Jackson v. Morgan

• Decision Date: 09 May 1911
• Docket Number: No. 7,201.,7,201.
• Citation: 94 N.E. 1021,49 Ind.App. 376
• Parties: JACKSON v. MORGAN et al.
• Court: Indiana Appellate Court

49 Ind.App. 376

94 N.E. 1021

JACKSON

v.MORGAN et al.¹

No. 7,201.

Appellate Court of Indiana, Division No. 2.

May 9, 1911.

Appeal from Superior Court, Marion County; J. M. Leathers, Judge.

Action by George W. Jackson against Joseph R. Morgan and another. From an adverse judgment, plaintiff appeals. Affirmed.

Doan & Orbison, for appellant. Howe & Batchelor, for appellees.

ADAMS, J.

This suit was brought by the appellant to recover damages from the appellees and one John H. Davidson, for alleged unlawful acts in causing and inducing the breach of a contract between appellant and said Davidson.

The amended complaint is in one paragraph, and substantially charges that on the 18th day of February, 1901, the appellant entered into an oral agreement with defendant John H. Davidson, by the terms of which appellant was to assist said Davidson in conducting the state agency of the Northwestern Life Association of Minneapolis, Minn., for the state of Indiana; that appellant was to keep the books of said agency, managing the agents for said company in Indiana, and was to receive as his compensation for said services one-half of the gross profits of said agency; that said agreement was for the term of one year.

It is further charged that at the time said oral agreement was made Davidson had a contract with said life association, whereby he was to receive as his compensation in the management of said state agency all of the first year's premiums on policies of insurance written by him or his agents in said state, and in addition thereto was to receive the sum of $100 per month, which was subsequently increased to $200 per month; that in pursuance of said agreement the appellant entered upon his duties as bookkeeper and manager of the agents for said agency, and continued in such capacity until about the 6th day of September, 1901, when, without fault on his part, and by reason of the acts hereinafter set out, he was ousted from said agency, and was refused the right to engage in said business as provided by the terms of his contract, and said contract was broken and canceled; that during the time appellant was so engaged he loaned said Davidson the sum of $454.22, with the understanding and agreement that said sum was to be repaid out of the first moneys coming to said agency, after the said loan was made; that the business office of said agency was in the city of Indianapolis, Ind., in connection with the law offices of appellees Morgan & Morgan; that said appellees knew of the contract between said Davidson and the appellant, and knew of the loan made to said Davidson, as aforesaid, and of the agreement with reference to its repayment; that the appellees, on or about the 6th day of September, 1901, entered into a conspiracy with said Davidson to break the contract existing between the appellant and said Davidson, and to oust appellant from any participation in said agency business, or in the profits thereof, and to exclude said plaintiff from the office of said agency and from the possession of all books, papers, and collateral held by appellant; that said conspiracy was entered into by said parties for the purpose of injuring appellant, dispossessing him of his rights in said business, and sharing in the profits thereof, for the purpose of benefiting said appellees and said Davidson at the expense of appellant; that in pursuance of said conspiracy the appellees, on or about the 6th day of September, 1901, made an agreement with said Davidson, whereby Davidson was to pretend to owe appellees the sum of $900, and that to secure said debt Davidson was to turn over to said appellees certain collateral securities, containing data essential in the conduct and management of said business, held by the appellant for said agency; that Davidson did not owe the appellees, and that said debt was a pretended debt to give the appellees the right to take possession of said securities, and thus deprive him of the data with which said business could be conducted; that appellees, acting with the knowledge and consent of Davidson, and in pursuance of said conspiracy, made a demand upon appellant for said securities, on account of said pretended indebtedness; that appellant refused to surrender possession of the same, whereupon appellees, with the knowledge and consent of Davidson, and in pursuance of said conspiracy, instituted a suit in replevin for the possession of said securities, and that the sheriff of Marion county took the same upon a writ of replevin, and turned the same over to the appellees; that appellees, acting with said Davidson, and with his knowledge and consent, excluded the appellant from the office of said agency, and from the effects and papers of the same, and from in any manner conducting the business thereof; that in pursuance of said conspiracy, appellant was precluded from receiving his salary of one-half of the gross profits of said business, and from applying the receipt of said agency business to the payment of said loan; that the profits accrued and about to accrue from the business of said agency were $3,000, and that by reason of the acts of conspiracy appellant's share of said profits was extinguished, and that he never received anything under and by virtue of his said agreement; that upon the trial of said replevin suit the court awarded the return of said securities to appellant, but at the time of said trial, and at the time of the award of possession of said securities, the life of said contract had been long extinguished, and said securities were of no further use or benefit to him in the conduct of said business. Judgment in the sum of $3,000 is demanded.

Appellant dismissed as to Davidson, and the appellees filed their joint demurrer to the amended complaint, upon the ground that the same did not state facts sufficient to constitute a cause of action against them. This demurrer was sustained by the court, and constitutes the only error assigned and relied upon for reversal.

[1] Counsel for appellant say that the legal question presented by the error assigned is whether a person, with knowledge of a contract, and with the intention of injuring one of the parties thereto, or securing a pecuniary benefit thereby, who assists or induces the other party to the contract to violate or break the same is liable in damages to the injured party. The appellees deny that an action can be maintained against a third person for inducing or procuring one party to a contract to violate the same, to the damage of the other party, except (1) where the relation of master and servant, strictly so called, is involved, and (2) where fraudulent, coercive, or other unlawful means have been employed to procure the breach.

The first exception grows out of or is based upon the English statute of laborers (23 Edw. III, A. D. 1349), which was never in force in this country; and the second is limited to such actions as involve some unlawful means employed, and are comprehended within well-recognized rights of action for tort. Outside of the causes arising from strikes and boycotts, of which there are many in the reports, being based upon another branch of the law of torts, the adjudicated cases involving facts similar to the case at bar are not numerous, and in Indiana the direct question presented is one of first impression; and the cases, both American and English, which may be considered in point are far from being in harmony.

It is said, in the case of Knickerbocker Ice Co. v. Gardiner Dairy Co., 107 Md. 556, 69 Atl. 405, 16 L. R. A. (N. S.) 746: “There is great conflict between judges and law writers as to how far there is a remedy for interference with contract relations, and it would be a useless task to undertake to reconcile them. They quite generally agree in their conclusions when the relation of master and servant is involved; but, even then, reach the same point by different routes.”

The appellant presses upon our attention the English case of Lumley v. Gye, 21 El. & Bl. 216, decided in 1853. This is a leading case, and has been extensively cited, as well as extensively criticised. Lumley was the lessee of the Queen's Theater, and had a contract with one Johanna Wagner to sing at his theater, and not elsewhere, during the period for which she was engaged. Gye, the lessee of Covent Garden Theater, with knowledge of the existing agreement, and during the term thereof, entered into a contract with Miss Wagner to sing at his theater for a larger sum than that stipulated for in Lumley's agreement. After Lumley had enjoined Miss Wagner from singing elsewhere, he brought an action against Gye in three counts. In the first he set out his contract, and charged the defendant with knowledge thereof; and, with the malicious intention of injuring the plaintiff, while the agreement was in force, successfully enticed and procured Miss Wagner to refuse to perform. The second was for enticing and procuring her to refuse to perform after the granting of the injunction. The third alleged that Miss Wagner, for hire, had become and was the plaintiff's dramatic artiste, and that defendant, with knowledge, maliciously enticed and procured her to depart from said employment. The general finding of the majority of the court was that an action would lie for inducing a breach of contract, even though no illegal means were employed to bring about the breach, if it was done for the indirect purpose of injuring the plaintiff, or of benefiting the defendant at the expense of the plaintiff.

The judges, upon the hearing, being divided, their judgments were delivered seriatim. It was held, upon different theories, that the action was maintainable, Coleridge, J., alone dissenting. Coleridge states the proposition involved as follows: “In order to maintain this action, one of two propositions must be maintained, either that an action will lie against any one by whose persuasion one party to a contract is induced to break it, to the...