No. 87-58-II 
Court of Appeals of Tennessee, Middle Section 

 
July 29, 1987, Filed 


PRIOR HISTORY: 

APPEALED FROM THE CHANCERY COURT OF PUTNAM COUNTY AT COOKEVILLE, TENNESSEE. 

COUNSEL: L. MICHAEL ZINSER, DAVID M. SMYTHE, MARKE E. HUNT, KING & BALLOW, for Plaintiff-Appellee.

S. RALPH GORDON, HARRIS, LEACH, GORDON, MARTIN & JONES, for Defendant-Appellant. 

JUDGES: CANTRELL, J., TODD, P.J., M.S., KOCH, J. 

OPINIONBY: CANTRELL 

OPINION: BEN H. CANTRELL, JUDGE.

Cookeville Newspapers, Inc. sued its former circulation manager for the conversion of newspaper rack income and for interference with the contractual relations between the plaintiff and its independent distributors. The defendant defended on the ground that the plaintiff's president knew and approved of the retention of the rack income and of the use of the funds to falsify the circulation figures of the newspaper. The Chancellor found for the plaintiff on all issues.

In June of 1976 Mr. Joseph P. Albrecht was named Editor and Publisher of the Herald Citizen, a daily newspaper in Cookeville owned by the plaintiff corporation. In July of 1977 Mr. Albrecht hired the defendant Lee R. Hardin as the paper's circulation manager.

Apparently for some Years prior to the time that Mr. Albrecht was named publisher, the paper had overstated its circulation  [*2]  in order to charge higher advertising rates. Mr. Albrecht became aware of this practice soon after he became publisher. He testified that he endeavored to get the paper's circulation up to the purported level rather than change the reports or notify the proper parties that the paper's circulation had been overstated.

Mr. Hardin was made aware of the problem regarding the carrier circulation statistics. Mr. Albrecht offered him a bonus to reach the goal of building the paper's paid carrier circulation to the point where the paper could become a member of the Audit Bureau of Circulation, an independent auditing service that verifies the circulation of member newspapers.

Mr. Hardin devised an elaborate scheme to continue showing false circulation figures for the paper. Since he was in charge of the bookkeeping function of the circulation department, he reported a lower wholesale price paid by each carrier than the carrier actually paid, thus showing a larger number of papers sold for the same amount of income. He directed the pressmen to print more papers than were actually purchased by subscribers. The unuse papers were sold as scrap and the income from the scrap paper sales was used  [*3]  to pay the inflated carrier bills that resulted from the scheme. Although the paper never met its stated circulation figure, Mr. Hardin claimed and received the bonus offered by Mr. Albrecht for reaching the goal.

As circulation manager of the paper Mr. Hardin had sole control of the paper's coin operated news racks where the papers sold for fifteen cents per copy. In 1979 the company put out a Sunday edition which sold for twenty-five cents. In April of 1981 the price for the daily edition increased to twenty-five cents. In March of 1978 Mr. Hardin's wife began assisting him in collecting the money from approximately sixty newspaper racks in the Cookeville area. Mrs. Hardin received a weekly check of $ 40.00 for her services.

As early as August 1, 1979 Mr. Hardin began keeping a portion of the money collected from the newspaper racks. When the papers sold for fifteen cents he kept seven cents and paid eight cents to the newspaper. When the price increased to twenty-five cents he kept eleven cents and remitted fourteen cents to the paper. In the daily circulation reports he showed himself as a distributor. The reports indicated a division of the rack income.

The propriety of Mr.  [*4]  Hardin's action in taking part of the money from the newspaper racks is at the heart of this controversy. Mr. Hardin contends that he, his wife, and Mr. Albrecht agreed on August 1, 1979 that the income from certain racks would be divided between Mr. Hardin and the paper and that Mr. Hardin would use the money so collected in other ways to pad the circulation records of the paper. Mr. Albrecht consistently denied any such agreement. After hearing the evidence and observing the demeanor of the witnesses the chancellor decided that the agreement cited by Mr. Hardin as his authorization to split the rack revenue did not exist. The Chancellor said:

"(The) real crux of the problem and the issue that the court stated at the conclusion of the trial or during the course of the trial is was Mr. Hardin authorized to take those monies. If he was, he wasn't guilty of conversion. If he wasn't, he was guilty of conversion. The court finds by the preponderance of the evidence to the effect that he was not authorized to take those monies either expressly or impliedly."

The chancellor's findings on this issue, where the findings turn on the resolution of issues of credibility, are entitled to  [*5]  great weight, Capitol City Bank v. Baker, 442 S.W.2d 259 (Tenn.App. 1969), and should not be reversed except upon clear, convincing and concrete evidence to the contrary. Browd er v. Hite, 602 S.W.2d 459 (Tenn.App. 1980). Let it suffice to say that we are not referred to any clear, concrete any convincing evidence in the record that compels a contrary result. There are of course arguments on both sides and there is evidence tending to support one side or the other. Mr. Albrecht cannot be proud of his actions in many respects. But the chancellor took all of the proof into account and rendered his decision. Without compelling proof in opposition to his findings we are not at liberty to disregard the facts found by the chancellor.

Therefore we concur in the chancellor's conclusion that Mr. Hardin wrongfully converted a portion of the money taken from the newspaper racks.

The chancellor awarded the newspaper $ 35,000 in - damages against Mr. Hardin. The parties had stipulated that the relevant statute of limitations for recovering the converted monies was three years. Hardin contends on appeal that the paper actually benefited from his actions and that the proof does not  [*6]  support with reasonable certainty an award of any amount. His version of the facts would support a finding that he took the revenue as a part of a scheme, participated in by Mr. Albrecht, to falsify the circulation figures published by the newspaper. On the other hand, the plaintiff insists that the proof shows damages in a much larger amount.

With respect to the certaint of the proof required to support an award of damages, it is not necessary to prove the exact amount involved. Cummings v. Brody, 667 S.W.2d 759 (Tenn.App. 1983). In that case the court said:

"Uncertain any speculative damages are prohibited only when the existence of damage is uncertain, not when the amount is uncertain. Where there is substantial evidence in the record and reasonable inferences jury be drawn from that evidence mathematical certainty is not required." 667 S.W.2d at 765.

With respect to Mr. Hardin's contention that his activities were a part of a scheme to falsify the circulation records, we have already affirmed the chancellor's findings that no such agreement existed. Mr. Hardin argues further, however, that Mr. Albrecht ratified the scheme by not repudiating it and refunding the advertising  [*7]  overcharges to the advertisers. The cases cited by Mr. Hardin stand for the proposition that a principal would be bound by the acts of the agent as against third persons unless the principal promptly repudiates the acts upon learning of them. In order to bar any recovery from Mr. Hardin in this case on the theory of ratification it would have to appear that after learning of the fact that Mr. Hardin was keeping part of the rack revenues Mr. Albrecht, on behalf of the newspaper, approved of the conduct and gave his deliberate assent. Walker v. Walker, 52 Tenn. 425 (1871). The proof in this case is to the contrary. If we accredit the testimony of Mr. Albrecht, as the chancellor did, the proof shows that Mr. Albrecht did not know of the diversion of funds until after Mr. Hardin was terminated, and this action was brought within a short time thereafter. Therefore we do not think the record shows a ratification of the conduct of Mr. Hardin.

With respect to the amount of damages awarded to the plaintiff we are of the opinion that the chancellor should also be affirmed on that point. The chancellor found that immediately after Mr. Hardin was terminated the rack revenues increased  [*8]  dramatically by about $ 3,000 per month. In addition the chancellor found that after this litigation began Mr. Hardin amended his federal tax returns to reflect approximately $ 49,000 in increased income for the three year period in question. Mr. Hardin's explanation about the source of this income sheds very little light on the question.

The chancellor's finding is entitled to a presumption of correctness unless the preponderance of the evidence is otherwise. Rule 13(d), Tenn.R.App.P. While we think the amount of the award may be generous to Mr. Hardin, the fact that it is impossible to tell how much of the moneY Mr. Hardin actually spent in his scheme to pad the circulation reports persuades us that the evidence does not preponderate in favor of a larger award.

Mr. Hardin attacks the chancellor's finding that he intentionally interfered with the contract between the plaintiff and the newspaper route carriers. The cause of action for such conduct is found in T.C.A. Section 47-50-109 which provides that a person who induces a breach of a lawful contract shall be liable for triple the amount of the damages resulting from the breach. Our Supreme Court has held that the statute repeats  [*9]  the common law except for the amount of damages that may be recovered against the wrongdoer. Emmco Insurance Company v. Beacon Mutual Indem. Co., 204 Tenn. 540, 322 S.W.2d 226 (1959). The elements required to show a cause of action under the statute were stated in Dynamic Hotel Management v. Erwin, 528 S.W.2d 819 (Tenn.App. 1975).

1. There must be a legal contract. 2. The wrongdoer must have knowledge of the existence of the contract. 3. There must be an intention to induce its breach. 4. The wrongdoer must have acted maliciously. 5. There must be a breach of the contract. 6. The act complained of must be the proximate cause of the breach of the contract.

See Also Continental Motel

Brokers, Inc. v. Blankenship, 739 F.2d 226 (6th Cir. 1984).

We think all the elements of this cause of action have been shown by the proof. Mr. Hardin argues that the plaintiff has not shown an enforceable contract with the contract carriers. The proof does show that the carriers agreed to purchase papers from the plaintiff and deliver them to home subscribers, dealers, or racks. Although the contracts with the distributors on March 8, 1985 were oral and arguably might have  [*10]  been terminated at will that fact is not a defense to an action for inducing a breach of that contract. Love & Amos Coal Co. v. U & W, 53 Tenn. App. 37, 378 S.W.2d 430 (1963). Therefore we are persuaded that an enforceable contract existed between the plaintiff and the newspaper carriers.

Mr. Hardin next attacks the finding of the chancellor that he induced the breach of contract. On that issue the chancellor found:

"Turning now to the interference between plaintiff and its independent contract carriers. First the defendant says that he didn't interfere with those rights. In that connection, there were eleven contract carriers and they all refused to deliver their newspapers on March 8, 1985. Merle Ford, Alfreida Ford, James Lynn, Michael Neil Gibbons and all of the other contract carriers apparently first met at the Herald Citizen's premises on the morning of March 8, 1985.

But after Mr. Albrecht stated that he didn't feel like it would be proper to air that grievance in front of all the carriers -- this meeting lasted some three-quarters of an hour to an hour and a half -- then Mr. Hardin came out about 1:00 o'clock on that same afternoon and said he had been fired  [*11]  and would not be re-hired and asked the carriers were they with him. Some of them said Yes.

At that time Merle Ford! Alfreida Ford and James Lynn in particular testified that Mr. Hardin instructed them and requested of them that they not pick up the papers and not deliver their routes, stating that Mr. Albrecht was bluffing. And if they would just hold out for a while,

Mr. Albrecht would make Mr. Hardin another offer. Merle Ford testified that he refused to deliver at the request of Mr. Hardin. Alfrieda Ford testified likewise. James Lynn testified likewise.

Basically there's three things that happened. Number one, he told the carriers there would be a shake-up of carriers. 'If we'll hold out, he'll make me another offer and I request that you don't pick up the papers.' Rita White also testified that Mr. Hardin stated in her presence that he thought he would get his job back if the carriers did not carry the papers."

We are satisfied that the chancellor's findings on the question of inducement should be affirmed since the evidence in the record does not preponderate against them. Rule 13(d), Tenn.R.App.P.

Mr. Hardin also disputes the chancellor's conclusion that he  [*12]  acted maliciously. We know of no authority defining that term in the context of a suit for damages under T.C.A. Section 47-50-109. However we are persuaded that the word "malice" as an element of this cause of action is used merely in the legal sense and refers to a wrongful act done intentionally and without just cause or excuse. Fleshman v. Trolinger, 74 S.W.2d 1069 (Tenn.App. 1934); See Also 45 Am.Jur.2d, Interference, Section 3.

The proof shows that Mr. Hardin was using his influence with the contract carriers to get them to refuse to deliver the plaintiff's newspapers as a means of putting pressure on Mr. Albrecht. We are satisfied that no just cause or excuse for that action is shown by thc facts in this record.

Finally Mr. Hardin argues that the contract carriers had a right, protected by the National Labor Relations Act, 29 U.S.C. Section 151, to walk off the job to protest Mr. Hardin's firing. While the NLRA does protect the rights of "employees" to certain "concerted activities" we are of the opinion that the contract carriers were not employees within the meaning of the act, and that even if they were the concerted activities (walking out to protest Mr. Hardin's  [*13]  firing) did not relate to wages, hours or working conditions, the activities protected by the NLRA. See NLRA v. Modern Carpet Industries, Inc., 611 F.2d 811 (10th Cir. 1979). Merely protesting the discharge of a supervisor is not protected concerted activity. Puerto Rican Food Products Corporation v. NLRA, 619 F.2d 153 (1st Cir. 1980).

The judgment of the court below is affirmed and the cause is remanded to the Chancery Court of Putnam County for the enforcement of its judgment and any other necessary proceedings. Tax the costs on appeal to the appellant.