Royal Realty Co. v. Levin
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Royal Realty Co. v. Levin
Opinion of the Court
Action for damages for fraud in inducing breach of contract and in the alternative for breach of contract. Plaintiff appeals from an order dismissing the action.
Plaintiff, a real estate company, made the following allegations in its complaint. On September 8, 1952, it negotiated an agreement with Anna and Ann Lynam for the purchase of their home in St. Paul. On that date the plaintiff’s agent, Samuel Lechtman, met with the Lynams at their home together with the defendant Albert D. Levin, one of the Lynams’ attorneys. An oral agreement on the terms of the purchase was reached, after which Albert Levin, by telephone, called the defendant Abe I. Levin, also an attorney for the Lynams, and explained the agreement to him. Lechtman talked to Abe Levin, and the latter told Lechtman that he approved the contract but wanted to execute the earnest money contract the following morn
Plaintiff alleged as its first cause of action that tbe representation made by tbe defendant Abe Levin that tbe transaction would be closed tbe morning of September 4, 1952, was false and was made with tbe intent to deceive and defraud plaintiff and that said representation was made as a part of a conspiracy on tbe part of tbe defendants to defraud tbe plaintiff. For its second cause of action plaintiff alleged that Abe Levin and Albert Levin failed to perform their agreement to complete tbe contract. Defendants’ motion to dismiss was granted on tbe ground that tbe complaint failed to state a claim upon which relief could be granted against tbe defendants and that there was no genuine issue as to any material fact.
Tbe only question before us is whether tbe complaint sets forth a legally sufficient claim for relief. It is immaterial to our consideration here whether or not tbe plaintiff can prove tbe facts alleged. Rule 9.02 of tbe Rules of Civil Procedure, which embodies tbe previously existing law in this state,
It is clear that the misrepresentation relied upon by plaintiff, namely, that the transaction would be completed the next morning, was not the proximate cause of the plaintiff’s damages. Nor does the complaint allege any other misrepresentations which might proximately have caused the damages claimed to have been suffered. The complaint does not state a claim for relief based on fraud and deceit.
Throughout their briefs the parties have referred to plaintiff’s asserted claim for relief as one for fraud and deceit in inducing breach of contract. While fraud is frequently involved in actions for interference with contract or inducing breach of contract,
Recovery may be had for inducing breach of contract by establishing (1) the existence of a contract; (2) the alleged wrongdoer’s knowledge of the contract; (3) his intentional procurement of its breach; (4) without justification; and (5) damages resulting therefrom.
“* * * It is not morally wrong to make or keep an oral agreement that falls within the statute of frauds, nor is there any statute which forbids entering such a contract.”
In Borchardt v. Kulick, 234 Minn. 308, 48 N. W. (2d) 318, we thoroughly reviewed our decisions, many of which were conflicting, concerning the effect of noncompliance with the statute of frauds. Although that case did not involve a contract to sell real estate, we concluded (234 Minn. 320, 48 N. W. [2d] 325):
“* * * the statute of frauds does not render a contract absolutely void in the sense that no contract ever comes into existence, * * *.”
We also held that the defense of the statute of frauds was personal to the party to be charged and his privies. The reasoning of the Borchardt and Oxborough cases is applicable here. We are of the opinion, in accordance with what we consider to be the better reasoned view, that the defendants in the present case cannot avail themselves of the statute of frauds so as to avoid liability.
The complaint clearly alleges the defendants had knowledge of the existence of the contract but does not specifically allege that the defendants persuaded or otherwise procured the Lynams to withdraw from the contract. It is, of course, essential that some acts of the defendants were the proximate cause of the breach.
Similarly, the complaint sufficiently alleges that the breach of contract was induced without justification.
The final element of an action for inducing breach of contract, namely, damages resulting from the interference, is also clearly alleged in the complaint. Consequently, we conclude that while the complaint does not state a claim for relief based on fraud, it does sufficiently allege a claim for inducing breach of contract.
As its second cause of action the plaintiff claims that the defendants Abe Levin and Albert Levin entered into a separate oral contract with plaintiff’s agent whereby plaintiff promised to forbear further action that evening in consideration for the Levins’ promise
Reversed.
This was held to be an appealable order in Royal Realty Co. v. Levin, 243 Minn. 30, 66 N. W. (2d) 5.
Parrish v. Peoples, 214 Minn. 589, 9 N. W. (2d) 225; 8 Dunnell, Dig. (3 ed.) § 3836.
Dear v. Remington, 176 Minn. 559, 223 N. W. 925; Prosser, Torts, § 90.
‘Interference with contract” is somewhat broader than “inducing breach of contract” in that the former includes “any act injuring or destroying persons or property which retards, makes more difficult, or prevents performance, or makes performance of a contract of less value to the promisee.” Johnson v. Gustafson, 201 Minn. 629, 633, 277 N. W. 252, 254, quoting from Annotation, 84 A. L. R. 43, 52.
Extensive annotations on procuring breach of contract may be found in 84 A. L. R. 43 and 26 A. L. R. (2d) 1227.
E.g., Sorenson v. Chevrolet Motor Co. 171 Minn. 260, 214 N. W. 754, 84 A. L. R. 35; Faunce v. Searles, 122 Minn. 343, 142 N. W. 816; Imperial Ice Co. v. Rossier, 18 Cal. (2d) 33, 112 P. (2d) 631; Wade v. Culp, 107 Ind. App. 503, 23 N. E. (2d) 615; Ross v. Wright, 286 Mass. 269, 190 N. E. 514, 98 A. L. R. 468; Elk Street Market Corp. v. Rothenberg, 233 App. Div. 243, 251 N. Y. S. 259. But see the dissent of Mr. Justice Stone in Sorenson v. Chevrolet Motor Co. supra, to the effect that if the interest to be served is legitimate the means used to effectuate the breach must be unlawful in themselves in order for the interference to be actionable.
See, Roberge v. Cambridge Co-op. Creamery Co. 243 Minn. 230, 232, 67 N. W. (2d) 400, 402; 2 Moore, Federal Practice (2 ed.) par. 8.13.
Sorenson v. Chevrolet Motor Co. 171 Minn. 260, 214 N. W. 754, 84 A. L. R. 35; see, Wolfson v. Northern States Management Co. 210 Minn. 504, 299 N. W. 676; Twitchell v. Nelson, 126 Minn. 423, 148 N. W. 451, 601.
E.g., Powell v. Powell, 172 Kan. 267, 239 P. (2d) 974; Cumberland Glass Mfg. Co. v. DeWitt, 120 Md. 381, 87 A. 927; Louis Schlesinger Co. v. Rice, 4 N. J. 169, 72 A. (2d) 197; Louis Kamm, Inc. v. Flink, 113 N. J. L. 582, 175 A. 62, 99 A. L. R. 1; Ringler v. Ruby, 117 Ore. 455, 244 P. 509, 46 A. L. R. 245; Bitzke v. Folger, 231 Wis. 513, 286 N. W. 36; Prosser, Torts, § 104, p. 980, note 44 and cases cited. Contra, Davidson v. Oakes,
Ringler v. Ruby, 117 Ore. 455, 460, 244 P. 509, 511, 46 A. L. R. 245, 248. Contra, Levy v. Ross, 81 N. Y. S. (2d) 472.
M. S. A. 513.05 provides: “Every contract * * * for the sale of any lands, or any interest in lands, shall be void unless the contract, or some note or memorandum thereof, expressing the consideration, is in writing and subscribed by the party by whom the * * * sale is to be made, or by his lawful agent thereunto authorized in writing; * * (Italics supplied.)
See, Rice v. Manley, 66 N. Y. 82, 87, 23 Am. R. 30, 34 (noting the distinction); Annotation, 104 A. L. R. 1420.
Sweeney v. Smith (C. C. E. D. Pa.) 167 F. 385, affirmed (3 Cir.) 171 F. 645; Prosser, Torts, § 104, p. 986.
The complaint in part alleges: “5. That the aforementioned acts by defendants, and each of them, were a conspirary with malice toward plaintiff with the intent and purpose of injuring plaintiff in its contractual relationship with the sellers in attempting to deprive it of the benefits of the agreement it had made for the purchase of said property.”
Promotion of the defendant’s legitimate interests is not sufficient. Sorenson v. Chevrolet Motor Co. 171 Minn. 260, 266, 214 N. W. 754, 756, 84 A. L. R. 35, 39. See, 12 Minn. L. Rev. 147, 168, where the author concludes that sufficient justification arises when “the defendants acted to protect an interest which the law will recognize as of greater weight than the contract itself.” See, also, Sayre, Inducing Breach of Contract, 36 Harv. L. Rev. 663; Prosser, Torts, § 104, p. 996.
Wolfson v. Northern States Management Co. 210 Minn. 504, 299 N. W. 676; Wilkinson v. Powe, 300 Mich, 275, 1 N. W. (2d) 539.
E.g., Keene Lbr. Co. v. Leventhal (1 Cir.) 165 F. (2d) 815, 822; Wilkinson v. Powe, 300 Mich. 275, 1 N. W. (2d) 539; Ross v. Wright, 286 Mass. 269, 190 N. E. 514, 98 A. L. R. 468.
Reference
- Full Case Name
- ROYAL REALTY COMPANY v. ABE I. LEVIN AND ANOTHER, INDIVIDUALLY AND AS COPARTNERS d.b.a. LEVIN & LEVIN, AND OTHERS
- Cited By
- 1 case
- Status
- Published