136 Misc.2d 38, 517 N.Y.S.2d 854
Judy COCHRAN, Plaintiff,
v.
Michael DELLFAVA, Defendant.
City Court of Rochester,
Monroe County, Small Claims Branch.
June 23, 1987.
JOHN R. SCHWARTZ, Judge.
The issue here is whether the plaintiff can
recover from the defendant the Two
Thousand Two Hundred Dollars
($2,200.00) **855 she gave to him to play
in the so-called "airplane game".
The game consists of a total of fifteen
players or investors. Each player must
initially pay Two Thousand Two Hundred
Dollars ($2,200.00) to enter the airplane
game. *39 There is an out-going pilot,
two co-pilots, four flight attendants, and
eight passengers. The pilot, co-pilots and
flight attendants are already on the plane
and they attempt to sell tickets to eight
new passengers. As each of these eight
passengers boards the airplane, he [she]
pays $2,200.00 for his [her] ticket to the
flight attendant, who in turn passes the
money onto the co-pilot, who in turn gives
it to the out-going pilot. When the eight
passenger tickets are sold, the out-going
pilot collects a total of Seventeen
Thousand Two Hundred Dollars
($17,200.00) for his or her original
$2,200.00 investment. After all eight
passenger tickets are sold, the out- going
pilot leaves the game and the plane is
split off into two new airplanes. Each co-pilot becomes an out-going pilot of his or
her own plane; the four flight attendants
split off and each becomes a co-pilot of
one of the new planes. The passengers
split off and become flight attendants of
the new planes. The members of the new
airplane then try to solicit eight new
passengers and the game goes on as
explained.
Clearly this is a "chain distribution
scheme" as defined in General Business
Law 359-fff(2): "... a chain distribution
scheme is a sales device whereby a
person, upon condition that he make an
investment, is granted a license or right to
solicit or recruit for profit or economic gain
one or more additional persons who are
also granted such license or right upon
condition of making an investment and
may further perpetuate the chain of
persons who are granted such license or
right upon such condition ..."
It is illegal and prohibited for any person
to promote, offer or grant participation in
a chain distribution scheme, General
Business Law 359-fff(1), and anyone who
does shall be guilty of an unclassified
misdemeanor. General Business Law
359-g(2).
FACTS:
On January 13, 1987, the plaintiff went to
a meeting called by the defendant
whereby she was persuaded by the
defendant to join the so-called "airplane
game". She alleged that he was the pilot
but the facts revealed he was only the co-pilot, and therefore, he had not started to
make a profit yet. The plaintiff stated that
she knew it was illegal to play in the game
but she was assured by the defendant
that "if they got caught, he would take all
responsibility". After the meeting, she
gave Two Thousand Two Hundred
Dollars ($2,200.00) to her friend, another
participant, who gave it to the defendant,
who gave it to the pilot. At the next *40
meeting, the plaintiff found out that she
had become a flight attendant on a plane
she did not wish to be on and asked the
defendant for her money back. He told
her that he did not have her money
because he gave it to the pilot. He
suggested that she call the pilot. The pilot
refused to give the plaintiff her money
back. The plane crashed and the plaintiff
never recovered her initial investment or
made a profit. She brings this action
against the defendant for the return of her
money.
LAW:
The issue here is, does the plaintiff have
a cause of action to recover her money in
a civil court?
It is illegal and criminal "to promote, offer
or grant participation in" the so-called
"airplane game". (See General Business
Law 359-fff(1) and 359- g(2)). "It is
settled law in this State (and probably of
every other state) that a party to an illegal
contract cannot ask a court of law to help
him [her] carry out his [her] illegal object,
nor can such a person plead or prove in
any court a case in which he [she], as a
basis for his [her] claim, must show forth
his [her] illegal purpose (Reiner v. North
Amer. Newspaper Alliance, 259 N.Y. 250,
181 N.E. 561; Municipal Metallic Bed
Mfg. Corp. v. Dobbs, 253 N.Y. 313, 316,
171 N.E.75; Morgan Munitions Corp. v.
Studebaker Corp., 226 N.Y. 94, 123 N.E.
146; Flegenheimer v. Brogan, 284 N.Y.
**856 268, 30 N.E.2d 591; Carmine v.
Murphy, 285 N.Y. 413, 35 N.E.2d 19;
Furman v. Furman, 287 N.Y. 772, 40
N.E.2d 643; Baksi v. Wallman, 297 N.Y.
456, 74 N.E.2d 172). For no court should
be required to serve as a paymaster of
the wages of crime, or referee between
thieves. Therefore, the law 'will not
extend its aid to either of the parties' or
'listen to their complaints against each
other, but will leave them where their own
acts have left them' ". (Stone v. Freeman,
298 N.Y. 268, 271, 82 N.E.2d 571,
quoting Schermerhorn v. Talmon, 14 N.Y.
93, 141).
[1] However, there are exceptions to this
general principal of law. Courts have
allowed recovery by a plaintiff to an illegal
contract provided the plaintiff's conduct
was malum prohibitum and not malum in
se. Here, the plaintiff's conduct was only
malum prohibitum (conduct prohibited by
statute) as opposed to malum in se
(conduct prohibited by the nature of the
act). To fall under the exception to the
general principal of law, not only must the
plaintiff establish that the agreement was
only malum prohibitum, but she must also
establish that she entered the agreement
under duress or undue influence and that
the defendant's conduct was more
culpable. Courts *41 havepermitted
recovery to a widow who became involved
in an illegal marriage brokerage contract
(Duvall v. Wellman, 127 N.Y. 156) and to
a Russian Jewish family who illegally
loaned money to another Russian Jewish
family so that family could emigrate from
a communist country (Briger v. Tuner, 104
Misc.2d 63, 427 N.Y.S.2d 904). A court
has also mandated the return of a
plaintiff's money based on an illegal
agreement for the proprietary operation by
plaintiff of defendant's restaurant,
including plaintiff's use of defendant's
liquor license, which was against public
policy. (Smith v. Pope, 72 A.D.2d 913,
422 N.Y.S.2d 192; see also 21 N.Y. Jur
Contracts 183).
In each of the cases, the courts held that
the parties were not in pari delicto. The
plaintiff either acted under duress, undue
influence, or out of good will.
Therefore, plaintiff's standing to bring this
lawsuit stands or falls on whether she
violated General Business Law Section
359-fff(1). Did she, by contributing her
Two Thousand Two Hundred Dollars
($2,200.00) to the airplane game in the
first instance, "promote" the game as
declared illegal in the statute?
[2] This Court finds, as a matter of law,
that by entering the so-called "airplane
game" as a passenger, one is in fact
"promoting" the game in violation of the
General Business Law (e.g. encouraging
the pilot to make an illegal profit;
encouraging others to enter the game by
example; and eventually hoping to make
an illegal profit). Therefore, plaintiff's
cause of action must fail as a matter of
law. It matters not whether the defendant
was the more culpable party, whether the
defendant was a pilot, as plaintiff testified,
and did actually recover a profit or
whether he took money because he never
made out-going pilot as defendant
testified.
The plaintiff by entering the game had
larceny in her heart. If the plane did not
crash she would have made a substantial
illegal profit. If this Court permitted her to
recover, in effect this Court would become
a referee amongst thieves. The law will
not extend its aid to the parties to such an
agreement. (See Stone v. Freeman, 298
N.Y. 268, 82 N.E.2d 571). Therefore, the
complaint is dismissed.
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