Snowden v. Sorensen
| Decision Date | 16 March 1956 |
| Docket Number | Nos. 36668,36669,s. 36668 |
| Court | Minnesota Supreme Court |
| Parties | R. B. SNOWDEN, Respondent, v. Frank L. SORENSEN, an individual d/b/a Solar Products Company, Ltd. Respondent, John L. Lenihan and Pharmakon, Inc., Appellants, James M. Lenihan, Defendant. |
Syllabus by the Court.
1. The elements essential for recovery of damages for inducing breach of contract are (1) the contract; (2) the wrongdoer's knowledge thereof; (3) his intentional procurement of its breach; (4) without justification; and (5) damages resulting therefrom.
2--3--4--5. Where party to agreement with plaintiff for sale to latter of machine for extraction of crude chlorophyll from alfalfa subsequently entered into agreement with defendant corporation whereunder such corporation was to purchase and refine crude chlorophyll to be produced by plaintiff and others, and whereunder it received an assignment of all such party's 'inventions and improvements in articles, apparatus, processes and compositions relating to or connected with chlorophyll derivatives Extracted from alfalfa' (italics supplied); where neither such corporation nor its president was aware of prior sales contract with plaintiff and thereafter did nothing to induce its breach; where breach of prior sales contract was caused solely by party originally contracting with plaintiff therein rather than by corporation or its president; and where no action of corporation or its president caused any damage sustained by plaintiff because of the breach of his sales contract, Held plaintiff not entitled to recover damages against such corporation or its president for inducing breach of prior sales contract.
Johnson, Sands & Brumfield, and Maurice C. Lizee, Minneapolis, for appellants.
George P. Hoke, Charles A. Bassford, Richards, Janes, Hoke, Montgomery & Cobb, Minneapolis, Walter U. Hauser, Minneapolis, for respondent.
Action by R. B. Snowden against defendant Frank L. Sorensen, doing business as Solar Products Company, Ltd., a trade name, for breach of a contract; and against defendants John L. Lenihan and Pharmakon, Inc., a Minnesota corporation, for inducing defendant Sorensen to bring about such breach in making impossible his performance of such contract.
At the close of plaintiff's testimony, the motions of defendants Lenihan and Pharmakon, Inc., for directed verdicts were denied; and thereupon all defendants rested. The trial court then directed verdicts in favor of plaintiff and against defendant Sorensen, and the jury returned verdicts against both other defendants, each in the sum of $4,483.58. These are appeals by defendants Lenihan and Pharmakon from the judgments entered pursuant to the verdicts after orders denying their respective motions to set aside such verdicts and to order judgments in their favor.
The contract involved was dated April 24, 1952, and provided that defendant Frank L. Sorensen, d.b.a. Solar Products Company, Ltd., was to deliver to plaintiff by May 17, 1952, machinery and equipment for the extraction of crude chlorophyll from alfalfa crops produced on plaintiff's plantation near Hughes, Arkansas. At the time of the execution of the contract, plaintiff paid to Sorensen the sum of $4,000 'as a downpayment' thereon, and Sorensen agreed to travel to plaintiff's place in Arkansas to supervise installation of the equipment which was then being manufactured by Sorensen under certain patent rights.
The contract required that all costs for the construction and installation of such equipment be paid by plaintiff and charged to Sorensen; that plaintiff have the option of purchasing such equipment at its cost, plus $5,000 to be paid Sorensen for services rendered in supervising its manufacture and installation; and that, if such option were not exercised, plaintiff have the right to keep the plant at its cost on his books, or in the alternative surrender it to Sorensen who would then be obligated to repay all sums advanced by plaintiff in its construction and installation.
The contract also provided that such crude chlorophyll as plaintiff produced thereunder would be dried in tunnels which plaintiff was to construct and which he did later construct at a cost of $452 and that thereafter the dried crude chlorophyll would be shipped to Sorensen in Minneapolis, who would pay plaintiff therefor at certain specified rates per pound dependent upon the percentage concentration of such crude chlorophyll. It also gave plaintiff rights for the sale of similar installations in certain states mentioned in the agreement.
Prior to this contract, Sorensen had been in contact with defendant John L. Lenihan, seeking to induce him to take over the process of refining crude chlorophyll in Minnesota, it being Sorensen's plan to install machines similar to that covered by plaintiff's contract in other localities to serve as a source of supply for such crude chlorophyll to be refined here. Lenihan manifested interest in the proposition, and on May 2, 1952, conferred with Sorensen with respect to the construction of such a refining plant in Minnesota. At that time nothing was mentioned by Sorensen about the contract with plaintiff other than that Sorensen already had arranged sources for the supply of the crude product. After May 7, 1952, Lenihan caused Pharmakon, Inc., to be organized as a Minnesota corporation and became its president. On May 12, 1952, another conference was held between Sorensen and Lenihan as an official of Pharmakon, Inc., as a result of which a contract was executed between them which provided:
'Pharmakon, Inc., a Minnesota corporation, has been organized for the purpose of aiding and assisting Sorensen * * * to finance and construct the machines and systems used for such purpose and for the rental, sale or other disposition of such machines, the purchase of the product to be refined and the refinement and sale of the product through the operation of a central refining and processing plant.
'Franklin L. Sorensen, Sr., in consideration of the assumption by Pharmakon, Inc., of certain obligations necessary in the development and marketing of said prospective invention or inventions, * * * does hereby sell, transfer, convey and assign to Pharmakon, Inc., all of his inventions and improvements in articles, apparatus, processes and compositions relating to or connected with chlorophyll derivatives extracted from alfalfa * * * and * * * all of his right, title and interest in and to all such inventions and improvements and in and to any letters patent and applications for letters patent thereon * * *.'
It was not until after execution of this contract on May 12, 1952, that Sorensen disclosed to Lenihan the previous contract with plaintiff. On May 15, 1952, Sorensen, accompanied by Lenihan, traveled to Memphis, Tennessee, for an interview with plaintiff. Sorensen was then cognizant that, because of mechanical difficulties in connection with the construction of the machine sold to plaintiff, and because of lack of funds to finance the purchase of the crude chlorophyll, he would be unable to perform his agreement with plaintiff. At the Memphis meeting he so advised plaintiff, and Lenihan, acting for Pharmakon, Inc., thereupon offered plaintiff a substitute agreement, whereunder plaintiff would be refunded the $4,000 previously paid to Sorensen, and a machine and equipment identical to that purchased from Sorensen would be leased to him. This proposal was rejected by plaintiff and Lenihan and Sorensen then returned to Minneapolis. With reference to this conversation, plaintiff testified as follows:
(Italics supplied.)
'A. Mr. Lenihan stated that he would like me to give up my contract and that he had a new contract and a deal with Mr. Sorensen...
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