Pack v. Wise

• Decision Date: 15 July 1963
• Docket Number: No. 913,913
• Citation: 155 So.2d 909
• Parties: Jimmie H. PACK, Plaintiff-Appellant, v. Erbon W.WISE et al., Defendants-Appellees.
• Court: Court of Appeal of Louisiana — District of US

Page 909

155 So.2d 909

Jimmie H. PACK, Plaintiff-Appellant, v. Erbon W.WISE et al., Defendants-Appellees.

No. 913.

Court of Appeal of Louisiana, Third Circuit.

July 15, 1963.

Rehearing Denied Sept. 5, 1963.

Dissenting Opinion Sept. 12, 1963.

Watson & Watson, by Jack C. Watson, Lake Charles, for plaintiff-appellant.

John Makar, Natchitoches, for defendants-appellees.

Before TATE, SAVOY, and CULPEPPER, JJ.

TATE, Judge.

We are here concerned with the liability in tort, if any, of a creditor who attempted to secure the payment of a disputed debt by contacting the employer of the alleged debtor. The employee, who was subsequently discharged, sues the creditor to recover damages. He appeals from the dismissal of his suit by the trial court.

1. Facts.

The plaintiff Pack was an employee of a bank. Early in 1961 he became interested in securing a source of additional income by publishing a shopper news guide. Through a mutual friend, he contacted the defendant Wise, who was president and principal stockholder of Southwest Builder, Inc., a printing firm.

Pack secured an estimate of the printing costs at a first interview with Wise, made further inquiries at a second interview, and at a third interview introduced Wise to one Mannix, who was to serve as active manager of the enterprise. This was the extent of the plaintiff Pack's contacts with Wise prior to and during the period of the publication of the shoppers' guide.

In the meantime, Pack had become associated in the enterprise with Carroll Fogleman, an attorney who was a mutual friend of both Pack and the defendant Wise. Immediately before the first issue of the publication, however, the plaintiff Pack was informed by a superior in the bank that the bank did not approve of its employees engaging in active outside business activities, such as soliciting advertisements for the shoppers' guide.

Fogleman and Pack then employed Mannix to actively manage the publishing enterprise, and Fogleman informed Wise that he himself would see that any debts incurred by the business were paid. This all occurred prior to or at the time of the publication of the first issue of the enterprise in March of 1961. The enterprise was incorporated immediately after the second issue in April of 1961, with eighty per cent of the stock being issued to Fogleman and his wife (half of which was held by Fogleman for the plaintiff Pack--i.e., Pack owned a forty per cent interest in the corporation).

The enterprise immediately ran into financial difficulties. On June 5th, after the fifth issue, the corporation was reorganized with additional stockholders receiving a portion of the stock. As a result, the plaintiff Pack's equity was reduced to twenty per cent. Fogleman further informed the defendant Wise that he himself would no longer be personally responsible for the debts of the corporation.

The reorganized management of the corporation published approximately four more issues before it finally ceased operations, with the last number issued approximately on August 1st.

A printing debt of $920 was due Southwest Builder, Inc., the firm managed by Wise, after the shoppers' guide concluded its operations. All of this debt was due for the last five issues of the publication by the corporation, in which Pack owned only a twenty per cent equity. The evidence clearly and without contradiction shows that Pack had disassociated himself entirely from active participation in the enterprise following publication of the first number on March 28, 1961; although it likewise indicates that Wise was not specifically informed that Pack had disassociated himself from personal responsibility for the enterprise. (On the other hand, Wise did know of the changes of active management following his first interview with Pack prior to the first issue.)

Immediately after the publishing operations of the shoppers' guide terminated, the plaintiff Pack was promoted to branch bank manager by his employer.

Wise, who was the effective owner and the president of two publishing corporations doing a large volume of business with the parent bank, wrote its president on September 5, 1961, to the effect that he, Wise, had been unsuccessful in collecting a past due printing account in the amount of $920 from Pack and concluding: 'We dislike having to bring this to your attention and do so only because of the unsatisfactory response we get from Mr. Pack. We will greatly appreciate any assistance you may care to give us in securing payment so that we will not have to proceed further against Mr. Pack.'

When the letter was received the following day, Pack was called into the office of the bank's executive vice-president. Pack explained that the debt was not his personally but was instead that of a corporation in which he was only a minority stockholder.

Accordingly, the president of the bank wrote Wise a letter on September 7th informing the latter of Pack's contention and stating that Pack contended he did not 'have anything to do with creating The indebtedness.' (Italics ours.) The letter concluded: 'If Pack misrepresented the facts, I would appreciate hearing from you further on the matter; otherwise, no action will be taken against Jimmy by this institution.'

Wise thereupon called the bank president and informed him of his version of the transaction, which placed heavy emphasis upon the undoubtedly truthful fact that initially (before publication of the first number) Pack had been the moving spirit in the publishing venture. Consequently, Pack was called in again that day by the bank's executive vice-president and was told by that official that he had heard enough of the matter and that he wanted it to be settled.

Thereupon, Pack had his attorney write a letter on September 18, 1961, requesting that Wise cease from communicating with Pack's employer concerning the matter. The letter concluded with the warning that 'if such communications continue, then necessary legal proceedings will be instituted and you will be held financially responsible for all damages sustained * * *.'

Upon receipt of this letter, Wise immediately brought it to the bank president. Pack was immediately sent for and questioned by the bank's president in a face-to-face confrontation between Pack and Wise, with the bank's executive vice-president present during at least part of this interview. Pack was immediately fired as a result of this conference.

2. The question of Pack's liability to Southwest Builder, Inc.

The present suit by the plaintiff Pack concerns his alleged right to recover damages against the defendant Wise arising out of the latter's wrongful coercion in attempting to collect the disputed debt. As we shortly demonstrate, it is actually not decisive of the present suit whether or not Pack would have been held liable for the corporate debt, if this were a suit to recover for the debt. (No suit has ever been brought to recover from Pack individually for this debt.)

In urging that he is not individually liable, the plaintiff Pack, of course, relies upon the well-settled principle that a corporate official agent is ordinarily not liable individually for corporate debts (Air Waves, Inc. v. Link, La.App. 1 Cir., 89 So.2d 422; Orleans Shoring Company v. DeVillentroy, La.App.Orl., 92 So.2d 274; La Parie v. Totora, La.App.Orl., 62 So.2d 658), nor is a stockholder (LSA-R.S. 12:19B). On the other hand, the defendant Wise claims that Pack is nevertheless liable to him for this corporate debt because credit had initially been extended to Pack individually, and the creditor had never been formally notified of Pack's withdrawal from the management of the enterprise and of the intended substitution of the corporation for him as the debtor for the printing of the subsequent issues. Hayes v. Claterbaugh, La.App.Orl., 140 So.2d 737; Jahncke Service v. Heaslip, La.App.Orl., 76 So.2d 463.

Whether Wise was entitled to rely on Pack's continued personal responsibility for the enterprise might be considered a very close question, since he was informed of Fogleman's personal guarantee when the first number was published, and in view of the information informally gained by him during publication activities, of the subsequent changes of management following his initial contact with Pack. We do not, however, feel obliged to pass upon this question, for reasons to be stated below.

Our principal reason in stating so fully the facts concerning the disputed debt is to show clearly both that Wise was without malice and was not unreasonable in claiming that Pack was liable individually for this debt of the publishing firm of which he was only a stockholder, and also to show that Pack was not mendacious, unreasonable, or frivolous in claiming to his bank superiors, when questioned by them, that he was not personally liable for what was undoubtedly the debt of a corporation with which his only connection was to own twenty per cent of the stock at the time of the creation of the debt of $920 which Wise was attempting to collect.

3. Tort liability for Wise's actions.

In a comprehensive opinion, our trial brother first held that Pack was indeed individually liable for the corporate debt, as Wise contended all along. Having so held, the trial court opinion further held that Wise's actions in telling the bank of Pack's just debt and in attempting to secure the bank's assistance in collecting it from Pack, were not unreasonable, especially since the bank had an interest in the matter, because a suit against one of its branch managers to some extent could reflect also upon the institution.

We think our trial brother fell into error in assuming that, even if the debt were justly owed, the creditor had a legal right to coerce the employee into paying it by pressure brought upon him through the employer, at least to the extent here demonstrated.

Whether or not a debt is justly due, the law recognizes a right in a debtor to be free from unreasonable coercion and also...