## Facts

- Malcolm Terry was an independent trucker who hauled milk from dairy farms to a milk plant in Margaretville, New York, owned by Dairymen’s League Co-Operative Association, Inc. (the association).
- The farmers Terry served were members of the association, which handled marketing and operational arrangements for its members’ milk.
- After the association closed another plant and redirected that milk supply to the Margaretville plant, milk had to be hauled from farms located farther away than before.
- To handle the longer haul, the association arranged for Terry and another driver, Williams, to pick up milk from the newly assigned group of farmers and deliver it to Margaretville.
- Because the new route increased trucking time and expense, the association offered to pay an additional amount above the usual hauling charge paid by farmers (with the total trucking compensation increased for the longer run).
- Terry entered into separate oral arrangements with a number of farmers on the route to haul their milk. Each agreement could be ended at any time by either party.
- Although each farmer had an individual agreement with Terry, the farmers acted together when setting up the hauling arrangement because the route was only workable for Terry if he had enough stops along the same run.
- Over time, several farms on the route stopped operating, reducing Terry’s volume and making the route less profitable.
- Terry repeatedly complained to the association that he could not afford to continue the route unless compensation was increased.
- The association, seeking to ensure that its members had a continuing means to get milk to the Margaretville plant, arranged for Williams to take over the route.
- Terry sued the association, alleging it maliciously induced the member-farmers to breach (or terminate) their hauling arrangements with him.
- The case was tried twice. A first verdict for Terry was set aside as against the weight of the evidence; a second jury again found for Terry, and judgment was entered on that verdict. The association appealed.

## Issues

1. Whether the association’s conduct in arranging for Williams to replace Terry subjected it to liability for inducing the breach (or termination) of Terry’s at-will hauling agreements with the member-farmers.
2. Whether the evidence permitted a finding that the association acted “maliciously,” meaning without legal or social justification, rather than to serve a legitimate business purpose connected to member milk delivery.

## Decision

- The Appellate Division reversed the judgment entered for Terry.
- The court dismissed the complaint.
- The court held the proof did not support a finding of malicious, unjustified interference; the association’s actions were justified by its legitimate interest in assuring milk transportation for its members.

## Legal Principles

- A claim for inducing breach of contract requires proof of intentional interference plus “malice” in the legal sense—interference without legal or social justification.
- Conduct taken in good faith to protect a legitimate economic interest may be justified and therefore not actionable, even if it results in the ending of another’s contractual relation.
- Where the underlying agreements are terminable at will, the plaintiff’s expectancy is limited; arranging for a change in service providers is less likely to be tortious absent proof of improper purpose or improper means.
- A cooperative association may act to secure practical and continuous services for its member-producers; such action is not “malicious” merely because it disadvantages a nonmember contractor.

## Conclusion

Because Terry’s hauling arrangements with the member-farmers were oral and terminable at will, and because the association acted to ensure continued milk delivery for its members when Terry said he could not continue without more pay, the evidence did not support a finding of malicious, unjustified interference; the Appellate Division reversed the judgment for Terry and dismissed the complaint.


Terry v. Dairymen's League Co-Operative Association, Inc., 2 A.D.2d 494, 157 N.Y.S.2d 71 (1956)