H. D. Watts Co. v. American Bond & Mortgage Co.

• Decision Date: 06 June 1929
• Citation: 267 Mass. 541,166 N.E. 713
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: H. D. WATTS CO. v. AMERICAN BOND & MORTGAGE CO., Inc. SAME v. MOORE.

267 Mass. 541

166 N.E. 713

H. D. WATTS CO.

v.AMERICAN BOND & MORTGAGE CO., Inc.

SAME

v.MOORE.

Supreme Judicial Court of Massachusetts, Suffolk.

June 6, 1929.

Exceptions from Superior Court, Suffolk County; Christopher T. Callahan, Judge.

Two actions of tort by the H. D. Watts Company against the American Bond & Mortgage Company, Incorporated, and against William J. Moore. Verdicts for plaintiff, and defendants bring exceptions. Exceptions sustained.R. G. Dodge, E. R. Anderson, and R. B. Owen, all of Boston, for appellants.

H. R. Bygrave and W. Flaherty, both of Boston, for appellee.

SANDERSON, J.

These two actions of tort are brought by a construction company against the defendant bonding company and its president, respectively. In each case the defendant is alleged to have unlawfully and maliciously induced, persuaded and coerced The Chatham, Inc., hereinafter called the Hotel Company, to break a contract which it had entered into with the plaintiff, in order to obtain the benefits thereof for the Longacre Engineering and Construction Company, Inc., hereinafter called the Longacre Company.

The cases were formerly before this court on exception of the plaintiff to directed verdicts for the defendants, and it was then held that the verdicts should not have been ordered. 260 Mass. 599, 157 N. E. 634. At the second trial a verdict in the sum of $322,400 was returned for the plaintiff in each case. The defendants' exceptions relate to the refusal of the judge to grant their motions for directed verdicts, to his refusal to grant certain requests for rulings, to the admission and exclusion of evidence, and to rulings given and refused.

There was evidence that the plaintiff, in July, 1922, had entered into a contract to construct an apartment hotel for the Hotel Company. In August, 1922 the defendant corporation contracted to underwrite an issue of bonds of the Hotel Company to provide the money required to construct the hotel; and the jury could have found that the defendants at the time this underwriting agreement was made had knowledge of the terms of the plaintiff's contract. It was undisputed that Moore refused to modify the terms of this underwriting contract and that it was abandoned by mutual consent in September or early in October, 1922. On or about November 9, 1922, Grabow, president of the Hotel Company, resigned and one Tobey was elected in his place. A new construction contract was then entered into between the Hotel Company and the Longacre Company, and a second underwriting agreement, bearing the same date as the new construction contract, was entered into between the Hotel Company and the defendant corporation, which contained the stipulation that the Longacre Company should have the contract for the erection of the hotel building. During the period between the abandonment of the first underwriting agreement and the making of the second no contractual relationship existed between the defendant corporation and the Hotel Company. The defendant Moore and members of his family held all but seven shares of the capital stock of the Longacre Company, and he was vice-president and a director, his son treasurer, and another son and a brother were directors. Moore was president, and owned a majority of the common stock, of the defendant corporation, of which his two sons and his brother were officers and directors. Most of the business of the Longacre Company was in the construction of buildings financed by the defendant corporation.

1. The evidence in the present record permits of substantially the same inferences by the jury on the question of liability as did the evidence in the first trial. In support of the motions for directed verdicts the defendants have sought to point out material differences in the evidence in the two trials.

It was not contended in the presentation of the case to this court at the former trial, and it does not now appear to be contended, that Moore, while acting for himself, was not also acting for the bonding company. He testified that he acted for the company in all he did.

It is, however, contended that there is no evidence from which the jury could find that Clark, who was first employed by the Hotel Company to procure a contract for the sale of its mortgage bonds, and Tobey were authorized to act as agents of the defendants in wrongfully inducing the Hotel Company to break its contract with the plaintiff. In the earlier case, on consideration of the evidence introduced and of that contained in offers of proof, this court held that the question whether they were so authorized was for the jury.

At the present trial evidence was introduced which at the former trial had been in the form of offers of proof. There was some variance between the evidence thus introduced and that contained in the offers, but the changes are not such as to require the court to reach a different conclusion on this issue. In both trials there was evidence that, about the middle of September, 1922, after the question of the bond to be given by the plaintiff for the performance of its contract had been considered, and after Watts, the plaintiff's president, at Moore's suggestion had submitted the plaintiff's figures on costs to be checked up by one Thomas, vice-president and manager of the Longacre Company, Watts told Moore that Thomas and the plaintiff were not far apart on figures which he offered to show Moore, and the latter said, ‘I don't wish to discuss this matter any further with you. Mr. Clark and Mr. Tobey know what I want, and they are handling this matter for me, and anything more that you have got to say, say it to them.’ There is no difference in the legal significance of this evidence and of that contained in the offer of proof at the first trial. The jury could have found that notwithstanding the employment of Clark by the Hotel Company he later became an agent of the defendants. The evidence that Watts had direct dealings with Moore after Moore's statement concerning Clark and Tobey was made to him did not require any inference that the agency of Clark and Tobey had thereby been terminated.

The defendants contend in support of their motions for directed verdicts that there was no evidence at the second trial that Moore induced the Hotel Company to repudiate its contract with the plaintiff and award a contract to the Longacre Company, with the object of getting the benefit of the contract for that company.

The statement of Moore set forth above was made about the middle of September, 1922. There was testimony that about the middle of October, 1922, Clark, just after an interview with Moore, from which Watts had been excluded, said to Watts, ‘It looks dark and gloomy for Grabow in this matter, because Moore is going to have Tobey president of this company. And * * * it looks dark for you, too, because he is not going ahead unless Longacre gets the building contract.’ Moore testified or admitted that Clark and Tobey told him in New York that they were going to Boston to eliminate Grabow and others and to install a ‘new crowd,’ that this substitution of new officers for the Hotel Company met with his approval, and that he made it conditional that he was to deal with the new set of men; that they were proposing to eliminate Grabow as a step toward getting the contract for the Longacre Company.

In October, 1922, there was a conference at Tobey's office in New York at which Clark, Tobey, Watts and two officials of the Hotel Company, one of whom owned substantially all of the stock of that company which had been issued, were present. There was evidence that in the course of that meeting Tobey said he was going in as president of the Hotel Company in place of Grabow, asked Watts what he would take for his contract then and there, and stated that he and Clark had seen Moore the day before and ‘there wasn't any earthly way of going ahead with the contract unless * * * [Watts] got out of the picture and Longacre built the building.’ Tobey tried to induce the plaintiff to give up its contractual rights, and the officials of the Hotel Company joined in urging it to compromise.

The jury could have found this evidence significant because of its tendency to prove the result which the defendants, through the agency of Clark & Tobey, intended to accomplish, and because of the suggestion in it of means to be employed; and could have found that the officials of the Hotel Company had been persuaded by the agents of the defendants to favor their interests and that as a result of what was said at this meeting and at other times Grabow was induced to resign and the Hotel Company to take the subsequent action which resulted in a termination of its contract with the plaintiff. There talks were followed by the resignation of Grabow and another officer of the Hotel Company, and the election in their places of the men indicated at a conference between Clark, Tobey, Moore and the president of the Longacre Company. Contracts procured by Grabow to aid in financing the enterprise were canceled when he resigned. On the day the new officers were elected, the directors of the Hotel Company authorized the new president and the treasurer to enter into a contract with the Longacre Company for the construction of the hotel, and authorized the president to enter into an underwriting agreement with the defendant corporation.

This series of events culminating in the execution of a building contract with the company in which Moore had a financial interest, thereby excluding the possibility of the performance by the Hotel Company of its contract with the plaintiff, and followed by the execution of a new underwriting contract with the defendant corporation, when considered in the light of the other testimony, leads us to the conclusion reached in the former opinion that there was evidence upon which the jury could find that the defendants, through Clark and Today as their authorized agents, wrongfully induced the ...