Corporations – Officers and Directors – Liability for Inducing a Corporation to Breach Its Contracts

Plaintiff real estate company brought suit against the directors of a corporation and other third persons for an alleged conspiracy to induce the corporation to breach its contract with plaintiff. The complaint alleged that the corporation had entered into an agreement whereby plaintiff was to procure a purchaser for certain premises owned by the corporation and that plaintiff had found a purchaser; that before a written offer could be obtained, the corporation contracted to sell to another broker who was to be used as a conduit to transfer title to the purchaser found by the plaintiff, and who was to receive the usual commission. In the supreme court the defendant’s motion to dismiss the complaint was denied and defendants appealed. Held, order reversed. Absent an allegation that the defendants had induced the corporation to breach its contract with the plaintiff, the allegation that the defendants agreed to “conceal” the making of the contract by the corporation was insufficient to impose liability upon the directors. Potter v. Minskoff, 2 App. Div. (2d) 513, 156 N.Y.S. (2d) 872 (1956).