Mitchell v. Aldrich

• Decision Date: 06 September 1960
• Docket Number: No. 35,35
• Parties: Everett C. MITCHELL, Philip Albee v. Carl J. ALDRICH, Alson I. Drew, Addison County Trust Co., Trustee.
• Court: Vermont Supreme Court

Page 833

163 A.2d 833

122 Vt. 19

Everett C. MITCHELL, Philip Albee v. Carl J. ALDRICH, Alson I. Drew, Addison County Trust Co., Trustee.

No. 35.

Supreme Court of Vermont.

Sept. 6, 1960.

Hanford G. Davis, Brandon, for plaintiffs.

Wayne C. Bosworth, Middlebury, for Aldrich.

Lee E. Emerson, Barton, for Drew.

Before HOLDEN, SHANGRAW, and SMITH, JJ., and DIVOLL and MORRISON, Superior Judges.

HOLDEN, Justice.

The plaintiffs seek recovery for wrongful interference with contract relations. They claim the defendants deprived them of an advantageous agreement to purchase a herd of dairy cattle. The trial court withheld the case from the jury by directing a verdict of no liability. The plaintiffs appeal from the judgment for the defendants that was entered on this ruling.

There was some conflict in the testimony given at the trial. Resolving this conflict in favor of the claim, as we are required from the error assigned, this is the plaintiffs' version of the controversy.

Prior to the sale of the cattle in question, the seller, William Comette, had procured several loans from the Chittenden Trust Company. His obligations were secured by mortgages on real and personal property. The chattel mortgage included farm machinery and the dairy herd, consisting of 102 cows. In August 1947 Comette decided to sell his entire herd and to this end obtained general permission from the mortgagee. He then called the plaintiff Mitchell, informed him of his intention to sell and sought to interest Mitchell in the purchase. The following morning, Mitchell and his associate, the plaintiff Albie, visited the Comette farm and inspected the cattle. After looking over the cattle, the plaintiffs made an offer to purchase the herd for $7,800. This offer was accepted by Comette. The terms of the sale provided for the payment of $100 at that time, $900 to be paid the following day and the balance of the purchase price became due on the removal of the cattle from Comette's barn, in no event later than ten days hence. Comette informed the plaintiffs of the mortgage lien of the Chittenden Trust Company and it was understood by the buyers that approval of the bank was necessary to complete the transaction. Upon the payment of the $100, a written memorandum of the agreement was signed by Comette which set forth the terms of the sale and specified the sale was subject to the approval of the bank.

Comette communicated with his mortgagee on the same day and was advised by the bank that a Mr. Aldrich would call at his farm. The bank had made a prior arrangement with Aldrich to appraise the cattle which Comette sought to sell. It appeared that the Chittenden Trust Company had from time to time called upon Aldrich to make such appraisals. Aldrich was not in the employ of the bank and received no compensation for making the valuations. After Comette's telephone message on August 15, the bank requested Aldrich to make his appraisal right away.

The bank's loan officer, responsible for servicing the Comette obligations, was called as a witness for the defendant Aldrich and gave this testimony concerning Aldrich's authority:

'A. We asked Mr. Aldrich to make an appraisal of the cattle as to determine the value of them.

'Q. And did you ask him to do anything whatsoever in regard to the sale of them? A. Other than if he wanted to buy them he had that privilege.

'Q. And did you ask him, did you say anything to him in regard to interesting other people in regard to it? A. No. sir.'

After telephoning the bank, Comette informed the plaintiffs that Aldrich had been sent to look at the cows. The plaintiffs went to Aldrich and informed him of their agreement to purchase the Comette cattle. Aldrich disclaimed any interest in the property but added that he would fulfill an appointment with Drew to look at the cattle.

When Aldrich and Drew arrived at the Comette farm, Comette informed them of his undertaking with the plaintiffs, and that he had received $100 in part payment of the price agreed upon. Aldrich replied by saying the plaintiff Mitchell was a 'tough fellow to do business with and that I (Comette) probably would never get my money after the cows left the barn'. Aldrich went on to say that it would be impossible for Mitchell to get the bank's approval of his purchase. Drew and Aldrich then offered Comette $8,100 for the herd and Aldrich stated there would be no doubt of the bank's approval of that offer. Comette's testimony continued to the effect that he relied on Aldrich's statements for he believed him to be a representative of the bank.

The sale to Drew was completed with the approval of the mortgagee. Drew derived a net profit from the resale of the cattle. Aldrich received compensation from Drew for assistance in getting the cattle ready for auction.

Except for special justification, the law has long recognized liability against one who intentionally intrudes to disrupt an existing contract relation. Lumley v. Gye, (1853) 2 E & B 216, 118 Eng.Rep. 749, 754; Angle v. Chicago, St. Paul, Minneapolis & Omaha Railway Co., 151 U.S. 1, 14 S.Ct. 240, 38 L.Ed. 55, 62; Beekman v. Marsters, 195 Mass. 205, 80 N.E. 817, 819, 11 L.R.A.,N.S., 201; Campbell v. Gates, 236 N.Y. 457, 141 N.E. 914, 915; Restatement, Torts § 766; Pollock, The Law of Torts, 13th ed., p. 340; Street, Foundations of Legal Liability, p. 343; Carpenter, Interference with Contract Relations, 41 Harv.L.R. 728. The interest protected is the right of the individual to security in his business relations. He has a right to preserve the undertakings of persons with whom he has commercial dealings. Ran W Hat Shop, Inc. v. Sculley, 98 Conn. 1, 118 A. 55, 29 A.L.R. 551, 558; Berry v. Donovan, 188 Mass. 353, 74 N.E. 603, 604, 5 L.R.A.,N.S., 899, certiorari dismissed 199 U.S. 612, 26 S.Ct. 745, 50 L.Ed. 333; Louis Kamm, Inc. v. Flink, 113 N.J.L. 582, 175 A. 62, 66, 99 A.L.R. 1; 1 Harper and James, The Law of Torts, § 6.5, p. 491. See also annotations 84 A.L.R. 46; 26 A.L.R.2d 1240.

The remedy afforded is not restricted to definite and enforceable contracts. Protection is appropriate against unjustified interference with reasonable expectancies of profit though the contract is terminable at will or unenforceable against the promisor in an adversary proceeding. The added element of a definite contract may be the basis for greater protection but it is not an essential requirement. Cumberland Glass Mfg. Co., Inc. v. DeWitt, 120 Md. 381, 87 A. 927, 930, affirmed 237 U.S. 447, 35 S.Ct. 636, 59 L.Ed. 1042; Aalfo Co., Inc. v. Kinney, 105 N.J.L. 345, 144 A. 715, 716; Schechter v. Friedman, 141 N.J.Eq. 318, 57 A.2d 251, 254; Restatement, Torts, § 766, comment b.

The promise of the seller, Comette, was a valid undertaking, made with proper reference to the security interest of his mortgagee in accordance with the requirement of 9 V.S.A. § 1763. The approval of the mortgagee, although not a certainty, was anticipated and expected. Save for the consent of the bank, the plaintiffs had a rightful interest in having the seller's promise performed free from other outside interference which might make performance more difficult or impossible.

The purpose of the consent requirement was solely for the protection of the mortgagee. Clearly, if the loan was adequately safeguarded, the mortgagor was not at liberty to abrogate his promise to the buyer in order to gain a higher price. The seller's promise remained in force until such time as it was disapproved for reasons connected with the impairment of the mortgagee's interest.

There is substantial evidence to support the conclusion that the defendants intruded upon this relationship to intercept the prospective gain for themselves by procuring a breach of the seller's undertaking to the plaintiffs before the approval of the bank could be invoked. In any event, the seller broke away from his original undertaking with the plaintiffs and the evidence permitted the jury to conclude that Comette's promise to the plaintiffs would have been fulfilled according to its terms had it not been for the participation of either or both of the defendants. It was for the jury to say whether the plaintiffs' loss of the Comette agreement was caused by the defendants. Doremus v. Hennessy, 176 Ill. 608, 52 N.E. 924, 926, 43 L.R.A. 797, rehearing denied 176 Ill. 608, 54 N.E. 524, 43 L.R.A. 797; 30 Am.Jur. Interference § 58, p. 94.

The next question is whether the interference was justified as a matter of law. If so the verdict directed by the court may be vindicated.

Justification for interference in the business relations of another is an affirmative defense, and the intruder has the burden of proving his privilege to intervene. Owen v. Williams, 322 Mass. 356, 77 N.E.2d 318, 9 A.L.R.2d 223, 226; Advance Music Corp. v. American Tobacco Co., 296 N.Y. 79, 70 N.E.2d 401, 403; 86 C.J.S. Torts § 57, p. 981; 30 Am.Jur., Interference, § 57, p. 93. Whether an occasion exists which justifies the invasion of another's contract or business relations by the defendant is generally a question for the jury. Meason v. Ralston Purina Co., 56 Ariz. 291, 107 P.2d 224, 228; Berry v. Donovan, 188 Mass. 353, 74 N.E. 603, 605, 5 L.R.A.,N.S., 899; 30 Am.Jur., Interference, § 58, p. 94.

The law has crystallized relatively...