In Posner Co. v. Jackson (223 N.Y. 325) an employee, having made an express contract to perform specific, unique and extraordinary services for a fixed period, was induced to break it by a rival manufacturer.Summary of this case from Exchange Bakery Restaurant, Inc., v. Rifkin
Argued March 8, 1918
Decided April 23, 1918
Edmond E. Wise for appellant.
Julius Henry Cohen and Theodore B. Richter for respondents.
The sufficiency of the complaint is challenged. In considering this appeal we must take its allegations as true. The plaintiff's right to recover thereon, if at all depends,
1. Upon its right to the employee's services pursuant to the express contract for a definite period of time.
2. The defendants' knowledge of the contract and of the same being valuable, important and essential to the plaintiff in maintaining its business as the defendants' competitor.
3. The defendants' willful and malicious intent and purpose to injure the plaintiff by depriving it of such employee's services as provided in the contract.
The employee contracted to "Devote the whole of her time, attention and energy to the performance of her said duties," and that she would not "until the expiration of such contract, or any extended term thereof, either directly or indirectly, engage in or become associated in the business of manufacturing or selling any kind of ladies' garments, apparel or other similar articles, either as principal, agent, or employee."
The employee's failure to perform her contract so far as appears was inexcusable. She is liable at law for the damages occasioned by her failure to perform her contract. As the services to be performed by her under the contract were special, unique and extraordinary, if the remedy at law is inadequate an action could have been sustained in equity to restrain her from the violation of the negative covenants to which she became bound in connection with her employment. ( McCall Co. v. Wright, 198 N.Y. 143; Hitchman Coal Coke Co. v. Mitchell, 245 U.S. 229.)
The faithful performance of the covenants by the employee was of vital importance to the employer. It is apparent from the allegations of the complaint that if the contract is not performed serious injury to the plaintiff must necessarily result therefrom. When the defendants induced the employee to break her contract with the plaintiff "It was well known to them that the plaintiff had been organized" by the employee and "that she was one of the principal persons engaged in its management, that she had loaned to its enterprise her name, and she was then a director and president thereof, and in the employ of the plaintiff, and that she was a party to a written contract of employment for her exclusive services for a period of years to come."
In persuading the employee to break the contract with the plaintiff the defendant Jackson acted for himself and for the defendant corporation. He intended "to injure the plaintiff in its business," and entice such employee from the plaintiff and persuade her to break her contract with the plaintiff for the purpose of "depriving it of her services and of securing such services for a competitor and of thereby injuring this (plaintiff) corporation."
It is alleged that in pursuance of a wrongful, corrupt and malicious purpose the defendants induced the employee to abandon and break her aforesaid contract and in violation of the same to enter into the employ of the defendant E.A. Jackson, Inc., "a competing business."
Such contract as that described is a property right. An interference with such a property right by which it is lost to an employer is a wrong in morals and when without justification or excuse may be an actionable tort for which damages can be recovered against the wrongdoer.
If a person knowingly and intentionally interfere with the express contract rights of an employer with his employee and the purpose and intent of such interference is to injure such employer and it does result in his injury, an action will be sustained to recover damages therefor. ( Bossert v. Dhuy, 221 N.Y. 342; National Protective Association v. Cumming, 170 N.Y. 315; Warschauser v. Brooklyn Furniture Co., 159 App. Div. 81; Lumley v. Gye, 2 El. Bl. 216; Quinn v. Leathem, 1901 A.C. 495; 27 Eng. Ruling Cases, 66 and note; 1 British Ruling Cases, 197 and note; Angle v. Chic., St. P., M. O.R. Co., 151 U.S. 1, 13; Dr. Miles Medical Co. v. Park Sons Co., 220 U.S. 373; Hitchman Coal Coke Co. v. Mitchell, 245 U.S. 229, 252; Eagle Glass Mfg. Co. v. Rowe, 245 U.S. 275; Lewis v. Bloede, 202 Fed. Rep. 7, 15; Walker v. Cronin, 107 Mass. 555; Moran v. Dunphy, 177 Mass. 485; Globe Rutgers Fire Ins. Co. v. Fireman's Fund Ins. Co., 97 Miss. 148; Thacker Coal Coke Co. v. Burke, 59 W. Va. 253; Doremus v. Hennessy, 176 Ill. 608; Gore v. Condon, 87 Md. 368; Bixby v. Dunlap, 56 N.H. 456; Martens v. Reilly, 109 Wis. 464; Rice v. Manley, 66 N.Y. 82; Aldridge v. Stuyvesant, 1 Hall, 210; Johnson Harvester Co. v. Meinhardt, 9 Abb. [N.C.] 393; Brennan v. United Hatters, 73 N.J.L. 729; Flaccus v. Smith, 199 Penn. St. 128.)
The right of recovery is not dependent upon statute. ( Walker v. Cronin, supra; Hitchman Coal Coke Co. v. Mitchell, supra.)
In the case of Ashley v. Dixon ( 48 N.Y. 430), on which the respondent in part relies, the decision was in fact based upon a failure of evidence to establish the plaintiff's contention, as is stated by the court in the first two paragraphs of the opinion. The further discussion of law was quite unnecessary to the decision. The case is also to be distinguished from the case under consideration in that it does not include the element of bad faith and willful intention to injure the plaintiff, So in the case of De Jong v. Behrman Co. ( 148 App. Div. 37) there was no specific allegation of purpose and intent to injure the plaintiff.
It is neither necessary nor desirable in this case to discuss the civil liability of a person who interferes with the contract rights of another except as they are alleged in the complaint in this action. Such liability is specially dependent upon the facts found in each case and we expressly restrict our opinion to the facts upon which it is based.
The judgment of the Appellate Division should be reversed and that of Special Term affirmed, with costs in this court and in the Appellate Division.
HISCOCK, Ch. J., COLLIN, CUDDEBACK, HOGAN and CRANE, JJ., concur; McLAUGHLIN, J., not sitting.