Case Name: Jimmie H. PACK, Plaintiff-Appellant, v. Erbon W. WISE et al., Defendants-Appellees
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1963-07-15
Citations: 155 So. 2d 909
Docket Number: No. 913
Parties: Jimmie H. PACK, Plaintiff-Appellant, v. Erbon W. WISE et al., Defendants-Appellees.
Judges: Before TATE, SAVOY, and CULPEP-PER, JJ.
Reporter: Southern Reporter, Second Series
Volume: 155
Pages: 909–922

Head Matter:
Jimmie H. PACK, Plaintiff-Appellant, v. Erbon W. WISE et al., Defendants-Appellees.
No. 913.
Court of Appeal of Louisiana. Third Circuit.
July 15, 1963.
Rehearing Denied Sept. 5, 1963.
Dissenting Opinion Sept. 12, 1963.
Watson & Watson, by Jack C. Watson, Lake Charles, for plaintiff-appellant.
John Makar, Natchitoches, for defendants-appellees.
Before TATE, SAVOY, and CULPEP-PER, JJ.

Opinion:
TATE, Judge.
We are here concerned with the liability in tort, if any, of a creditor who attempted to secure the payment of a disputed debt by contacting the employer of the alleged debt- or. The employee, who was subsequently discharged, sues the creditor to recover damages. He appeals from the dismissal of his suit by the trial court.
1. Facts.
The plaintiff Pack was an employee of a bank. Early in 1961 he became interested in securing a source of additional income by publishing a shopper news guide. Through a mutual friend, he contacted the defendant Wise, who was president and principal stockholder of Southwest Builder, Inc., a printing firm.
Pack secured an estimate of the printing costs at a first interview with Wise, made further inquiries at a second interview, and at a third interview introduced Wise to one Mannix, who was to serve as active manager of the enterprise. This was the extent of the plaintiff Pack's contacts with Wise prior to and during the period of the publication of the shoppers' guide.
In the meantime, Pack had become associated in the enterprise with Carroll Fogleman, an attorney who was a mutual friend of both Pack and the defendant Wise. Immediately before the first issue of the publication, however, the plaintiff Pack was informed'by a superior in the bank that the bank did not approve of its employees engaging in active outside business activities, such as soliciting advertisements for the shoppers' guide.
Fogleman and Pack then employed Man-nix to actively manage the publishing enterprise, and Fogleman informed Wise that he himself would see that any debts incurred by the business were paid. This all occurred prior to or at the time of the publication of the first issue of the enterprise in March of 1961. The enterprise was incorporated immediately after the second issue in April of 1961, with eighty per cent of the stock being issued to Fogleman and his wife (half of which was held by Fogle-man for the plaintiff Pack — 1. e., Pack owned a forty per cent interest in the corporation).
The enterprise immediately ran into financial difficulties. On June 5th, after the fifth issue, the corporation was reorganized with additional stockholders receiving a portion of the stock. As a result, the plaintiff Pack's equity was reduced to twenty per cent. Fogleman further informed the defendant Wise that he himself would no longer be personally responsible for the debts of the corporation.
The reorganized management of the corporation published approximately four more issues before it finally ceased operations, with the last number issued approximately on August 1st.
A printing debt of $920 was due Southwest Builder, Inc., the firm managed by Wise, after the shoppers' guide concluded its operations. All of this debt was due for the last five issues of the publication by the corporation, in which Pack owned only a twenty per cent equity. The evidence clearly and without contradiction shows that Pack had disassociated himself entirely from active participation in the enterprise following publication of the first number on March 28, 1961; although it likewise indicates that Wise was not specifically informed that Pack had disassociated himself from personal responsibility for the enterprise. (On the other hand, Wise did know of the changes of active management following his first interview with Pack prior to the first issue.)
Immediately after the publishing operations of the shoppers' guide terminated, the plaintiff Pack was promoted to branch bank manager by his employer.
Wise, who was the effective owner and the president of two publishing corporations doing a large volume of business with the parent bank, wrote its president on September 5, 1961, to the effect that he, Wise, had been unsuccessful in collecting a past due printing account in the amount of $920 from Pack and concluding: "We dislike having to bring this to your attention and do so only because of the unsatisfactory response we get from Mr. Pack. We will greatly appreciate any assistance you may care to give us in securing payment so that we will not have to proceed further against Mr. Pack."
When the letter was received the following day, Pack was called into the office of the bank's executive vice-president. Pack explained that the debt was not his personally but was instead that of a corporation in which he was only a minority stockholder.
Accordingly, the president of the bank wrote Wise a letter on September 7th informing the latter-of Pack's contention and stating that Pack contended he did not "have anything to do with creating the indebtedness." (Italics ours.) The letter concluded: "If Pack misrepresented the facts, I would appreciate hearing from you further on the matter; otherwise, no action will be taken against Jimmy by this institution."
Wise thereupon called the bank president and informed him of his version of the transaction, which placed heavy emphasis upon the undoubtedly truthful fact that initially (before publication of the first number) Pack had been the moving spirit in the publishing venture. Consequently, Pack was called in again that day by the bank's executive vice-president and was told by that official that he had heard enough of the matter and that he wanted it to be settled.
Thereupon, Pack had his attorney write a letter on September 18, 1961, requesting that Wise cease from communicating with Pack's employer concerning the matter. The letter concluded with the warning that "if such communications continue, then necessary legal proceedings will be instituted and you will be held financially responsible for all damages sustained
Upon receipt of this letter, Wise immediately brought it to the bank president. Pack was immediately sent for and questioned by the bank's president in a face-to-face confrontation between Pack and Wise, with the bank's executive vice-president present during at least part of this interview. Pack was immediately fired as a result of this conference.
2. The question of Pack's liability to Southwest Builder, Inc
The present suit by the plaintiff Pack concerns his alleged right to recover damages against the defendant Wise arising out of the latter's wrongful coercion in attempting to collect the disputed debt. As we shortly demonstrate, it is actually not decisive of the present suit whether or not Pack would have been held liable for the corporate debt, if this were a suit to recover for the debt. (No suit has ever been brought to recover from Pack individually for this debt.)
In urging that he is not individually liable, the plaintiff Pack, of course, relies upon the well-settled principle that a corporate official agent is ordinarily not liable individually for corporate debts (Air Waves, Inc. v. Link, La.App. 1 Cir., 89 So.2d 422; Orleans Shoring Company v. DeVillentroy, La.App.Orl., 92 So.2d 274; La Parie v. Totora, La.App.Orl., 62 So.2d 658), nor is a stockholder (LSA-R.S. 12:-19B). On the other hand, the defendant Wise claims that Pack is nevertheless liable to him for this corporate debt because credit had initially been extended to Pack individually, and the creditor had never been formally notified of Pack's withdrawal from the management of the enterprise and of the intended substitution of the corporation for him as the debtor for the printing of the subsequent issues. Hayes v. Claterbaugh, La.App.Orl., 140 So.2d 737; Jahncke Service v. Heaslip, La.App.Orl., 76 So.2d 463.
Whether Wise was entitled to rely on Pack's continued personal responsibility for the enterprise might be considered a very close question, since he was informed of Fogleman's personal guarantee when the first number. was published, and • in view of the information informally gained by him during publication activities, of the subsequent changes of management following his initial contact with Pack. We do not, however, feel obliged to pass -upon this question, for reasons to be stated below.
Our principal reason in stating so fully the facts concerning the disputed debt is to show clearly both that Wise was without malice and was not unreasonable in claiming that Pack was liable individually for this debt of the publishing firm of which he was only a stockholder, and also to show that Pack was not mendacious, unreasonable, or frivolous in claiming to his bank superiors, when questioned by them, that he was not personally liable for what was undoubtedly the debt of a corporation with which his only connection was to own twenty per cent of the stock at the time of the creation of the debt of $920 which Wise was attempting to collect.
3. Tort liability for Wise's actions.
In a comprehensive opinion, our trial brother first held that Pack was indeed individually liable for the corporate debt, as Wise contended all along. Having so held, the trial court opinion further held that Wise's actions in telling the bank of Pack's just debt and in attempting to secure the bank's assistance in collecting it from Pack, were not unreasonable, especially since the bank had an interest in the matter, because a suit against one of its branch managers to some extent could reflect also upon the institution.
We think our trial brother fell into error in assuming that, even if the debt were justly owed, the creditor had a legal right to coerce the employee into paying it by pressure brought upon him through the employer, at least to the extent here demonstrated.
Whether or not a debt is justly due, the law recognizes a right in a debtor to be free from unreasonable coercion and also to be free from unreasonable violations of his right to privacy in his personal affairs, and the debtor is entitled to general and special damages in tort for violations of his rights in these regards. Tuyes v. Chambers, 144 La. 723, 81 So. 265; Quina v. Roberts, La.App.Orl., 16 So.2d 558.
See also: Annotation, "Right of privacy", 138 A.L.R. 22 (Section 11c "Attempts to collect debt"), supplemented at 168 A.L.R. 466 (Section 11c), and 14 A.L.R.2nd 750 (Section 19) ; Annotation, "Right of action for damages because of methods used in attempting to collect debt", 55 A.L.R. 971, supplemented at 106 A.L.R. 1453; Annotation, "Right of debtor to recover for mental pain and anguish caused by methods pursued by creditor ", 91 A. L.R. 1495, supplementing earlier annotations to this effect; Prosser on Torts (2d Ed., 1955), Sections 38 and 97; 77 C.J.S. Right of Privacy § 2, p. 400; 41 Am.Jur. Privacy, Section 30, p. 947.
In Quina v. Roberts, cited above, an employee was held to be entitled to recover damages from a creditor which had written to the debtor's employer requesting the latter's assistance in collecting the balance due on a small debt. The court noted that an examination of the letter and enclosure sent to the employer was "sufficient to warrant the conclusion that it was issued with the intention of invoking his [the employer's] influence and control over the plaintiff as a means of forcing the latter, through fear of discharge or otherwise, to liquidate the small balance of his indebtedness."
In holding the creditor liable, Judge (now Justice) McCaleb, the organ of the court, stated: "It is manifest to us that the issuance of the letter and enclosure in this case,.for the obvious purpose and design of forcing a payment by plaintiff, constituted a tort under our law and that plaintiff is entitled to redress even though he was unable to prove special damage", 16 So.2d 560. The organ of the court also commented that "it made no difference whether the money was legally due or not", 16 So.2d 561.
The opinion notes that the classification of the conduct in question as an actionable tort is based upon at least two grounds. These grounds, which are not necessarily either interdependent or exclusive of one another, consist (a) of an unreasonable invasion of another's right to privacy (see Restatement of Torts, Section 867), and (b) of the intentional causing of unreasonable emotional disturbance of another (see Restatement, Section 46, as amended in 1947), such as by coercive tactics "tantamount to an attempt on the part of the creditor to extort money from the plaintiff [debtor]", Quina v. Roberts, cited above, at 16 So.2d 561.
Aside from communicating directly with a debtor's employer, Louisiana law clearly recognizes that coercive tactics to collect a debt by themselves constitute a tort, Tuyes v. Chambers, 144 La. 723, 81 So. 265, as well as that an unreasonable invasion of a person's right to privacy is actionable, even if non-malicious, Hamilton v. Lumbermen's Mut. Cas. Co., La.App. 1 Cir., 82 So.2d 61, certiorari denied. (The right of privacy has been variously defined as "the right to be let alone" and as part of "the general right of immunity of the person", "the right to an 'inviolate personality' ", a violation of which right is "a direct invasion of the legal right of the individual", 82 So.2d 63.)
Recently, where a creditor telephoned members of a debtor's family in an effort to coerce payment, the Supreme Court of Alabama held that such conduct constituted an actionable invasion of the debtor's right to privacy. Norris v. Moskin Stores, Inc., 272 Ala. 174, 132 So.2d 321. The court reviewed the jurisprudence relating to the question fairly comprehensively, pointing out for example several decisions of other jurisdictions which had held that the mere contacting of a debtor's employer does not necessarily constitute an actionable tort.
The court held that a rule of reason should be adopted to balance the interest of the creditor in collecting the debt against the right of privacy of a debtor as to his own affairs. This rule the Alabama court summarized as follows, 132 So.2d 323, " 'a creditor has a right to take reasonable action to pursue his debtor and persuade payment, although the steps taken' may result to a certain degree in the invasion of the debtor's right of privacy,' but that the debtor has a cause of action for injurious conduct on the part of the creditor which exceeds the bounds of reasonableness."
Thus, assuming that the simple action of contacting a debtor's employer is not actionable in Louisiana as coercive in itself (but see Quina v. Roberts), it might well be argued that the defendant Wise's actions in writing the initial letter and in following it up with an explanatory telephone call in response to the bank's reply to his initial letter did not by themselves constitute conduct on his part unreasonably violating the plaintiff's right to privacy. However, we think that, in cumulation with his past conduct, Wise plainly committed an actionable tort when, in addition to the two prior contacts with the plaintiff's employer, he further brought to the bank's attention the letter to him of Sepember 18th from the plaintiff's lawyer.
This letter expressly and formally informed him of the plaintiff's defense to any claim against him individually for the corporate debt, and it expressly informed him that the plaintiff did not desire any more intrusions by Wise into the relationship between the plaintiff and his employer. At the time he brought this letter to the plaintiff's employer, Wise was thus plainly put on notice that the plaintiff Pack felt he had a valid defense at law to Wise's claim that Pack was individually liable for the corporate debt. Instead of filing suit to secure a judicial adjudication of the validity of this defense, the creditor instead brought to the attention of Pack's employer the letter from Pack's attorney requesting the creditor to desist from further communications with Pack's employer about the matter.
In doing so, we think Wise's conduct, in cumulation with his past efforts to secure the bank's assistance in collecting from an employee a debt he disputed as due, exceeded what might have been within reasonable bounds in communicating with the employer about its employee's private affairs. Wise's action in this regard constituted either an invitation to the bank to take disciplinary action against its employee for his securing the services of an attorney to prevent further repeated and continued harassment concerning the disputed debt through the creditor's contacting the employer; or else Wise's action may have constituted further action by Wise to coerce the payment of a debt which the employee felt he did not owe. In either event, Wise's conduct constituted an unreasonable violation of the plaintiff's right to privacy or a tortious attempt to coerce Pack into paying the disputed debt — in short, the commission by Wise of a tort against Pack.
Before proceeding to a discussion of the other legal issues, we should note that the record clearly shows that the defendant Wise is a very high type of individual who was not motivated by any malicious motive in the matter, but rather by the righteous and firm conviction that Pack was liable for the debt and should pay it. On the other hand, although his motive may not have been to coerce Pack into paying a debt Pack did not owe, nevertheless, as the record shows, Wise was a valued and influential customer of the bank, as a consequence of which his actions in repeatedly contacting this employer undoubtedly had a coercive effect. In fact, the plaintiff's superior informed Pack as a result of Wise's first two contacts that this superior wanted the debt to be settled and did not want to be bothered about it again, which (even if unintended as such) was tantamount to an instraction to see that the debt was settled whether or not Pack was liable for it.
4. Liability individually of Wise and/or his corporations
The debt of $920 was due to The Southwest Buillder, Inc., a corporation of which Wise was president and owned most of the stock. The evidence clearly indicates that Wise's actions to collect this debt were done on behalf of this corporation.
However, the present suit was not brought against this corporation. Instead, the plaintiff sued both Wise individually and also Wise Publications, Inc., another publishing corporation managed and mostly owned by Wise. This latter corporation was impleaded because Wise had used its stationery (rather than that of Southwest Builder, Inc.) in his initial letter to the plaintiff's employer.
The defendant's able counsel contends that Wise is not individually liable for a tort committed by him in the course of his duties as a corporate officer. However, it is settled that the aggrieved party has a cause of action in such instances both against the corporate officer individually who committed the tort, as well as against the corporation which is responsible for his acts. Wisemore v. First National Life Ins. Co., 190 La. 1011, 183 So. 247; Adams v. Fidelity & Cas. Co., La.App. 1 Cir., 107 So.2d 496; 19 C.J.S. Corporations § 845 p. 271. Wise is therefore personally liable for the tort herein committed.
As to the liability of Wise Publications, Inc., the other corporation made defendant, the evidence clearly shows that Wise's actions concerning the debt were not in the course and scope or within his ostensible authority as an officer of such corporation, which was not at all concerned with the debt of $920 (which was owed instead to Southwest Builder, Inc., another corporation managed by Wise). Although the use of the corporate letterhead by a corporate officer may raise the presumption that the officer is acting on behalf of the corporation (see 3 C.J.S. Agency § 324e, p. 288), we are cited to no authority to the effect that a corporation can be held liable on the naked ground that its corporate officer inadvertently or improperly used the corporate stationery. We therefore affirm the action of the trial court in dismissing the suit insofar as Wise Publications, Inc., is concerned.
5. Damages.
As stated in Quina v. Roberts, cited above, in allowing recovery for a similar tort, "Article 2315 of our Code is broad in its scope and contemplates redress-to all who suffer injury as a consequence of a commission of an offense or quasi-offense. This includes recovery for mental1 pain and anguish for which compensatory damages will be awarded
In the present instance, prior to the transaction in question, the plaintiff Pack had an unblemished record as an outstanding and promising young man. Five years after he was employed by his bank, he had been promoted to branch bank manager. The evidence reflects that he was active in civic affairs and highly regarded in his community.
Although the defendant contends that Pack was fired solely because in his initial interviews with his bank superiors he had misrepresented the extent of his participation in the publishing enterprise, we think the evidence clearly reflects that his bank superiors also fired him because, instead of following their instructions to settle the debt claimed by Mr. Wise on a satisfactory-basis, he had acted contrary to their instructions and had obtained legal representation. See Tr. 113D, Tr. 31 (Interrogatory; 21), Tr. 37 (Interrogatory 17).
For instance, a few days after Pack was-, discharged, the bank's executive vice-president prepared a memorandum concerning the incident for the bank's records. This memorandum of October 5, 1961, concludes : " Mr. Pack's services for our bank were discontinued primarily on the grounds, that instead of doing as requested and settling the matter on what we would term a satisfactory basis, he had used poor judgment in acting contrary to our wishes and advice, and obtained legal representation."' Tr. 113D. In our opinion, this official's, testimony at the trial some sixteen months, later does not substantially differ from his. recollection of the facts as set forth in his. memorandum prepared a few days after the incident.
(As to the alleged misrepresentation, we think it is manifest that the apparent variance between Wise's and Pack's versions of the debt resulted from Wise's emphasis on the earlier pre-publication negotiations in which Pack had played an active part, while Pack's version related solely to his non-participation in the corporate affairs as a minority stockholder at the time the ‡920 debt was created for the printing of the last few issues.)
After losing his job, Pack was unable to secure another for approximately six weeks. As a result of being- fired, he suffered at least a temporary loss of self-esteem and of general reputation. Fortunately, starting with lower pay, within a relatively short time he was able to enjoy earnings equivalent to those which he enjoyed at the time of his discharge.
Nevertheless, he is entitled to an 'award for the tortious invasion of his privacy and the improper coercion, causing him the loss of his job and some damage (mostly temporary) to his reputation, as well as for the mental pain and suffering and anxiety resulting from his being discharged because of the defendant's tort and being without work for about six weeks, unable to support himself and his wife and four children.
Considering that the plaintiff lost approximately two thousand dollars in earnings as the result of the defendant's tort, we think that an award of five thousand dollars in all, for both special and general damages, will be fair and proper under all the circumstances reflected by the record. See, e. g., Deshotel v. Thistlethwaite, 240 La. 12, 121 So.2d 222; Hamilton v. Lumbermen's Mut. Cas. Co., La.App. 1 Cir., 82 So.2d 61.
Decree.
For the foregoing reasons, the judgment of the trial court is affirmed insofar as it dismissed the plaintiff's suit against Wise Publications, Inc.; it is reversed and set aside insofar as it dismissed the plaintiff's claim against the defendant Erbon W. Wise individually; and judgment is now rendered in favor of Jimmie H. Pack and against Erbon W. Wise in the amount of Five Thousand Dollars ($5,000), together with legal interest from the date of judicial demand until paid. The defendant Wise is taxed with all costs of these proceedings and of this appeal.
Affirmed in part; reversed in part.
SAVOY, J., dissents being of the opinion that the judgment of the district judge is correct.
On Application for Rehearing
En Banc. Rehearing denied.