Passaic Print Works v. Ely & Walker Dry-Goods Co.

105 F. 163 | 8th Cir. | 1900

Lead Opinion

THAYER, Circuit Judge,

after stating the case as above, delivered the opinion of the court.

The complaint filed in the lower court, the substance of which has been stated, shows by necessary intendment that when the circular of the defendant company was issued it had in stock a limited quantity of the four brands of calico of the plaintiff’s manufacture which are therein described. The circular stated, in substance, that the defendant had such calicoes in stock, and the complaint did not deny that fact, but admitted it by averring that “the defendant corporatino had but a small quantity of such goods to sell, and for that fea- . son qualified its offer to sell by inserting in the circular after ,the name of the goods the words, ‘as long as they last.’ ” Moreover, the owner of property, real or personal, has an undoubted right to sell it and to offer it for sale at whatever price he deems proper, although the effect of such offer may be to depreciate the market value of the commodity which he thus offers, and incidentally to-occasion loss to third parties who have the same kind or species of property for sale. The right to offer property for sale, and to fix the price at which it may be bought, is incident to the ownership of property, and the loss which a third party sustains in consequence of the exercise of that right is damnum absque injuria. We are thus confronted with the inquiry whether the motive which influenced the defendant company to offer for sale such calicoes of, the plaintiff’s manufacture as they had in stock at the price named in its circular, conceding such motive to have been as alleged in the complaint, changed the complexion of the act, and rendered the same unlawful, when, but for the motive of the actor, it would have been clearly lawful. It is common learning that a bad motive — such as an intent to hinder, delay, and defraud creditors, by virtue of St. 13 Eliz. c. 5, and possibly by the rules of the common law — will render a conveyance or transfer of property void which, but for the bad motive, would have been valid. So, also, one who sets the machinery of the law in motion without j)rob-able cause, and for the sole purpose of injuring ihe reputation of another, or subjecting him to loss and expense, is guilty of an unlawful act which would have been lawful but for, the improper motive. And one who, by virtue of his situation, has a qualified privilege to make defamatory statements concerning another, may be deprived of the benefit of that privilege by proof that it was not exercised in good faith, but in pursuance of a malicious intent to injure the person concerning whom the defamatory statement or statements were made. Poll. Torts (Webb’s Ed.) pp. 831-335-, and cases there cited. There is also some authority for saying that one who maliciously (that is, with intent to obtain some personal benefit at another’s loss or expense) induces another to break his contract with a third party thereby commits an actionable wrong if special damage is disclosed, although the act done would have been lawful if the wrongful motive had been absent. Lumley v. Gye, 2 El. & Bl. 216; Bowen v. Hall, 6 Q. B. Div. 333; Walker v. Cronin, 107 Mass. 555. And see Poll. Torts (Webb’s Ed.) pp. 668-673. Aside from cases of the latter kind, it is a general rule that the bad motive which inspires an act will not change its complexion,' and render it unlawful, if otherwise the act was done in the exercise of an undoubted right. Or,, as has sometimes been said, “when an act done is, apart ‘from the feelings which prompted it, legal, the civil law ought to take no cognizance of its motive.” The question as to how far and under what circumstances a bad purpose will render an act actionable which, considered by itself, and without reference to the purpose which prompted it, is lawful, has been so much discussed since the decision, in Allen v. Flood [1898] 1 App. Cas. 1, that it would be profitless to indulge in further comment. It' has been well observed that'it would be dangerous to the peace of society to admit the doctrine that any lawful act can be transformed prima facie into an actionable wrong by a simple allegation that the act was inspired by malice or ill will, or by an improper motive. It is wiser, therefore, to exclude any inquiry into the motives of men when their actions are lawful, except in those cases where it is well established that malice is an essential ingredient of the cause of action, or in those cases where, the act done being wrongful, proof of a bad motive will serve to exaggerate the damages.

The case at bar falls within neither of the exceptions to the general rule above stated, — that, if an act is done in the exercise of an undoubted right, and is lawful, the motive of the actor is immaterial. No one can dispute the right of the defendant company to offer for sale goods tha t it owned and were in its possession, whether the quantity was great or small, for such a price as it deemed proper. This was the outward visible act of which complaint is made, and, being lawful, the law will not hold it to be otherwise because of a secret purpose entertained by the defendant company io inflict loss on the plaintiff by compelling- it to reduce the cost of a certain kind of its prints or calicoes.

Nor is the complaint aided in any respect by reference to the law of conspiracy, since the only object that the defendants had in view which the law will consider was the disposition or sale of certain goods which the defendant corporation had the right to sell; and tiie means employed to accomplish that end, namely, placing them on the market at a reduced cost, were also lawful.

In the brief filed in behalf of the plaintiff in error it is suggested finally that the complaint may be sustained on tlie ground that it states 'a good cause of action for maliciously causing certain persons to break or cancel their contracts with the plaintiff, but we think it quite obvious that the complaint was not framed with a view of stating a cause of action of that nature, and that it is insufficient for that purpose. It does not give the name of any person or corporation with whom the plaintiff had a contract for the sale of its prints which was subsequently broken in consequence of the wrongful acts of the defendant. Neither does it show that it had accepted any orders for goods which the jobber was not privileged to cancel at his* pleasure. Nor does it allege any special damage incident to the breach of any particular contract. In view of all the allegations which the complaint contains it is manifest, we think, that it was framed with a view of .recovering on the broad ground that the issuance of the circular was unlawful and actionable, provided the motive of the defendant company in issuing it was to occasion loss or inconvenience to the plaintiff.

We are of opinion that the complaint did not state a cause of action, as the trial court held, and the judgment below is therefore affirmed.

---

Dissenting Opinion

SANBORN, Circuit Judge

(dissenting). I cannot concur in . the opinion of the majority in this case because the petition alleges that the defendants, by their advertisement of the goods manufactured by plaintiff, without any legitimate trade purpose, prevented job-hers from purchasing goods of the plaintiff, and caused those who had agreed to purchase from it to cancel their orders unless the plaintiff would make them a rebate, so that the plaintiff sustained damage in the sum of $19,000. In my opinion, the gravamen of this cause of action is not the malicious intent or purpose of the defendants, but it is their wrongful act of interfering with the plaintiff’s business, of preventing sales that it would have made, and of causing the cancellation of orders to> or contracts of purchase from, the plaintiff already made. This act, without any allegation or averment of intent or purpose, was itself wrongful, unless it was done for a justifiable purpose. The act of interfering'with and injuring the trade or business of the plaintiff without justifiable cause entitled the plaintiff to damages. It is conceded that, if the defendants had advertised these prints for any legitimate trade purpose, for the purpose of selling them for gain for themselves, for the purpose of converting them into money because they preferred their advertised price to the goods, or for the purpose of competing in trade with the ' plaintiff, they would have had a justifiable cause for inflicting upon it the damages of which it complains, and these damages would then .have been damnum-absque injuria. But, if they had advertised them for any of these purposes, this case would have constituted an exception to the general rule of law. The general rule is that when- - ever one injures a man’s business, profession, or occupation he is liable for the damages he inflicts. The exception is that, where the injury is caused by competition in trade or the lawful exercise of a right which the inflictor has, then the injury is justifiable, and no damages can be recovered. But, where such an injury is inflicted, .the presumption always is- that the rule, and not the exception, applies, and, if the inflictor would justify, he must show that he falls within the exception. The question in this case, therefore, is not whether or not the motive or intent of the defendants will make acts . unlawful which were otherwise lawful, but whether or not the intent and purpose of the defendants will justify an otherwise unlawful act, and excuse them from the payment of damages for which, under the general rule of law, they are liable to the plaintiff. It is whether or not the petition shows that they advertised the goods for legitimate trade purposes, so that their acts fell within the exception, which justifies the infliction of damages, and not under the general rule, which requires them to compensate the plaintiff for the injury they have caused. The opinion of the majority assumes that the defendants advertised the prints for a legitimate trade purpose, so. that their acts fell within the exception to the general rule. It overlooks the legal presumption that injury to one’s business entitles Mm to compensatory damages, and the plain averment of the petition that the acts of the defendants were not done for any justifiable cause, but were committed for the sole purpose of inflicting upon the plaintiff the injury they caused. The tenth paragraph of the petition reads in this way:

“Tenth. That the effect of Issuing the aforesaid circular of the defendant ¡corporation -was to advertise to the retail trade throughout the states of Missouri;-Arkansas, Kansas, Texas, Illinois, Indiana, Kentucky, Tennessee, Indian Territory, Colorado, and New Mexico that the goods named and quoted, manufactured by the plaintiff, could be purchased at a less price from the defendant corporation than they could be from the other jobbers in St. Louis, to whom the plaintiff had sold large quantities of said goods, and to thereby cause the said other jobbers in St. Louis to either cancel their orders, or portions thereof, so as aforesaid given to the said plaintiff for such goods, or, as an alternative, to compel the plaintiff to relabel the goods, and to give a rebate on the prico, in order that said jobbers might meet the prices so offered by the circular of said defendant corporation, and to thereby break np, injure, and destroy the sales and trade of the said plaintiff in the market of St. Louis and the country tributary thereto, and to make the said other jobbers in St. Louis afraid to deal in the said goods of this plaintiff except at greatly reduced prices, and then in comparatively small quantities; and upon information and belief the plaintiff alleges that tire quotations of this plaintiff’s said goods in. the said circular were made by the said defendants with the end and object in tiiis paragraph stated, and not for any legitimate trade purpose.”

Now, no one will dispute the rules of law that the plaintiff in this action had the right to conduct its business of manufacturing and selling prints without the injurious interference of strangers, and that the defendants were subject to the universal rule that they must so use their own property and rights as to inflict no unnecessary injury upon their neighbors. The averments of this petition are that they were not using any of their property or exercising any of their rights for any legitimate trade purpose, but that they were using' them for the express purpose of inflicting injury upon the plaintiff, and that they succeeded in imposing the infliction. These allegations seem to me to bring this case under the general rule of law, and to clearly negative the claim that it falls within the exception. They seem to state a good cause of action. The principle upon whichihis conclusion rests is nowhere better stated than by Chief Justice Holt in the old case of Keeble v. Hickeringill, 11 East, 574, note where the plaintiff recovered damages from the defendant for firing guns on his own land which frightened wild ducks away from the decoy pond of the plaintiff, where the latter was taking them to sell for gain. He said:

“Where a violent or malicious act is done to a man’s occupation, profession, or way of getting a livelihood, there an action lies in all cases. But if a man doth him damage by using the same employment, — as, if Mr. Hickeringill had set up another decoy on his own ground near the plaintiff’s, and that had spoiled the custom of the plaintiff, — no action would lie, because he had as much liberty to make and use a decoy as the plaintiff. This is like the case of It Hen. IV. p. 47. One schoolmaster -sets up a new school to the damage of an ancient school, and thereby the scholars are allured from the old school to come to his new. (The action there was held not to lie.) But, suppose Mr. Hickeringill should lie in the way with his guns, and fright the boys from going to school, and their parents would not let them go thither, sure that schoolmaster might have an action for the loss of his scholars. 29 Edw. III. p. 18. A man hath a market, to which he hath toll for horses sold. A man is bringing his horse to market to sell. A stranger hinders and obstructs him from going thither to the market. An action lies because it imports damage. Action upon the case lies against one that shall by threats fright away his tenants at will. 9 Hen. VII. pp. 7, 8; 21 Hen. VI. p. 31; 14 Edw. IV. p. 7.” 11 East, 576, note.

In the case of Mogul Steamship Co. v. McGregor, 21 Q. B. Div. 544-553, Chief Justice Coleridge said:

“But it is said that the motive of these acts was to ruin the plaintiffs, and that such a motive, it has been held, will render the combination itself wrongful and- malicious, and that, if damage has resulted to the plaintiffs, an action will lie. I concede that, if the premises are established, the conclusion follows. It is too late to dispute, if I desired it, as I do not, that a wrongful and malicious combination to ruin a man in his trade may be ground for such an action as this.”.

In the' same case 'upon appeal (23 Q. B. Div. 598), all of the judges were of the opinion that, if the acts done in pursuance thereof were shown to have been for the purpose of ruining and destroying the plaintiff’s trade, then an action for the damage occasioned could be maintained. Bowen, J., at page 614, says:

“No man, whether trader or not, can, however, justify damaging another in his commercial business by fraud or misrepresentation. Intimidation, obstruction, and molestation are forbidden. So is the intentional procurement of a violation of individual rights, contractual or otherwise, assuming always that there is no just cause for it. The intentional driving away of customers by show of violence (Tarleton v. McGawley, Peake, 270), the obstruction of the actors on the stage by a preconcerted hissing (Clifford v. Brandon, 2 Camp. 358; Gregory v. Brunswick, 6 Man. & G. 205), the disturbance of wild fowls in decoys by firing of guns (Carrington v. Taylor, 11 East, 571, and Keeble v. Hickeringill, Id. 574, note), the impeding or threatening servants or workmen (Garret v. Taylor, Cro. Jac. 567), the inducing persons under personal contract to break contracts (Bowen v. Hall, 6 Q. B. Div. 333, and Lumley v. Gye, 2. El. & Bl. 216), all are instances of such forbidden acts.”

- In Walker v. Cronin, 107 Mass. 555, 562, an action for molesting, obstructing, and hindering the plaintiffs from carrying on their business of the manufacture and sale of boots and shoes by persuading employés to abandon the employment of the plaintiffs, and persons who were about to enter their employment not to do so, the supreme court of Massachusetts sustained the action, and said:

“The general principle is announced in Com. Dig. ‘Action on the Case,’ A.: ‘In all cases where a man has a temporal loss or damage by the wrong of another, he may have an action upon the ease to be repaired in damages.’ The intentional causing of such loss to another without justifiable cause, and with the malicious purpose to inflict it, is of itself a wrong. This proposition seems to be fully sustained by the references in the case of Carew v. Rutherford, 106 Mass. 1, 10, 11.”

The court then cites the cases to which reference has already been made,, and that class of cases which holds that a man may dig on his own land for water, although he thereby cuts off the supply of water from his neighbor’s well, and then says at page 564:

“Every one has a right to enjoy the fruits and advantages of his own enterprise; industry, skill, and credit. He has no right to be protected against competition, bat he has a right to be free from malicious and wanton interference, disturbance, or annoyance. If disturbance or loss come as a result of competition, or the exercise of like rights by others, it is damnum absque injuria, unless some superior • right by contract or otherwise is interfered with. But, if it come from the merely wanton or malicious acts of others, without the justification of competition or the service of any interest or lawful purpose, it then stands upon a different footing, and falls within the principle of the authorities first referred to.”

. Thu proposition is sustained by respectable authority; it is just, and I believe it is sound, — that an action 'will lie for depriving a .man...of custom (that is, of possible contracts), when the result is effected by persuasioú as well as when it is accomplished by fraud or force, if the "harm is inflicted without justifiable cause, such’ as competition in trade. Walker v. Cronin, 107 Mass. 555, 565; Morasse v. Brochu, 151 Mass. 567, 25 N. E. 74, 8 L. R. A. 524; Hartnett v. Association, 169 Mass. 229, 235, 47 N. E. 1002, 38 L. R. A. 194; Delz v. Winfree, 80 Tex. 400, 405, 16 S. W. 111; Doremus v. Hennessy, 62 Ill. App. 391, 403; Van Horn v. Van Horn, 52 N. J. Law, 284, 20 Atl. 485; Temperton v. Russell, 62 Law J. (Q. B. Div. 1893) 412, 419.

Under the legal principles to which reference has been made,..and under the authorities which have been cited, the petition in this base states a good cause of action for interference with and injury to the business of the plaintiff by preventing it from obtaining custom it would otherwise have obtained, without any justifiable cause or excuse, and for this reason the demurrer should have been overruled, and the case sent to trial.

There is another reason why the judgment below should be reversed. It is that the petition sufficiently states a cause of action for maliciously interfering with contracts between jobbers in St. Louis and the plaintiff, and inducing the former to break their contracts to the injury of the latter. The petition alleges that the defendants were jobbers in the city of St. Louis, that they issued the circular, that its effect was “to thereby cause the said other jobbers in St. Louis to either cancel their orders, or portions thereof, so as aforesaid given to the said plaintiff for such goods, or, as an alternative, to compel the plaintiff to relabel the goods, and to give a rebate on the price, in order that said jobbers might meet the prices so offered by the circular of said defendant corporation, and to thereby break up, injure, and destroy the sales and trade of the said plaintiff in the market of St. Louis and the country tributary thereto.” Here is a plain allegation that contracts had been made for the sale of these goods to the other jobbers in St. Louis, and that the acts of the defendant corporation induced them to break their contracts, or to compel the plaintiff to lose a portion of the price agreed upon therein as a condition of their performance. Whenever one maliciously interferes in a contract between two parties, and induces one of them to break the contract to the injury of the other, the injured party may maintain an action against the wrongdoer for his damages. Angle v. Railway Co., 151 U. S. 1, 13, 14 Sup. Ct. 240, 38 L. Ed. 55; Lumley v. Gye, 2 El. & Bl. 216; Bowen v. Hall, 6 Q. B. Div. 333, 337; Green v. Button, 2 Cromp., M. & R. 707; Walker v. Cronin, 107 Mass. 555; Benton v. Pratt, 2 Wend. 385; Rice v. Manley, 66 N. Y. 82; Jones v. Stanly, 76 N. C. 355, 356; Tasker v. Stanley, 153 Mass. 148, 26 N. E. 417, 10 L. R. A. 468; Temperton v. Russell, 62 Law J. (Q. B. Div. 1893) 412, 419. For the reasons which have now been briefly stated, the judgment below should, in my opinion, be reversed, and the defendants should be required to answer the petition.