Summary
holding filing of false affidavits as materialman's liens which resulted in corporation's bankruptcy and owner's loss of salary constituted injury to property right with a four-year statute of limitations
Summary of this case from Kapordelis v. Gainesville Surgery Center; L.P.Opinion
41309.
ARGUED MAY 3, 1965.
DECIDED OCTOBER 22, 1965. REHEARING DENIED NOVEMBER 24, 1965.
Action for damages. Hall Superior Court. Before Judge Smith.
Palmour Palmour, J. Ernest Palmour, Jr., for plaintiff in error.
Whelchel, Dunlap Gignilliat, James A. Dunlap, contra.
1. One may be directly injured by a wilful and malicious act nominally directed at another. Where it is alleged that the defendants, seeking both to collect a debt owing to them and to collect money not owing as well as to procure a favorable contract for future business, knowingly filed false affidavits claiming that a corporation bearing plaintiff's name, of which he was president, and held sole ownership and control, was indebted in sums grossly in excess of the true amount, and filed the same as a materialman's lien against numerous properties which the plaintiff's corporation was improving but on which the defendants knew that no material purchased from them had been used, and the result of these acts was to force plaintiff's corporation into bankruptcy and to cause him to suffer financial injury other than the decrease in value of his corporate stock, a cause of action is set out for at least some of the relief sought.
2. It is unnecessary to decide whether the petition sets out a cause of action in the technical sense for malicious use of civil process since a cause of action for a wilful and malicious tort is otherwise alleged.
ARGUED MAY 3, 1965 — DECIDED OCTOBER 22, 1965 — REHEARING DENIED NOVEMBER 24, 1965.
Dale's petition alleges that he is a graduate electrical engineer with 12 years experience in the field; that he was president and owner of all stock in Dalco, Inc., a corporation the name of which was a shortening of "Dale Company," a fact widely known among contractors in the counties where he did business who equated the financial condition of Dalco, Inc. with that of Dale; and that the defendant City Plumbing Heating Supply Company and its co-defendant agents wilfully, maliciously, and without probable cause destroyed his earning capacity and standing in the electrical engineering and contracting business together with loss of salary and profits. At a time when Dalco, Inc. was indebted to the defendants in the sum of $6,324.45 for materials used solely on a job referred to as the Pine Tree Plant, the defendants demanded that plaintiff and the corporation pay them approximately $42,000 and sign a long-term contract for purchase of materials from them in default of which they "would file materialman's lien on every project or job upon which Dalco, Inc. was working" and "would file liens on all of plaintiff's and Dalco, Inc.'s jobs regardless of whether or not such liens were legal and would put plaintiff and Dalco, Inc. out of business." On plaintiff's refusal to accede to the demand, the defendants caused false affidavits to be executed by Teaver, the corporate vice-president, which were wilfully, maliciously, and unlawfully filed as material-man's liens against Pine Tree Plant and Dalco, Inc. for approximately twice the amount owing by Dalco, Inc., and against five other owners and Dalco, Inc. on properties as to which the defendants knew that no indebtedness existed. Numerous persons who knew that plaintiff owned all the stock in and was in complete control of Dalco, Inc. learned of these liens and attributed financial weakness, instability, and irresponsibility to the plaintiff as well to to the corporation. By reason of these acts Dalco, Inc. was forced into bankruptcy, and the plaintiff suffered a loss of salary and diminution of future earning capacity. All of the lien proceedings (except one against Pillsbury Co. on which foreclosure proceedings are pending) have terminated favorably to the plaintiff.
General demurrers were sustained by the trial court and the plaintiff excepts.
1. This court held in Short v. McKinney, 111 Ga. App. 557 ( 142 S.E.2d 398) that a corporate stockholder may not, without joining the corporation as a party plaintiff or defendant, sue to recover the value of his shares of stock in the corporation because some act of the defendant has damaged the corporation and thereby reduced the value of the stock. This is not that kind of suit. The plaintiff here alleged a direct, wilful and malicious injury to himself by way of loss of earnings because of his refusal, individually and as the alter ego of a corporation bearing his name and under his complete ownership and control, to pay a corporate debt which was not owing and to sign a purchase contract obligating the corporation and the plaintiff to the defendants for a long period of time in the future. For the injury to himself he may bring a direct action. See Bromley v. Bromley, 106 Ga. App. 606 ( 127 S.E.2d 836).
2. Count 1 of this petition was apparently attempted to be founded on the tort of malicious abuse of civil process, and count 2 on libel. The action was filed over a year but less than two years from the alleged illegal misconduct, and count 2 was obviously barred by the statute of limitation. Was count 1 likewise barred? The answer depends on whether the action involves an injury to a property right or only an injury to the reputation. It is loosely drawn, but, "Where the averments of a petition are so loosely and uncertainly made as to render it difficult to determine the nature of the cause of action relied upon by the plaintiff, and where the facts alleged therein are such as to be proper and adequate to support one form of action, but inadequate, although appropriate, to another form of action, and where plaintiff's petition is ambiguous to the extent that the plaintiff's intention is not clearly manifest as to which form of action is relied upon, but there is no appropriate demurrer interposed, it should not be held that no cause of action is stated." McCullough v. Atlantic Refining Co., 50 Ga. App. 237, 238 ( 177 S.E. 601). In that case as in this one, there was a demurrer on the ground that the action, being for an injury to the reputation, was barred after a year, but the court held that there was in addition a cause of action set out for malicious abuse of process. It is here contended that the filing of the false affidavit of claim of lien by the defendant cannot amount to malicious use or abuse of process because such a lien is not a "process" in its technical sense. But see in this connection Defnall v. Schoen, 73 Ga. App. 25 ( 35 S.E.2d 564). It does have an equally inhibitory effect upon disposition of the property on which the lien is filed, and might therefore be considered analogous in its effect, but this we need not decide. As stated in the first division of this opinion, the cause of action is an injury to the plaintiff and not exclusively to the corporation, and the question remains as to the nature of the infringement of the plaintiff's legal rights. It is alleged that the business public with whom the plaintiff dealt knew him to be the sole owner and in sole control of the corporation which bore his name, and considered him and the corporation as one in a business sense. So, too, did the defendant, who told the plaintiff that the plaintiff should pay certain money and make a certain contract in the corporate name, and that, if he refused to do so, both the plaintiff and the corporation would be put out of business. It then filed false affidavits which did have the effect of putting both the plaintiff and the corporation out of business.
For a comparable situation, see Judge Jordan's opinion in Southland Publishing Co. v. Sewell, 111 Ga. App. 803, 809 ( 143 S.E.2d 428).
"Malicious injury to the business of another will give a right of action to the injured party." Southern R. Co. v. Chambers, 126 Ga. 404 (1) ( 55 S.E. 37, 7 LRA (NS) 926). In American Oil Co. v. Towler, 56 Ga. App. 866 ( 194 S.E. 223), it was held that where one maliciously and wrongfully, with intent to injure another person's business, prevented others from dealing with him by blacklisting him, and his business was thereby injured, a right of action accrued. See to the same effect Rivers v. Dixie Broadcasting Corp., 88 Ga. App. 131 ( 76 S.E.2d 229); Gunnels v. Atlantic Bar Assn., 191 Ga. 366 ( 12 S.E.2d 602, 132 ALR 1165); Studdard v. Evans, 108 Ga. App. 819 ( 135 S.E.2d 60). In such a case it is not necessary to show that the wrongdoer has procured the breach of any specific contract, but only that he has purposely interfered with the plaintiff's reasonable expectancies of trade with third persons. Restatement of the Law, Torts, Vol. IV, p. 50, § 766 (b). The action at common law was a trespass on the case. The right is a property right protected by the law. Kamm v. Flink, 113 NJL 582 ( 175 A 62, 99 ALR 1, 6, and see Anno., p. 12 et seq.). No one has the right to disturb another's business for the sake of compelling him to do an act which in his judgment is contrary to his best interests. Carlson v. Carpenter Contractor's Assn., 305 Ill. 331 ( 137 N.E. 222, 27 ALR 625). "Our decisions are to the effect that the right to conduct one's business without the wrongful interference of others is a valuable property right which will be protected, if necessary, by injunctive process. Bowen v. Morris, 219 Ala. 689, 123 S 222. And the enjoyment of the good name and good will of a business is likewise a valuable property right subject to like protection. Bankers' Fire Marine Ins. Co. v. Sloss, 229 Ala. 26, 155 S 371. One's employment, trade or calling is likewise a property right and the wrongful interference therewith is an actionable wrong. U.S. F. c. Co. v. Millonas, 206 Ala. 147, 89 S 732, 29 ALR 520." Carter v. Knapp Motor Co., 243 Ala. 600, 603 ( 11 So.2d 383, 144 ALR 1177). To the same effect is N.A.A.C.P. v. Overstreet, 221 Ga. 16 ( 142 S.E.2d 816), where a cause of action was held stated for injunction and damages against an organization which unlawfully picketed the plaintiff's premises with the intention of damaging his business. "A person's business is property in the pursuit of which he is entitled to protection from tortious interference by a third person, who, in interfering therewith, is not acting in the exercise of some right." N.A.A.C.P. v. Overstreet, supra. The defendant here had no legal right to interfere with the plaintiff's business by filing liens against property on which nothing was owing to the defendant with the intention of coercing the plaintiff into paying him money which he did not owe. Since this is a property right, the plaintiff had four years in which to bring his action. Code § 3-1003; Muse v. Connell, 62 Ga. App. 296 ( 8 S.E.2d 100). This is true although elements appropriate to a libel action are involved, where the business interest is the thing legally threatened, and the publication of the words is merely an instrument and incident of this result. See Carter v. Knapp Motor Co., supra, p. 604, citing Nann v. Raimist, 255 N.Y. 307 ( 174 N.E. 690, 694, 73 ALR 669). See also McGurk v. Cronenwett, 199 Mass. 457 ( 85 N.E. 576), where an action was brought against one for wrongfully inducing an employer to discharge his employee, and the demurrer pointed out certain deficiencies in the petition if construed to be an action for libel. The court held that the action was not intended as an action for slander or libel, and the technical rules relating to that form of action would not be extended to an action for damages for loss of employment.
A petition must be judged by both its allegations of fact and its specific prayers. Some of the damages sought here are subject to demurrer as being appropriate only to an action for injury to the reputation; others, including the plaintiff's loss of salary income constitute property damage rather than damage resulting from injury to the person. Nor will any statement in either brief be considered to create a cause of action where none exists or to destroy one in fact set out.
The trial court erred in sustaining the general demurrer to count 1.
Judgment reversed. Felton, C. J., Nichols, P. J., and Pannell, J., concur. Hall, J., concurs specially. Bell, P. J., Frankum, Jordan, and Eberhardt, JJ., dissent.
ON MOTION FOR REHEARING.
The point is made that although the appellant alleges he suffered "loss of salary of $15,000 per year he would have received from November 30, 1962, through July 31, 1964" no contract between himself and the corporation to this effect is set out. This being a tort action, it was unnecessary for the plaintiff to plead the contract or attach it as an exhibit to his petition. Carter v. Spiegel, May Stern Co., 45 Ga. App. 754 (3) ( 166 S.E. 34). It is recognized that the corporation and the plaintiff are two separate entities, and that the plaintiff has no right of action for devaluation of the corporation stock or for the invasion of any other right belonging to the corporation as such, since the latter would be the proper party plaintiff in that event even though this plaintiff is the sole owner. However, a petition will not be dismissed on general demurrer if any part of it is good in substance. Hines v. Wilson, 164 Ga. 888 (1) ( 139 S.E. 802). This petition alleges that the defendant demanded that both Dalco, Inc. and the plaintiff pay defendant $42,473.01, and that both Dalco, Inc. and plaintiff sign the contract for purchase of materials, and that neither he nor Dalco, Inc. was indebted to the defendants except for the $6,324.45 worth of material used by Dalco, Inc. on the Pine Tree Plant. It is therefore clear that the petition alleges a tort against the plaintiff as an individual and damages accruing to him as an individual distinct from any right of action belonging to Dalco, Inc. as a corporation.
Motion for rehearing denied.
I concur in the judgment reversing the sustaining of the general demurrer to count 1 for the reason that the petition alleges injury and damages to a property right of the plaintiff in paragraph 9 (b) ("Loss of salary of $15,000.00 per year plaintiff would have received from November 30, 1962 through July 31, 1964, $25,000.00.") While a person is not liable for the unintentional invasion of the interest of another in his contractual or employment relationships with third persons ( Byrd v. English, 117 Ga. 191 ( 43 S.E. 419, 64 LRA 94); Morse v. Piedmont Hotel Co., 110 Ga. App. 509 ( 139 S.E.2d 133)), where the defendant acts for the purpose of causing the very harm of which the plaintiff complains, a cause of action is set out as against a general demurrer. Studdard v. Evans, 108 Ga. App. 819 ( 135 S.E.2d 60).
It is my opinion that the only damages recoverable by the plaintiff alleged in the petition are based on an action in tort for damage to the plaintiff's reputation. Under Code Ann. § 3-1004 injuries to a person's reputation must be brought within one year after the right of action accrues. This petition shows on its face that the acts of the defendants allegedly damaging the plaintiff were done over the period from August 18, 1962, to September 5, 1962, and that the petition was filed on August 17, 1964. The statute of limitation was raised by demurrer to the petition and I think it was properly sustained by the trial court.
Paragraph 4 of the plaintiff's petition alleges that as a result of the actions of the defendants "plaintiff's reputation and standing in the profession of trade and electrical engineering and electrical contracting was destroyed." The petition further alleges that because of the acts of the defendants "plaintiff cannot obtain credit, procure a contractor's bond, or secure employment"; that his earning capacity has been destroyed, and that the wrongful acts of the defendants in filing said liens "attributed financial weakness, instability and irresponsibility to the plaintiff" and that "many persons, the exact number of which plaintiff cannot state, considered and understood said purported liens to indicate plaintiff to be personally, financially weak, unstable and irresponsible," and that plaintiff has suffered "by damage to his feelings and humiliation."
Such allegations clearly subject the petition to the construction that the alleged acts of the defendants have damaged plaintiff's reputation in his profession to the extent that he has been deprived of earning a livelihood in his profession as a result thereof. In the case of Sicklesmith v. Citizens Bank of Hapeville, 101 Ga. App. 533 ( 114 S.E.2d 319), this court construed allegations of injury to the plaintiff's credit and financial standing in the community to be an action in tort for damage to the plaintiff's reputation, subjecting it to the one-year statute of limitation set forth in Code Ann. § 3-1004. The court further held in that case that the defense of the statute of limitation, being apparent on the face of the petition, was properly raised by demurrer, citing Hollingsworth v. Redwine, 73 Ga. App. 397 ( 36 S.E.2d 869).
The majority opinion says that the petition is loosely drawn, and then makes a unique attempt to breathe life into it by calling it an action for damage to plaintiff's property, thus giving plaintiff four years in which to bring the action. For this strained construction, the opinion cites McCullough v. Atlantic Refining Co., 50 Ga. App. 237 ( 177 S.E. 601), which deals with a situation where, as Judge Sutton said, "it is difficult to determine from the plaintiff's petition the particular form of action on which he relies" and concludes that "where plaintiff's petition is ambiguous to the extent that the plaintiff's intention is not clearly manifest as to which form of action is relied upon, but there is no appropriate demurrer interposed, it should not be held that no cause of action is stated." Such is not the situation here facing the court for the petition is not ambiguous but clearly demands the conclusion that it is an action for damage to the plaintiff's reputation, appropriate demurrers were filed thereto, and the plaintiff's intention is clearly manifest as to which form of action he relies upon. This could not be more clearly shown than by the plaintiff's own statement on page 1 of his brief that he is "seeking in count 1 to recover damages in the amount of $309,367.67 by reason of injury to plaintiff's reputation resulting from the acts of the defendant alleged in the petition." (Emphasis supplied). Count 2 of the petition is not involved in this appeal since no exception was taken to the order sustaining the demurrers to that count.
The case of Studdard v. Evans, 108 Ga. App. 819 ( 135 S.E.2d 60) relied upon by Judge Hall in his special concurrence is not analogous to the facts here since that case involved a property right arising out of a contract. The allegation of loss of salary for a period of time (itself remote and speculative) is not asserted as a property right but merely as one of the results of the alleged damage to the plaintiff's reputation and supports the previous allegation that plaintiff had been unable "to secure employment" as one of the results of the defendant's actions. The cause of action was still one for injury to the plaintiff's reputation and the alleged loss of salary merely an item of damages flowing from the cause of action. Under Judge Hall's theory, any action based on injury to the plaintiff's reputation would be converted into an action for damage to plaintiff's property when the usual items of damage resulting therefrom, such as loss of earning capacity, inability to obtain credit, loss of employment, etc., are set forth to support the cause of action.
It being clear that plaintiff's petition seeks damages for injury to his reputation, and it appearing on the face of the petition that it was filed more than one year after the right of action accrued, the trial court did not err in sustaining the demurrers and dismissing the petition.
I am authorized to state that Bell, P. J., Frankum and Eberhardt, JJ., concur in this dissent.