Albemarle Theatre, Inc. v. Bayberry Realty Corp.

27 A.D.2d 172, 277 N.Y.S.2d 505, 1967 N.Y. App. Div. LEXIS 4741
CourtAppellate Division of the Supreme Court of the State of New York
DecidedFebruary 28, 1967
StatusPublished
Cited by58 cases

This text of 27 A.D.2d 172 (Albemarle Theatre, Inc. v. Bayberry Realty Corp.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Albemarle Theatre, Inc. v. Bayberry Realty Corp., 27 A.D.2d 172, 277 N.Y.S.2d 505, 1967 N.Y. App. Div. LEXIS 4741 (N.Y. Ct. App. 1967).

Opinion

Witmer, J.

The questions presented on this appeal are:

(1) Whether plaintiff, as a party to a contract with .several of the defendants, may maintain an action in tort for damages [173]*173against said defendants because of their conduct in conspiring and acting with third persons in derogation of the rights of the plaintiff under the contract and with intent to destroy plaintiff’s interest in the subject matter of the contract?

(2) Does the amended complaint in this action, in which conspiracy to injure plaintiff’s property, the subject of the contract between plaintiff and defendants, is charged against said defendants and others and in which it is alleged that defendants have committed torts against the plaintiff and its said property and wherein compensatory and punitive damages are sought, state a cause of action for breach of contradi

(3) Does the amended complaint state a cause of action against a particular third party, also made a defendant herein, for inducing the alleged breach of contract by the contracting defendants 1

The action was commenced in May, 1957 and issue was joined on the amended complaint in June, 1957. When the case was about to be reached for trial late in 1965 defendants-respondents successfully moved to dismiss the amended complaint as to them on the ground of ‘ ‘ legal insufficiency ’ ’; and it is from the order granting such motion with "leave to replead that this appeal is taken.

Plaintiff instituted the action to recover damages for alleged loss of rents and destruction of the value of its Albemarle Theatre property, which the plaintiff in 1949 had leased to defendant Bramarle for a 13%-year period at a basic rental plus a percentage of the gross receipts from its operation as a theatre. Plaintiff alleges that as a condition of granting such lease to Bramarle, it entered into an agreement at the same time with other defendants, known as the Century Group, of which Bramarle was a part, in which the Century Group agreed to supply to Bramarle first run motion pictures for exhibition in said theatre; that plaintiff’s Albemarle Theatre had a high reputation as a first-rate theatre; and that continuing the showing of first run pictures therein would maintain its good rating and its value as a theatre property. It was alleged that to further their interests in other competing theatres and obtain other income, the Century Group defendants, including Bramarle, thereafter entered into agreement with other defendants, known as the RKO Group (the owners of competing theatres, who are not parties to this motion), to run motion pictures of lesser grade than first run in the Albemarle Theatre; that such agreement was part of a conspiracy on the. part of all the defendants to increase their income at the expense of the plaintiff’s interest in the lease and to the permanent injury and destruction of the [174]*174value of said Albemarle Theatre; that as a part and result of said agreement the defendant Andrews, Inc., a refreshment concessionaire company, and the other Century Group defendants have for some years received substantial revenues from refreshment concessions in RKO Theatres; and plaintiff’s rents have been greatly reduced and the reputation of the Albemarle Theatre has been damaged so seriously that at the end of the lease period it will no longer have utility as a theatre, and plaintiff has been greatly damage thereby. Plaintiff alleges that “'The aforesaid acts, torts and conspiracy of the defendants were done with the wilful intention to destroy and impair plaintiff’s property rights in the Albemarle Theatre ”, and asks for punitive damages in the sum of $2,000,000 as well as for compensatory damages.

It is familiar law that allegations of a civil conspiracy, without more, do not constitute a cause of action (Cuker Ind. v. Crow Constr. Co., 6 A D 2d 415, 417; Miller v. Spitzer, 224 App. Div. 39); and that likewise allegations of conspiracy by some parties to a contract to break it and their consequent failure to carry out the contract, in pursuance of the conspiracy, without more do not state a cause of action in tort against them in favor of another party to the contract (Bereswill v. Yablon, 6 N Y 2d 301; Miller v. Vanderlip, 285 N. Y. 116, 125; Warner Bros. Pictures v. Simon, 21 A D 2d 863, affd. 15 N Y 2d 836; Friedman v. Roseth Corp., 270 App. Div. 988, affd. 297 N. Y. 495; Rosenbaum v. Branster Realty Corp., 276 App. Div. 167). In such cases the remedy against the conspiring parties to the contract is an action for breach of contract.

The amended complaint, however, contains allegations far beyond a mere assertion of conspiracy by the defendants not to carry out the contract. It is alleged that the defendant contracting parties, in order to improve the operating position of other theatres owned by them and run in competition to plaintiff’s Albemarle Theatre, and to secure substantial additional income from refreshment concession operations in other theatres, not only failed to operate the Albemarle Theatre responsibly pursuant to the contract, but affirmatively, intentionally and wilfully set out in conjunction with other defendants to destroy the value and utility of the Albemarle Theatre henceforth as a theatre. Such allegations state a valid cause of action in tort against the contracting parties.

Although the principle of liability for tort by one party to a contract to another party thereto is more frequently applied in cases of public carriers, innkeepers and confidential relationships, it is by no means limited thereto. (Cortes v. Baltimore [175]*175Insular Line, 287 U. S. 367, 372; Greco v. Kresge Co., 277 N. Y. 26, 30; Boyce v. Greeley Sq. Hotel Co., 228 N. Y. 106, 110-111; Gillespie v. Brooklyn Hgts. R.R. Co., 178 N. Y. 347, 352; Rich v. New York Cent. & Hudson Riv. R.R. Co., 87 N. Y. 382, 393 et seq.; Trans Caribbean Airways v. Lockheed Aircraft Serv.-Int., 14 A D 2d 749; Prosser, Torts, [3d ed.], pp. 634-643; 86 C.J.S., Torts, §§ 2 and 3; and, see, Thornton, The Elastic Concept of Tort and Contract as Applied by the Courts of New York, 1948, 14 Brooklyn L. Rev. 196; and cf. Stella Flour & Feed Corp. v. National City Bank of N. Y., 285 App. Div. 182, affd. 308 N. Y. 1023.)

The difference between actions in tort and for breach of contract is expressed by Prosser (supra, p. 634) as follows: “ The fundamental difference between tort and contract lies in the nature of the interests protected. Tort actions are created to protect the interest in freedom from various kinds of harm. The duties of conduct which give rise to them are imposed by the law, and are based primarily upon social policy, and not necessarily upon the will or intention of the parties * * * Contract actions are created to protect the interest in having promises performed. Contract obligations are imposed because of conduct of the parties manifesting consent, and are owed only to the specific individuals named in the contract. Even as to these individuals, the damages recoverable for a breach of the contract duty are limited to those reasonably within the contemplation of the defendant when the contract was made, while in a tort action a much broader measure of damages is applied.

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Bluebook (online)
27 A.D.2d 172, 277 N.Y.S.2d 505, 1967 N.Y. App. Div. LEXIS 4741, Counsel Stack Legal Research, https://law.counselstack.com/opinion/albemarle-theatre-inc-v-bayberry-realty-corp-nyappdiv-1967.