Wolf v. Perry

• Decision Date: 18 May 1959
• Docket Number: No. 6475,6475
• Citation: 339 P.2d 679,1959 NMSC 44,65 N.M. 457
• Parties: Ralph P. WOLF d/b/a Zia Oil Company, Plaintiff-Appellee, v. E. H. PERRY and Leroy Lowry, d/b/a Perry and Lowry Oil Company, Max Konz and Frank Maurale, Defendants-Appellants.
• Court: New Mexico Supreme Court

Page 679

339 P.2d 679

65 N.M. 457

Ralph P. WOLF d/b/a Zia Oil Company, Plaintiff-Appellee, v. E. H. PERRY and Leroy Lowry, d/b/a Perry and Lowry Oil

Company, Max Konz and Frank Maurale,

Defendants-Appellants.

No. 6475.

Supreme Court of New Mexico.

May 18, 1959.

Phillips, Dolan & Clear, Albuquerque, for appellants.

Schall & Sceresse, Albuquerque, for appellee.

LUJAN, Chief Justice.

This is a tort action for inducing a breach of contract.

In the fall of 1955, plaintiff-appellee, Ralph Wolf, was in the business of distributing the petroleum products of Union Oil Company. At that time, one Max Konz, the owner of certain real property in Moriarty, New Mexico, on which gasoline pumps and other equipment were located entered into an exclusive gasoline sales contract of five years' duration with the plaintiff. The contract provided that the plaintiff had the right to cancel the contract on ten-day notice. It further provided that should Konz dispose of the business 'he shall advise the purchaser of this contract, and not sell said business until and unless the purchaser agrees to be bound by the provisions thereof for the period until this contract shall terminate.'

Defendants-appellants, Perry and Lowry, were at all material times distributors of Phillips Petroleum Company products.

At the time Konz entered into the contract with the plaintiff, one Frank Maurale was operating a service station in Albuquerque and the plaintiff was selling him Union Oil Company products.

In June, 1956, Maurale negotiated with Konz for the purchase of the latter's Moriarty property, and on June 25, 1956, he signed a binder for such purchase. Title was transferred to Maurale by warranty deed on July 23, 1956.

The testimony is conflicting as to whether Maurale knew of the contract between Konz and the plaintiff prior to signing the binder. He did know of the contract prior to the actual transfer of the property, having been advised by his attorney that it was not binding on him.

Plaintiff and his son, Jerry Wolf, testified that Maurale stated he would abide by the contract even though 'he didn't think it was any good.' Maurale flatly denied this and testified that he only went through with the purchase after being advised by his attorney that he was not bound on the Konz-Wolf contract. Witness Underwood, the real estate agent who negotiated the sale of the Konz property to Maurale, testified that Maurale told him he would not purchase the property if there was a contract for the purchase of gasoline from the plaintiff which would be binding on him.

At the time Maurale purchased the Moriarty property from Konz, no gasoline had been sold on the premises for some four months and the large Union Oil Company sign was down. Konz testified that he sold the property to Maurale as real estate and not as a going business. He further testified that he felt he had never been released from his contract with the plaintiff; that as early as December, 1955, he had called the office of defendants Perry and Lowry with a view toward purchasing Phillips Petroleum Company products; that the defendants had never attempted to persuade him to discontinue purchasing Union Oil Company products.

Defendant Perry testified that when he received would of the call from Konz, he visited him, and upon being advised by Konz that the contract with the plaintiff was cancellable on thirty-day notice, he offered to sell him gasoline on the open market. However, no arrangement or contract was entered into between Konz and the defendants.

Sometime prior to the closing of the deal for the Moriarty property, Perry visited Maurale once at his Albuquerque station and offered to sell him gasoline for the Moriarty station 'on the open market.' In this connection, Perry testified as follows:

'(Maurale) told me he wasn't going to handle Union products, and in fact, he wouldn't have bought the station under any circumstances if he had to deal with Zia Oil Company. He was going to make different arrangements. He and Mrs. Maurale came to our office on two different occasions. She also made the same statement. They wouldn't handle Union Oil Company's products under any circumstances. They also made the statement that there was no contract and they were at liberty to buy from whomever they pleased.'

There was also a conflict in the testimony as to whether or not Perry and Lowry had any knowledge of the existence of a contract between Maurale and the plaintiff. Plaintiff testified that upon being told by his son that Maurale was having the Moriarty station painted Phillips Petroleum Company colors, he then called Maurale who confirmed this fact. Plaintiff testified that he then called Perry and 'talked to him and tried to get them to get in touch with the man doing the painting and ask him to quit. I said we had a contract with the business, we were in for considerable amounts of money, and I asked him if he wouldn't honor the contract. He told me that Mr. Maurale told him he didn't have a contract and he passed it off very lightly.'

The complaint named Max Konz, Frank Maurale and Perry and Lowry as defendants. It alleged that Konz breached a contract with the plaintiff; that Maurale breached a contract with the plaintiff; and that Perry and Lowry induced Maurale's breach.

After Konz, Maurale, Perry and Lowry filed answers to the complaint, plaintiff moved to drop Konz and Maurale from the case and file an amended complaint. The motion was granted and the amended complaint named Perry and Lowry as the sole defendants. Maurale moved to strike the order dropping him on the grounds that the amended complaint alleged facts which, if proved, might establish his liability to the plaintiff. Further amendment of the pleadings was permitted, and a second amended complaint was filed naming Perry and Lowry and Maurale as defendants. The second amended complaint alleged a breach of contract by Maurale which was 'tortiously induced' by defendants Perry and Lowry. In the course of the trial, the case against Maurale was dismissed.

The trial court found that the contract between the plaintiff and Konz was of 'five years duration. That Frank Maurale was substituted for Konz in the aforesaid contract but that Maurale was dismissed from this lawsuit but nevertheless there was an interference with the contract on the part of the defendants herein.'

The court concluded 'defendants, Perry and Lowry, tortiously interfered with the contract to the damage of the plaintiff.'

From a judgment awarding $500 damages to the plaintiff, defendants appeal. Plaintiff cross-appeals on the question of damages.

For the moment we will assume that all of the requisite elements of a novation are present and that by oral agreement Maurale was substituted for Konz on the gasoline sale contract with the plaintiff.

The general rule is that one who, without justification or privilege to do so, induces a third person not to perform a contract with another, is liable to the other for the harm caused thereby. See Annotation in 26 A.L.R.2d 1227. The prevailing doctrine is that liability for inducing a breach of contract attaches even if the contract, though valid, is unenforceable. See e. g., Aalfo Co. v. Kinney, 105 N.J.L. 345, 144 A. 715; Ringler v. Ruby, 117 Or. 455, 244 P. 509, 46 A.L.R. 245; Prosser on Torts, p. 980 (1941).

One cannot be held liable for the tort of inducing a...