Cust v. Item Co.

• Decision Date: 27 April 1942
• Docket Number: 36269.
• Citation: 8 So.2d 361,200 La. 515
• Court: Louisiana Supreme Court
• Parties: CUST v. ITEM CO., Limited.

8 So.2d 361

200 La. 515

CUST v. ITEM CO., Limited.

No. 36269.

Supreme Court of Louisiana

April 27, 1942

Moise S. Steeg, Jr., of New Orleans, for plaintiff and appellant.

Deutsch, Kerrigan & Stiles and Alfred K Hagedorn, all of New Orleans, for defendant and appellee.

O'NIELL Chief Justice.

The plaintiff is appealing from a judgment dismissing her suit on an exception of no cause or right of action. The suit is for damages for an alleged breach of contract by a third party Mrs. Concklin C. Barry. The plaintiff avers that an employee of the defendant, Item Company, acting within the scope of his employment, induced Mrs. Barry to breach the contract. And for that Mrs. Cust is demanding of the Item Company $5,646 damages.

The right of action of course depends upon the following facts recited in Mrs. Cust's petition. She resides in Danville, Virginia. In January 1939, she organized in New Orleans an enterprise called the Hospitality and Service Bureau, the business of which was the bringing of customers to the bureau's clients or patrons from among the newcomers in the city. Mrs Cust avers that the business commenced operating on March 1, 1939, under a written contract with Mrs. Barry, as follows:

'In opening the Hospitality and Service Bureau of New Orleans, La., the two of us, Mrs. Lucie P. Cust and Mrs. Concklin C. Barry, agree to give each other one month notice in case either of us wishes to sever connection with the other one.

'We also agree to share equally the expenses, and the profits of the business; to divide equally the profit after expenses have been deducted.

'Since Mrs. Cust created and developed the project, and is sharing it equally with a partner, we both agree that she have protection, in this way, for a period of three years after connection is severed, that a partner agrees not to enter into any business similar to that taught her by Mrs. Cust. This is to avoid competition.

'(Signed) Lucie P. Cust

'(Signed) Cocklin C. Barry

'Date of opening: March 1st, 1939.'

Mrs. Cust avers that Mrs. Barry had no previous knowledge of the hospitality and service business, and that she, Mrs. Cust came to New Orleans and for a period of about two months immediately preceding March 1, 1939, trained and instructed Mrs. Barry in the manner of conducting the business, giving her the trade secrets and the benefit of Mrs. Cust's knowledge and experience with which, as she says, she had conducted such a business successfully for several years. She avers that for some time before February 1, 1940, and during all of February and March, Mrs. Barry contacted the patrons and prospects of the bureau and induced them to transfer their business to a similar enterprise to be organized by the Item Company; that on some of these occations Mrs. Barry was accompanied by an employee of the Item Company, acting within the scope of his authority, and that these inducements, by Mrs. Barry either alone or in company with the agent or agents of the Item Company, were made with the knowledge and consent of the Item Company and as the result of a conspiracy between the Item Company and Mrs. Barry to establish a competing business and obtain the plaintiff's patrons or clients for the contemplated new enterprise. The plaintiff avers that Mrs. Barry notified her on or about February 1, 1940, that at the end of the month she would sever her business connection with the plaintiff; that thereafter Mrs. Barry continued her solicitations for the Item Company, and at a subsequent date was employed by the company in its hospitality and service department. Mrs. Cust avers that she is informed that an employee of the Item Company brought Mrs. Barry to another employee of the company and proposed that Mrs. Barry should be employed by the company to establish a hospitality service department for the Item Company, like that which she, Mrs. Cust, had organized. She avers that at a date unknown to her and on terms and conditions impossible to ascertain, but while Mrs. Barry was under contract with her, Mrs. Barry solicited the patrons and clients of Mrs. Cust on behalf of the Item Company, being sometimes accompanied by an employee of the Item Company; and that subsequently the Item Company established and conducted a hospitality service department and employed Mrs. Barry there, on a basis unknown to Mrs. Cust. She avers that the Item Company had full knowledge of the terms and conditions of the written agreement between her and Mrs. Barry, and, in the alternative, that, if the Item Company did not have knowledge of Mrs. Barry's contract with the plaintiff, the company ratified the acts of its agents by establishing and operating the competitive business. Mrs. Cust names six New Orleans merchants who, she alleges, were induced by employees of the Item Company, with the aid of Mrs. Barry, to discontinue patronizing Mrs. Cust's firm's Hospitality and Service Bureau, and to transfer their business or patronage to the Item Company; and that, but for this interference by the Item Company and Mrs. Barry, these patrons would have continued patronizing the plaintiff's bureau 'for at least two years'. Mrs. Cust avers that four of the six patrons whom she names had been paying her firm $20 per month each, that one of them had been paying $15 per month and that the other had been paying $10 per month, making a total of $105 per month; that the contracts with these patrons were for a definite period; that, at their termination the patrons continued to accept the services; and that, but for the acts of the Item Company and Mrs. Barry, 'these clients would have continued as such for at least two years.' For that the plaintiff claims 24 times $105, or $2,520 damages. In addition, she claims that she suffered damages by being compelled, by the acts which she complains of, to return to New Orleans from her home in Danville, Virginia, and to remain in New Orleans four and a half...