Chapter VIII: Interference with Advantageous Relations (6)

Upon filing the bill an order was made restraining the defendants “from in any manner knowingly and intentionally causing or attempting to cause by threats, offers of money, payment of money, offering to pay or the payment of transportation expenses, inducements or persuasions to any employe of the complainant under contract to render service to it to break such contract by quitting such service; from any and all personal molestation of persons willing to be employed by complainant with intent to coerce such persons to refrain from entering such employment; from addressing persons willing to be employed by complainant against their will and thereby causing them personal annoyance with a view to persuade them to refrain from such employment; from loitering or picketing in the streets near the premises of complainant, Nos. 68 and 70 York street, and No. 37 Montgomery street, Jersey City, with intent to procure the personal molestation and annoyance of persons employed or willing to be employed by complainant and with a view to cause persons so employed to quit their employment, or persons willing to be employed by complainant to refrain from such employment; from entering the premises of complainant, Nos. 68 and 70 York street, Jersey City, against its will with intent to interfere with its business; from violence, threats of violence, insults, indecent talk, abusive epithets practiced upon any persons without their consent with intent to coerce them to refrain from entering the employment of complainant, or to leave its employment.”

STEVENSON, V. C. (orally). The bill is filed to restrain a body of workmen, who are on a strike, and other persons associated with them, from doing certain things which are alleged to be injurious to the complainant, their former employer. The things that they are restrained from doing are specified in the restraining order. That order was not made hastily. It was formulated with care on the part of the court, and I do not understand that counsel for the defendant criticises its terms on the ground that they are too broad. The defence is that the persons who are enjoined have not been doing, and are not threatening now to do, any of those things that are interdicted. That is the sum and substance of the defence, which has been presented by a great many affidavits and with very great force.

The order does not interfere with the right of the workman to cease his employment for any reasons that he deems sufficient. It does not undertake to say that workmen may not refuse to be employed if certain other classes of workmen are retained in employment. It leaves the workman absolutely free to abstain from work—for good reasons, for bad reasons, for no reasons. His absolute freedom to work, or not to work, is not in any way impaired. The restraining order is based upon the theory that the right of the workman to cease his employment, to refuse to be employed, and to do that in conjunction with his fellow-workmen, is just as absolute as is the right of the employer to refuse further to employ one man, or ten men, or twenty men who have theretofore been in his employment. From an examination of the cases and a very careful consideration of the subject I am unable to discover any right in the courts, as the law now stands, to interfere with this absolute freedom on the part of the employer to employ whom he will, and to cease to employ whom he will; and the corresponding freedom on the part of the workman, for any reason or no reason, to say that he will no longer be employed; and the further right of the workmen, of their own free will, to combine and meet as one party, as a unit, the employer who, on the other side of the transaction, appears as a unit before them. Any discussion of the motives, purposes or intentions of the employer in exercising his absolute right to employ or not to employ as he sees fit, or of the free combination of employes in exercising the corresponding absolute right to be employed or not as they see fit, seems to me to be in the air.

Thus, there is a wide field in which employes may combine and exercise the arbitrary right of “dictating” to their common employer “how he shall conduct his business.” The exact correlative of this right of the employe exists, in an equal degree, in the employer. He may arbitrarily “dictate” to five thousand men in his employ in regard to matters in respect of which their conduct ought, according to correct social and ethical principles, to be left entirely free. But if the “dictation” is backed up solely by the announcement that, if it is not submitted to, the dictating party will refrain from employing, or refrain from being employed, as the case may be, no legal or equitable right belonging to the party dictated to, which I am able to discern, is thereby invaded.

Some of the expressions which I have used, and which are commonly used, in relation to this subject seem to me to be misleading. Union workmen who inform their employer that they will strike if he refuses to discharge all non-union workmen in his employ are acting within their absolute right, and, in fact, are merely dictating the terms upon which they will be employed. All such terms necessarily relate both to “how the employer shall conduct his business” and how the employes shall conduct their business.

The doctrine of the old cases, of which we have in New Jersey an interesting example in State _v._ Donaldson, 3 Vr. 151, which placed the employe, when acting in combination with his fellow-workmen, at a tremendous disadvantage as compared with his employer, I think may be regarded as entirely exploded. The authority of the deliverances of the supreme court in State _v._ Donaldson was largely, if not entirely, abolished by statute in 1883.

The principles which I have endeavored to state are all recognized in the restraining order in this case, and are so plainly recognized that the intelligent and industrious counsel for the defendants is unable to point out any respect wherein the terms of the order should be modified. The things which the restraining order interdicts are things which, for the purposes of this argument, it is practically conceded the defendants have no right to do.

In this situation of the case it would seem to be unnecessary to further consider the legal propriety of the restraining order, much less to take it up clause by clause. I have, however, pointed out what conduct on the part of the defendants is excluded from the operation of this order, and I think that it is fair to all the parties to this suit who are concerned in the maintenance of the restraining order to explain, at least in a general way, what conduct is included within its prohibition. This can be most conveniently done by making plain the most important principles embodied in the order—principles which practically have been developed by the courts of this country and England during the last five or ten years.

The injunction in strike and boycott cases is of very recent use. Already a wide difference of opinion has been developed among judges in regard to the liability of a combination of workmen to actions at law for damages and suits in equity for an injunction.

It is only very recently, I think, that one of the most important rights which now are vindicated by the injunction in a strike case has been differentiated; in many cases it has been apparently half recognized or indirectly enforced.

That the interest of an employer or an employe in a contract for services is property is conceded. Where defendants, in combination or individually, undertake to interfere with and disrupt existing contract relations between the employer and the employe, it is plain that a property right is directly invaded. The effect is the same whether the means employed to cause the workman to break his contract, and thus injure the employer, are violence or threats of violence against the employe or mere molestation, annoyance, or persuasions. In all these cases, whatever the means may be, they constitute the cause of the breaking of a contract, and consequently they constitute the natural and proximate cause of damage. The intentional doing of anything by a third party which is the natural and proximate cause of the disruption of a contract relation, to the injury of one of the contracting parties, is now very generally recognized as actionable, in the absence of a sufficient justification, and the question, in every case, seems to turn upon justification alone.

Where the tangible property of an employer is seized or directly injured by violence, with intent to interfere with the carrying on of his business, the case, also is free from embarrassment.

In the case of Frank _v._ Herold, 18 Dick. Ch. Rep. 443, Vice-Chancellor Pitney amply discussed the whole subject of the unlawfulness of molestation and annoyance of employes, with intent and with the effect to induce them to abandon their employment, to the injury of their employer’s business.

But the difficult case presents itself when the workmen in combination undertake to interfere with the freedom of action on the part of other workmen who naturally would seek employment where they (the workmen in combination) desire and intend that no man shall be employed excepting upon their terms.

The difficulty is in perceiving how molestation and annoyance, not of the employes of a complainant, but of persons who are merely looking for work and may become employes of the complainant, can be erected into a legal or equitable grievance on the part of the complainant. But the difficulty is still further increased where the possible employes make no complaint to any court for protection, and the conduct of the molesting party does not afford a basis which the ancient common law recognized as sufficient to support an action of tort on their behalf, such as for an assault and battery or a slander. Abusive language is not necessarily actionable at the common law. If to call a man a “scab” in the street or to follow him back and forth from his home to his place of employment was formerly not actionable on behalf of the victim of this petty annoyance, the problem is to understand how one who is merely the victim’s possible employer can complain, either at law or in equity, there being no actual contract for service, but only a potential one, interfered with.

It is easier, I think, to obtain a correct idea of the legal and equitable right which underlies many of the injunctions which have been granted in these strike cases restraining combinations of workmen from interfering with the natural supply of labor to an employer, by means of molestation and personal annoyance, if we exclude from consideration the conduct of the defendants as a cause of action on behalf of the immediate victims of their molestation—_i. e._, of the workman or workmen whom the combination are seeking to deter from entering into the employment which is offered to them, and which they, if let alone, would wish to accept. I say this, although I firmly believe that the molested workman, seeking employment and unreasonably interfered with in this effort by a combination, has an action for damages at common law, and, where the molestation is repeated and persistent, has the same right to an injunction, in equity, which, under the same circumstances, is accorded to his contemplated employer.

The underlying right in this particular case under consideration, which seems to be coming into general recognition as the subject of protection by courts of equity, through the instrumentality of an injunction, appears to be the right to enjoy a certain free and natural condition of the labor market, which, in a recent case in the House of Lords, was referred to, in the language of Lord Ellenborough, as a “probable expectancy.” This underlying right has otherwise been broadly defined or described as the right which every man has to earn his living, or to pursue his trade or business, without undue interference, and might otherwise be described as the right which every man has, whether employer or employe, of absolute freedom to employ or to be employed. The peculiar element of this perhaps newly-recognized right is that it is an interest which one man has in the freedom of another. In the case before this court the Jersey City Printing Company claims the right, not only to be free in employing labor, but also the right that labor shall be free to be employed by it, the Jersey City Printing Company.

A large part of what is most valuable in modern life seems to depend more or less directly upon “probable expectancies.” When they fail, civilization, as at present organized, may go down. As social and industrial life develops and grows more complex these “probable expectancies” are bound to increase. It would seem to be inevitable that courts of law, as our system of jurisprudence is evolved to meet the growing wants of an increasingly complex social order, will discover, define and protect from undue interference more of these “probable expectancies.”

In undertaking to ascertain and define the rights and remedies of employers and employes, in respect of their “probable expectancies” in relation to the labor market, it is well not to lose sight altogether of any other analogous rights and remedies which are based upon similar “probable expectancies.” It will probably be found in the end, I think, that the natural expectancy of employers in relation to the labor market and the natural expectancy of merchants in respect to the merchandise market must be recognized to the same extent by courts of law and courts of equity and protected by substantially the same rules.

It is freedom in the market, freedom in the purchase and sale of all things, including both goods and labor, that our modern law is endeavoring to insure to every dealer on either side of the market. The valuable thing to merchant and to customer, to employer and to employe, manifestly is freedom on both sides of the market. The merchant, with his fortune invested in goods and with perfect freedom to sell, might be ruined if his customers were deprived of their freedom to buy; the purchaser, a householder, seeking supplies for his family, with money in his pocket and free to buy, might find his liberty of no value and might suffer from lack of food and clothing if the shopmen who deal in these articles were so terrorized by a powerful combination as to be coerced into refusing to sell either food or clothing to him.

It is, however, the right of the employer and employe to a free labor market that is the particular thing under consideration in this case.

A man establishes a large factory where working people reside, taking the risk of his being able to conduct his industry and offer these working people employment which they will be willing to accept. He takes the risk of destructive competition and a large number of other risks, out of which, at any time, may come his financial ruin and the suspension of his manufacturing works. But our law, in its recent development, undertakes to insure to him, not only that he may employ whom he pleases, but that all who wish to be employed by him may enter into and remain in such employment freely, without threats of harm, without unreasonable molestation and annoyance from the words, actions or other conduct of any other persons _acting in combination_. What is the measure or test by which the conduct of a combination of persons must be judged in order to determine whether or not it is an unlawful interference with freedom of employment in the labor market, and as such injurious to an employer of labor in respect of his “probable expectancies,” has not as yet been clearly defined. Perhaps no better definition could be suggested than that which may be framed by conveniently using that important legal fictitious person who has taken such a large part in the development of our law during the last fifty years—the reasonably prudent, reasonably courageous and not unreasonably sensitive man. Precisely this same standard is employed throughout the law of nuisance in determining what degree of annoyance on the part of one’s neighbor one must submit to, and what degree of such annoyance is excessive and the subject of an action for damages or a suit for an injunction.

A man may not be liable to an action for slander for calling a workman a “scab” in the street, but if a hundred men combine to have this workman denounced as a “scab” in the street, or followed in the streets to and from his home, so as to attract public attention to him and place him in an annoyingly conspicuous position, such conduct, the result of such combination, is held to be an invasion of the “probable expectancy” of his employer or contemplated employer, an invasion of this employer’s _right to have labor flow freely to him_. Without any regard to the rights and remedies which the molested workman may have, the injunction goes at the suit of the employer to protect his “probable expectancy”—to secure freedom in the labor market to employ and to be employed, upon which the continuance of his entire industry may depend.

I think it is safe to say that all through this development of strike law, during the last decade, no principle becomes established which does not operate equally upon both employer and employe. The rights of both classes are absolutely equal in respect of all these “probable expectancies.” An operator upon printing machines has the right to offer his labor freely to any of the printing shops in Jersey City. These shops may all combine to refuse to employ him on account of his race, or membership in a labor union, or for any other reason, or for no reason, precisely as twenty employes in one printing shop may combine and arbitrarily refuse to be further employed unless the business is conducted in accordance with their views. But in the case of the operative seeking employment, he has a right to have the action of the masters of the printing shops, in reference to employing him, left absolutely free. If, after obtaining, or seeking to obtain, employment in a shop, the master of that shop should be subjected to annoyances and molestation, instigated by the proprietors of other printing shops, who combine to compel by such molestation and annoyance, this one master printer, against his will and wish, to exclude the operative from employment, this operative, in my judgment, would have a right to an action at law for damages, and would have a right to an injunction if his case presented the other ordinary conditions upon which injunctions issue. But the common law courts have not had time to speak distinctly on this subject as yet, and it is necessary to be cautious in dealing with a subject in which both courts of law and courts of equity as yet are feeling their way.

I think that the leading principle enforced in the restraining order in this case is not inconsistent with any authorities which control this court. This principle is that a combination of employers, or a combination of employes, the object of which is to interfere with the freedom of the employer to employ, or of the employe to be employed (in either of which cases there is an interference with the enjoyment of a “probable expectancy,” which the law recognizes as something in the nature of property), by means of such molestation or personal annoyance as would be liable to coerce the person upon whom it was inflicted, assuming that he is reasonably courageous and not unreasonably sensitive, to refrain from employing or being employed, is illegal and founds an action for damages on the part of any person knowingly injured in respect of his “probable expectancy” by such interference, and also, when the other necessary conditions exist, affords the basis of an injunction from a court of equity.

The doctrine which supports that portion of the restraining order in this case which undertakes to interdict the defendants from molesting applicants for employment as an invasion of a right of the complainant, is applicable to a situation presenting either an employer or an employe as complainant, and containing the following elements:

_First._ Some person or persons desiring to exercise the right of employing labor, or the right of being employed to labor.

_Second._ A combination of persons to interfere with that right, by molestation or annoyance, of the employers who would employ, or of the employes who would be employed, in the absence of such molestation.

How far the element of combination of a number of persons will finally be found necessary, in order to make out the invasion of a legal or equitable right in this class of cases, need not be discussed. We are dealing with cases where powerful combinations of large numbers, in fact, exist.

_Third._ Such a degree of molestation as might constrain a person having reasonable fortitude, and not being unreasonably sensitive, to abandon his intention to employ or to be employed, in order to escape such molestation.

_Fourth._ As the result of the foregoing conditions, an actual pecuniary loss to the complaining party, by the interference with his enjoyment of his “probable expectancies” in respect of the labor market.

I do not think that the constraining force brought to bear upon the employer or employe which the law can interdict can ever include the power of public opinion or even of class opinion. Every man, whether an employer or an employe, constitutes a part of a great industrial system, and his conduct is open to the criticism of the members of his own class. While, therefore, a combination of union men have no right to cry “scab” in the streets to non-union employes, or follow them in the street in a body to and from their homes, or do many other things _in combination_, which, if done once by a single individual, would not found an action of tort, such combinations, I think, have left a fairly wide field of effort towards the creation and application of public opinion as a constraining force upon conduct of any kind which they wish to discourage.

I have endeavored to explain, in a general way, my own view of the most important and least understood principle embodied in the restraining order in this case, in order that the defendants, and, in fact, all parties interested, may have all possible light in construing and applying the exact terms of the order. What I have said may be found to be subject to modifications, without subjecting the terms of the order to any change. All generalizations on such a subject—such a novel subject as the one under consideration—are dangerous. There may be conduct on the part of a combination of employers, or of employes, which would seem to come within the general definition or description of illegal and prohibited conduct, which I have attempted to frame, but which conduct, nevertheless, might be justified, and hence could not be adjudged illegal. Molestation and personal annoyance, however, the terms which I have employed, do not seem to be inclusive of any justifiable conduct, especially if no one is allowed to complain that he is molested or annoyed by being subjected peaceably to the judgment and criticism of public opinion.

* * * * *

The vice-chancellor then discussed at length the effect of the answer of the defendants and the affidavits annexed thereto, which denied all the charges of interference with existing labor contracts or molestation practiced to prevent new workmen from being employed. The conclusion was that, notwithstanding such denials, even when sustained by the greater weight of evidence, the restraining order should be held in force as to those defendants who stood fairly charged, under oath, with the interdicted misconduct, and should be vacated as to any other defendants not so charged; that the sole issue appeared to be one of fact, viz., whether the defendants had done, and were threatening to do, the acts complained of or not, and that such an issue could not properly be tried on _ex parte_ affidavits, but should be reserved for the final hearing; that in a case like this, where the defendants were the only persons in sight apparently interested in having the unlawful conduct complained of continued, and were therefore subjected to a temptation to cause such conduct to be continued, an injunction which merely prevented them from doing acts which they disclaimed any right to do, and denied that they had done or threatened to do, should be retained until the final hearing.

THE MOGUL STEAMSHIP COMPANY LIMITED _v._ McGREGOR & COMPANY
IN THE COURT OF APPEAL, JULY 13, 1889.
_Reported in Law Reports, 23 Queen’s Bench Division, 598._

BOWEN, L. J.[580] We are presented in this case with an apparent conflict or antinomy between two rights that are equally regarded by the law—the right of the plaintiffs to be protected in the legitimate exercise of their trade, and the right of the defendants to carry on their business as seems best to them, provided they commit no wrong to others. The plaintiffs complain that the defendants have crossed the line which the common law permits; and inasmuch as, for the purposes of the present case, we are to assume some possible damage to the plaintiffs, the real question to be decided is whether, on such an assumption, the defendants in the conduct of their commercial affairs have done anything that is unjustifiable in law. The defendants are a number of shipowners who formed themselves into a league or conference for the purpose of ultimately keeping in their own hands the control of the tea carriage from certain Chinese ports, and for the purpose of driving the plaintiffs and other competitors from the field. In order to succeed in this object, and to discourage the plaintiffs’ vessels from resorting to those ports, the defendants during the “tea harvest” of 1885 combined to offer to the local shippers very low freights, with a view of generally reducing or “smashing” rates, and thus rendering it unprofitable for the plaintiffs to send their ships thither. They offered, moreover, a rebate of five per cent to all local shippers and agents who would deal exclusively with vessels belonging to the Conference, and any agent who broke the condition was to forfeit the entire rebate on all shipments made on behalf of any and every one of his principals during the whole year—a forfeiture of rebate or allowance which was denominated as “penal” by the plaintiffs’ counsel. It must, however, be taken as established that the rebate was one which the defendants need never have allowed at all to their customers. It must also be taken that the defendants had no personal ill-will to the plaintiffs, nor any desire to harm them except such as is involved in the wish and intention to discourage by such measures the plaintiffs from sending rival vessels to such ports. The acts of which the plaintiffs particularly complained were as follows:—First, a circular of May 10, 1885, by which the defendants offered to the local shippers and their agents a benefit by way of rebate if they would not deal with the plaintiffs, which was to be lost if this condition was not fulfilled. Secondly, the sending of special ships to Hankow in order by competition to deprive the plaintiffs’ vessels of profitable freight. Thirdly, the offer at Hankow of freights at a level which would not repay a shipowner for his adventure, in order to “smash” freights and frighten the plaintiffs from the field. Fourthly, pressure put on the defendants’ own agents to induce them to ship only by the defendants’ vessels, and not by those of the plaintiffs. It is to be observed with regard to all these acts of which complaint is made that they were acts that in themselves could not be said to be illegal unless made so by the object with which, or the combination in the course of which, they were done; and that in reality what is complained of is the pursuing of trade competition to a length which the plaintiffs consider oppressive and prejudicial to themselves. We were invited by the plaintiffs’ counsel to accept the position from which their argument started—that an action will lie if a man maliciously and wrongfully conducts himself so as to injure another in that other’s trade. Obscurity resides in the language used to state this proposition. The terms “maliciously,” “wrongfully,” and “injure” are words all of which have accurate meanings, well known to the law, but which also have a popular and less precise signification, into which it is necessary to see that the argument does not imperceptibly slide. An intent to “injure” in strictness means more than an intent to harm. It connotes an intent to do wrongful harm. “Maliciously,” in like manner, means and implies an intention to do an act which is wrongful, to the detriment of another. The term “wrongful” imports in its turn the infringement of some right. The ambiguous proposition to which we were invited by the plaintiffs’ counsel still, therefore, leaves unsolved the question of what, as between the plaintiffs and defendants, are the rights of trade. For the purpose of clearness, I desire, as far as possible, to avoid terms in their popular use so slippery, and to translate them into less fallacious language wherever possible.

The English law, which in its earlier stages began with but an imperfect line of demarcation between torts and breaches of contract, presents us with no scientific analysis of the degree to which the intent to harm, or, in the language of the civil law, the _animus vicino nocendi_, may enter into or affect the conception of a personal wrong; see Chasemore _v._ Richards, 7 H. L. C. 349, at p. 388. All personal wrong means the infringement of some personal right. “It is essential to an action in tort,” say the Privy Council in Rogers _v._ Rajendro Dutt, 13 Moore, P. C. 209, “that the act complained of should under the circumstances be legally wrongful as regards the party complaining; that is, it must prejudicially affect him in some legal right; merely that it will, however directly, do a man harm in his interests, is not enough.” What, then, were the rights of the plaintiffs as traders as against the defendants? The plaintiffs had a right to be protected against certain kind of conduct; and we have to consider what conduct would pass this legal line or boundary. Now, intentionally to do that which is calculated in the ordinary course of events to damage, and which does, in fact, damage another in that other person’s property or trade, is actionable if done without just cause or excuse. Such intentional action when done without just cause or excuse is what the law calls a malicious wrong (see Bromage _v._ Prosser; Capital and Counties Bank _v._ Henty, _per_ Lord Blackburn, 7 App. Cas. 741, at p. 772). The acts of the defendants which are complained of here were intentional, and were also calculated, no doubt, to do the plaintiffs damage in their trade. But in order to see whether they were wrongful we have still to discuss the question whether they were done without any just cause or excuse. Such just cause or excuse the defendants on their side assert to be found in their own positive right (subject to certain limitations) to carry on their own trade freely in the mode and manner that best suits them, and which they think best calculated to secure their own advantage.

What, then, are the limitations which the law imposes on a trader in the conduct of his business as between himself and other traders? There seem to be no burdens or restrictions in law upon a trader which arise merely from the fact that he is a trader, and which are not equally laid on all other subjects of the Crown. His right to trade freely is a right which the law recognizes and encourages, but it is one which places him at no special disadvantage as compared with others. 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 other, assuming always that there is no just cause for it. The intentional driving away of customers by show of violence, Tarleton _v._ M’Gawley, Peake, 205; the obstruction of actors on the stage by preconcerted hissing, Clifford _v._ Brandon, 2 Camp. 358, Gregory _v._ Brunswick, 13 L. J. C. P. 34; the disturbance of wild fowl in decoys by the firing of guns, Carrington _v._ Taylor, 11 East, 571, and Keeble _v._ Hickeringill, 11 East, 574 note; the impeding or threatening servants or workmen, Garret _v._ Taylor, Cro. Jac. 567; the inducing persons under personal contracts to break their contracts, Bowen _v._ Hall, Lumley _v._ Gye,—all are instances of such forbidden acts. But the defendants have been guilty of none of these acts. They have done nothing more against the plaintiffs than pursue to the bitter end a war of competition waged in the interest of their own trade. To the argument that a competition so pursued ceases to have a just cause or excuse when there is ill-will or a personal intention to harm, it is sufficient to reply (as I have already pointed out) that there was here no personal intention to do any other or greater harm to the plaintiffs than such as was necessarily involved in the desire to attract to the defendants’ ships the entire tea freights of the ports, a portion of which would otherwise have fallen to the plaintiffs’ share. I can find no authority for the doctrine that such a commercial motive deprives of “just cause or excuse” acts done in the course of trade which would but for such a motive be justifiable. So to hold would be to convert into an illegal motive the instinct of self-advancement and self-protection, which is the very incentive to all trade. To say that a man is to trade freely, but that he is to stop short at any act which is calculated to harm other tradesmen, and which is designed to attract business to his own shop, would be a strange and impossible counsel of perfection. But we were told that competition ceases to be the lawful exercise of trade, and so to be a lawful excuse for what will harm another, if carried to a length which is not fair or reasonable. The offering of reduced rates by the defendants in the present case is said to have been “unfair.” This seems to assume that, apart from fraud, intimidation, molestation, or obstruction, of some other personal right _in rem_ or _in personam_, there is some natural standard of “fairness” or “reasonableness” (to be determined by the internal consciousness of judges and juries) beyond which competition ought not in law to go. There seems to be no authority, and I think, with submission, that there is no sufficient reason, for such a proposition. It would impose a novel fetter upon trade. The defendants, we are told by the plaintiffs’ counsel, might lawfully lower rates provided they did not lower them beyond a “fair freight,” whatever that may mean. But where is it established that there is any such restriction upon commerce? And what is to be the definition of a “fair freight?” It is said that it ought to be a normal rate of freight, such as is reasonably remunerative to the shipowner. But over what period of time is the average of this reasonable remunerativeness to be calculated? All commercial men with capital are acquainted with the ordinary expedient of sowing one year a crop of apparently unfruitful prices, in order by driving competition away to reap a fuller harvest of profit in the future; and until the present argument at the bar it may be doubted whether shipowners or merchants were ever deemed to be bound by law to conform to some imaginary “normal” standard of freights or prices, or that law courts had a right to say to them in respect of their competitive tariffs, “Thus far shalt thou go, and no further.” To attempt to limit English competition in this way would probably be as hopeless an endeavor as the experiment of King Canute. But on ordinary principles of law no such fetter on freedom of trade can in my opinion be warranted. A man is bound not to use his property so as to infringe upon another’s right. _Sic utere tuo ut alienum non lædas._ If engaged in actions which may involve danger to others, he ought, speaking generally, to take reasonable care to avoid endangering them. But there is surely no doctrine of law which compels him to use his property in a way that judges and juries may consider reasonable: see Chasemore _v._ Richards, 7 H. L. C. 349. If there is no such fetter upon the use of property known to the English law, why should there be any such a fetter upon trade?

It is urged, however, on the part of the plaintiffs, that even if the acts complained of would not be wrongful had they been committed by a single individual, they become actionable when they are the result of concerted action among several. In other words, the plaintiffs, it is contended, have been injured by an illegal conspiracy. Of the general proposition, that certain kinds of conduct not criminal in any one individual may become criminal if done by combination among several, there can be no doubt. The distinction is based on sound reason, for a combination may make oppressive or dangerous that which if it proceeded only from a single person would be otherwise, and the very fact of the combination may show that the object is simply to do harm, and not to exercise one’s own just rights. In the application of this undoubted principle it is necessary to be very careful not to press the doctrine of illegal conspiracy beyond that which is necessary for the protection of individuals or of the public; and it may be observed in passing that as a rule it is the damage wrongfully done, and not the conspiracy, that is the gist of actions on the case for conspiracy: see Skinner _v._ Gunton, 1 Wms. Saund. 229; Hutchins _v._ Hutchins, 7 Hill, 104. But what is the definition of an illegal combination? It is an agreement by one or more to do an unlawful act, or to do a lawful act by unlawful means: O’Connell _v._ The Queen, 11 Cl. & F. 155; Reg. _v._ Parnell, 14 Cox, Criminal Cases, 508; and the question to be solved is whether there has been any such agreement here. Have the defendants combined to do an unlawful act? Have they combined to do a lawful act by unlawful means? A moment’s consideration will be sufficient to show that this new inquiry only drives us back to the circle of definitions and legal propositions which I have already traversed in the previous part of this judgment. The unlawful act agreed to, if any, between the defendants must have been the intentional doing of some act to the detriment of the plaintiffs’ business without just cause or excuse. Whether there was any such justification or excuse for the defendants, is the old question over again, which, so far as regards an individual trader, has been already solved. The only differentia that can exist must arise, if at all, out of the fact that the acts done are the joint acts of several capitalists, and not of one capitalist only. The next point is whether the means adopted were unlawful. The means adopted were competition carried to a bitter end. Whether such means were unlawful is in like manner nothing but the old discussion which I have gone through, and which is now revived under a second head of inquiry, except so far as a combination of capitalists differentiates the case of acts jointly done by them from similar acts done by a single man of capital. But I find it impossible myself to acquiesce in the view that the English law places any such restriction on the combination of capital as would be involved in the recognition of such a distinction. If so, one rich capitalist may innocently carry competition to a length which would become unlawful in the case of a syndicate with a joint capital no larger than his own, and one individual merchant may lawfully do that which a firm or a partnership may not. What limits, on such a theory, would be imposed by law on the competitive action of a joint-stock company limited, is a problem which might well puzzle a casuist. The truth is, that the combination of capital for purposes of trade and competition is a very different thing from such a combination of several persons against one, with a view to harm him, as falls under the head of an indictable conspiracy. There is no just cause or excuse in the latter class of cases. There is such a just cause or excuse in the former. There are cases in which the very fact of a combination is evidence of a design to do that which is hurtful without just cause—is evidence—to use a technical expression—of malice. But it is perfectly legitimate, as it seems to me, to combine capital for all the mere purposes of trade for which capital may, apart from combination, be legitimately used in trade. To limit combinations of capital, when used for purposes of competition, in the manner proposed by the argument of the plaintiffs, would, in the present day, be impossible—would be only another method of attempting to set boundaries to the tides. Legal puzzles which might well distract a theorist may easily be conceived of imaginary conflicts between the selfishness of a group of individuals and the obvious well-being of other members of the community. Would it be an indictable conspiracy to agree to drink up all the water from a common spring in a time of drought; to buy up by preconcerted action all the provisions in a market or district in times of scarcity: see Rex _v._ Waddington, 1 East, 143; to combine to purchase all the shares of a company against a coming settling-day; or to agree to give away articles of trade gratis in order to withdraw custom from a trader? May two itinerant match-vendors combine to sell matches below their value in order by competition to drive a third match-vendor from the street? In cases like these, where the elements of intimidation, molestation, or the other kinds of illegality to which I have alluded are not present, the question must be decided by the application of the test I have indicated. Assume that what is done is intentional, and that it is calculated to do harm to others. Then comes the question, Was it done with or without “just cause or excuse?” If it was _bona fide_ done in the use of a man’s own property, in the exercise of a man’s own trade, such legal justification would, I think, exist not the less because what was done might seem to others to be selfish or unreasonable: see the summing-up of Erle, J., and the judgment of the Queen’s Bench in Reg. _v._ Rowlands, 17 Q. B. 671. But such legal justification would not exist when the act was merely done with the intention of causing temporal harm, without reference to one’s own lawful gain, or the lawful enjoyment of one’s own rights. The good sense of the tribunal which had to decide would have to analyze the circumstances and to discover on which side of the line each case fell. But if the real object were to enjoy what was one’s own, or to acquire for one’s self some advantage in one’s property or trade, and what was done was done honestly, peaceably, and without any of the illegal acts above referred to, it could not, in my opinion, properly be said that it was done without just cause or excuse. One may with advantage borrow for the benefit of traders what was said by Erle, J., in Reg. _v._ Rowlands, 17 Q. B. 671, at p. 687, n., of workmen and of masters: “The intention of the law is at present to allow either of them to follow the dictates of their own will, with respect to their own actions, and their own property; and either, I believe, has a right to study to promote his own advantage, or to combine with others to promote their mutual advantage.”

Lastly, we are asked to hold the defendants’ Conference or association illegal, as being in restraint of trade. The term “illegal” here is a misleading one. Contracts, as they are called, in restraint of trade, are not, in my opinion, illegal in any sense, except that the law will not enforce them. It does not prohibit the making of such contracts; it merely declines, after they have been made, to recognize their validity. The law considers the disadvantage so imposed upon the contract a sufficient shelter to the public. The language of Crompton, J., in Hilton _v._ Eckersley, 6 E. & B. 47, is, I think, not to be supported. No action at common law will lie or ever has lain against any individual or individuals for entering into a contract merely because it is in restraint of trade. Lord Eldon’s equity decision in Cousins _v._ Smith, 13 Ves. 542, is not very intelligible, even if it be not open to the somewhat personal criticism passed on it by Lord Campbell in his “Lives of the Chancellors.” If indeed it could be plainly proved that the mere formation of “conferences,” “trusts,” or “associations” such as these were always necessarily injurious to the public—a view which involves, perhaps, the disputable assumption that, in a country of free trade, and one which is not under the iron _régime_ of statutory monopolies, such confederations can ever be really successful—and if the evil of them were not sufficiently dealt with by the common law rule, which held such agreements to be void as distinct from holding them to be criminal, there might be some reason for thinking that the common law ought to discover within its arsenal of sound commonsense principles some further remedy commensurate with the mischief. Neither of these assumptions are, to my mind, at all evident, nor is it the province of judges to mould and stretch the law of conspiracy in order to keep pace with the calculations of political economy. If peaceable and honest combinations of capital for purposes of trade competition are to be struck at, it must, I think, be by legislation, for I do not see that they are under the ban of the common law.

In the result, I agree with Lord Coleridge, C. J., and differ, with regret, from the Master of the Rolls. The substance of my view is this, that competition, however severe and egotistical, if unattended by circumstances of dishonesty, intimidation, molestation, or such illegalities as I have above referred to, gives rise to no cause of action at common law. I myself should deem it to be a misfortune if we were to attempt to prescribe to the business world how honest and peaceable trade was to be carried on in a case where no such illegal elements as I have mentioned exist, or were to adopt some standard of judicial “reasonableness,” or of “normal” prices, or “fair freights,” to which commercial adventurers, otherwise innocent, were bound to conform.

In my opinion, accordingly, this appeal ought to be dismissed with costs.

_Appeal dismissed._[581]

PASSAIC PRINT WORKS _v._ ELY & WALKER DRY GOODS COMPANY
UNITED STATES CIRCUIT COURT OF APPEALS, EIGHTH CIRCUIT, NOVEMBER 14,
1900.
_Reported in 44 U. S. Circuit Court of Appeals Reports, 426_, S. C. _105
Federal Reporter, 163._

In U. S. Circuit Court of Appeals, Eighth Circuit. Before CALDWELL, SANBORN, and THAYER, Circuit Judges.[582]

In error to U. S. Circuit Court for Eastern District of Missouri.

This case was determined below on a demurrer to the plaintiff’s petition, which was sustained; and a final judgment was entered against the Passaic Print Works, the plaintiff below, it having declined to plead further.

The plaintiff’s petition contained, in substance, the following allegations (_inter alia_):—

Plaintiff is a corporation engaged in the manufacture of prints or calicoes which it sells to jobbers or wholesale dealers in St. Louis and elsewhere, who in turn sell the same to the retail trade. In 1899 it had fixed on certain prices for certain specified brands of calicoes; and it had, prior to Feb. 25, 1899, received from several wholesale dealers in St. Louis orders for large amounts of said brands at the prices specified. On February 25, 1899, the defendant company, combining and conspiring among themselves and with others to the plaintiff unknown, and maliciously intending to injure the business of the said plaintiff, and to cause it great loss in money, and to break up and ruin the plaintiff’s trade among the jobbers in St. Louis, maliciously caused a circular, in the name of the said defendant corporation, to be issued and sent out to the retail trade tributary to St. Louis. In the circular defendant company offered for sale several brands of calicoes manufactured by plaintiff at prices lower than those fixed by plaintiff. The brands were offered “as long as they last” at these reduced prices: “Prices for all items subject to change without notice, and orders accepted only for stock on hand.” Plaintiff further alleged that it was informed and believed that defendant had but a small quantity of such goods to sell, and for that reason qualified its offer as above stated.

The petition further averred, that the effect of issuing this circular was to compel jobbers to whom plaintiff had already sold either to cancel their orders or to compel plaintiff to make a rebate on price, and to thereby break up the trade of plaintiff in St. Louis and the adjacent country, and to make the other jobbers in St. Louis afraid to deal in said brands except at greatly reduced prices and then in comparatively small quantities; and upon information and belief the plaintiff alleged “that the quotations of this plaintiff’s said goods in the said circular were made by the said defendants with the end and object in this paragraph stated, and not for any legitimate trade purpose.”

THAYER, Circuit Judge, [after stating the case] delivered the opinion of the court.