Bohn Manufacturing Co. v. Hollis , 54 Minn. 223 ( 1893 )

Mitchell, J.

The pleadings in this case, and the affidavits read on the motion to dissolve the temporairy injunction, are so voluminous, and so abound in mere inferences as to motives and consequences, and in adjectives and other qualifying epithets, as to convey the impression, at first sight, that the facts were both complicated and controverted. But a careful analysis of the record proves that there is no real dispute as to the material facts, which are comparatively simple. Stripped of all extraneous matter, the case discloses just this state of facts: The plaintiff is a manufacturer and vendor of lumber and other building material, having a large and profitable trade at wholesale and retail in this and adjoining states, a large and valuable part of this trade being with the retail lumber dealers. The defendant the Northwestern Lumbermen’s Association is a voluntary association of retail lumber dealers, comprising from twenty-five to fifty per cent, of the retail dealers doing business in the states referred to, many of whom are, or have been, customers of the plaintiff. A “retailer,” as defined in the constitution of the association, is “any person who is engaged in retailing lumber, who carries at all times a stock of lumber adequate to the wants of the community, and who regularly maintains an office as a lumber dealer, and keeps the same open at proper times.” Any wholesale dealer or manufacturer of lumber who conforms to the rules of the association may become an honorary member, and attend its meetings, but is not allowed to vote. The object of the association is stated in its constitution to be “the protection of its members against sales by wholesale dealers and manufacturers to contractors and consumers.” The object is more fully stated, and the means by which it is to be carried into effect are fully set out, in sections 3, 3£, 4, and 6 of the by-laws, which are all that we consider material in this case. The plaintiff sold two bills of lumber directly to consumers or contractors at points where members of the association were engaged in business as retail dealers. Defendant Hollis, the secretary of the association, having been informed of this fact, notified plaintiff, in pursuance of section 3 of the by-laws, that he had a claim- against it for ten per cent, of the amount of these sales. Considerable correspondence with reference to the matter ensued, in which the plaintiff, from time to time, promised to adjust the matter, but procrastinated and evaded doing so for so long that finally Hollis threatened that unless plaintiff immediately settled the matter be would send to all the members of the association the lists or notices provided for by section 6 of the by-laws, notifying them that plaintiff refused to comply with the rules of the association, and was no longer in sympathy with it. Thereupon, plaintiff commenced this action for a permanent injunction, and obtained, ex parte, a temporary one, enjoining the defendants from issuing these notices, etc. This appeal is from an order refusing to dissolve the temporary injunction. It is alleged, and in view, of the facts must be presumed to be true, that if these notices should be issued the members of the association would thereafter refuse to deal with the plaintiff, thereby resulting in loss to it of gains and profits.

The case presents one phase of a subject which is likely to be one of the most important and difficult which will confront the courts during the next quarter of a century. This is the age of associations and unions, in all departments of labor and business, for purposes of mutual benefit and protection. Confined to proper limits, both as to end and means, they are not only lawful, but laudable. Carried beyond those limits, they are liable to become dangerous agencies for wrong and oppression. Beyond what limits these associations or combinations cannot go, without interfering with the legal rights of others, is the problem which, in various phases, the courts will doubtless be frequently called to. pass upon. There is, perhaps, danger that, influenced by such terms of illusive meaning as “monopolies,” “trusts,” “boycotts,” “strikes,” and the like, they may be led to transcend the limits of their jurisdiction, and, like the court of king’s bench in Bagg’s Case, 11 Coke, 98a, assume that, on general principles, they have authority to correct or reform everything which they may deem wrong, or, as Lord Ellsmere puts it, “to. manage the state.” But whatever doubts or difficulties may arise in other cases, presenting other phases of the general subject involved here, it seems to us that there can be none on the facts of the present case. Both the affidavits and brief in behalf of the plaintiff indulge in a great deal of strong, and even exaggerated, assertion, and in many words and expressions of very indefinite and illusive meaning, such as “wreck,” “coerce,” “extort,” “conspiracy,” “monopoly,” “drive out of business,” and tbe like. This looks very formidable, but in law, as well as in mathematics, it simplifies things very much to reduce them to their lowest terms. It is conceded that retail lumber yards in the various cities, towns, and villages are not only a public convenience, but a public necessity; also, that, to enable the owners to maintain these yards, they must sell their lumber at a reasonable profit. It also goes without saying that to have manufacturers or wholesale dealers sell at retail, directly to consumers, in the territory upon which the retail dealer depends for his customers, injuriously affects and demoralizes his trade. This is so well recognized as a rule of trade, in every department, that generally wholesale dealers refrain from selling at retail within the territory from which their customers obtain their trade. Now, when reduced to its ultimate analysis, all that the retail lumber dealers, in this case, have done, is to form an association to protect themselves from sales by wholesale dealers or manufacturers, directly to consumers or other nondealers, at points where a member of the association is engaged in the retail business. The means adopted to effect this object are simply these: They agree among themselves that they will not deal with any wholesale dealer or manufacturer who sells directly to customers, not dealers, at a point where a member of the association is doing business, and provide for notice being-given to all their members whenever a wholesale dealer or manufacturer makes any such sale. That is the head and front of defendants’ offense. It will be observed that defendants were not proposing to send notices to any one but members of the association. There was no element of fraud, coercion, or intimidation, either towards plaintiff or the members of the association. True, the secretary, in accordance with section 3 of the by-laws, made a demand on plaintiff for ten per cent, on the amount of the two sales. But this involved no element of coercion or intimidation, in -the legal sense of those terms. It was entirely optional with plaintiff whether it would pay or not. If it valued the trade of the members of the association higher than that of nondealers at the. same points, it would probably conclude to pay; otherwise, not" It cannot be claimed that the act of making this demand was actionable; much less, that it constituted any ground for an injunction; and hence this matter may be laid entirely out of view. Nor was any coercion proposed to be brought to bear on the members of the association, to prevent them from trading with the plaintiff. After they received the notices, they would be at entire liberty to trade with plaintiff, or not, as they saw fit. By the provisions of the by-laws, if they traded with the plaintiff, they were liable to be “expelled;” but this simply meant to cease to be members. It was wholly a matter of their own free choice, which they preferred, — to trade with the plaintiff, or to continue members of the association. So much for the facts, and all that remains is to apply to them a few well-settled, elementary principles of law:

1. The mere fact that the proposed acts of the defendants would have resulted in plaintiff’s loss of gains and profits does not, of itself, render those acts unlawful or actionable. That depends on whether the acts are, in and of themselves, unlawful. “Injury,” in its legal sense, means damage resulting from an unlawful act. Associations may be entered into, the object of which is to adopt measurés that may tend to diminish the gains and profits of another, and yet, so far from being unlawful, they may be highly meritorious. Commonwealth v. Hunt, 4 Met. (Mass.) 111; Mogul Steamship Co. v. McGregor, 21 Q. B. Div. 544.

2. If an act be lawful,—one that the party has a legal right to do,—the fact that he may be actuated by an improper motive does not render it unlawful. As said in one case, “the exercise by one man of a legal right cannot be legal wrong to another,” or, as expressed in another case, “malicious motives, make a bad case worse, but they cannot make that wrong which, in its own essence, is lawful.” Heywood v. Tillson, 75 Me. 225; Phelps v. Nowlen, 72 N. Y. 39; Jenkins v. Fowler, 24 Pa. St. 308.

3. To enable the plaintiff to maintain this action, it must appear that defendants have committed, or are about to commit, some unlawful act, which will interfere with, and injuriously affect, some of its legal rights. We- advert to this for the reason that counsel for plaintiff, devotes much space to assailing this association as one whose object is unlawful because in restraint of trade. We fail to see wherein it is subject to this' charge; but, even if it were, this would not, of itself, give plaintiff a cause of action. No case' can be found in which it was ever held that, at common law, a contract or agreement in general restraint of trade was actionable at tbe instance of third parties, or could constitute the foundation for sucb an action. The courts sometimes call such contracts “unlawful” or “illegal,” but in every instance it will be found that these terms were used in the sense, merely, of “void” or “unenforce-ble” as between the parties; the law considering the disadvantage so imposed upon the contract a sufficient protection to the public. Mogul Steamship Co. v. McGregor, 23 Q. B. Div. 598, [1892] App. Cas. 25.

4., What one man may lawfully do singly, two or more may law-1 fully agree to do jointly. The number who unite to do the act can-1 not change its character from lawful to unlawful. The gist of a private action for the wrongful act of many is not the combination or conspiracy, but the damage done or threatened to the plaintiff by the acts of the defendants. If the act be unlawful, the combination of many to commit it may aggravate the injury, but cannot change the character of the act. In a few cases there may be some loose remarks apparently to the contrary, but they evidently have their origin in a confused and inaccurate idea of the law of criminal conspiracy, and in failing to distinguish between an unlawful act and a criminal one. It can never be a crime to combine to commit a lawful act, hut it may be a crime for several to conspire to commit an unlawful act, which, if done by one individual alone, although unlawful, would not be criminal. Hence, the fact that the defendants associated themselves together to do the act complained of is wholly immaterial in this case. We have referred to this for the reason that counsel has laid great stress upon the fact of the combination of a large number of persons, as if that, of itself, rendered their conduct actionable. Bowen v. Matheson, 14 Allen, 499; Mogul Steamship Co. v. McGregor, 23 Q. B. Div. 598, [1892] App. Cas. 25; Parker v. Huntington, 2 Gray, 124; Wellington v. Small, 3 Cush. 145; Payne v. Western & Atlantic R. Co., 13 Lea, 507.

5. With these propositions in mind, which bring the case down to a very small compass, we come to another proposition, which is entirely decisive of the case. It is perfectly lawful for any man1 (unless under contract obligation, or unless his employment charges him with some public duty) to refuse to work for or to deal with any man or class of men, as he sees fit. This doctrine is founded! upon the fundamental right of every man to conduct his own business in his own way, subject only to the condition that he does not interfere with the. legal rights, of others. And, as has been already said, the right which one man may exercise singly, many, after consultation, may agree to exercise jointly, and make simultaneous declaration of their choice. This has been repeatedly held as to associations or unions of workmen, and associations of men in other occupations or lines of business must be governed by the same principles. Summed up, and stripped of all extraneous matter* this is all that defendants have done, or threatened to do, and we fail to see anything unlawful or actionable in it. Commonwealth v. Hunt, supra; Carew v. Rutherford, 106 Mass. 1; Mogul Steamship Co. v. McGregor, [1892] App. Cas. 25.

{.Opinion published 55 N. W. Rep. 1119.)

Order reversed, and injunction dissolved.

Vanderburgh, J., absent, took no part.