197 A.D. 277 | N.Y. App. Div. | 1921
Lead Opinion
The primary controverted question of fact is whether the game “ Over the Top ” is the same as the “ Kentucky Derby ”
The serious question of law is upon the liability of defendant Reichenthaler to damages for inducing the Kentucky Derby Company, Inc., to break its contract with plaintiff. The question seems to be answered in the negative in New York Phonograph Co. v. Davega (127 App. Div. 222). To the same effect seem to be Ashley v. Dixon (48 N. Y. 430), Daly v. Cornwell (34 App. Div. 27) and Laskey Feature Play Co., Inc., v. Fox V. Co. (93 Misc. Rep. 364). These cases hold that a third party who induces one to break a contract is not liable to the other party unless it is done by fraud or fraudulent representations.
Later cases, however, have apparently modified this doctrine, so that, as the law is in its present condition of development, the moral obligation to abstain from interference with a contract between others, referred to by Judge Earl in Ashley v. Dixon (supra) is now a legal obligation, and neither active, as distinguished from constructive, fraud nor fraudulent misrepresentation, is any longer essential to the cause of action.
In Standard Fashion Co. v. Siegel-Cooper Co. (30 App. Div. 564) the point is slightly touched upon with the assertion of the liability of a third party for inducing the breach of a contract, but not in a reasoned opinion. The case arose on demurrer and was affirmed in 157 New York, 60. Murphy v. Christian Press Assn. Pub. Co. (38 App. Div. 426), sometimes cited on this point, involves a trespass on property (i. e., a copyright), and, therefore, I do not consider it an authority. However, a direct authority seems to be found in New York
In Lamb v. Cheney & Son (227 N. Y. 418), which went up on demurrer to the sufficiency of the complaint alleging that the defendant “ maliciously ” induced an employee to break his contract with plaintiff, the court upheld the complaint, saying: “ In actions of this character the word should be given a liberal meaning. The act is malicious when the thing done is with the knowledge of plaintiff’s rights and with the intent to interfere therewith. In a legal sense it meatos a wrongful act, done intentionally, without just cause or excuse. * * * It does not mean actual malice or ill-will, but consists in the intentional doing of a wrongful act without legal justification.”
The finding of fact in the case, before us is that the defendant, “ in wilful violation of the terms and conditions of the said agreement, and wilfully intending to violate same, and wilfully and maliciously intending to interfere with and injure the rights of the plaintiff under said agreement and renewal thereof, negotiated with the Kentucky Derby Co., Inc.” Under the authority of Lamb v. Cheney & Son (supra), the act of the defendant in this case was properly found to be • malicious, for the defendant knew about the contract rights of the plaintiff, and the change from horses to soldiers was done with
It will be noted that the two cases last cited involved contracts of employment. I am unable to imagine any sufficient reason why the same rule does not apply to contracts of a different nature. Such was the decision in New York Bank Note Co. v. Hamilton B. N. Co. (supra), and such is the opinion of Mr. Justice Scott in the First Department in De Jong v. Behrman Co. (148 App. Div. 37).
The action is in tort for maliciously inducing the Kentucky Derby Company, Inc., to break its contract with the plaintiff. The judgment rightly referred it to a referee to compute damages instead of profits. Profits could be recovered only if defendant Reichenthaler was using plaintiff’s property. Such is the basis of awarding profits for the infringement of a patent, over which subject State courts have no jurisdiction. (Continental Store Service Co. v. Clark, 100 N. Y. 365; Lamb v. Cheney & Son, supra.) In the “ Kentucky Derby ” game the plaintiff has no property rights used by the defendant, which this court can consider. The plaintiff’s right is simply in the contract with the Kentucky Derby Company and his sole cause of action is in tort for damages for inducing a breach of such contract. As an action at law would not afford an adequate remedy, because the breach is a continuing one, equity has jurisdiction to proceed by injunction to prevent the continuing breach in the future and, incidentally, to award damages for the past.
The judgment is too broad. It should enjoin defendant Reichenthaler only and should not extend to like or similar games nor to the use thereof other than on the Bowery,- Coney Island.
The 10th finding of fact must be disapproved, and in place thereof this court makes a finding in the words of the provision of the contract in question.
The judgment and findings should be modified in accordance with this opinion, and the judgment as modified affirmed, without costs.
Mills, Rich and Jaycox, JJ., concur; Putnam, J., reads for reversal.
Dissenting Opinion
(dissenting) :
Interference with contract rights first became actionable when the relations of master and servant were involved. Long before Lumley v. Gye (2 E. & B. 216) New York courts recognized a remedy for harboring servants against one knowing of their relation. (Seidmore v. Smith, 13 Johns. 322 [1816].) If only such means or inducements as a better offer are used, with no fraud or misrepresentation, one may induce another to break off an existing contract. (Ashley v. Dixon, 48 N. Y. 430; Roseneau v. Empire Circuit Co., 131 App. Div. 429, 434.)
Posner Co. v. Jackson (223 N. Y. 325) and Lamb v. Cheney & Son (227 id. 418), relied on in the prevailing opinion, are based on remedies of employers. They come-far short of extending such rights to sue to general contracts, such as sales with exclusive covenants.
New York Bank Note Co. v. Hamilton B. N. Co. (180 N. Y. 280) was a peculiar case. The fraud in that suit was not a mere attribute of a breach of contract. The fraudulent scheme was engineered by a former secretary of the plaintiff, who carried confidential information to the Hamilton Company, and by his negotiations the press was obtained, so that an injunction was there based on substantial grounds.
Furthermore, in the case at bar there was not the identical device, but one wherein the background and scenery of the two games are “ entirely dissimilar,” as the court has found. If the law here is to follow the Massachusetts decision that there is no difference between enticing a servant, and inducing the breach of any other contract (Beekman v. Marsters, 195 Mass. 205), this judgment can be affirmed; but I am not prepared to go to that length.
Interlocutory judgment and findings modified in accordance with opinion by Blackmar, P. J., and the judgment as modified affirmed, without costs. Settle, order on notice before the presiding justice.