned there would not be a quorum of the board of directors. The witness stated that he acted as secretary of the corporation and retained possession of the corporate records until September 26, 1951; that he continued as an employee of plaintiff until September 30,1951, having been told by Jones that his services would not be required after that date. Also on August 7th, defendant Manhattan Soap Co. wrote a letter to Scheideler informing him that ‘‘ With reference to the various conversations and meetings which we have held in regard to the make-up of the Duane Jones Company, we now wish to tell you that, as the agency is now constituted, we will move our account from the Duane Jones Company not later than September 30, 1951.” On August 10, 1951, defendant Scheideler addressed a letter to Duane Jones stating that he was resigning as of September 30,1951.

A special meeting of the board of directors of plaintiff was held August 17, 1951, at which the resignation of defendant Scheideler as an employee was read and- — -in view of his status as a member of the plaintiff’s pension trust plan — it was ‘ ‘ Resolved, that action upon the resignation of Mr. Scheideler as employee of this Company be suspended pending an investigation of his conduct to determine if he should be discharged for cause.” At that meeting the board also voted to discharge immediately and for cause (with two weeks severance pay) the defendants Hayes, Hughes, Hubbard, Beck and Brooks. On the same date, the defendant Werner submitted his resignation as an employee, effective September 15th, and thereafter on August 23d he submitted a second resignation effective immediately.

Despite their resignations as employees of plaintiff, defendants Scheideler, Werner and Hulshizer testified that they continued to receive payments from, and to perform services for, plaintiff for varying periods of time extending to September 30, 1951. Scheideler stated that he rendered services to plaintiff during August and September, 1951, and that he received salary payment through September 14, 1951. Werner testified that he serviced accounts for plaintiff in the period from August 15 to September 15, 1951 — during which time he signed and received payment on petty cash slips drawn upon plaintiff — and that he received a salary up to September 15,1951. Defend- ¡ ant Hulshizer worked at plaintiff’s office until September 30, 1951, and received his last salary check from plaintiff on September 28,1951. With regard to the defendants discharged for cause on August 17th, Duane Jones testified that he asked the men “as a matter of courtesy ’ ’ to stay on until they could be replaced and that the severance pay was intended to cover their services during that holdover period.

On August 22, 1951, the defendants Scheideler, Werner and Beck signed a certificate of incorporation of the defendant Scheideler, Beck & Werner, Inc., which certificate was filed with the Secretary of State on August 23, 1951. A few days later, on August 30th, the corporate defendant executed a lease of office space at 487 Park Avenue, where it opened for business as an advertising agency on September 10, 1951.

Within six weeks after its formal opening, the defendant Scheideler, Beck & Werner, Inc., had in its employ seventy-one of the one hundred thirty-two persons formerly employed by plaintiff, including the defendants Scheideler, Werner, Beck, Hughes, Brooks, Hubbard and Hulshizer. Each of the defendants named above was a stockholder in the corporate defendant, and the defendants Scheideler, Werner, Hulshizer and Beck held the offices of president, vice-president, secretary and treasurer of the corporation respectively. Upon this subject, Scheideler testified that, on August 21, 1951, he had informed an officer of Manhattan Soap Co. that he (Scheideler) had “ decided definitely to go ahead ” with the creation of a new agency and that he had already solicited several key employees, some of whom were then employed by plaintiff, including the defendants Hughes, Beck, Hubbard and Werner. According to Scheideler’s further testimony it appears that prior to August 23d he had solicited an assistant account executive — -whom he considered a valuable employee of the plaintiff — to become an employee of Scheideler, Beck & Werner, Inc. Similarly, the defendant Hulshizer became secretary of defendant corporatian on August 23d when — to Scheideler’s knowledge — he was still an employee and oEeer of plaintiff. Hulshizer testified that it was ‘6 quite possible ’ ’ that he had been invited by Scheideler between August 1st and August 15th to become a part of the Scheideler, Beck & Werner agency. In that connection, it appears that in August, 1951, the services of Bichard Stevens were secured as business manager of Scheideler, Beck & Werner, Inc.— the position held by Stevens with Duane Jones Company immediately prior to his employment by Scheideler. By his own admission, Scheideler instructed Stevens to get the personnel necessary to staff the corporate defendant on the basis of an anticipated annual billing of $4,500,000 — the average requirements in the business being-fourteen people per million dollars of billings. Scheideler said that he “ instructed Stevens to secure the proper personnel to fill various departments wherever he could secure them ”, but that he thought it “ Most likely ” Stevens would obtain the necessary employees from the ranks of plaintiff Duane Jones Company.

Upon the question of accounts or customers, it appears that, at the time of its opening or shortly thereafter, defendant Scheideler, Beck & Werner, Inc., had as accounts Manhattan Soap Co., G-. F. Heublein, International Salt, Wesson Oil, C. F. Mueller Company, The Borden Company, Marlin Fire Arms, Mcllhenny Corp., Haskins Bros, and Continental Briar Pipe, all of which were customers of plaintiff prior to the formation of defendant Scheideler, Beck & Werner, Inc. The evidence with regard to the transfer of each of the above accounts is as follows: Manhattan Soap Co. and its aEliate, Haskin Bros., were solicited by Scheideler in August, 1951. Scheideler had however discussed the proposed purchase of Duane Jones’ interest in plaintiff with defendant Burke, an oficer of Manhattan, a day or two prior to the meeting- at the Park Lane Hotel on June 28th and Burke had received almost daily reports of the negotiations looking toward a change in the organization of plaintiff agency.

Q-. F. Heublein became a customer of defendant corporation in the middle of September, 1951, as a result of solicitation by the defendant Werner on August 29th. Immediately prior thereto, Werner had been account executive of the Heublein account for plaintiff corporation, to which he submitted a resignation on August 23d but for which he continued to service accounts until September 15th.

International Salt Co. became a customer of Scheideler, Beck & Werner, Inc., in the early part of September, 1951, following solicitation by defendant Werner — who was also plaintiff’s account executive for International Salt — on August 24, 1951.

Defendant Scheideler testified that the Wesson Oil account walked in off the street” as a customer of the corporate defendant, without solicitation. However, the witness admitted that he had for years been servicing the Wesson account for plaintiff and that the advertiser was one which he had approached prior to the meeting of June 28th on the matter of buying out Duane Jones’ interest in plaintiff.

The C. F. Mueller Company transferred its business to Scheideler, Beck & Werner, Inc., after having been solicited by defendant Hulshizer, who handled the account for plaintiff, on a date between August 28th and September 7th.

The Borden Company became an account of the corporate defendant after August 31st through the solicitation of defendants Scheideler and Beck, who had supervised the account while employed by plaintiff.

Scheideler, Beck & Werner, Inc., acquired the account of Continental Briar Pipe Company in the latter part of 1951 through the efforts of defendant Werner, its former account executive with plaintiff.

The remaining two accounts — Marlin Fire Arms and Mcllhenny Corp.— came to defendant corporation by reason of solicitation of those accounts by Philip Genthner, a former account executive and employee of the plaintiff agency who, at the request of defendant Scheideler, resigned his position with plaintiff and became associated with Scheideler, Beck & Werner, Inc. Scheideler testified that he approached Genthner early in September, 1951, while the latter was “ a valued employee of the plaintiff corporation ” and requested bim to join the Scheideler firm; that he (Scheideler) told Genthner at that time that he wanted Genthner ‘ ‘ for the purpose of soliciting business that Genthner was known to be working for plaintiff on the Marlin Fire Arms and Mcllhenny accounts; and that those accounts came to defendant corporation from plaintiff at about the same time that G-enthner became associated with the Scheideler agency.

On August 24, 1951 — the day following incorporation of defendant Scheideler, Beck & Werner, Inc.— defendant Scheideler addressed a letter to Duane Jones as president of plaintiff corporation which read in part:

“ Dear Duane: Several weeks ago, in a letter sent to the Manhattan Soap Company (copy of which you sent me), you requested my resignation. On August 10, 1951, I answered this request by memo, stating that September 30, 1951 be the effective date. This would allow ample time to arrange affairs of the clients I am servicing. To date, all work has been carried out to these clients’ complete satisfaction.
Since this, I have been working in my own spare time on organizing a new agency. This has now been set up and will formally open for business September 10, 1951.
A number of Duane J ones Company clients and several other companies have been invited to join the new agency. Also, a number of Duane Jones Company personnel as well as other people have been invited to join the new agency. Many in both categories have already given verbal approval. They will advise you directly as to their intentions. * * * ”

Duane Jones testified that, prior to receipt by him of the letter last quoted above, he had not been informed by any of the defendants, either directly or indirectly, that they had invited plaintiff’s customers or personnel to join a new agency. That testimony is supported by statements by the defendants Werner and- Hulshizer that they had not revealed either to plaintiff or to Duane Jones their intention to solicit for the Scheideler organization accounts handled by them at plaintiff agency.

The foregoing evidence has led us to conclude that the conduct of the individual defendants-appellants as officers, directors or employees of the plaintiff corporation “ * * * fell below the standard required by the law of one acting as an agent or employee of another.” (Lamdin v. Broadway Surface Adv. Corp., 272 N. Y. 133, 138.) Bach of these defendants was * * * prohibited from acting in any manner inconsistent with his agency or trust and [was] at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.” (Id., p. 138.) Plaintiff’s evidence — which the jury apparently believed -s- established that on June 28, 1951, the individual defendants-appellants met and agreed to take over the business of the plaintiff agency, either by purchase of the controlling interest in the corporation or by resignation en masse and the formation of a new agency; that at that meeting it was proposed that the defendants contact plaintiff’s customers whose advertising accounts were then being serviced by the defendants as account executives of plaintiff, with referance to prospective control of plaintiff’s business by the individual defendants; that on July 3d the employees-defendants offered to purchase, at a fixed price, the controlling interest in plaintiff agency and stated that, if the offer were not accepted, they would resign and that plaintiff’s customers had been presold ” on the proposed action; that a day or two after termination of unsuccessful negotiations for their purchase of the stock, the defendants who were officers and directors submitted to plaintiff their resignations from those positions, all (save one) of which resignations were received by plaintiff on the same day and were in substantially identical form; that three of the individual defendants immediately commenced negotiations leading to the incorporation on August 23d of a rival advertising agency which agency commenced operations on September 10th; that, at or about the time it commenced business, the defendant agency had as its customers nine accounts formerly serviced by plaintiff and employed more than 50% of plaintiff’s personnel; that the accounts and personnel were acquired through solicitation by, or at the direction of, the individual defendants prior to or during the period when they were completing their duties as employees of plaintiff; and finally, that the rival agency was formed and the accounts and personnel were solicited without disclosure of such activities to plaintiff.

The inferences reasonably to be drawn from the record justify the conclusion- — reached by the jury and by a majority of the Appellate Division — that the individual defendants-appellants, while employees of plaintiff corporation, determined upon a course of conduct which, when subsequently carried out, resulted in benefit to themselves through destruction of plaintiff’s business, in violation of the fiduciary duties of good faith and fair dealing imposed on defendants by their close relationship with plaintiff corporation. The jury’s determination of those questions of fact — affirmed by the Appellate Division — is beyond our power to disturb. “ If conflicting inferences are possible as to abuse or opportunity, the trier of the facts must make the choice between them. There can be no revision in this court unless the choice is clearly wrong.” (Meinhard v. Salmon, 249 N. Y. 458, 467.)

Nor is it a defense to say that the defendants-appellants did not avail themselves of the benefit of the customers and personnel diverted from plaintiff until after defendants had received notice of discharge or had informed plaintiff of their intention to leave Duane Jones Company. Upon this record the jury might have found that the conspiracy originated in June or July while a fiduciary duty existed, and that the benefits realized when defendant Scheideler, Beck & Werner, Inc., commenced operation in September were merely the results of a predetermined course of action. In view of that circumstance, the individual defendants would not be relieved of liability for advantages secured by them, after termination of their employment, as a result of opportunities gained by reason of their employment relationship. (Byrne v. Barrett, 268 N. Y. 199, 206-207; and see Volk Co. v. Fleschner Bros., 298 N. Y. 717.)

Defendants assert that the complaint against them should have been dismissed by the trial court because of what they describe as a “ fatal variance between pleading and proof ”. It is their position that the complaint alleges a conspiracy “organized”, “conceived”, “executed” and “masterminded ” by the defendants Burke (treasurer of Manhattan) and Manhattan Soap Company; that plaintiff failed to prove wrongful conduct on the part of Manhattan (which was exonerated by the jury) or by the defendant Burke (as to whom the Appellate Division dismissed the complaint); that, lacking such proof, the remaining defendants may not be held liable under the amended complaint served herein. A reading of the amended complaint convinces us to the contrary. That pleading contains allegations sufficient in law to allege a cause of action for conspiracy against the defendants other than Burke and Manhattan, irrespective of proof which might be presented as to the latter two defendants.

Defendants-appellants also urge as a basis for reversal of the judgment rendered against them, that plaintiff failed sufficiently to establish a causal relationship between damages sustained by plaintiff and the alleged wrongful conduct by the defendants. For this argument defendants rely upon (1) the fact that none of the accounts serviced by plaintiff were under contract to plaintiff agency, and (2) the fact that there is evidence of record from which it may be inferred that plaintiff had ££ resigned ” all of its accounts in August, 1951, prior to the solicitation of such accounts by the individual defendants. Plaintiff was not required to show interference by defendants with existing contractual relationships in order to impose liability in the present action. (Union Car Adv. Co. v. Collier, 263 N. Y. 386, 401.) As was said in Keviczky v. Lorber (290 N. Y. 297, 306): "' An injury to a person’s business by procuring others not to deal with him, or by getting away his customers, if unlawful means are employed, such as fraud or intimidation, or if done without justifiable cause, is an actionable wrong.’ (2 Cooley on Torts, § 230.) ” Moreover, there is evidence of record from which the jury might have inferred that the loss of customers suffered by plaintiff in August and September, 1951, was the direct result of defendants-appellants ’ activities immediately prior thereto. Plaintiff introduced evidence of the customers it had serviced for varying periods of time prior to June 28, 1951, and which it was then servicing; it established activities by defendants as to demands made upon plaintiff to surrender the business to defendants, accompanied by threats of mass resignation pursuant to a scheme reputed to have been ££ presold ” to the customers; it proved solicitation by defendants of plaintiff’s accounts and personnel, and, finally, it established a mass exodus to the corporate defendant of plaintiff’s customers and a majority of its key personnel. Upon that state of the record, the jury was entitled to find that plaintiff’s losses were a proximate result of defendants’ conduct. (Keviczky v. Lorber, supra, p. 302.)

With regard to proof of plaintiff’s resignation of accounts, we agree with the statement by one of the Justices at the Appellate Division that ‘ ‘ The renunciation of accounts by J ones is of no conclusive significance, if we credit, as apparently the jury did, that Jones was then in a position in which, as he described it, a gun ’ was being held to his head ” (281 App. Div. 629). On the record before us the jury could have found that Jones’ action was only an intermediate result of defendants’ predetermined conduct which, when carried to completion, resulted in the ultimate acquisition by defendant Scheideler, Beck & Werner, Inc., of the accounts formerly serviced by plaintiff.

Plaintiff established that the Pharmaco account — one of its customers which did not go to Scheideler, Beck & Werner, Inc., but which was alleged by the amended complaint to have been lost through defendants’ misconduct — had an annual gross billing of $650,000. There was evidence that the defendant Hayes handled the Pharmaco account for plaintiff and that, after his resignation from plaintiff, he became associated with the rival firm of Doherty, Clifford, Steer & Shenfield, to which the Pharmaco account transferred. Hayes testified that he introduced ” Pharmaco to his new employer.

Moreover, defendants’ answer alleged that, in the course of negotiations looking toward defendants’ acquisition of Duane Jones’ interest in plaintiff, defendants offered Jones: “ $700,000 in installment payments over a period of five years; and, in addition thereto, % of 1 per cent of the commissions of all accounts as of record for a period of five years, based upon 1951 appropriations, which would amount to approximately $45,000 per annum, and % of 1 per cent of said commissions for a further period of five years which would amount to approximately $22,500 per annum for said second five-year period: * * * Implicit in that pleading are admissions by the defendants that, according to their own estimates based upon 1951 appropriations, plaintiff had reasonable expectations of annual gross billings of approximately $9,000,000, which billings could be expected to continue undiminished for a period, of ten years.

Nor do we agree with defendants’ claim that the trial court’s charge with respect to damages was so erroneous as to require a reversal of the judgment. Indeed, in view of the fact that the charge on damages covers approximately four and one-half pages of the printed record, we douht that the general exception taken by defendants’ counsel “ to measure of damages ” was sufficient to preserve for appeal the alleged error now asserted with respect thereto. (Fitzpatrick v. International Ry. Co., 252 N. Y. 127, 140-141.) At the request of the jury, the charge with regard to damages subsequently was reread, after which defendants’ counsel excepted to the repetition of the charge and particularly in that repetition to the statement to the effect that the jury may award damages up to the present date ”. Defendants have failed to cite any authority for the position now urged by them — viz., that plaintiff may not recover damages sustained up to the time of trial — nor do they suggest a date which they would approve as a proper date for termination of the assessment of plaintiff’s loss. If plaintiff established wrongful conduct by defendants as alleged in the amended complaint — and the jury found that it did — it was entitled to recover as damages the amount of loss sustained by it, including opportunities for profit on the accounts diverted from it through defendants’ conduct. (Keviczky v. Lorber, supra, pp. 305-306.) Under the facts here presented, plaintiff’s loss was a continuing one extending at least up to the date of trial. It is no answer that the amount of profit plaintiff would have made cannot be definitely established by proof at the trial. “ There is no good reason for requiring any higher degree of certainty in respect to the amount of damages than in respect to any other branch of a cause. Juries are allowed to act upon probable and inferential as well as direct and positive proof. And when from the nature of the case the amount of the damages cannot be estimated with certainty, or only a part of them can be so estimated, no objection is perceived to placing before the jury all the facts and circumstances of the case having any tendency to show damages or their probable amount, so as to enable them to make the most intelligible and accurate estimate which the nature of the case will permit.” (1 Sutherland on Damages [4th ed., 1916], § 70.)

We are thus brought to defendants’ final argument urged upon this appeal, which we regard as valid and which requires a reversal in part of the judgment entered upon the order of the Appellate Division. We refer to defendants’ claim that the amended complaint now before this court does not state a cause of action against the defendant Scheideler, Beck & Werner, Inc. As we have seen, the amended complaint originally served by plaintiff attempted to allege four causes of action. By the third cause of action — which was alleged to be “ against Scheideler, Beck & Werner, Inc. and Joseph Scheideler, Paul Werner and Joseph Beck individually” — plaintiff charged that the corporate defendant had received business accounts and good will wrongfully diverted from plaintiff and demanded that such accounts and good will, together with the stock in defendant corporation, be impressed with a trust in favor of the plaintiff. That cause of action for equitable relief was severed from the present action, and only the first and fourth causes of action were submitted to the jury and are before us on this appeal. It appears from a reading of the amended complaint that it does not contain an allegation of wrongful conduct by the corporate defendant under the first or fourth cause of action. Plaintiff has further failed to allege the corporate existence of the defendant Scheideler, Beck & Werner, Inc., as required by rule 93 óf the Buies of Civil Practice, and has omitted the corporation from the lists of defendants alleged in the Forty-Sixth and Sixty-Fifth paragraphs of the amended complaint to have conspired against plaintiff. In those circumstances, we conclude that the judgment rendered against the defendant Scheideler, Beck & Werner, Inc., should be reversed.

With regard to the cross appeal by plaintiff,

Duane Jones Company, Inc.

Plaintiff’s cross appeal is from so much of the judgment entered upon the Appellate Division order as modified the judgment of Trial Term and dismissed the complaint as a matter of law against defendants Burke and Hayes. It will be recalled that the defendant Burke was treasurer of plaintiff’s principal customer, the defendant Manhattan Soap Company, which company was exonerated by the jury from any participation in the conspiracy alleged in the amended complaint. Defendant Hayes is a former officer and employee of plaintiff who resigned from Duane Jones Company in the summer of 1951 but who did not become associated with the corporate defendant Scheideler, Beck & Werner, Inc.

With regard to the judgment for plaintiff entered upon the jury verdict, the Appellate Division order directed ‘ ‘ that the said judgment so appealed from be and the same is hereby modified on the facts and the law so as to dismiss the complaint as a matter of law against defendants Burke and Hayes, the Court having considered the questions of fact and having determined that it would not grant a new trial upon those questions; * * * (For the basis of the action by the Appellate Division, see 281 App. Div. 622, 623-625.)

We agree with the conclusion reached by the Appellate Division with respect to defendant Burke, the officer of the defendant Manhattan Soap Company. The theory of plaintiff’s action against that corporate defendant, as set forth in the amended complaint, was that Burke, as an officer of Manhattan, made “ unusual and irregular financial demands on the plaintiff that, on the refusal of such demands by plaintiff, Burke and Manhattan entered upon a course of conduct and conspired with the defendant Scheideler, to destroy plaintiff’s business. There is nothing in the record to support the allegations that demands made by Burke or Manhattan were anything in the way of monetary payments from the plaintiff nor were those demands legally irregular. There is no evidence from which it may reasonably be inferred that Burke’s conduct was directed toward the willful and intentional destruction of plaintiff’s business. On the contrary, plaintiff’s evidence shows that, during the course of the negotiations for the sale of Jones’ interest in the plaintiff corporation, defendant Burke agreed, at Jones’ request, to take an active part in arriving at a satisfactory agreement with the nine individual defendants. It was established that neither Burke nor his principal the defendant Manhattan Soap Company had any interest in Scheideler, Beck & Werner, Inc., and that they acquired none of the employees which plaintiff alleges were wrongfully diverted from it. Concededly, plaintiff made no claim that Burke or Manhattan made any profit or received any financial advantage from the resignation of the nine defendants whom plaintiff considered key employees. In that connection the fact is of paramount importance that no fiduciary relationship existed between plaintiff and its customer Manhattan and the latter’s officer, Burke, whose only interest was as treasurer of a corporation, the gross advertising billings of which averaged $3,000,000 to $4,000,000 a year spent through the plaintiff agency. Burke did not attend the meetings of the defendants-appellants held on June 28th, July 3d and July 5th. Indeed, a reading of the record as a whole leads one to conclude that Burke’s conduct in the summer of 1951 was motivated by a sincere concern for the welfare of his employer, Manhattan Soap Company, rather than by a desire to injure plaintiff’s business. The jury has determined that the action of Manhattan, through its employee and agent Burke, did not constitute participation in the wrongful conspiracy alleged by plaintiff. In view of that circumstance, and upon the record before us, we think the Appellate Division was correct insofar as it directed dismissal of the amended complaint against the corporation’s agent, Burke.

We reach a contrary conclusion with regard to the defendant Hayes. The Appellate Division apparently based its action in dismissing the complaint, as a matter of law, against Hayes upon its determination that, inasmuch as the defendant11 derived no profit from the new corporation ”, conspiracy on his part was not established. There is evidence of record, however, that Hayes participated in each of the meetings relied on by plaintiff as establishing the conspiracy. In fact, he was the spokesman for the individual defendants-appellants at the meeting with Duane Jones on July 3d, and it is he who, according to plaintiff’s witness, Jones, delivered the ultimatum that Jones must either sell out at the defendants’ price or see plaintiff’s staff resign en masse pursuant to a plan already “ presold ” to plaintiff’s customers. His resignation as officer and director of plaintiff was received on the same date and in the same form as those of the other defendants who are former officers of plaintiff corporation. The fact that, after his separation from the plaintiff agency, the defendant Hayes did not become associated with the defendant Scheideler, Beck & Werner, Inc., is not conclusive as to his liability in the present action. Nor may it be said that he did not benefit from plaintiff’s dismemberment. The record shows that, following his resignation from plaintiff, Hayes became associated with the rival advertising agency of Doherty, Clifford, Steers & Shenfield. It also appears, as we have seen, that after Hayes’ transfer, Pharmaco Co. — an account which he had serviced as one of plaintiff’s account executives, and which is alleged to have been lost by plaintiff as a result of the conspiracy charged in the amended complaint — moved its account from plaintiff to the Doherty agency with which Hayes had become associated. Indeed, Hayes testified that it was he who introduced ” Pharmaco to his new employer. The prevailing opinion at the Appellate Division recognized that Hayes had been instrumental in diverting at least one of plaintiff’s customers. There it was said: ‘ ‘ Defendant Hayes is not chargeable with liability for having resigned from plaintiff and accepted employment with a competing company, already established, even though he succeeded in obtaining at least one of plaintiff’s customers ”. Upon that state of the record, we think the jury was warranted in its finding, as alleged in the amended complaint, that the defendant Hayes conspired to destroy plaintiff’s business and that, pursuant to that conspiracy, plaintiff lost at least one account which it formerly held. Inasmuch as the Appellate Division modified the judgment and dismissed the complaint as to Hayes as a matter of law and affirmed the findings of fact made in the court below, the judgment entered upon the order of the Appellate Division — insofar as it dismissed the amended complaint against the defendant Hayes — should be reversed and as to him the judgment of the trial court should be reinstated.

Having considered all other matters to which the briefs of counsel direct our attention, we reach the following conclusion:

On the appeal by the defendants-appellants, the judgments should be so modified as to reverse so much thereof as award recovery against the corporate defendant-appellant, and to dismiss the first and fourth causes of action against the said corporate defendant-appellant.

Upon the appeal by plaintiff, the judgment should be so modified as to reverse the judgment insofar as it dismisses the amended complaint against the defendant Hayes, and, as to said defendant, the judgment of the Trial Term should be reinstated, with costs in all courts.

As so modified, the judgment should be in all other respects affirmed, with costs in this court to plaintiff-respondent against the individual defendants-appellants; with costs in all courts to the corporate defendant-appellant against plaintiff-respondent, and with costs in this court to defendant-respondent Burke against plaintiff-appellant.

Conway, Desmond, Dye, Fuld and Froessel, JJ., concur; Van Voorhis, J., taking no part.

Judgment accordingly.

       The amended complaint alleged four causes of action, the second of which was discontinued upon plaintiffs motion made in the course of the trial. The third cause of action sought equitable relief and was severed from the present action.