Source: https://casetext.com/case/kozlowsky-v-westminster-nat-bank
Timestamp: 2019-11-17 23:45:15
Document Index: 762674554

Matched Legal Cases: ['§ 24', '§ 22', '§ 709', '§ 451', '§ 452', '§ 24']

Kozlowsky v. Westminster Nat. Bank, 6 Cal.App.3d 593 | Casetext
Kozlowsky v. Westminster Nat. Bank
6 Cal.App.3d 593 (Cal. Ct. App. 1970)
Kozlowskyv.Westminster Nat. Bank
Court of Appeal of California, Second District, Division FourApr 15, 1970
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Docket No. 34087.
Appeal from Superior Court of Los Angeles County, Clinton Rodda, Temporary Judge.
Brock Rykoff and Richard L. Rykoff for Plaintiff and Appellant.
Wenke, Marx, Kemble Burge, Gary L. Taylor, John E. Sisson and John E. Sisson, Jr., for Defendants and Respondents.
This is an action for damages allegedly sustained by plaintiff as a result of his discharge as president of defendant Westminster National Bank. Other defendants include Commercial National Bank, into which Westminster merged subsequent to the acts complained of, and two individuals, Ronald Caspers and Harry Klassman. The superior court sustained general demurrers to the fifth amended complaint without leave to amend, and dismissed the action. Plaintiff is appealing from that order of dismissal.
Other parties defendant were dismissed when their demurrers to the fourth amended complaint were sustained without leave. No appeal was taken from that order.
The Bank's defense to this cause of action is based upon a statute applicable only to national banks. (1) Although the complaint shows that the defendant has a name using the word "National," a name which may lawfully be used only by a banking association chartered under federal law (see 12 U.S.C. § 22; 18 U.S.C. § 709), the complaint alleges that the defendant Bank "is a California corporation." (2) To avoid any dispute over a matter which could not be the subject of any bona fide controversy, this court, prior to oral argument, notified the parties as follows: "The parties are hereby notified that the court proposes to take judicial notice of the certificate of authority issued by the United States Comptroller of the Currency to Westminster National Bank (see Evid. Code, §§ 451, subd. (b), 452, subd. (b)) and of the fact of nonexistence of any California corporation authorized to do a banking business under that name (see Evid. Code, § 452, subd. (g)).
This provision that the board of directors may dismiss officers "at pleasure," unlike some verbally similar statutes, has been construed as overriding any contract to employ for a fixed term. (3) By virtue of this statute the board may dismiss an officer without liability for breach of the agreement to employ. ( Cox v. First Nat. Bank (1935) 10 Cal.App.2d 302, 305 [ 52 P.2d 524]; see In re Paramount Publix Corp. (2d Cir. 1937) 90 F.2d 441, 443 [111 A.L.R. 889].)
(4) The second count alleges in substance these additional facts: In August 1966 defendants Klassman and Caspers represented to plaintiff that Klassman had acquired the controlling interest in the Bank by purchasing the stock theretofore owned by Caspers.
Defendants argue that the alleged misrepresentation was of no consequence because plaintiff's employment was terminable at any time regardless of whether Klassman or Caspers controlled the voting stock. This argument entirely ignores the significance of the representation upon which plaintiff relied. To him it was not a matter of indifference who controlled the corporation. A person contemplating the presidency of a bank may anticipate that he can enjoy a long and harmonious relationship with a particular group of stockholders, but not with some other group. Plaintiff was willing to take the risk of leaving his former position and accepting the presidency of a bank controlled by the Klassman group, who had offered him the position. Instead, plaintiff found himself under the control of a man who had never wanted him. Plaintiff alleges that the representation that Klassman had already acquired control was the material fact that induced him to change his position. He is entitled to an opportunity to prove it at a trial.
(5) Unjustifiable interference with contractual relations is an actionable tort. This is so even though the relationship is terminable at will, for "the fact that a contract is `at the will of the parties, respectively does not make it one at the will of others.'" ( Speegle v. Board of Fire Underwriters (1946) 29 Cal.2d 34, 39 [ 172 P.2d 867].) Thus the fact that the Bank was privileged to discharge plaintiff at any time does not necessarily privilege a third party unjustifiably to induce the termination. "The tort of interference with an advantageous relationship, or with a contract, does not, however, disintegrate because it relates to a contract not written or an advantageous relation not articulated into a contract. The nature of the tort does not vary with the legal strength, or enforceability, of the relation disrupted. The actionable wrong lies in the inducement to break the contract or to sever the relationship, not in the kind of contract or relationship so disrupted, whether it is written or oral, enforceable or not enforceable." ( Zimmerman v. Bank of America (1961) 191 Cal.App.2d 55, 57 [ 12 Cal.Rptr. 319].)
The remaining question to be determined is whether the alleged interference by Caspers was privileged by reason of his relationship to the Bank. The pleading alleges that Caspers owned and controlled a majority of the stock and thereby controlled the actions of defendant Bank. In addition, we note that an earlier pleading, the fourth amended complaint, alleges that Caspers was one of the directors of the Bank. (6) If that is a fact which militates in Caspers' favor we must consider it because of the rule that a plaintiff may not improve his pleading by simply omitting, without explanation, the previously pleaded facts which render the pleading vulnerable. (See Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 836 [ 69 Cal.Rptr. 321, 442 P.2d 377].) (7) The law recognizes that interference by a person having a financial interest in a matter must be evaluated differently from interference by a stranger. Section 769 of the Restatement of Torts states: "One who has a financial interest in the business of another is privileged purposely to cause him not to enter into or continue a relation with a third person in that business if the actor
In Collins v. Vickter Manor, Inc. (1957) 47 Cal.2d 875 [ 306 P.2d 783] the complaint alleged that a corporation had breached a contract and that the defendants Engle and Vickter were two of the three officers, directors and "beneficial owners" of the corporation (which had not issued any stock) who had induced the breach. The Supreme Court said (at p. 883): "Plaintiffs have alleged the existence of a valid contract and an intentional unjustified interference with it by the individual defendants which caused defendant corporation to breach such contract to plaintiffs' damage. Whether or not Engle and Vickter were privileged to cause the corporation to discontinue its relations with plaintiffs, in the belief that such a course of action was in the best interests of the corporation, is a matter of defense, to be decided by a resolution of the factual issues presumptively involved. Their right, if any, to such privilege, does not affirmatively appear on the face of the complaint."
The Collins case differs from the case at bench in that we do not have here a breach by the corporation. But that distinction is not decisive in determining whether the complaint states a cause of action. (8) As the Speegle and Zimmerman cases, supra, make clear, the tort is unjustified interference, whether a contract was breached or not. In either case the existence of privilege will depend upon other circumstances not disclosed on the face of the complaint.
Defendants have relied on what may conveniently be called the "manager's privilege" as justifying the action of Caspers, citing Marin v. Jacuzzi (1964) 224 Cal.App.2d 549 [ 36 Cal.Rptr. 880]. In that case the plaintiff alleged that he had been discharged maliciously by Jacuzzi, who was the general manager of the employer corporation. The appellate court held the complaint did not state a cause of action against Jacuzzi because (a) by reason of his confidential relationship as general manager, he was absolutely privileged, and (b) his act was no more than the act of the corporation. To the same effect see Imperial Ice Co. v. Rossier (1941) 18 Cal.2d 33, 38 [ 112 P.2d 631]; Mallard v. Boring (1960) 182 Cal.App.2d 390, 393 [ 6 Cal.Rptr. 171]; Lawless v. Brotherhood of Painters (1956) 143 Cal.App.2d 474, 478 [ 300 P.2d 159].
That line of cases is not applicable to the facts alleged in the case at bench. (9, 10) There is no allegation that Caspers is the general manager, or that he was otherwise authorized to act on behalf of the Bank in discharging its president. The federal statute ( 12 U.S.C. § 24, supra) empowers the board of directors, not the stockholders or an individual director, to dismiss an officer. We recognize that a majority stockholder has an important interest in the bank, justifying the expression of his views to the directors in matters affecting the bank's well being and his own as a stockholder. But the board of directors has responsibilities to persons other than the holder of the majority voting power. We cannot say, as a matter of law, that, by virtue of Caspers' position as majority stockholder and director, his interference with the business relationships of the Bank would be, under all conceivable circumstances, privileged.
In the case at bench the complaint does not allege any of the circumstances surrounding Caspers' action except to say that he acted "wantonly, maliciously and without justification." Such an allegation imports that defendant was not acting for the protection of his legitimate interests as a shareholder. (See Imperial Ice Co. v. Rossier (1941) 18 Cal.2d 33, 36 [ 112 P.2d 631].) Under the authorities reviewed above, we must conclude that the complaint states a cause of action, and that the question of defendant's privilege, as a stockholder, to seek plaintiff's discharge is a matter of defense.