225 N.Y. 380, 122 N.E. 378 (1919)
The plaintiff was employed by defendant Guggenheim Exploration Co. and sent to the Yukon to investigate mining claims which were the subject of an option.1 He found other claims numbered 89 to 104 below discovery at Bonanza Creek which were not included in the option but which he believed to be essential to the successful operation of those that were included.2 In conjunction with Perry, he purchased rights in the new claims.3
Those claims were the subject of the Perry-Treadgold contract.4 The plaintiff had another interest in compensation paid to Perry for services in the Yukon district under the Perry-Guggenheim contract.5 The plaintiff persuaded Perry to ask for more pay than would otherwise have satisfied him in order that the plaintiff might get a share of it.6 In earlier proceedings the court held there could be no recovery by the plaintiff of compensation paid to Perry under the Perry-Guggenheim contract.7
The president and the general manager of the employer knew that the plaintiff was interested in the Perry-Treadgold contract and consented thereto, but no written consent was found or proved.8 The plaintiff had reserved the privilege of withdrawal so that if the president or general manager disapproved of his investment the payment would instead be treated as a loan to Perry personally.9 The Appellate Division found upon sufficient evidence that the employer consented to the investment with knowledge of that reserved privilege.10 This case is here upon re-argument.11 The facts were concisely stated in Judge Cuddeback’s opinion at 223 N.Y. 294.12 The re-argument was restricted to the single question whether plaintiff’s rights under the Perry-Treadgold contract may be finally determined now.13
Whether the two contracts are inseparably united in scheme and execution such that misconduct in respect of one defeats recovery under the other?14
When two contracts concern distinct subjects and payments, they are severable, and misconduct in one does not forfeit rights under the other.15
No. The Perry-Treadgold contract involved the plaintiff's interest with Perry in claims 89 to 104 below discovery at Bonanza Creek.16 In contrast, the Perry-Guggenheim contract involved compensation paid to Perry for services in the Yukon district.17 The plaintiff persuaded Perry to ask for more pay under the latter contract.18 The amount due under each head is stated in the findings, and increase of the one had no tendency to swell the measure of the other.19
Subsequent misconduct in another and distinct transaction does not work a forfeiture of rights already lawfully accrued.20
The two contracts are severable, permitting recovery under the Perry-Treadgold contract despite misconduct under the Perry-Guggenheim contract.21
Whether the plaintiff is chargeable as a trustee for profits under the Perry-Treadgold contract if the employer had not consented to the investment?22
Yes. The plaintiff was sent to the Yukon to investigate mining claims which were the subject of an option.25 He found other claims numbered 89 to 104 below discovery at Bonanza Creek which were not included in the option but which he believed to be essential to the successful operation of those that were included. In conjunction with Perry, he purchased rights in the new claims.
The claims had an intimate relation to those the plaintiff was under a duty to investigate.26 One could not profitably be operated without the other.27 A constructive trust is the formula through which the conscience of equity finds expression.28 It would be against good conscience for the plaintiff to retain these profits unless his employer has consented.29
Absent consent, the plaintiff is chargeable as a trustee for the profits under the Perry-Treadgold contract.30
Whether oral consent by the employer varies the employer’s rights under a contract that requires written consent for any waiver, modification, alteration, or annulment?31
The prohibition of oral waiver may itself be waived, and parties to a contract may unmake it by a new agreement, or the consent may establish an election between remedies that does not require a writing.32
Yes. The president and the general manager of the employer knew that the plaintiff was interested in the Perry-Treadgold contract and consented thereto, but no written consent was found or proved. The plaintiff had reserved the privilege of withdrawal so that if the president or general manager disapproved of his investment the payment would instead be treated as a loan to Perry personally. The Appellate Division found upon sufficient evidence that the employer consented to the investment with knowledge of that reserved privilege.
The clause which forbids a change may be changed like any other.33 The oral consent is at least sufficient to preclude the implication of a trust and is equivalent to an election that the agent shall not be charged as a trustee.34
Oral consent by the employer varies the employer’s rights and protects the plaintiff from being charged as a trustee.35
Whether the plaintiff’s rights under the Perry-Treadgold contract may be finally determined now without a new trial?36
When the facts are sufficiently developed and the transactions are severable, the court may finally determine the plaintiff's rights under the contract on re-argument without remanding for a new trial.37
Yes. This case is here upon re-argument restricted to the single question whether plaintiff’s rights under the Perry-Treadgold contract may be finally determined now.38 The two contracts concern distinct subjects and payments.39 The employer consented orally to the investment with knowledge of the plaintiff's reserved privilege of withdrawal.40 The consent gives protection to the agent and precludes any implication of a trust.41
The judgment of the Appellate Division should be modified so that the award made to the plaintiff shall be limited to his share of the profits under the Perry-Treadgold contract, to wit: $27,300 in cash with interest from April 1, 1908, and 5,460 shares of the capital stock of the Yukon Gold Company of the par value of $27,300 with any dividends declared thereon since April 1, 1908.42
The plaintiff's rights under the Perry-Treadgold contract may be finally determined now, and the judgment is modified and affirmed accordingly.43