[522] Syllabus. LAWLOR ET AL v. LOEWE ET AL. (Circuit Court of Appeals, Second Circuit, April 10, 1911. Petition for Rehearing, May 8, 1911.) [187 Fed. Rep. 522.] MONOPOLIES (§ 12)-COMBINATION IN RESTRAINT OF INTERSTATE COMMERCE-BOYCOTT.-If it be shown that individuals have combined together to induce a manufacturer engaged in interstate commerce to conduct his business as they wish, and upon his refusal further combine not only to prevent him from manufacturing articles intended for interstate commerce, but also to prevent his vendees in other states from reselling the articles which they had imported from the state of manufacture, or from further negotiating for the purchase and intertransportation of such articles, the combiners intending thereby to destroy or obstruct an existing interstate traffic, such combination of individuals must be held to have essentially obstructed the free flow of commerce between the states, and is in violation of Anti-Trust Act of July 2, 1890, c. 647, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3200), and when such obstruction is shown to have brought about an injury to a person's business, damages may be recovered, although the impelling motive of the combination was an effort to better the condition of the combiners, which, except for the anti-trust act, might be proper and lawful.' [Ed. Note. For other cases, see Monopolies, Dec. Dig. § 12.] TRADE UNIONS ( 4)-AGENTS OF LABOR ORGANIZATION-LIABILITY OF MEMBERS FOR UNLAWFUL ACTS.-A clause in the constitution of a labor organization which provides that certain of its officers "shall use all the means in their power" to bring nonunion shops into the trade, does not necessarily imply that these officers shall use other than lawful means, and the fact alone that a member contributes money to the support of the organization does not make him responsible as a principal for unlawful acts of the officers or their agents, but in order that his contributions shall have such effect something more must be shown, as that unlawful means had been so frequently used with the express or tacit approval of the association that its agents were warranted in assuming that they might use such means, and that the associa[523]tion and its individual members would approve or tolerate such use, whenever the end sought to be attained might be best attained thereby. [Ed. Note. For other cases, see Trade Unions, Dec. Dig. § 4.] For former opinions in this case, see (148 Fed. Rep., 924) Vol. 3, p. 41; (208 U. S., 274), vol. 3, p. 324. Syllabus copyrighted, 1911, by West Publishing Company. Syllabus. MONOPOLIES ( 28)-ACTION FOR DAMAGES AGAINST COMBINATION IN RESTRAINT OF INTERSTATE COMMERCE QUESTIONS FOR JURY.-In an action to charge defendants, as members of various local unions of a labor organization, with liability for acts of agents of the organization on the ground of a combination in restraint of interstate commerce in violation of Anti-Trust Act of July 2, 1890, c. 647, § 1, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3200), where there was conflicting testimony as to their knowledge of such acts and other evidence from which inferences must be drawn, the question of liability was for the jury, and it was error to withdraw such question from them and to submit only the question of damages. [Ed. Note. For other cases, see Monopolies, Dec. Dig. § 28.] TRADE UNIONS (§ 9)-ACTION TO CHARGE PRINCIPAL FOR ACTS OF AGENT EVIDENCE.-In an action to charge members of a labor organization individually with liability because of alleged unlawful acts of agents sent out by the organization, evidence that defendants paid dues to the organization after service of the complaint is not competent either as showing ratification by defendants of the acts of such agents or that such acts were authorized when committed. [Ed. Note. For other cases, see Trade Unions, Dec. Dig. § 9.] EVIDENCE (317)-HEARSAY.-In an action by a manufacturer doing an interstate business against members of a labor organization to charge them with liability under Anti-Trust Act of July 2, 1890, c. 647, 7, 26 Stat. 210 (U. S. Comp. St. 1901, p. 3202), one of the violations of the act charged being that defendants combined to prevent customers of plaintiff in other states from buying his goods by means of threats or boycott, etc. testimony of plaintiff's salesmen that customers told them of such threats, made by persons claiming to represent defendant organization, was incompetent as hearsay. [Ed. Note.-For other cases, see Evidence, Cent. Dig. §§ 11741200; Dec. Dig. § 317.] In Error to the Circuit Court of the United States for the District of Connecticut. Action at law by D. E. Loewe and others against Martin Lawlor and others. Judgment for plaintiffs, and defendants bring error. Reversed. This cause, an action for damages under the anti-trust act, comes here upon writ of error to review a judgment of the Circuit Court, District of Connecticut, for $232,240.12 in favor of defendants in error, who were plaintiffs below. The verdict on which this judgment was entered was practically directed by the court, who left to the jury merely the matter of damages, as the "only question with which Opinion of the Court. they could properly concern themselves." The jury assessed the damages at $74,000, which amount the court trebled. Alton B. Parker, F. L. Mulholland, and John K. Beach, for plaintiffs in error. Walter G. Merritt and Daniel Davenport, for defendants in error. Before LACOMBE, COXE, and NOYES, Circuit Judges. [524] LACOMBE, Circuit Judge. 1. The complaint is printed in full, and the cause of action thoroughly discussed in Loewe v. Lawlor, 208 U. S. 274, 28 Sup. Ct. 301, 52 L. Ed. 488, where the demurrer to the complaint was disposed of. Reference to that opinion sufficiently indicates the issues involved on the trial. The decision also has fixed the law of this case. It is needless to inquire whether boycotts generally, or this particular variety of boycott, are or are not unlawful at common law, or under the statutes of some particular state. If it be shown that individuals have combined together to induce a manufacturer engaged in interstate commerce to conduct his business as they wish, and, upon his refusal, further combine not only to prevent him from manufacturing articles intended for interstate commerce, but also to prevent his vendees in other states from re-selling the articles which they had imported from the state of manufacture or from further negotiating for the purchase and intertransportation of such articles, the combiners intending thereby to destroy or obstruct an existing interstate traffic, such combination of individuals must be held to have essentially obstructed the free flow of commerce between the states. A combination to effect such an obstruction is a violation of the Anti-Trust Act (act July 2, 1890, c. 647, 26 Stat. 209 [U. S. Comp. St. 1901, p. 3200]); and when such obstruction is shown to have brought about an injury to a person's business, recovery may be had, although the impelling motive of the combination was an effort to better the condition of the combiners, which except for the Anti-Trust Act might be proper and lawful. Opinion of the Court. Of the facts, conceded by demurrer, which were relied upon in the former decision, the following are fully proved by competent evidence in the record now before us: Plaintiffs were manufacturers of hats in Danbury, Conn., and had an interstate trade with customers in different states, which was very much the larger percentage of their business. The combination of individuals known as the United Hatters of North America, numbering several thousand members, were combined with other labor unions into another association known as the American Federation of Labor, numbering more than a million members, scattered all over the United States. The United Hatters undertook to unionize the different factories in which their members worked. In some instances the owners thereof at first refused to unionize their factories. Thereupon the United Hatters declared a union war against them and missionaries purporting to represent the combination visited customers of such recalcitrant owners in different states, and told them that unless they ceased to handle such goods, the affiliated unions would refrain from patronizing them. As a result thereof some of those who had at first refused yielded and unionized their factories. Plaintiffs were interviewed by some officers and members of a hatters' union, and after some discussion as to the advantages and disadvantages of unionizing their factory refused to do so. Thereupon a strike was called which took all union men out of plaintiffs' factory. Subsequently missionaries representing themselves as coming on behalf of the United Hatters visited customers of plaintiffs in other states. To some of these customers they stated that [525] unless they would cancel any orders they had given for plaintiffs' goods, and would agree to discontinue buying from plaintiffs in the future, their (the customers') "factories would be tied up and the men called out." To others they stated that if they continued business with plaintiffs they (the missionaries) would "call on their own customers and endeavor to prevent their using their goods "; i. e., the goods offered for sale by the person interviewed. To others they stated that unless they ceased to deal in plaintiffs' goods they "would be boycotted," or "would be put on the unfair list." Some of the customers of plaintiffs who were thus inter Opinion of the Court. viewed ceased to make further purchases of Loewe hats because of statements made to them at these interviews. The first assignment of error, which challenges attention on this appeal and which is discussed at the outset of defendants' brief, is the action of the trial judge in taking the case from the jury and himself deciding every question except the amount of damages. Defendants contend that in so doing" the trial court assumed the function of a jury in passing upon the credibility of witnesses and weighing conflicting testimony." We think this assignment of error is well taken for these reasons: The defendants are all members of a voluntary association or trade union of journeymen hatters, known as the United Hatters of North America, including more than 9,000 journeymen hatters residing in different states of the United States or in Canada. Defendants are members of various local unions of this association in the state of Connecticut, and each of them has paid dues continuously to his local union for some years prior to September, 1903, the date this suit was commenced. These dues were both local and national—a certain percentage of the member's wages for each purpose. Both had to be paid; as the secretary of the Danbury local expressed it, "we wouldn't accept one if he didn't pay the other." This money has been, in part at least, disbursed in paying the various officers of the local and of the general unions and in paying the various agents or missionaries who have been engaged in carrying out the objects of the association, which included the extension of the union, the increasing of a demand for goods bearing the union label and the so-called unionizing of factories. These objects of course could be promoted by methods entirely lawful and proper, or by methods which were unlawful and improper, or which were of such a character as to constitute a combination in restraint of interstate trade within the meaning of the Anti-Trust Act. In 1896 the United Hatters of North America affiliated with the American Federation of Labor, its officers on its behalf pledging its members individually and collectively to be governed by the constitution, rules and usages of the federation. Since then delegates to the conventions of the federation have been elected by a referendum |