A. S. Rampell, Inc. v. Hyster Co.

1 Misc. 2d 788, 148 N.Y.S.2d 102, 1955 N.Y. Misc. LEXIS 2182
CourtNew York Supreme Court
DecidedDecember 7, 1955
StatusPublished
Cited by5 cases

This text of 1 Misc. 2d 788 (A. S. Rampell, Inc. v. Hyster Co.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
A. S. Rampell, Inc. v. Hyster Co., 1 Misc. 2d 788, 148 N.Y.S.2d 102, 1955 N.Y. Misc. LEXIS 2182 (N.Y. Super. Ct. 1955).

Opinion

Eder, J.

This is an action for damages arising out of alleged tortious acts committed by defendants leading up to and culminating in the termination of plaintiff’s dealer-distributor agreement with defendant Hyster Company. The individual defend [790]*790ants are Hyster Company’s district manager (Shaffer) and one of plaintiff’s salesmen (Chester). Defendants have moved to dismiss for insufficiency each of the six causes of action in the amended complaint.

Plaintiff alleges that it (and its predecessor companies) had been for fifteen years a distributor of Hyster Company products for territory in New York and New Jersey pursuant to written contracts which contained a termination clause permitting either party to terminate at any time; that it developed a market and trained a sales and service force for Hyster’s products and grossed annual income therefrom of $800,000; and that this profitable dealership was terminated in August, 1952.

In the first cause it is alleged against Hyster Company that, with knowledge of their existing employment agreements, it induced three salesmen and a service-parts man, almost half of plaintiff’s key employees, to leave plaintiff’s employment and enter its employ so that it would be in a favorable position for subsequently terminating plaintiff’s distributorship without risk of a break in the continuity of trained representation. Chester, it is alleged, was induced to breach ” his written agreement of employment; the other two salesmen to terminate ” their written contracts of employment; and the serviceman to terminate ” his oral contract of employment. The dates of the respective agreements are set forth but not the terms thereof. We shall therefore assume that all employment agreements except Chester’s were terminable at will.

Defendant requests dismissal on the ground that in this State, at least, it is “ well settled ’ ’ that no cause of action arises from inducing another to terminate an agreement which represents an at-will employment or one terminable merely on giving notice. It is true that the earlier authorities in New York seemed to favor the rule that an action for alleged interference with a contract would lie only if the contract gave plaintiff definite rights for a definite period of time (see Posner Co. v. Jackson, 223 N. Y. 325). But the trend has been to broaden the base of liability. To gain the proper perspective we may note that in Truax v. Raich (239 U. S. 33, 36) it was said that by the weight of authority in this country unjustified interference of third persons was actionable although the employment was at will; and in section 766 of Restatement, Torts, some protection, it is stated, is appropriate against unjustified interference with “ reasonable expectancies ” even when an existing contract is lacking. These authorities would thus render a third person liable for unjustified ” inducement to terminate a mere at-will oral employment relationship. Prosser on Torts (pp. 980-982) does not go quite that far; [791]*791he says that “ any type of contract ” is sufficient as a foundation of the action for procuring its breach, including a contract terminable at will, since, until terminated, “ the contract is a subsisting relation, of value to the plaintiff, and presumably to continue in effect. ’ ’

It is important, however, to confine this principle within its proper limits. Where an employee does not have a definite contract for a definite period of time, another businessman, even a competitor, may offer him a job and thereby induce him to change his employment. This is self-evident. In such a case it is only when the intention or means of procurement are unjustified that a cause of action for damages arises. In the recent case of Coleman & Morris v. Pisciotta (279 App. Div. 656) the court said “ mere inducement to an employee at will to discontinue such employment is not actionable, at least unless the purpose of the actor was solely to produce damage, or unless the means employed were dishonest or unfair, ’ ’

The first cause of action is thus seen to be clearly sufficient by this standard. Here, in fact, we have definite agreements. Their precise terms are not important for present purposes. We have assumed, to meet defendant’s argument, their terminability at will. The purpose of Hyster Company, according to the complaint, was to capture the trained force of plaintiff, its own distributor of many years ’ standing, in order to permit termination of plaintiff’s distributorship and appropriation of its good will as dealer. Their procurement with such intent and with knowledge of their existing employment agreements is actionable.

The second cause is directed against its former salesman, Chester, alleging violation of his duty as an employee, expressed in his contract, to give his exclusive time and efforts to its business in the following respects: (1) entered upon negotiations with Hyster Company for a dealership in competition with plaintiff; (2) “ defamed ” plaintiff to Hyster; (3) induced the other employees to terminate their agreements with plaintiff; (4) induced Hyster to terminate plaintiff’s dealership; (5) abetted Hyster’s plan.

The fact that, as to (1), it is not alleged that the negotiations resulted in Chester’s obtaining such dealership is immaterial; injury is sufficiently charged in his failure to devote himself exclusively to plaintiff’s affairs. The words of defamation, (2), need not be set forth in the amended complaint; this cause is not in libel as such and this allegation is simply part of Chester’s acts in violation of his duty. It was held on defendant’s motion to make the original complaint more definite and certain that such defamatory statements (as well as other “ more defi[792]*792nite ” allegations sought) could be obtained by a bill or examination before trial, and, if necessary, leave to interpose appropriate defenses be then procured. That order, it has been noted, was affirmed without opinion by the Appellate Division. (3) and (4) are within the rule stated as to the first cause. (5) is actionable as constituting breach of his duty as aforesaid. The second cause is held to be sufficient (see Duane Jones Co. v. Burke, 306 N. Y. 172).

In the third cause, it is charged that Shaffer, “ serving as factory liaison ” between Hyster and plaintiff, (1) induced Chester to breach his employment agreement; (2) induced the other employees to terminate their contracts and enter Hyster’s employ; (3) induced Hyster to terminate plaintiff’s distributorship ; and that he did these things to advance his position with Hyster to permit his promotion to New York Branch Manager ”.

The general rule is that an officer or employee of a corporation is immune from personal tort liability for inducing breach by his firm of its obligations (Greyhound Corp. v. Commercial Cas. Ins. Co., 259 App. Div. 317; Burr v. American Nat. Theatre Academy, 103 N. Y. S. 2d 589, affd. 278 App. Div. 908). Such act is presumed to be done in the interest of his corporation even though it may have been marked with excess of zeal or personal malice to plaintiff. Individual liability may, however, be imposed where his acts involve individual and separate torts distinguishable from acts solely on his employer’s behalf or where his acts are performed in his own interest and adverse to that of his firm.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Architectural Manufacturing Co. v. Airotec, Inc.
166 S.E.2d 744 (Court of Appeals of Georgia, 1969)
Wilson v. McClenny
136 S.E.2d 569 (Supreme Court of North Carolina, 1964)
Wendell v. Sleppin
7 Misc. 2d 304 (New York Supreme Court, 1956)
A. S. Rampell, Inc. v. Hyster Co.
2 A.D.2d 744 (Appellate Division of the Supreme Court of New York, 1956)

Cite This Page — Counsel Stack

Bluebook (online)
1 Misc. 2d 788, 148 N.Y.S.2d 102, 1955 N.Y. Misc. LEXIS 2182, Counsel Stack Legal Research, https://law.counselstack.com/opinion/a-s-rampell-inc-v-hyster-co-nysupct-1955.