Birl v. Philadelphia Elec. Co.

• Decision Date: 22 March 1960
• Citation: 167 A.2d 472,402 Pa. 297
• Parties: Joseph J. BIRL, Appellant, v. PHILADELPHIA ELECTRIC COMPANY and Hunter Lott.
• Court: Pennsylvania Supreme Court

167 A.2d 472

402 Pa. 297

Joseph J. BIRL, Appellant, v. PHILADELPHIA ELECTRIC COMPANY and Hunter Lott.

Supreme Court of Pennsylvania.

March 22, 1960.

Ronald N. Rutenberg, Rutenberg & Rutenberg, Harry A Rutenberg, Philadelphia, for appellant.

Michael A. Foley, Philadelphia, for appellees.

Before CHARLES ALVIN JONES, C. J., and BELL, MUSMANNO BENJAMIN R. JONES, COHEN, BOK and EAGEN, JJ.

BENJAMIN R. JONES, Justice.

This appeal is from a final order of the Court of Common Pleas of Philadelphia County in a trespass action, said order having sustained appellees' preliminary objections and dismissed appellant's complaint. ^[1]

Joseph J Birl, appellant, instituted a trespass action against the Philadelphia Electric Company (herein called Company) and Hunter Lott (herein called Lott) in which Birl charged that the Company, acting through Lott, its sales manager, had 'falsely and maliciously' induced the Eureka Williams Corporation (herein called Eureka) to dismiss Birl from his employment as Eureka's assistant branch manager and branch manager-to-be in Philadelphia.

Birl's complaint contained two counts: the first count alleged that, on or about January 30, 1958, Lott, acting as the Company's sales manager, advised Eureka that the Company would not allow Birl 'to contact, deal or do business' with it because Birl had left the Company's employment nine years earlier without giving written notice to the Company; the second count alleged that Lott, acting within the scope of his employment by the Company, had slandered Birl by telling his superior and other persons that Birl had left his former employment with the Company in 1951 without giving notice.

The court below sustained appellees' preliminary objections on the ground that Birl's complaint in both counts failed to set forth a cause of action. The instant appeal raises one question: have either or both counts of Birl's complaint stated a cause of action?

At least since Lumley v. Gye, (1853) 2 Ell. & Bl. 216, 1 Eng.Rul.Cas. 706, the common law has recognized an action in tort for an intentional, unprivileged interference with contractual relations. It is generally recognized that one has the right to pursue his business relations or employment free from interference on the part of other persons except where such interference is justified or constitutes an exercise of an absolute right: Restatement, Torts, Section 766. The Special Note to comment m, in Section 766 points out:

'There are frequent expressions in judicial opinions that 'malice' is requisite for liability in the cases treated in this Section. But the context and course of decision make it clear that what is meant is not malice in the sense of ill will but merely purposeful interference without justification.'

Our cases are in accord: Klauder v. Cregar, 327 Pa. 1, 7, 192 A. 667; ^[2] Dora v. Dora, 392 Pa. 433, 437, 141 A.2d 587. ^[3]

The elements of this tort of inducing breach of contract or refusal to deal, which must be averred in the complaint, are set forth in the Restatement, Torts, Section 766, which says, '* * * one who, without a privilege to do so, induces or otherwise purposely causes a third person not to (a) perform a contract with another, or (b) enter into or continue a business relation with another is liable to the other for the harm caused thereby'. In other words, the actor must act (1) for the purpose of causing this specific type of harm to the plaintiff, (2) such act must be unprivileged, and (3) the harm must actually result. Furthermore, where the defendant is alleged to have induced another to discharge his employee by false statements, the substance of such statements should be set out in the complaint. Moran v. Dunphy, 177 Mass. 485, 59 N.E. 125, 52 L.R.A. 115.

The sufficiency of the first count of Birl's complaint must be determined in the light of these principles. In paragraph 5, Birl avers that, on or about January 30, 1958, the Company, acting through Loft, its agent then acting within the scope of his employment, 'falsely and maliciously' stated to certain named Eureka officials that the Company would not allow Birl 'to contact, deal or do business' with the Company or any of its properties because 'when [Birl] had previously been employed by the Company, in 1949-1951, said [Birl] had quit without giving written notice to the Company'; in paragraph 6, it is averred that, the Company being Eureka's most important customer in the Philadelphia area, Birl was instructed by his superiors, to whom the Company and Lott had communicated this statement, that unless he 'could convince [the Company] and [Lott] to rescind this arbitrary refusal to deal, based on the false and malicious allegations', his [Birl's] employment with Eureka would be terminated; in paragraph 7, Birl averred that he had contacted the Company through Lott and two other agents but they refused to rescind Lott's order; in paragraph 8, it was averred that, when Lott was informed by Birl that Birl would lose his employment if the order was not rescinded, Lott told Birl 'that he did not care what happened to [Birl] and that [Birl] should have thought of this in 1951 when he resigned without notice'; paragraph 9 averred that solely 'because of such false and malicious representations' Eureka discharged Birl from his employment; paragraph 10 averred that the 'representations and statements and refusal to deal with [Birl] were made by [the Company] acting through its duly authorized agent [Lott] maliciously, and knowing the same to be untrue, and with the intent of bringing about [Birl's] discharge from his said employment and well knowing that the refusal of [the Company] to allow [Birl] to contract, deal, or do business with it and its properties would result in [Birl's] loss of employment'.

In Sullivan v. City and County of Philadelphia, supra, 378 Pa. at page 650, 107 A.2d at page 855, Mr. Justice (now Chief Justice) Jones stated: 'What we said in Davis v. Investment Land Co., 296 Pa. 449,...