214 N.W. 754 | Minn. | 1927
Lead Opinion
The complaint alleges: A subsisting agency contract between plaintiff and defendant corporation which, in the event of any question arising threatening to interfere with their mutually satisfactory business relationship, could be terminated only by notice of 60 or 10 days depending on whether plaintiff was an exclusive Chevrolet dealer. The business relations between plaintiff and defendant corporation were mutually satisfactory. The contract required the corporation to furnish cars and parts which plaintiff agreed to advertise and sell. Plaintiff purchased special tools and equipment for repairing Chevrolet cars. He advertised extensively and had a valuable business. Defendant Sander was plaintiff's competitor. Defendants conspired and agreed to destroy and take away plaintiff's business. Sander knew of plaintiff's contract with the corporation, and defendants agreed to acquire plaintiff's business for Sander. Pursuant to this plan and the agreement between defendants, the corporation wrongfully repudiated its contract with plaintiff without giving the notice therein required for cancelation. Plaintiff's business was thereby destroyed by the wrongful acts of defendants. This was done with actual malice toward plaintiff and such malice of the two defendants was well known to each and adopted by both of them.
Every act done by a business man in diverting trade from a competitor to himself is an act intentionally done, and when successful is an injury to the competitor because to that extent it lessens his profits. But it is not wrongful. Trade must be free and unrestricted, but the competitor should operate within the zone of fair *262 dealing. Competition justifies the use of all lawful and fair means to gain the trade that would otherwise go to a competitor in business.
The mere fact that plaintiff suffered a loss does not render defendants' acts unlawful or actionable. That depends upon whether the acts in and of themselves are unlawful. There is no injury in law resulting in damages except that which flows from an unlawful act. Bohn Mfg. Co. v. Hollis,
Ertz v. Produce Exch. of Minneapolis,
Joyce v. G.N. Ry. Co.
In Victor Talking Machine Co. v. Lucker,
"This was a notice by one competitor telling buyers not to do business with another. Such conduct, without more, is not actionable. One man may lawfully seek the business of a competitor and may tell the `trade' not to buy of his competitor, so long as he indulges in no threat, coercion, misrepresentation, fraud or other harassing methods."
In Boasberg v. Walker,
In Tuttle v. Buck,
In Roraback v. Motion Picture Mach. Op. Union,
"No person or combination of persons has the right maliciously to injure or destroy the business of another by acts which serve no legitimate purpose of his own."
A person may use any lawful means to accomplish a lawful purpose, although the means adopted may incidentally cause injury to another, but he may not intentionally injure or destroy the other's business to accomplish an unlawful purpose. Canellos v. Zotalis,
In the Carnes case it is said:
"The term `malice,' as used in the class of cases mentioned, means nothing more than the intentional doing of a wrongful act without legal justification or excuse, or otherwise stated the wilful violation of a known right. Whether a wrongdoer's motive in interfering is to benefit himself, or to gratify his spite by working mischief to another, is immaterial, malice in the sense of ill-will or spite not being essential. Numerous cases thus defining malice are collected in 15 R.C.L. pp. 56 and 57."
Where a person does an act solely to impose civil liability, which otherwise would not exist, upon another, such conduct is wrong and, being followed by damages, is actionable in tort. Silliman v. Dobner,
In Minnesota W.G. Co-Op. M. Assn. v. Radke,
Where a party does a wrongful act resulting in damages to another there is liability. The damage alone does not establish liability. If the act is rightful there is no liability. If a person adopts lawful means to accomplish a lawful result the motive is immaterial. It is also immaterial, if while so acting, another is incidentally injured. Liability may rest upon an unlawful use of a legal right.
Defendant Sander had a perfect right to negotiate and make an agency contract with defendant corporation. If he did this for his own welfare and resorted to no wrongful means to accomplish the purpose he has not subjected himself to liability and the situation *265 is not changed by the fact that, as an incident thereto, plaintiff was damaged. But did he so act?
Likewise, the defendant corporation had a legal right to breach its contract with plaintiff and pay the resulting damages. It also had the legal right to make an agency contract with Sander for the purpose of advancing its own interests. But did it so act?
The allegations of the complaint are in effect that defendants' purpose was solely to destroy plaintiff's business. If such was the case, it was wrongful and, if followed by damages, which are alleged, liability would follow.
If the corporation deliberately breached its contract it subjected itself to a certain definite liability to plaintiff, but that liability rests on a cause of action other than that mentioned in the complaint.
Under his contract with the corporation plaintiff had built up a valuable business. His relations with the company were mutually satisfactory. Sander, a stranger to the contract, wished to put an end to the business relations between plaintiff and the company and induced the company to repudiate the contract. If he had done this for no other purpose than to deprive plaintiff of the benefits of the contract and of his established business, under all the cases Sander would be liable for his wrongful interference in the contract relations between plaintiff and the company. But according to the complaint Sander had another motive. Not only did he wish to deprive plaintiff of his business, but he also desired to appropriate the business to himself. It cannot be said that this desire furnishes an excuse or justification for an act which would otherwise be unlawful. On the contrary, it accentuates the inherent wrongfulness of Sander's conduct. Under these circumstances, it would be contrary to the decided weight of authority to hold that Sander was serving his legitimate interests or that his conduct was free from wrong, or that, since plaintiff has a cause of action against the company for breach of contract, Sander should go scot-free. It seems clear that elementary principles of business ethics demonstrate the unlawfulness of Sander's conduct, and the law ought to insist on as high a standard of business morality as prevails among reputable business men. *266
The liability of the corporation under the allegations of the complaint is equally apparent, for it is alleged that it was a party to the agreement with Sander to deprive plaintiff of his business, and by its acts enabled Sander to appropriate the business.
Many of the early cases involving this question embrace the breach of contracts for personal services between master and servant. The rule was extended, beginning with Lumley v. Gye, 2 El. Bl. 216, 22 L.J.Q.B. 463. See 2 Harv. L.Rev. 19. It is now recognized that there is no distinction between a defendant wilfully inducing a third person to break any other contract between him and the plaintiff. The right of competition is not the right to destroy contractual rights. Beekman v. Marsters,
"But where there is either a binding contract for employment for a specific time or a valid contract for the sale and delivery of goods, or other valid executory contract, the interference of a third party lays a direct basis for a suit, precisely as with any other direct blow knowingly struck against any property interest which the law protects."
First Nat. Bank of Hastings v. Corp. Sec. Co.
We hold that the complaint states a cause of action.
Reversed.
Dissenting Opinion
It is easy to say that "wrongful interference" with the contract rights of another resulting in his damage is an actionable wrong. That is undoubted law, except in those jurisdictions which have refused to apply the rule of Lumley v. Gye, 2 El. Bl. 216, 75 E.C.L. 216, 244. The difficulty arises in determining what makes a case of "wrongful interference," and is enhanced by considering malice *268
an element instead of merely a frequent attendant of the offense. The word in the present connection is "a mere title" and "its use always occasions question and requires definition and explanation. * * * `When all that is meant by malice is an intention to commit an unlawful act without reference to spite or ill-feeling, it is better to drop the word * * * and so avoid all misunderstanding.'" R an W Hat Shop v. Sculley,
Is it wrongful for one employer merely to say to a man in the service of another, "When you are ready to quit your present job, I will pay you a substantial increase in wages?" The answer, of course, must be no, and it must remain so even though the offer was made with knowledge of the existing contract, and results in its breach. If that was the intent, is the result different? If so, a mere mental operation of the actor has changed the legal quality of his act. Suppose another case — that of a retail merchant who, having just contracted to purchase a line of goods from one manufacturer, is approached by the salesman of another. If the latter is told of the contract but has a much better line of goods at lower prices and convinces the merchant of that and, quite incidentally, that it would be to his advantage to breach his first contract and buy the goods last offered, has an actionable wrong been committed? Certainly not if the salesman has been talking only with an eye to the future and in the hope of procuring for his own house the next contract. Will the result be changed solely because he hoped that a breach of the present agreement might flow from his honest praise of his own goods?
The salesman has been truthful. He has done nothing more than present the facts concerning his own line. Upon what theory can it be said that he has done anything wrongful — has committed a *269 tort for which his employer should answer in damages? None, unless one which attaches to rights of contract a sanctity which they do not possess. "Inviolability of contract" is a misleading phrase, for no contract has the quality it assumes. The law has no prohibition of breach of contract and is satisfied if the delinquent answers in damages. Cases are conceivable where the breach may be laudable morally and the inciting advice legally blameless.
The gist of the cause of action is not the violation of contract. It is rather the wrongful invasion of one's personal rights. Rights given by contract as property rights are on no higher plane than personal rights. They are no more immune from wrongful interference than the latter. And after all, the privilege of contracting is considered a property right as is also that to pursue one's vocation without unlawful interference. 3 Words Phrases (2d Ser.) 1302. So the attempt to distinguish between personal and property rights, for the purpose of determining the essentials of wrongful interference, is futile, at least as to all contracts which are not specifically enforceable. They present peculiar problems which are not now involved. This objection to the distinction attempted for present purposes between personal rights and contract rights is advanced with much hesitation because it appears not only in the opinion of the chief justice but also in Beekman v. Marsters,
The absence from the decision of a definition of "wrongful interference" is probably as it should be, for there is inherent in definition *270
the danger of excluding a case which progress, unhindered by definition, would include. But we are at least safe in examining the cases for the elements, the minimum requirements, so to speak, of liability. My own hasty and incomplete examination of the authorities suggests very strongly that there is no "wrongful interference" unless there has been the purposeful procuring of a breach of contract by a stranger to it who has no legitimate interest to serve or, having one, uses unlawful means to effect his purpose. Tuttle v. Buck,
Decision in the Roraback case was placed also upon Ertz v. Produce Exch. of Minneapolis,
In Joyce v. G.N. Ry. Co.
Many of the cases involving the efforts of labor unions to serve their members show legitimate interests but the use of improper means. Roraback v. Motion Picture Mach. Op. Union, supra, is such a case. R an W Hat Shop v. Sculley,
It is equally clear that misrepresentation, fraud, mere vexatious intrusion, or officious and harassing intermeddling may constitute unlawful means of such nature as to create liability. Angle v. C. St. P.M. O. Ry. Co.
So far as defendant Sander is concerned, the instant complaint appears to me plainly deficient. Sander was himself an automobile dealer having a perfect right to continue in that business and to sell Chevrolet cars if he could get the agency for them. The one result charged against him is that he succeeded in securing the agency which plaintiff had enjoyed. Stripped of its characterizations of supposed motive, the complaint charges nothing more. We may assume that Sander was actuated in part by ill will towards plaintiff. That alone does not make lawful means unlawful, and not a single unlawful act is charged against Sander. He wanted the Chevrolet agency; he had a right to want it and to get it, if he could, by lawful means. No others are alleged against him.
So far as defendant Chevrolet Motor Company is concerned, the utmost wrong charged against it is that it terminated without notice the contract which it had a right to terminate on ten days' notice. Subject to that requirement, plaintiff's agency was terminable at will. So, while the Chevrolet company may be liable to the extent that it breached the contract by terminating it without ten days' notice, the fact remains that a third party is not generally liable for inducing the breach of a contract which is terminable at will. So held with respect to a partnership at will, McGuire v. Gerstley,
But if that construction of the complaint is strict to the point of error, I still urge that, while we are reiterating that liability arises from a wrongful interference with contract rights which results in damage, we should say also that there is no wrongful interference where the defendant has a legitimate interest to protect and uses means which are in and of themselves lawful.
The tests thus suggested by the decisions by no means remove all the difficulty. It remains in each case to determine what is a legitimate interest and what are lawful means for its protection. What is a legitimate interest probably will not present as much difficulty as will arise in passing upon the propriety of the means employed. That problem will have to depend ultimately upon the fundamental principle of all liability for tort, that each must so use his own as not to interfere unduly with the enjoyment of the rights of others. It is altogether a question of what duty a stranger to a contract owes the parties to it. It is correct generalization to say that he at least is obligated to abstain from officious intermeddling calculated to induce a breach. But how far must he abstain from advancing his own interests by proper means? Do one's good faith and truth make an actionable tort solely because they result in another's breach of contract? They certainly may if the theory of this decision is legally correct. For that reason I dissent from it and submit that the demurrer of defendant Sander at least should be sustained. *274
