Stebbins & Roberts, Inc. v. Halsey, 79-22

• Decision Date: 11 June 1979
• Docket Number: No. 1,No. 79-22,79-22,1
• Citation: 265 Ark. 903,582 S.W.2d 266
• Court: Arkansas Supreme Court
• Parties: STEBBINS & ROBERTS, INC., Appellant, v. John T. HALSEY, Appellee

Page 266

582 S.W.2d 266

265 Ark. 903

STEBBINS & ROBERTS, INC., Appellant, v. John T. HALSEY, Appellee.

No. 79-22.

Supreme Court of Arkansas, Division No. 1.

June 11, 1979.

Rehearing Denied July 9, 1979.

Spitzberg, Mitchell & Hays, Little Rock, for appellant.

Hamilton, O'Hara & Hays, P.A., Little Rock, for appellee.

GEORGE ROSE SMITH, Justice.

Ever since the decision in Lumley v. Gye, 2 El. & Bl. 216, 118 Eng.Rep. 749 (1853), the courts have recognized as a tort wrongful interference with a contractual relationship between third persons. In this case the appellee, John T. Halsey, seeks redress for that tort. His complaint alleges that he was employed by PPG Industries, Inc., and lost his job as a result of wrongful conduct by the appellant, his former employer. The verdict and judgment awarded Halsey $30,000 in damages. For reversal the appellant contends primarily that it was entitled to a directed verdict.

In the fall of 1976 PPG and the appellant Stebbins & Roberts were rival paint companies in Little Rock. Halsey had worked as a paint salesman for the appellant for more than a year. His written contract of employment provided that if he ceased to be an employee of Stebbins & Roberts, he would not for a period of one year compete with the company by selling paint products as an employee of a competitor within any territory he had worked for Stebbins & Roberts during one year before his termination. Halsey, in working for Stebbins & Roberts, had been assigned as his "territory" a list of 165 substantial paint customers such as contractors, apartments, and factories.

Halsey decided to leave Stebbins & Roberts and go to work for PPG. On November 1 he submitted a letter of resignation, to be effective in 30 days. The company made no objection to his leaving, but preferred to accept his resignation immediately. Halsey went to work for PPG on November 2.

Within a day or so Thomas J. Bonner, the president of Stebbins & Roberts, telephoned Larry Bixler, the manager of PPG. Bonner had a law degree and had practiced law for 24 years. The jury could have found, from somewhat conflicting testimony, that Bonner told Bixler that Halsey had a contract with Stebbins & Roberts and could not legally work for PPG. Bonner did not threaten to sue PPG, but he said that he was going to have to make an example of Halsey. Another witness, who had been working at the time for Stebbins & Roberts in a management capacity, quoted Bonner as having said with reference to Halsey: "I'll teach him and the other salesmen a lesson. I'll sue the little bastard and I will name the company that he goes with."

Bixler discussed the matter with his superiors. It was decided that if Halsey could not legally work for PPG in the territory he would have to be terminated. Halsey was given two weeks in which to settle the matter; but Bonner refused to release him from the Stebbins & Roberts contract, and Halsey lost his job with PPG.

The appellant, in arguing that it was entitled to a directed verdict, presents what is really a twofold contention: First, Halsey failed to prove that Bonner's interference was wrongful; and second, Bonner, simply because the appellant had the employment contract with Halsey, was entitled to make the statements that he did in his conversation with Bixler.

Prosser's discussion of the applicable principles of law is applicable to both the appellant's contentions:

Given the intention to interfere with the contract, liability usually will turn upon the ultimate purpose or object which the defendant is seeking to advance. The early cases, with their emphasis upon "malice," regarded proof of an improper motive as an essential part of the plaintiff's cause of action. As the tort became more firmly established, there was a gradual shift of emphasis, until today it is generally agreed that an intentional interference with the existing contractual relations of another is prima facie sufficient for liability,...