Mason v. Funderburk

• Decision Date: 03 November 1969
• Docket Number: No. 5--4997,5--4997
• Citation: 247 Ark. 521,446 S.W.2d 543
• Court: Arkansas Supreme Court
• Parties: Fred MASON, Appellant, v. L. J. FUNDERBURK et al., Appellees.

Page 543

446 S.W.2d 543

247 Ark. 521

Fred MASON, Appellant, v. L. J. FUNDERBURK et al., Appellees.

No. 5--4997.

Supreme Court of Arkansas.

Nov. 3, 1969.

Terrel, Rawlings, Matthews & Purtle, Little Rock, for appellant.

Smith, Williams, Friday & Bowen, by Robert V. Light, Little Rock, for appellees.

FOGLEMAN, Justice.

Appellant, plaintiff below, seeks reversal of a summary judgment, asserting error in the court's finding that there was no genuine issue of material facts. We agree with the trial court that there were no genuine issues of fact as to some of the appellees, who were defendants below, but find that there are genuine issues of material facts as to others. In so holding, we apply the well-established rules that the burden to show that there is no genuine issue of material fact is upon the moving party, that all doubts must be resolved against the judgment, that all presumptions and inferences must be resolved against the movant and that, in a case in which fairminded men may honestly differ about the conclusions to be drawn from the testimony, a summary judgment should be denied.

Appellant was employed by appellee Field Enterprises Educational Corporation as its district manager by a contract entered into on June 19, 1963. He was employed to sell certain encyclopedias, dictionaries and other such publications, on a commission basis, in the northeastern part of the state. The contract was subject to cancellation upon thirty days' notice in writing given by either party. The controversy from which this litigation arose began when appellant was elected to the Calico Rock School Board in 1966. Ultimately appellee Field Enterprises Educational Corporation acting through appellee L. J. Funderburk, its state manager, terminated the contract as of August 24, 1967.

Subsequently, appellant instituted this action against Funderburk; Field Enterprises Educational Corporation; Dr. Dale Hudson and John Kron, two of the other members of the Calico Rock School Board; Dr. Dean Hudson, Superintendent of the Mountain Home Public Schools and a brother of Dr. Dale Hudson; Neill Hudson, Principal of the Atkings High School, another brother of Dr. Dale Hudson; and Jack B. Connor, Principal of the Calico Rock Public Schools. The complaint is couched in broad general language alleging that appellees conspired to deprive him of his rights under the contract and to earn a livelihood, to injure him and to deprive him of his means of livelihood. He alleged damages as a result of conversations, letters and other activities of appellees which he alleged to be false and calculated to injure his character and reputation. He asserted that the appellees intentionally publicized false, malicious and slanderous material and wrote letters and held conversations by which they procured dismissal from his employment and caused him to be held up to public contempt, ridicule, embarrassment and humiliation.

Appellees filed a motion to require appellant to make his complaint more definite and certain but followed discovery procedures rather than pressing this motion. Other than the motion for summary judgment granted by the court, appellees have filed no other pleading.

Appellant has not, either in his pleadings or in his brief in this court, made any attempt to characterize or identify his cause of action. His brief here has been of little assistance, as it cites no authority to indicate what, if any, cause of action is supported by the facts disclosed. Appellees have characterized the cause of action as being one based upon the common law action for civil conspiracy or for defamation of character. We shall consider whether there are issues of material facts on the causes of action suggested by appellees, as well as a possible cause of action for damages for wrongful inducement to cause Field Enterprises not to continue a business or employment relationship with appellant.

A review of authorities pertaining to a cause of action for defamation would serve no useful purpose. Consideration of the rules of law governing the other causes of action, however, is advisable in determining whether appellees have clearly shown that there is no material issue of fact. Under Arkansas law, a malicious and wilful interference with contractual rights and relationships of another has been recognized as an actionable tort. Mahoney v. Roberts, 86 Ark. 130, 110 S.W. 225; Johns v. Patterson, 138 Ark. 420, 211 S.W. 387; Hogue v. Sparks, 146 Ark. 174, 225 S.W. 291; Ketcher v. Sheet Metal Workers' International Association, 115 F.Supp. 802 (E.D.Ark.1953); Tollett v. Mashburn, 183 F.Supp. 120 (W.D.Ark.1960) aff'd 291 F.2d 89 (8th Cir. 1961). See also Dale v. Hall, 64 Ark. 221, 41 S.W. 761; Wakin v. Wakin, 119 Ark. 509, 180 S.W. 471. According to the Supreme Court of the United States a cause of action based on interference with another's contract with a third person without legal justification has been recognized at least since Lumley v. Gye, 2 El.Bl. 216, 118 Eng.Rep. 749 (Q.B.1853). Arkansas v. Texas, 346 U.S. 368, 74 S.Ct. 109, 98 L.Ed. 80 (1953). The theory allowing the recovery of damages for unlawful interference with contractual relationships will also support the recovery of damages from one who, without a privilege to do so, induces or otherwise purposely causes a third person not to enter into or continue a business relation with another, at least where the means of inducement are tortious. See Restatement of Torts § 766, et seq., and Comments (1939); Calbom v. Knudtzon, 65 Wash.2d 157, 396 P.2d 148 (1964). This rule applies to situations in which a party induces or otherwise purposely causes another not to employ a third person as well as the situation in which the party induces or purposely causes an employer to terminate a relationship with an employee, even though the employment was at will. Restatement of Torts § 766, Comment c. (1939). It has long been recognized in many American jurisdictions that one who, maliciously and without justifiable cause by means of false statements, threats or putting in fear or, perhaps, by means of malevolent advice or persuasion, induces an employer to discharge an employee is liable in an action of tort to the employee for the damages thereby sustained, regardless of whether the employment was for an unexpired fixed term or terminable at the will of the employer. 2 Cooley on Torts 182, § 226 (4th Ed. 1932). We find the following language of the Supreme Court of Missouri in Downey v. United Weatherproofing, Inc., 363 Mo. 852, 253 S.W.2d 976 (1953), to be justified:

'It has now come to be the view of a majority of courts in this country that one who maliciously or without justifiable cause induces a person to breach his contract with another may be held responsible to the latter for the damages resulting from such breach. The term 'maliciously' in this connection alludes to malice in its technical legal sense, that is, the intentional doing of a harmful act without justification or excuse, and does not necessarily include actual malice, that is, malice in the sense of spite or ill will.

The right to perform a contract and to reap the profits therefrom, and that right to performance by the other party, are property rights entitling each party to the fulfillment of the contract by performance. And the intentional interference with the contractual relation without just cause so as to effect a breach of the contract is a wrong for which the wrongdoer may be held accountable in damages. The right of recovery for inducing a breach of a contract is but one instance of the protection which the law affords against unjustified interference in business relations. An existing contract may be a basis for greater protection, but some protection is appropriate against unjustified interference with reasonable expectancies of commercial relations even where an existing contract is lacking. The unjustifiable character of the alleged wrongdoer's conduct and the harm caused thereby may be equally clear in both instances, but the differentiation between them relates to the scope of the privileges, or the kind and amount of interference that is justifiable in view of the differences in the facts.'

The language of the Washington court in Calbom v. Kundtzon, 65 Wash.2d 157, 396 P.2d 148 (1964), is also appropriate:

'Intentional and unjustified third-party interence with valid contractual relations or business expectancies constitutes a tort, with its taproot embedded in early decisions of the courts of England, * * * (Citations omitted.)

From and with the English decisions, the tort has become engraved upon American law, generally unsullied in principle, although with some case by case distinctions. * * * (Citations omitted.)

The fundamental premise of the tort--that a person has a right to pursue his valid contractual and business expectancies unmolested by the wrongful and officious intermeddling of a third party--has been crystallized and defined in Restatement, Torts § 766, * * *

The basic elements going into a prima facie establishment of the tort are (1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the interferor; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted.'

See also Russell v. Croteau, 98 N.H. 68, 94 A.2d 376 (1953); Dukes v. Brotherhood of Painters, etc., 191 Tenn. 495, 235 S.W.2d 7, 26 A.L.R.2d 1223 (1950); Chipley v. Atkinson, 23 Fla. 206, 1 So. 934 (1887). ¹

Neither the fact that a contract is not for a fixed period nor the fact that there is no cause of action against the person who is influenced to terminate the contract, or to refuse to perform the agreement is a bar to an action against such an action. Chipley v. Atkinson, supra; Wolf v. Perry & Lowry Oil Co., 65...