8 § 30. Fraud or misrepresentation.-What has just been said does not, necessarily at least, apply to the case of inducing by fraud or misrepresentation, nonfulfillment by a third person of his contract. Such cases have been regarded as standing on a different basis from those already considered, though, perhaps, even as to such cases, the theoretical objections already stated apply. 8 Such inducing was held actionable in Angle v. Chicago, St. Paul, etc., Ry. Co., 151 U. S. 1, 13; 14 Supm. 240, 245; 38 L. Ed. 55 (1894); Morehouse v. Terrill, 111 Ill. App. 460 (1903); Morgan v. Andrews, 107 Mich. 33; 64 N. W. 869 (1895); Lally v. Cantwell, 30 Mo. App. 524 (1888); Rice v. Manley, 66 N. Y. 82; 23 Am. Rep. 30 (1876); Benton v. Pratt, 2 Wend. (N. Y.) 385; 20 Am. Dec. 623 (1829); Snow v. Judson, 38 Barb. (N. Y.) 210 (1862); American Law Book Co. v. Edward Thompson Co., 41 Misc. 396; 84 N. Y. Suppl. 225 (Supm. Ct., Sp. T., 1903); Green v. Button, 2 Crompton, M. & R. 707 (1835); National Phonograph Co. v. Edison-Bell Co., 1 Ch. D. (1908) 335. Compare Chambers v. Baldwin, 91 Ky. 121; 15 S. W. 57; 11 L. R. A. 545; 34 Am. St. Rep. 165 (1891); Hollenbeck v. Ristine, 114 Iowa, 358; 86 N. W. 377 (1901); American Ins. Co. v. France, 111 Ill. App. 382 (1903). CHAPTER VII RELATION OF TRADE COMPETITOR AS JUSTIFYING INJURY § 31. Relation of trade competitor as justifying injury. 32. Malicious intent. 33. Inducing refusal to deal. § 31. Relation of trade competitor as justifying injury.—In all ages those engaged in trade have striven for success at the expense of their rivals. In ruder ages, as indeed still is the case in the newer and comparatively unsettled regions open to trade, traders frequently resort to acts, not alone of fraud, but of violence, even to robbery and murder. Such acts are condemned by the common law of England, as indeed by the law of every civilized nation. There remain, however, many acts which, like those just considered, are done with intent to injure a trade rival, and yet are generally regarded as entirely lawful.2 1 1 As instances are given "fraud, misrepresentation, intimidation, coercion, obstruction or molestation of the rival or his servants or workmen, and the procurement of violation of contractual relations." Macauley v. Tierney, 19 R. I. 255; 33 Atl. 1; 37 L. R. A. 455; 61 Am. St. Rep. 770 (1895). Not all of the instances here given are, however, beyond the realm of debate; for instance, "the procurement of violation of contractual relations." See c. VI. In Hubbuck v. Wilkinson, 1 Q. B. D. (1899) 86, a statement by a trader that his own goods were superior to those of a competitor, was held not actionable, even if untrue and causing loss. In Ajello v. Worsley, 1 Ch. (1898) 274, an injunction was refused against a dealer advertising for sale goods manufactured by the plaintiff, though without having such in his possession. The court made the distinction between the case under consideration, as one of an untrue statement relating to the defendant's own business, and cases of untrue statements regarding the plaintiff's business. 2 The legality of such acts was very early established. Thus, in a case decided in 1410 (11 Henry 4, fol. 47, pl. 21), referred to fre What is the test of separation between these classes? If the doctrine already contended for be correct, namely, that the test of liability for an act producing injury is in no ease that of malice or malicious intent, but purely whether the act was the natural incident or outgrowth of some lawful relation, we may state, by way of application of this doctrine to the relation of competitor in trade, that the existence of the relation of trade competitor justifies acts that are the natural incident or outgrowth of such relation, whether or not done with the direct intent to injure one's rival.3 In this view, acts that are quently in Allen v. Flood, App. Cas. (1898), 1, and holding that a schoolmaster setting up a school to the damage of an ancient school, whereby the scholars were allured from the old school to come to his, committed no actionable wrong. So it was said in Commonwealth v. Hunt, 4 Metc. (Mass.) 111, 134; 38 Am. Dec. 346, 359 (1892): "We think that associations may be entered into, the object of which is to adopt measures that may have a tendency to impoverish another, that is, to diminish his gains and profits, and yet, so far from being criminal or unlawful, the object may be highly meritorious and public-spirited. The legality of such an association will therefore depend upon the means to be used for its accomplishment." To similar effect Karges Furniture Co. v. Amalgamated Woodworkers' Local Union, 165 Ind. 421; 75 N. E. 877; 2 L. R. A. N. S. 788 (1905); Walker v. Cronin, 107 Mass. 555, 564 (1871); Martell v. White, 185 Mass. 255, 260; 69 N. E. 1085, 1087; 64 L. R. A. 260, 263; 102 Am. St. Rep. 341 (1904); Bohn Manuf. Co. v. Hollis, 54 Minn. 223, 233; 55 N. W. 1119, 1121; 21 L. R. A. 337, 339; 40 Am. St. Rep. 319 (1893); National Protective Assoc. v. Cumming, 170 N. Y. 315, 330; 63 N. E. 369, 373; 58 L. R. A. 135, 142; 88 Am. St. Rep. 648 (1902); Macauley v. Tierney, supra; Curran v. Treleaven, 2 Q. B. D. (1891) 560; Mogul S. S. Co. v. McGregor, infra. 3 This doctrine seems clearly recognized in London Guarantee Accident Co. v. Horn, 206 Ill. 493; 69 N. E. 526; 99 Am. St. Rep. 185 (1903), where, however, the relation of trade competitor was held not to exist for the purpose of justifying inducing discharge from employment. See § 71. And with the statement in the text, compare the following language in the dissenting opinion of Holmes, J., in Vegelahn v. Guntner, 167 Mass. 92, 106; 44 N. E. 1077, 1081; 35 L. R. A. 722, 726; 57 Am. St. Rep. 443 (1896): "The policy of allowing free competition justifies the intentional inflicting of temporal damage, including the damage of interference with a man's business by some means, when the damage is done not for its own sake, but as an instrumentality in reaching the end of victory in the battle of trade. In such a case it cannot matter whether the plaintiff is the only rival of the defendant, and so is not the natural incident or outgrowth of such relation are not justified. Or we may express the distinction as one between "fair" and "unfair" competition. Thus, the acts of fraud and violence just considered do not, in any proper sense of the words, come under the description of "fair competition," or of "natural incidents or outgrowths" of the relation of trade competitor. On the other hand, there are acts that come so clearly under such description that their legality is generally conceded. We may cite by way of illustration, setting up an opposition line of conveyance, or rival hotel in the same town, introducing improvements," and generally the manifold devices involved. in modern methods of advertising. But there is a border class of cases as to which has existed considerable difference of judicial opinion. The test that we consider the proper one to apply to every such case (ignoring entirely the existence or non-existence of malice or malicious intent), namely, whether the act is a natural incident or outgrowth of the relation of trade competitor, may not always be easy to apply to the complicated facts aimed at specifically, or is one of a class all of whom are hit. The only debatable ground is the nature of the means by which such damage may be inflicted." In Doremus v. Hennessy, 176 Ill. 608; 52 N. E. 924; 43 L. R. A. 797; 68 Am. St. Rep. 203 (1898), where certain acts of trade competitors were held actionable, the decision is to be sustained, if at all, by an application of the test indicated in the text. The court did not, however, apply such test, but proceeded on the ground that the acts were wrongful acts done to the detriment of the right of the plaintiff, and therefore malicious and actionable. Beyond this unsatisfactory test of liability none is indicated. 4 What we may call the doctrine of "unfair competition" is as yet comparatively in its infancy. With in the scope of such competition fall 5 See Commonwealth v. Hunt, 4 Metc. (Mass.) 111; 38 Am. Dec. 346 (1842); Van Horn v. Van Horn, 56 N. J. Law, 318, 323; 28 Atl. 669, 670 (1894); Barr v. Essex Trades Council, 53 N. J. Eq. 101, 116; 30 Atl. 881, 886 (1894). of a particular case; but it does not seem practicable to lay down a more precise rule. In this connection it has been said:7 "Here, as in most cases where there is a conflict between two important principles, either of which is sound and to be sustained within proper bounds, but each of which must finally yield to some extent to the other, it frequently is not possible by a gen • A notable instance of acts of trade competitors held to constitute no actionable injury appears in Mogul S. S. Co. v. McGregor, App. Cas. (1892), 25, which affirmed 23 Q. B. D. 598 (1889), which had affirmed 21 Id. 544 (1888); and see prior decision in 15 Id. 476 (1885). The case is remarkable for the number of opinions delivered in its various stages, and has attracted wide attention, though, as pointed out elsewhere (see § 117), it is not, as sometimes supposed, an authority as to the validity of contracts in restriction upon competition. The acts complained of were those of "an associated body" of owners of steam vessels, who endeavored to obtain shipments for such vessels to the exclusion of others, by charging to those who would deal exclusively with them cheaper rates of freight than their competitors were will ing to accept. This decision was applied under very similar conditions in Lough v. Outerbridge, 143 N. Y. 271, 283; 38 N. E. 292, 296; 25 L. R. A. 674, 679; 42 Am. St. 7 Martell v. White, 185 Mass. 255, 258; 69 N. E. 1085, 1087; 64 L. R. A. 260, 262; 102 Am. St. Rep. 341 (1904), where, with reference to the means allowable, it was said (185 Mass. 260; 69 N. E. 1087; 64 right of competition rests upon the L. R. A. 263): "It is a right which is to be exercised with reference to the existence of a similar right on Rep. 712 (1894). See editorial note in 18 Quart. Law Rev. 1 (1902). As to conditions of liability of association composed of representatives of certain fire insurance companies, to company not a member of such association, see Continental Ins. Co. v. Board of Fire Underwriters, 67 Fed. 310 (C. C. Cal., 1895), of which decision it was said in Brown v. Jacobs Pharmacy Co., 115 Ga. 429, 451; 41 S. E. 553, 562; 57 L. R. A. 547, 558; 90 Am. St. Rep. 126 (1902): "Here there was no effort to drive out of business companies not members, further than non-intercourse, and not having the same agents. So far as the enforcing of these provisions by a penalty is concerned, the decision is in conflict with Boutwell v. Marr, 71 Vt. 1; 42 Atl. 607; 43 L. R. A. 803; 76 Am. St. Rep. 746 (1899)." In Bowen v. Matheson, 14 Allen (Mass.) 499 (1876), no action was held to lie in favor of a shipping master against those who formed an association to control the business of the shipping masters of a certain localthe part of others. The trader has not a free lance. Fight he may, but as a soldier, not as a guerrilla. The doctrine that the interests of the great public are best subserved by permitting the general and natural laws of business to have their full and free operation, and that this end is best attained when the trader is allowed in his business to make |