## Facts

- Commonwealth Pictures Corp. contracted to pay Fred McConnell $10,000 upon execution of a film distribution contract he procured, plus a percentage of Commonwealth’s gross distribution receipts.
- McConnell obtained the producer’s grant of distribution rights to Commonwealth.
- Commonwealth paid McConnell the $10,000 but refused to pay any percentage commissions or provide an accounting.
- In defending McConnell’s suit for an accounting, Commonwealth alleged McConnell secured the distribution rights by bribing the producer’s representative.
- Commonwealth further alleged the $10,000 paid to McConnell was agreed to be, and was, paid by McConnell as the bribe.

## Issues

1. Whether public policy bars enforcement of an otherwise lawful contract when the plaintiff’s asserted performance consists of illegal, corrupt conduct directly connected to the compensation claim.
2. Whether affirmative defenses alleging such bribery are legally sufficient and should not be stricken at the pleading stage.

## Decision

- The Court of Appeals of New York reversed the order striking Commonwealth’s affirmative defenses.
- The court held that the bribery-based defenses were legally sufficient and must remain in the case.
- The court ruled that courts will not assist a plaintiff to recover compensation where the claim is inseparably connected to the plaintiff’s illegal and corrupt conduct.
- The matter was remitted for further proceedings with the defenses reinstated.

## Legal Principles

- Courts will deny relief where a plaintiff must rely on illegal or corrupt conduct to establish the claim for recovery.
- The illegality bar applies not only to contracts illegal on their face, but also to contracts lawful in formation when illegal performance is directly connected to the obligation sued upon.
- If the illegal act is merely collateral to the claim, recovery may not be barred; if there is a direct connection between illegality and the claim, public policy precludes enforcement.
- A party may not use the courts to obtain the “rewards of corruption” or profit from wrongdoing used to produce the transaction giving rise to the claimed compensation.

## Conclusion

The court held that a plaintiff cannot enforce contractual compensation rights when the plaintiff’s performance, as alleged, depended on bribery that directly produced the deal and thus directly supported the claim for commissions; affirmative defenses asserting such bribery are sufficient and may not be stricken.


McConnell v. Commonwealth Pictures Corp., 7 N.Y.2d 465, 166 N.E.2d 494 (N.Y. 1960)