Lexington Homes, Inc. v. W. E. Tyson Builders, Inc.

331 S.E.2d 318, 75 N.C. App. 404, 1985 N.C. App. LEXIS 3665
CourtCourt of Appeals of North Carolina
DecidedJuly 2, 1985
Docket8412SC230
StatusPublished
Cited by12 cases

This text of 331 S.E.2d 318 (Lexington Homes, Inc. v. W. E. Tyson Builders, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lexington Homes, Inc. v. W. E. Tyson Builders, Inc., 331 S.E.2d 318, 75 N.C. App. 404, 1985 N.C. App. LEXIS 3665 (N.C. Ct. App. 1985).

Opinions

PHILLIPS, Judge.

The only question raised by this appeal is whether the evidence presented at trial was sufficient to support the claim of W. E. Tyson Builders, Inc. that Lexington Homes, Inc. and Oscar L. Norris tortiously interfered with its contract with First Atlantic Corporation and The Northwestern Bank. We are of the opinion that the evidence was sufficient to support the claim made and that the trial court erred in directing a verdict against the defendant and third party plaintiff, W. E. Tyson Builders, Inc.

It has long been the law in this State that one who tortiously interferes with the contract rights of another is liable for the [409]*409damage caused thereby. Jones v. Stanly, 76 N.C. 355 (1877). When viewed favorably to the defendant, as the law requires, the evidence presented tends to show the following: In furtherance of its plan to build houses on the Golf Acres lots and sell them, defendant had entered into a valid construction loan agreement with First Atlantic Corporation and The Northwestern Bank, incident to which defendant had received a draft for $114,210 and deposited it in its account. Lexington Homes and its President, Oscar L. Norris, knew that defendant had the construction loan; that the $114,210 draft obtained under the contract had been deposited in defendant’s bank account; that checks had been written and mailed thereon to other suppliers in the approximate amount of $42,000; and that defendant’s business would be disrupted if payment on the draft was stopped. Lexington Homes and Norris nevertheless got First Atlantic to stop payment on the draft by falsely representing to it that defendant was not going to pay plaintiff and the other suppliers from the loan funds; and they did this without justification for the malicious purpose of coercing or intimidating defendant into immediately paying in full plaintiffs bill, which was several hundred dollars larger than it should have been. The unjustified interference by the appellees caused defendant to stop payment on the several checks it had written against the $114,210 deposit, and caused some checkholders to file liens against the property; delayed the completion and sale of the houses for several months; and increased defendant’s expenses in completing the houses in the approximate amount of $60,000 to $80,000.

While the rule laid down in 86 C.J.S. Torts § 44 that an action will lie against one who wrongfully interferes with the contract rights of another had been recognized by our Supreme Court in numerous cases, including Bryant v. Barber, 237 N.C. 480, 75 S.E. 2d 410 (1953), Coleman v. Whisnant, 225 N.C. 494, 35 S.E. 2d 647 (1945), and Jones v. Stanly, supra, so far as our research discloses, the proof required for such an action had not been itemized until Childress v. Abeles, 240 N.C. 667, 84 S.E. 2d 176 (1954). In Childress the Court stated that in these cases it is necessary to show: (1) That a valid contract existed between the plaintiff and a third person, conferring upon the plaintiff some contractual right against the third person; (2) that the outsider had knowledge of the plaintiff s contract with the third person; (3) [410]*410that the outsider intentionally induced the third person not to perform his contract with the plaintiff; (4) that in so doing the outsider acted without justification; (5) that the outsider’s act caused the plaintiff actual damages. Id. at 674, 84 S.E. 2d at 181, 182. It is obvious, we think, that the requisites stated, except that the tort-feasor be an “outsider,” are met by the evidence recorded in this case, but what an “outsider” is was not explained by the Chil-dress Court, though it cited with approval Jones v. Stanly, supra, a case which certainly involved a “non-outsider,” if there be such a thing. In that case a judgment against the President and Superintendent of the Atlantic & North Carolina Railroad for wrongfully causing the railroad that he managed not to perform its contract to transport a large number of crossties for plaintiff was reinstated, without the Court even intimating that the defendant’s status as an insider excused or justified the tort committed. In a later case involving another defendant that had a legitimate interest in and was closely connected with the contract allegedly interfered with the Court clarified this ambiguity in the Childress decision by declaring that a “defendant’s status as an outsider or a non-outsider is pertinent only to the question of justification for his action,” Smith v. Ford Motor Co., 289 N.C. 71, 88, 221 S.E. 2d 282, 292 (1976), and held that Ford Motor Company had no right to interfere with its dealer’s management contract with plaintiff for any purpose other than promoting the efficient operation of the dealership. Since the evidence in this case tends to show that plaintiff and Norris acted unjustifiably for the improper purpose of obtaining payment of a sum defendant did not owe, plaintiffs status as a creditor entitled to collect the actual amount that defendant owed it is immaterial to the case, as explained later.

The appellees contend here, as they did in obtaining the dismissal in the court , below, that the evidence presented was insufficient to establish the following three things defendant was obliged to prove; that First Atlantic breached its contract with defendant; that appellees were not justified in having payment on the $114,210 draft stopped; and that defendant was actually damaged as a consequence of the interference. The grounds relied upon for these contentions and the arguments made in support of them are largely irrelevant to the thrust and tenor of defendant’s case against them and the recorded evidence in support of it. [411]*411First of all defendant does not have to prove that appellees caused First Atlantic to breach its contract with defendant, because its claim is only that appellees wrongfully interfered with defendant’s rights under the contract; and clear, direct evidence that appellees did wrongfully interfere with its contract rights was presented. According to the evidence, the appellees caused First Atlantic to stop payment on the draft that defendant lawfully had in its bank account and had written checks against. That defendant had a right to possess the draft and use it free from the wrongful interference of others is clearly inferable from the facts that it had a loan agreement with First Atlantic, a lending rather than an eleemosynary institution, and that First Atlantic issued and delivered the draft to defendant. That defendant did not show, as appellees contend, that the underlying loan agreement required First Atlantic to issue the draft at that time and in that amount, or that the draft might have been issued later or in a different way without recourse on defendant’s part, is beside the point. As Justice Barnhill so cogently pointed out in the concurring opinion to Bruton v. Smith, 225 N.C. 584, 36 S.E. 2d 9 (1945), a party to a contract has the right to reap the benefits of it, such as they are, free from the wrongful interference of others; and since First Atlantic as a contracting party issued the draft to defendant at that time and in that manner defendant had a right to use and enjoy that benefit of its contract free from the wrongful interference of the appellees or anyone else.

The appellees’ argument as to justification, equally wide of the mark, starts and stops with their legitimate interest in obtaining early payment of the sum owed from the funds received by defendant.

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Lexington Homes, Inc. v. W. E. Tyson Builders, Inc.
331 S.E.2d 318 (Court of Appeals of North Carolina, 1985)

Cite This Page — Counsel Stack

Bluebook (online)
331 S.E.2d 318, 75 N.C. App. 404, 1985 N.C. App. LEXIS 3665, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lexington-homes-inc-v-w-e-tyson-builders-inc-ncctapp-1985.