Wise v. Southern Pacific Co.

It is alleged that the performance of defendants’ acts “was motivated by malice and was intentional” and was for the purpose and objective of discriminating against plaintiff as a committeeman of the Brotherhood and obtaining his discharge ; and that plaintiff is entitled to and claims punitive damages against defendants in the sum of $50,000.

Defendants ’ demurrers assert that each count of the complaint fails to state facts sufficient to constitute a cause of action and is uncertain, ambiguous and unintelligible in various particulars. The court sustained the general and special demurrers of each defendant without leave to amend.

First count against defendant Southern Pacific Company.

It is settled that a railroad employee may bring and maintain a common law or, where a state so provides, statutory action for damages for his wrongful discharge from employment in breach of a collective bargaining agreement. A state court has jurisdiction to adjudicate such cases and is not barred from doing so by the Railway Labor Act. ( 45 U.S.C.A. § 151 et. seq.) However neither state nor federal courts have jurisdiction to interpret a collective bargaining agreement or to order reinstatement of an employee, exclusive jurisdiction over such matters being vested in the National Railroad Adjustment Board. (Moore v. Illinois Central R.R. Co. (1941) 312 U.S. 630 [ 61 S.Ct. 754 , 85 L.Ed. 1089 ]; Slocum v. Delaware, Lackawanna & Western R.R. Co. (1950) 339 U.S. 239 [ 70 S.Ct. 577 , 94 L.Ed. 795 ]; Roberts v. Western Pacific R.R. Co. (1951) 104 Cal.App.2d 814 , 815 [ 232 P.2d 563 ]; Roberts v. Western Pacific R.R. Co. (1951) 104 Cal.App.2d 816 , 819-820 [ 232 P.2d 560 ], cert, denied 342 U.S. 906 [ 72 S.Ct. 298 , 96 L.Ed. 678 ]; Stroman v. Atchison, T. & S.F. Ry. Co. (1958) 161 Cal.App.2d 151 , 165 [ 326 P.2d 155 ]; Russell v. Ogden Union Ry. & Depot Co. (1952) 122

It is also settled that “California law requires an employee to exhaust his administrative remedies under his employment contract before he may bring an action for damages for violation of such contract. [Citations.] ” (Stroman v. Atchison, T. & S.F. Ry. Co., supra, 161 Cal.App.2d 151 , 166.) Such requirement has been met in this case.

The general rules of pleading applicable to actions for breach of contract obtain in actions for breach of contracts of employment. (Palmer v. Harlow (1921) 52 Cal.App. 758 , 763 [ 199 P. 844 ].) The essential elements required to be pleaded therefore in an action for breach of employment contract are: (1) the contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) the resulting damage to plaintiff. (Smith v. Royal Mfg. Co. (1960) 185 Cal.App.2d 315 , 325 [ 8 Cal.Rptr. 417 ]; M. G. Chamberlain & Co. v. Simpson (1959) 173 Cal. App.2d 263 , 274 [ 343 P.2d 438 ]; 2 Witkin, Cal. Procedure, p. 1226.) A complaint in such an action will be held sufficient as against a general demurrer “if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants ... although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, ... In passing upon the sufficiency of a pleading, its allegations must be liberally construed with a view to substantial justice between the parties.” (Gressley v. Williams (1961) 193 Cal.App.2d 636 , 639 [ 14 Cal.Rptr. 496 ]; Hardy v. San Fernando Valley Chamber of Commerce (1950) 99 Cal.App.2d 572 ,577-578 [ 222 P.2d 314 ].)

It is obvious that in the case at bench the first two elements of the cause of action are adequately pleaded. As to the contract, where a written instrument is the foundation of a cause of action, it may be pleaded in haec verba by attaching a copy as an exhibit and incorporating it by proper reference. (Holly Sugar Corp. v. Johnson (1941) 18 Cal.2d 218 , 225 [ 115 P.2d 8 ]; Byrne v. Harvey (1962) 211 Cal.App.2d 92 , 103 [ 27 Cal.Rptr. 110 ].) As to performance, plaintiff may allege that he has “duly performed all the conditions on his part.” (Code Civ. Proc., § 457.) Defendant Company does not attack plaintiff’s averments relating to the fourth element of damages.

1. Civil Conspiracy.

The gist of an action charging civil conspiracy is not the conspiracy but the damages suffered. (Bowman v. Wohlke (1913) 166 Cal. 121 , 125 [ 135 P. 37 , Ann.Cas. 1915B 1011]; Brumfield v. Crocker-Anglo National Bank (1960) 185 Cal.App.2d 759 , 764 [ 8 Cal.Rptr. 591 ]; Prosser (2d ed.), Law of Torts, p. 235.) It is the long established rule that a conspiracy, in and of itself, however atrocious, does not give rise to a cause of action unless a civil wrong has been committed resulting in damage. (Herron v. Hughes (1864) 25 Cal. 555 , 560; Mox Incorporated v. Woods (1927) 202 Cal. 675 , 677 [ 262 P. 302 ]; Orloff v. Metropolitan Trust Co. (1941) 17 Cal.2d 484 , 488 [ 110 P.2d 396 ]; Agnew v. Parks (1959) 172 Cal.App.2d 756 , 762 [ 343 P.2d 118 ]; Burke v. Hibernia Bank (1960) 186 Cal.App.2d 739 , 747-748 [ 9 Cal.Rptr. 890 ].) As stated in Mox, supra, “the major significance of the conspiracy lies in the fact that it renders each participant in the wrongful act responsible as a joint tort-feasor for all damages ensuing from the wrong, irrespective of whether or not he was a direct actor and regardless of the degree of his activity.” (Pp. 677-678.) (See also California Auto Court Assn. v. Cohn (1950) 98 Cal.App.2d 145 , 149 [ 219 P.2d 511 ]; Schaefer v. Berinstein (1956) 140 Cal. App.2d 278 , 293 [ 295 P.2d 113 ]; Prosser, op. cit., pp. 234-236.) The advantage to the pleader in charging a conspiracy is to implicate all participating in the common design and thus fasten liability on him who agreed to the plan to commit the wrong as well as on him who actually carried it out. (Mox Incorporated v. Woods, supra, 202 Cal. 675 , 678; Agnew v. Parks, supra; Schaefer v. Berinstein, supra. ) The conspiracy “may be inferred from the nature of the acts done, the relations of the parties, the interests of the alleged conspirators, and other circumstances.” (Schaefer v. Berinstein, supra; James v. Herbert (1957) 149 Cal.App.2d 741 ,746-747 [ 309 P.2d 91 ].)

To state a cause of action for conspiracy, the complaint must allege (1) the formation and operation of the conspiracy, (2) the wrongful act or acts done pursuant thereto, and (3) the damage resulting from such act or acts. (Mox Incorporated v. Woods, supra; Orloff v. Metropolitan

In James, supra, the plaintiff entered into an oral agreement of joint venture with the defendants Herbert and Prescott. Plaintiff alleged that said defendants entered into a wrongful conspiracy with each other and with the defendant Roberts to exclude her from further participation in the venture and to deprive her of her interests and profits; and that pursuant to the conspiracy, defendants did so, converted to their use all the assets and destroyed the business of the venture. The demurrer of Prescott (one of the joint venturers) and Roberts (the third person) were sustained with leave to amend and, upon plaintiff declining to amend, judgment was entered on the order sustaining the demurrer. The appellate court held that the complaint stated facts sufficient to constitute a cause of action for conspiracy and reversed the judgment. It is to be noted that in James, as distinguished from California Auto, the legal issue on demurrer was raised by one of the contracting parties to the venture (Pres

In Moropoulos, supra, plaintiff sued to recover damages arising from a conspiracy between the defendants and one Karales (plaintiff’s partner) pursuant to which such persons wrongfully and fraudulently appropriated and destroyed the partnership business. However Karales was not joined as a defendant and while the court noted that he “was a joint tort-feasor with the defendants” ( 186 Cal. 679 , 687) the ease appears to involve a conspiracy to commit the tort of conversion and not to induce breach of contract. It is clear that it cannot serve as authority for the proposition that an action for conspiracy to breach a contract lies against a party to the contract.

In sum, while we have found no California ease precisely in point, we believe that California Auto and James, the latter particularly, recognize to some extent that a cause of action for conspiracy to breach a contract may lie against a contracting party.

We turn to the defendants’ authorities. May v. Santa Fe Trail Transp. Co., supra, cited by Company and Hitke, was an action against a corporation and three of its officials: in the first count for unlawful discharge of plaintiff from employment; and in the second count for a conspiracy to cause such discharge. Plaintiff alleged an oral contract terminable at will and conceded that unless a cause of action was stated in the first count, none was stated in the second. Since the contract was terminable at will, plaintiff’s discharge was not actionable and, absent a wrongful act, no action could lie against defendant employer for “conspiring” to do something it could lawfully do. May therefore does not hold that an action for conspiracy will not lie under any circumstances against such contracting party. Indeed May but echoes the broad principle applied in certain California eases cited by defendants Association and Smith, that a conspiracy is not actionable unless it results in the perpetration of an unlawful

In rejecting the contention that an action would not lie against Worrie for conspiring to breach his own contract, the court called attention to the following cases supporting such position: Canister Co. v. National Can Corp., supra, 96 P. Supp. 273; Sax v. Sommers (1951) 108 N.Y.S.2d 467 ; Allison v. American Airlines (D.C. N.D. Okla. 1953) 112 P. Supp. 37; Barler v. Stephenson (1953) 260 Ala. 151 [ 69 So.2d 251 ]; and Hein v. Chrysler Corp. (1954) 45 Wn.2d 586 [ 277 P.2d 708 ], It is also convenient to note at this point that Canister, which is included among the foregoing and is relied on by defendants in the case before us, is one of a line of New York cases holding that such a conspiracy is not actionable. (See 15 C.J.S. Conspiracy, § 13, p. 1020, 1963 Cum. Supp. and cases therein cited.)

The court in Worrie also lists the following eases as among those holding that an action for conspiracy will lie against a party to the contract: Motley, Green & Co. v. Detroit Steel & Spring Co. (C.C. S.D. N.Y. 1908) 161 P. 389 ; Hendricks v. Forshey (1917) 81 W.Va. 263 [ 94 S.E. 747 , L.R.A. 1917C 150]; Luke v. Du Pree (1924) 158 Ga. 590 [ 124 S.E. 13 ]; Sorenson v. Chevrolet Motor Co. (1927) 171 Minn. 260 [ 214 N.W. 754 , 84 A.L.R. 35 ]; Wade v. Culp (1939) 107 Ind. App. 503 [ 23 N.E.2d 615 ]; Falstaff Brewing Corp. v. Iowa Fruit & Produce Co. (8th Cir. 1940) 112 P.2d 101 ; and Charles v. Texas Co. (1942) 199 S.C. 156 [ 18 S.E.2d 719 ],

In Motley, Green & Co. v. Detroit Steel & Spring Co., supra, a complaint against two corporations alleging that they entered into a conspiracy to and did procure the breach of a contract between plaintiff and one of said defendants was held to state a good cause of action against both defend

“The acts of the Railway Steel Spring Company clearly constituted an actionable wrong, as damage resulted to the complainant company. The acts were done without justifiable cause. It is immaterial that it was invited to commit these wrongs by the other party to the contract. ... If what the Railway Steel Spring Company [third person] did was an actionable wrong, how can it be said that the same acts, done and aided by the Detroit Company [contracting party], did not constitute an actionable wrong on its part? As the two defendant companies acted in concert, and took part in the several acts constituting the wrong and in consummating it, to my mind both are liable on precisely the same grounds. When two parties unite and act in concert by agreement to commit a wrong, and it is consummated, the injured party may sue one alone, or both in one action, or each in a separate action.” (161 F. at p. 397.)

In Hendricks v. Forshey, supra, the complaint alleged that plaintiff had similar individual contracts with defendants and others to haul milk and that the defendants conspired to breach their respective contracts and to refuse to permit plaintiff to perform them. The court held that it stated a a good cause of action for tort in the nature of a conspiracy and affirmed a judgment against all defendants.

In Sorenson v. Chevrolet Motor Co., supra, the complaint alleged a conspiracy between defendants Chevrolet and Sander, a competitor of plaintiff, to breach plaintiff’s agency agreement with Chevrolet, destroy plaintiff’s business and acquire it for Sander. The court held that it stated a cause of action against both defendants stating: “If the corporation deliberately breached its contract, it subjected itself to a certain definite liability to plaintiff but that liability rests on a cause of action other than that mentioned in the complaint.” (214 N.W. at p. 755.)

In Wade v. Culp, supra, the court affirmed a judgment against defendants who conspired to procure the breach of a contract entered into by one of said defendants with plaintiff, observing that the case was similar to Sorenson v. Chevrolet Motor Co., supra, and declaring that “ [s]uch conduct on the part of the appellants resulted in a loss to the appellee and their conduct was therefore wrongful and unlawful.” (23 N.E.2d at p. 617.)

In Falstaff Brewing Corp. v. Iowa Fruit & Produce Co., supra, the court affirmed a judgment against defendant for breach of contract and for conspiracy entered into between defendant’s sales manager and a third person (apparently not joined as defendant) to breach an agency contract between plaintiff and defendant. The court rejected defendant’s claim that there was no conspiracy, stating that the arrangements necessitated joint action on the part of the conspirators and that “ [c]learly, such combined action was a conspiracy. Clearly, it was a conspiracy which contemplated an unlawful act—the breach of a contract then in force and then being performed by plaintiff.” (112 F.2d at p. 107.)

We think that the better reasoned cases hold that an action for conspiracy to induce a breach of contract will lie against a party to the contract who is included among the defendant-conspirators. Such eases, in our view, rest solidly on the principle that all who are involved in the common scheme are

Against the backdrop of California Auto and James we find the authorities from other jurisdictions above discussed particularly persuasive. To hold the contracting party along with his confederates liable in tort seems to us not only to be within the compass of the above principle but also consonant with good morals. We perceive no fatal anomaly in the circumstance that the plaintiff may, as he does here, seek relief in an independent cause of action on the contract. It happens frequently that the wrongful act at the center of the controversy may partake of the nature of both tort and contract and in such event the wronged plaintiff may sue in tort for the wrongful invasion of his rights and also sue for breach of contract. (Cf. Cason v. Glass Bottle Blowers Assn. (1951) 37 Cal.2d 134 , 142 [ 231 P.2d 6 , 21 A.L.R.2d 1387 ].) A complaint may in different counts set forth inconsistent causes of action. (Faulkner v. California Toll Bridge Authority (1953) 40 Cal.2d 317 , 328 [ 253 P.2d 659 ].)

We hold that a cause of action for conspiracy will lie against the defendant Company.

2. Corporate agents as conspirators.

Defendants assert that the defendants Hitke and Smith cannot be joined as conspirators. We think this point is well taken. Agents and employees of a corporation cannot conspire with their corporate principal or employer where they act in their official capacities on behalf of the corporation and not as individuals for their individual advantage. (Bliss v. Southern Pacific Co. (1958) 212 Ore. 634 [ 321 P.2d 324 , 328-329]; May v. Santa Fe Trail Transp. Co., supra, 189 Kan. 419 [ 370 P.2d 390 , 395].) This rule derives from the principle that ordinarily corporate agents and employees acting for and on behalf of the corporation cannot be held liable for inducing a breach of the corporation’s con

In the instant case, it is alleged in the second count that at all times mentioned defendants Hitke and Smith were “employees, agents and representatives” of their respective corporations and “were acting within the course and scope of their said employment. ...” There is no allegation that they were acting in any other capacity. There is no allegation expressly stating or from which it can be reasonably inferred that they were acting for their individual advantage. The allegation that the acts of these defendants were motivated by malice and were intentional would not impose liability. (Imperial Ice Co. v. Rossier, supra.)

We hold that the second count fails to set forth facts sufficient to constitute a cause of action against defendants Hitke and Smith.

3. Causal connection between conspiracy and discharge.

Defendants’ contention that plantiff has failed to allege a causal connection between the conspiracy and his discharge must succumb to a fair reading of the allegations of the second count already set forth by us. They allege a conspiracy for the purpose of securing plaintiff’s discharge, the performance of certain acts pursuant thereto and finally that the defendant Company “in furtherance of said agreement did on March 2, 1960, without cause, wrongfully discharge plaintiff. ...” This is a plain and clear statement that the discharge resulted from the conspiracy.

4. Failure to reallege paragraph VIII of first count.

Defendants make much of the circumstance that plaintiff failed to reallege in the second count paragraph VIII of the first count which alleged that plaintiff exhausted his administrative remedies under the union agreement. Plaintiff asserts that this was probably an inadvertence on plaintiff’s part and states that the first mention made of the point was in the briefs filed herein. Plaintiff further contends that such allegation is not vital to the second count anyhow,

We conclude that the second count states facts sufficient to constitute a cause of action against defendants Company and Association.

We therefore turn to the special demurrers to the second count. They assert that such count is uncertain, ambiguous, and unintelligible. In respect to those allegations of the first count realleged in the second count, such demurrers reassert the specifications made by the Company’s special demurrer to the first count. We have already determined that the first count is good as against the special demurrer and need not pursue this matter further.

Additionally the special demurrer of defendants Company and Hitke claims that the second count fails to allege “in what manner and in what respects” defendants conspired, brought false charges, wrongfully accused plaintiff, and deprived him of a fair hearing; in what manner the codefendants aided and abetted defendant Company; and in what manner the defendants’ acts were with malice or wrongful purpose. It is also claimed that the "[t]ime, place, and circumstance” with respect to the conspiracy are uncertain.

The special demurrer of defendants Association and Smith to a great extent repeats the specifications set forth by defendants Company and Hitke. In addition it claims that the first count as realleged in the second count fails to allege that the Association and Smith had anything to do with plaintiff’s discharge; that such repleaded count does not allege “in what manner and in what particulars” various acts were done; that the second count fails to state any “relationship, obligation, right or duty” between plaintiff and such defendants; fails to allege material facts by which such defendants conspired to bring false charges against plaintiff, to wrongfully accuse him and to deprive him of a fair hearing ; and fails to allege facts which constitute an unlawful agreement pursuant to which such demurring defendants induced certain persons to give false statements and testimony and

Since we have concluded that the second count fails to state facts sufficient to constitute a cause of action against Hitke and Smith, our inquiry on the special demurrers should be centered on the defendants Company and Association. Here our observations on the special demurrer to the first count and the authorities noted therewith are largely applicable. In the light of our discussion of the allegations pertinent to the conspiracy and under the applicable rules (see authorities cited ante), we think that the matters to which these special demurrers are directed are set forth with sufficient clarity and particularity. In our view the pleading under attack presents the essential facts with reasonable specificity to apprise defendants Company and Association of the “nature, source, and extent” of the cause of action. (Goldstein v. Healy, supra, 187 Cal. 206 , 210.) Defendant Association protests that no alleged facts show that it had anything to do with plaintiff’s discharge or that any relationship existed between it and plaintiff. As we have already pointed out, there is no requirement that such facts exist in order to make defendant Association liable. As a participant in the common design, defendant Association is responsible as a joint tortfeasor since liability is fastened on him who agreed to the plan to commit the wrong as well as on him who actually carried it out. (Mox Incorporated v. Woods, supra, 202 Cal. 675 , 678.)

In summary the first count of the complaint is good against the Southern Pacific Company, the sole defendant therein charged, and the second count is good against the defendants Southern Pacific Company and Association of American Railroads but not good against defendants Harry J. Hitke and W. A. Smith. However defendants Company and Hitke filed a joint demurrer and defendant Association and Smith filed a separate demurrer also joint as to them. A joint demurrer by two defendants must be overruled if the complaint is good against either of them. (Asevado v. Orr (1893) 100 Cal. 293 , 300 [ 34 P. 777 ]; Cameron v. City of Richmond (1919) 42 Cal.App. 262 , 263 [ 183 P. 604 ]; Greenwood v. Mooradian, supra, 137 Cal.App.2d 532 , 546; Agnew v. Cronin (1957) 148 Cal.App.2d 117 , 130 [ 306 P.2d 527 ]; 2 Chadbourn, Grossman, Van Alstyne, op. cit., § 1213, pp. 416-418; 2 Witkin, Cal. Procedure, p. 1476.)

Bray, P. J., and Molinari, J., concurred.