## Facts

- S. T. Grand, Inc. contracted with the City of New York in 1966 to clean the Jerome Park Reservoir under an asserted “public emergency” exception to competitive bidding.
- Grand completed the work; the City paid about $689,500, leaving an unpaid balance of $148,735.
- Grand and its president were later convicted in federal court of conspiring to use interstate facilities with intent to violate New York bribery laws, based on an agreement to pay a kickback to the responsible City commissioner in exchange for award of the contract.
- Grand sued the City for the unpaid balance; the City asserted the contract was illegal due to bribery and counterclaimed to recover the amounts already paid.

## Issues

1. Whether Grand’s criminal conviction was conclusive proof of the bribery facts in the subsequent civil action, or only prima facie evidence subject to rebuttal.
2. If bribery was conclusively established, whether Grand could nonetheless recover the unpaid balance or retain some payments under an equitable, partial-restitution approach rather than complete forfeiture.

## Decision

- The court held the criminal conviction was conclusive as to the underlying bribery facts in the civil action because Grand had a full and fair opportunity to litigate in the criminal case.
- The court held the public contract was illegal as procured by bribery, barring Grand from recovering the unpaid balance.
- The court awarded the City restitution of the amounts already paid under the illegal contract, applying complete forfeiture.
- The court declined to apply a partial, equitable remedy and affirmed judgment for the City dismissing Grand’s claim and granting the City’s counterclaim.

## Legal Principles

- A criminal conviction may have collateral-estoppel effect in a later civil action as conclusive proof of the facts necessarily determined, when the party against whom it is asserted had a full and fair opportunity to litigate.
- Public contracts procured by bribery are illegal and unenforceable by the bribe-paying contractor.
- When a public contract is tainted by bribery in its award, courts may require complete forfeiture: the contractor cannot recover unpaid amounts and may be compelled to restore payments already received.
- Equitable, partial-restitution measures are unavailable where the illegality consists of direct bribery corrupting the public contracting decision.

## Conclusion

The court treated the contractor’s bribery conviction as dispositive in the civil case, declared the public contract illegal, denied the contractor any further recovery, and ordered restitution of payments to the City to enforce a strict forfeiture rule against bribery in public contracting.


S. T. Grand, Inc. v. City of New York, 298 N.E.2d 105 (N.Y. 1973)