R an W Hat Shop, Inc. v. Sculley , 98 Conn. 1 ( 1922 )

We shall take up first the corrections of the finding which appellant seeks to have made. There are ninety-seven of these, of which only a few are specifically pursued in the brief. Their disposal did not require the printing of the entire evidence. It was an abuse of our practice to have caused this evidence to have been made a part of the record. Counsel for the appellant use this evidence not only in relation to the errors as to the finding, but also in support of their grounds of argument. This latter use is wholly contrary to our practice and is essentially unfair. No litigant was ever benefited in this court by the improper use of evidence made a part of the record for the limited purpose of correcting the finding. The trial court finds that it was not the purpose of Green and Lawlor in the instructions given, nor of Sculley or O'Hara, to cause the breach of any existing contracts. But the court also finds that the natural effect of the instructions, if carried out, would be to cause breaches of contracts, and that these defendants ought as reasonable men to have known this.

Sculley and O'Hara knew that McLachlan was doing business with the plaintiff. They failed to ask McLachlan whether the plaintiff had any contracts for unfilled orders with him. The court found that they might well have inferred from their conversation with, and from the conduct of, McLachlan that he had then no other accepted and unfilled orders from the plaintiff. This does not seem to us to have been a reasonable inference to draw, but rather that the circumstances were such as to put them on inquiry as to whether McLachlan had unfilled orders from plaintiff at this time, June 24th, and that the substance of draft-finding 45 should have been found. But whether these defendants should have been charged with this knowledge at this time becomes unimportant in view of the finding that a few days later they learned that McLachlan had accepted, unfilled orders from plaintiff, or heard statements which would have indicated this to any reasonable person. Having acquired such notice, if they persisted in procuring the continuance of the breach of plaintiff's contract, their responsibility will arise in the same way as it would if they had had notice when they first procured the breach. Bigelow on Torts (8th Ed.) p. 259.

The plaintiff's draft-finding 47, that "defendants Sculley and O'Hara, with knowledge of the existence of the orders placed by the plaintiff with McLachlan, induced and persuaded him to break his contracts with plaintiff," might well have been specifically found, but as we read the finding it is fairly involved in it, so that there is no occasion to add this request.

The court refused to find plaintiff's request 8, that defendants' purpose was to make plaintiff's factory a union shop, and to accomplish that by means of injury inflicted upon it. These claims were matters of inference from the evidence and for the court to draw. The instructions as to giving union finishing shops the preference was given by letter to the officers of the local unions, including Sculley and O'Hara, by the officers of the national organization, Green and Lawlor. Upon plaintiff's demand at the trial, defendants promised to produce the letter, but failed to do so. Plaintiff seeks to have inserted in the finding the inference which it claims should be drawn from this failure to produce. Evidence has no place in a finding. There is nothing in the record showing that the court did not consider this item of evidence in connection with the rest of the evidence.

We do not find that the court was in error in refusing to find that defendants employed threats and coercion to procure McLachlan to breach his contracts with plaintiff, nor in refusing to find that defendants conspired to prevent McLachlan from producing hat bodies for plaintiff. The court's refusal under the evidence was not unreasonable.

The court has inadvertently failed to make a finding as to the damage suffered by plaintiff through the breach by McLachlan of his contracts. There appears to have been no serious conflict as to this. There should be added to the finding substantially paragraph 70 of the draft-finding, viz: as a result of the refusal of McLachlan to deliver the hat bodies contracted for by plaintiff, it was compelled to purchase them elsewhere at a cost over the contract prices of $5,139.75, and the damage suffered by plaintiff from such breach was $5,139.75.

The action of the trial court as to the other findings complained of is too plainly justified to require discussion. There remains to consider, upon the finding as thus corrected, the questions of law which appellant discusses in its brief. Point 2, that "the combination engaged in by defendants was an unlawful conspiracy in restraint of interstate trade and commerce," we shall refrain from discussing in view of the conclusion reached upon another ground of appeal. Point 3, that "the combination in which defendants are engaged is an unlawful combination to boycott and injure the plaintiff," does not arise upon the facts found. Point 4, that "the defendants employed threats and coercion for the purpose of intimidating McLachlan into breaching his contracts and such action by them was unlawful," is not raised by the finding. Moreover, if these facts did appear in the finding, the plaintiff could not urge the claim that defendants' conduct was forbidden by General Statutes, § 6358, since no such claim appears to have been made upon the trial and is not found in the appeal.

The single remaining question before us is stated in plaintiff's brief as follows: "It is unlawful to knowingly induce a breach of contract either with intent to injure a third party or to secure a benefit for oneself." The facts found show that defendants Sculley and O'Hara were the agents of Green and Lawlor throughout this transaction. They further show that defendants Green, Lawlor, Sculley and O'Hara intentionally procured, by means of these instructions, the breach of McLachlan's contracts with plaintiff, when Sculley and O'Hara had personal knowledge of their existence and Green and Lawlor had knowledge through that of their agents Sculley and O'Hara, for the purpose of securing for union "finishing" shops an adequate supply of "hats in the rough," so as to secure to the members of the affiliated unions steady employment. It thus appears that these defendants, who represented these unions, knew of these contracts when they procured their breach, and that their purpose was to benefit the unions and their members.

The plaintiff was free to make any legal contract with McLachlan, and he with the plaintiff, which did not wrongfully infringe upon the legal rights of others or offend against public rights, and their liberty to so contract was a right which our law gave and guaranteed to each. When the plaintiff and McLachlan entered into their contracts, each acquired the right to have the other fulfil them according to their terms, or to obtain damages for the failure to fulfil. These were the duties which the contracts imposed on each, and these were the rights which they created. Such contract relation gave to each a property right in the contracts, and any intentional interference with the rights of either by a third party was an interference with his rights of property, and if intentionally done by one not having equal or superior rights or by one knowing of this contract relation, it was a wrongful interference subjecting him who procured the breach to an action for the damage resulting from the tort.

When one acting under a right of his own interferes with an existing contract in ignorance of it, he has committed no wrong. The mere fact that his act injures another does not create a liability, for he was acting within his own rights and did not intentionally or wrongfully cause the injuries. And where one acting under an equal or a superior right causes such injury to a contract relation, he will not be liable for resulting damage, for he had a right to do what he did. Procuring the breach of a contract without knowledge of it, or acting in the exercise of an equal or a superior right, is acting with just cause or excuse, and, when this appears, it is a justification for what would otherwise be an actionable wrong.

Sculley and O'Hara acted with personal knowledge of plaintiff's contracts. Green and Lawlor acted with knowledge, because their agents, Sculley and O'Hara, obtained this knowledge while carrying out the instructions of their principals, Green and Lawlor. Their attempted justification is that they acted in the exercise of an equal or superior right to that of the plaintiff, and that the injury to it was incidental to their exercise of their undoubted right, and consequently was damnumabsque injuria. Their justification is that they sought to benefit those whom they represent by securing for them the means for steady employment. The purpose was legitimate and commendable, but it could not be carried out in disregard of the rights of plaintiff, which were existent before this purpose was conceived. The plaintiff's rights were superior to those of these defendants. A justification for injury to another cannot rest upon the violation of his existing rights which he who justifies knew of. Though the defendants' purpose was commendable, the means used to carry it through cannot be justified. The knowingly procuring McLachlan to breach his contracts with plaintiff were wrongful acts of defendants and done intentionally by them, and for the resulting damage they are liable. "The gist of the action is not the intent to injure, but to interfere without justification with plaintiff's contractual rights with knowledge thereof." Lamb v. Cheney Son, 227 N.Y. 418, 422, 125 N.E. 817; Quinn v.Leathem, L. R. (1901) App. Cas. 495.

The trial court held that liability for procuring the breach of these contracts would have arisen had their breach been the end sought, but when the end sought was the securing of work for the members of the union and the breach of the contracts was an incident following the carrying out of this legitimate purpose, no liability would arise. If such a doctrine were law, a third person or combination of persons could compel the breach of any contract and justify by saying to him who had suffered great loss because of the breach of his contract: "We did not do it to cause you injury or to breach your contract, but to improve our financial condition; the breach of your contract was a mere incident to the fulfillment of our purpose." The inviolability of contracts would then be an incident to the self-interest of men. It may be that an occasional authority has announced this doctrine, but an extended examination satisfies us that the authorities generally upon this subject are not in accord with it and are in accord with the conclusions to which we have come.

The intentional procurement of the breach of an existent contract, if done with knowledge of the contract and without just cause or excuse, makes him who causes the breach liable for resulting damage; and this is so even though he acted in promoting his own legitimate interests. This principle originated, so far as fixing it in definite and clear statement in a given case, in 1853, in Lumley v. Gye, 2 El. Bl. 216, in an action on the case for a breach of a contract for personal service. That court announced the principle that the duty rested upon all, not parties to the contract but having knowledge of it, not to maliciously procure the breach of the contract, and that such a violation of duty was wrongful and for it an action on the case would lie. Bowen v.Hall, L. R. 6 Q. B. D. 333, 337, in 1881, reaffirmed this principle as applicable to all kinds of contracts, and so the law of England has remained. "Maliciously" was used not in the sense of ill will, but that the act done was a wrongful and unlawful act. Lord Crompton, in Lumley v. Gye, says "that a person who wrongfully and maliciously, or, which is the same thing, with notice, interrupts the relation subsisting between master and servant . . . whereby the master is injured, commits a wrongful act." Lord James observes, in South Wales Miners Federation v. Glamorgan CoalCo., Ltd., L. R. (1905) App. Cas. 239, 250: "If the breach of the contract of service by the workmen was an unlawful act, any one who induces and procures the workmen, without just cause or excuse, to break such contract also acts unlawfully, and thus the allegation that the act done was wrongfully done is established." Lord Lindley, in Quinn v. Leathem, L. R. (1901) App. Cas. 495, 535, states the principle in this way: "But if the interference is wrongful and is intended to damage a third person, and he is damaged in fact — in other words, if he is wrongfully and intentionally struck at through others, and is thereby damnified —" he has an action. In Bromage v. Prosser, 4 Barn. Cress. 247, 255, the court defines "maliciously." "In its legal sense it means a wrongful act, done intentionally, without just cause or excuse." See also Mogul Steamship Co. v. McGregor, L. R. 23 Q. B. D. 598, 613. These authorities hold that "maliciously" merely means wrongful or unlawful in the sense of an act done without justification.

The Supreme Judicial Court of Massachusetts in 1871, some ten years before Bowen v. Hall, announced, in an action on the case for procuring the breach of a contract, this principle as applicable to all cases of breaches of contracts, and held that "if such a contract [for employment] exists, one who knowingly and intentionally procures it to be violated may be held liable for the wrong, although he did it for the purpose of promoting his own business." Walker v. Cronin, 107 Mass. 555,563. In 1893, in Angle v. Chicago, St. P., M. O. Ry.Co., 151 U.S. 1, 13, 14 Sup. Ct. 240, the Supreme Court of the United States sustained a cause of action in which it was alleged that through the efforts of the defendant, the performance by the plaintiff of his contract for the construction of a railroad was prevented; and held, in an opinion by Mr. Justice Brewer, that "it has been repeatedly held that, if one maliciously interferes in a contract between two parties, and induces one of them to break that contract to the injury of the other, the party injured can maintain an action against the wrongdoer." This decision and the principle so announced, has been expressly upheld in later decisions. Bitterman v. Louisville N. R. Co., 207 U.S. 205, 223,28 Sup. Ct. 91. Mr. Justice Hughes, in Dr. Miles Medical Co. v. Park Sons Co., 220 U.S. 373, 394, 31 Sup. Ct. 376, summarizes the principle of the Federal court in this terse form: "The complainant invokes the established doctrine that an actionable wrong is committed by one who maliciously interferes with a contract between two parties and induces one of them to break that contract to the injury of the other." The sense in which maliciously is used by this court is expressed in Bitterman v. Louisville N. R. Co., 207 U.S. 205, 223,28 Sup. Ct. 91: "It is not necessary that the ingredient of actual malice in the sense of personal ill will should exist to bring this controversy within the doctrine of the Angle Case. The wanton disregard of the rights of a carrier causing injury to it, which the business . . . involved, constitutes legal malice within the doctrine of the Angle Case." See also Hitchman Coal Coke Co. v. Mitchell, 245 U.S. 229, 38 Sup. Ct. 65.

The principle of these cases has often been affirmed and its reach and limitation determined by the Massachusetts court. In Martell v. White, 185 Mass. 255, 258,69 N.E. 1085, the defendant association was coerced into refusing to trade with plaintiff. The court expressed its position with clearness: "In a case like this," it said, "where the injury is intentionally inflicted, the crucial question is whether there is justifiable cause for the act. If the injury be inflicted without just cause or excuse, then it is actionable. . . . But from the very nature of the case it is manifest that the right of competition furnishes no justification for an act done by the use of means which in their nature are in violation of the principle upon which it rests." In an action on the case for a breach of plaintiff's contract of employment, the court, in Berry v. Donovan,188 Mass. 353, 355, 74 N.E. 603, declared: "The primary right of the plaintiff to have the benefit of his contract and to remain undisturbed in the performance of it is universally recognized. . . . Such a right can lawfully be interfered with only by one who is acting in the exercise of an equal or superior right which comes in conflict with the other. An intentional interference with such a right, without lawful justification, is malicious in law, even if it is from good motives and without express malice." This interpretation of malicious is approved in Beekman v. Marsters,195 Mass. 205, 212, 80 N.E. 817; McGurk v. Cronenwett,199 Mass. 457, 461, 85 N.E. 576; Lamb v. Cheney Son, 227 N.Y. 418, 421, 125 N.E. 817.

A number of cases of like doctrine will be found cited in the notes in Annotated Cases, 1916E, p. 608,id. 1912B, p. 1162, and Vol. 11, Amer. Eng. Anno. Cases, p. 337. Valuable discussions of this subject will be found in an article on Lumley v. Gye, by Mr. Schofield in 2 Harvard Law Review, 19; and in Chapter 7 of Bigelow on Torts (8th Ed.), is an illuminating discussion of the entire subject.

The term "malicious" in this connection has been called a mere title and this designation seems apposite. Its use always occasions question and requires definition and explanation. For this reason we incline to agree with Lord James when he says, in his opinion in SouthWales Miners Federation v. Glamorgan Coal Co., Ltd., L. R. (1905) App. Cas. 239, 255: "But 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 malice and so avoid all misunderstanding"; and plaintiff in this case probably for this reason substitutes in its complaint in place of maliciously the words "wilfully and knowingly."

We adopted, in substance, the principle of these authorities in Connors v. Connolly, 86 Conn. 641,86 A. 600, which was an action to recover damages for a conspiracy to secure plaintiff's discharge, in these words: "The undisputed facts disclose that the plaintiff suffered damage in the loss of his employment, and that this damage was intentionally caused. These facts shown, a prima facie cause of action was made out against those who, thus acting with intent, caused the damage. Recovery, however, might be defeated by the establishment by those persons of a justification, the burden being upon them to do so."

As a result of the breaching of plaintiff's contracts with McLachlan it has suffered a loss of $5,139.75.

There is error as to Green, Lawlor, Sculley and O'Hara, the judgment as to them is reversed, and the Superior Court is ordered to enter its judgment for $5,139.75, with interest from January 1st, 1920, against