Case Name: PASSAIC PRINT WORKS v. ELY & WALKER DRY-GOODS CO. et al.
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1900-11-14
Citations: 105 F. 163
Docket Number: No 1,410
Parties: PASSAIC PRINT WORKS v. ELY & WALKER DRY-GOODS CO. et al.
Judges: Before CALDWELL, SANBORN, and THAYER, Circuit Judges.
Reporter: Federal Reporter
Volume: 105
Pages: 163–171

Head Matter:
PASSAIC PRINT WORKS v. ELY & WALKER DRY-GOODS CO. et al.
(Circuit Court of Appeals, Eighth Circuit.
November 14, 1900.)
No 1,410.
1. Torts — Injury to Another’s Business — Effect of Wrongful Intent.
The right to offer property for sale, and to fix the price at which it may be bought, is an incident to its ownership, and any loss which a third party may sustain in consequence of the exercise of that right is damnum absque injuria. The right to make such an offer being undoubted, and the offer in itself lawful, it cannot be converted into an actionable wroiig by an allegation that it was made with the» intent and for the purpose of injuring another owner of similar property by depreciating its markfet value.
2. Same.
Plaintiff alleged in its petition that it was a manufacturer of calicoes of certain designated brands and styles, which it sold in large quantities, at stated prices, to jobbers in St. Louis; that defendants, who were jobbers in that city, having on hand a limited quantity of calicoes of such brands and stylos, issued circulars to retail dealers, in which they offered to sell the same, so long as their stock should last, at prices below those asked and received from jobbers by plaintiff; that such action was taken by defendants, as plaintiff was informed and believed, for the purpose of injuring the business of the plaintiff, and not for any legitimate trade purpose of their own; and that the effect of such action was to injure and destroy plaintiff’s trade in St. Louis and the country tributary thereto, and to cause other jobbers to cancel their orders to plaintiff, or to compel plaintiff to reduce its prices, thereby causing it loss and damage in a sum stated. Held, that such petition did not state a cause of action for the recovery of damages.
S. Samé — Actions—Pleading.
A petition alleging that defendants, by offering to sell to the retail trade certain goods owned by them, and manufactured by plaintiff, at prices lower than those at which plaintiff sold the same style and brand of goods to jobbers, with the intent and purpose of injuring plaintiff’s business, caused jobbers to cancel contracts with plaintiff for the purchase of such goods, is insufficient to state a cause of action for the recovery of damages for maliciously causing plaintiff’s customers to break their contracts, where it does not name any of the persons with whom such contracts existed, nor allege that such persons were not privileged to cancel their orders, nor the special damages resulting from the breach of any particular contract.
Sanborn, Circuit Judge, dissenting.
In Error to the Circuit Court of the United States for the 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 the following allegations: That the plaintiff was a corporation organized under the laws of the state of New Jersey, and engaged in the manufacture of prints or calicoes at Passaic, in that state. That prior to February 25, 1899, it had been engaged for more than 15 years in the manufacture of prints or calicoes, and by careful management of its business had earned a reputation of manufacturing a high class of such goods. That it sold its goods, through its selling agents, to jobbers or wholesale dealers throughout the United States, who in turn sold the same to the retail trade. That the city of St. Louis, Mo., was one of the markets in which its prints or calicoes were sold at wholesale, and that it had a large and prosperous trade in that city; that among the goods by it manufactured and sold were four brands of calicoes known as “Trouville Mourning Prints,” “Central Park Shirtings,” “Elmora Fancy Prints,” and “Ramona Fancy Prints,” all of which were of a kind largely purchased by jobbers in the St. Louis market, being well suited to the retail trade tributary thereto. That its selling agents had fixed the price for said brands of calicoes for the .season of 1899 as follows: For the Trouville mourning prints, 3% cents a yard, less a discount of 5 per cent, and 2 per cent.; for the Central Park shirtings, 3y2 cents a yard, less a discount of 5 per cent, and 2 per cent.; for the Elmora fancy prints, 4% cents per yard, less a discount of 10 per cent, and 2 per cent.; and for the Ramona fancy prints, 4 cents per yard, less a discount of 5 per cent. That at the date aforesaid the blank cloth from which such calicoes were made was selling at 2y2 cents per yard, and that the price above specified for the finished product was its price at Passaic, N. J., without the addition of any freight. It was further alleged that prior to February 25,1899, the plaintiff had received orders for a large amount of the several kinds of prints aforesaid at the prices above specified from several large wholesale dealers doing business in the city of St. Louis, and “that on or about the 25th day of February, 1899, the said defendants (to wit, the Ely & Walker Dry-Goods Company et aL), 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, which said circular was in words and figures following; that is to say: ‘Ely & Walker Dry-Goods Co. We beg to call your attention to the following items at prices that cannot be replaced, and request you to order promptly if interested, to secure first selection of styles. Prices for all items subject to change without notice, and orders accepted only for stock on hand.’,” Then followed a long list of various brands of cloth, with a specification of the prices at which the various brands would be sold, and among them the following: “Trouville mourning prints, as long as they last, 3%; Central Park and Boat Club shirting prints, as long as they last, 2%; Elmora and Ramona fancy prints, as long as they last, 3%.” It was next averred that the plaintiff had not sold to the defendant corporation or to either of the Individual defendants any of the aforesaid prints or calicoes of its manufacture for a period of about one year prior to February 25, 1890; that it had never sold to said defendants any Elmoras or Ramonas; that, if said defendant bad any of said last-mentioned prints, it had purchased them at second-hand; that as it was informed and believed the defendants had but a small quantity of such goods to sell, and for that reason qualified its offer to sell by Inserting in its circular the words “as long as they last”; and that the price named in said circular for the aforesaid four brands of prints of its manufacture was less than the price charged by the plaintiff for said prints, it having universally charged for said prints for delivery in the spring of 1899 the several prices therefor heretofore specified. It was next averred that the effect of the aforesaid circular was to advertise to the retail trade tributary to the city of St. Louis that the four brands of calicoes aforesaid of the plaintiff's manufacture could be purchased at a less price from the defendant corporation than they could be from other jobbers in the city of St Louis to whom the plaintiff had sold large quantities thereof, and to cause said other jobbers to either cancel their orders, or to compel the plaintiff to make a rebate on the price of its goods in order that other jobbers might meet the prices so specified in the defendant’s circular, and to break up, injure, and destroy tlie sale and trade in such prints in the St. Louis market and in the country tributary thereto, except at greatly reduced prices. It was also alleged, but on information and belief, that the quotations aforesaid in the defendant’s circular were made for the purpose of injuring and destroying the plaintiff’s trade in the manner last stated, and that in consequence of the issuance of said circular the plaintiff had lost profits on sales which it otherwise might have made to the amount of $10,000, and had been further damaged by having to change the name of its goods and by having their identity lost to the amount of $20,000, and had also been further damaged by the malicious acts complained of to the amount of $20,000'; making its total loss $50,000, for which sum it prayed judgment.
Edwin O. Hoyt (George W. Lubke, Hugo Muencli, Frederick B. Van Vorst, Walter T. Rosen, and W. A. Underwood, on the brief), for plaintiff in error.
William B. Thompson (Ford W. Thompson, on the brief), for defendants in error.
Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

Opinion:
THAYER, Circuit Judge,
after stating the case as above, delivered the opinion of the court.
The complaint filed in the lower court, the substance of which has been stated, shows by necessary intendment that when the circular of the defendant company was issued it had in stock a limited quantity of the four brands of calico of the plaintiff's manufacture which are therein described. The circular stated, in substance, that the defendant had such calicoes in stock, and the complaint did not deny that fact, but admitted it by averring that "the defendant corporatino had but a small quantity of such goods to sell, and for that fea- . son qualified its offer to sell by inserting in the circular after ,the name of the goods the words, 'as long as they last.' " Moreover, the owner of property, real or personal, has an undoubted right to sell it and to offer it for sale at whatever price he deems proper, although the effect of such offer may be to depreciate the market value of the commodity which he thus offers, and incidentally to-occasion loss to third parties who have the same kind or species of property for sale. The right to offer property for sale, and to fix the price at which it may be bought, is incident to the ownership of property, and the loss which a third party sustains in consequence of the exercise of that right is damnum absque injuria. We are thus confronted with the inquiry whether the motive which influenced the defendant company to offer for sale such calicoes of, the plaintiff's manufacture as they had in stock at the price named in its circular, conceding such motive to have been as alleged in the complaint, changed the complexion of the act, and rendered the same unlawful, when, but for the motive of the actor, it would have been clearly lawful. It is common learning that a bad motive — such as an intent to hinder, delay, and defraud creditors, by virtue of St. 13 Eliz. c. 5, and possibly by the rules of the common law — will render a conveyance or transfer of property void which, but for the bad motive, would have been valid. So, also, one who sets the machinery of the law in motion without j)rob-able cause, and for the sole purpose of injuring ihe reputation of another, or subjecting him to loss and expense, is guilty of an unlawful act which would have been lawful but for, the improper motive. And one who, by virtue of his situation, has a qualified privilege to make defamatory statements concerning another, may be deprived of the benefit of that privilege by proof that it was not exercised in good faith, but in pursuance of a malicious intent to injure the person concerning whom the defamatory statement or statements were made. Poll. Torts (Webb's Ed.) pp. 831-335-, and cases there cited. There is also some authority for saying that one who maliciously (that is, with intent to obtain some personal benefit at another's loss or expense) induces another to break his contract with a third party thereby commits an actionable wrong if special damage is disclosed, although the act done would have been lawful if the wrongful motive had been absent. Lumley v. Gye, 2 El. & Bl. 216; Bowen v. Hall, 6 Q. B. Div. 333; Walker v. Cronin, 107 Mass. 555. And see Poll. Torts (Webb's Ed.) pp. 668-673. Aside from cases of the latter kind, it is a general rule that the bad motive which inspires an act will not change its complexion,' and render it unlawful, if otherwise the act was done in the exercise of an undoubted right. Or,, as has sometimes been said, "when an act done is, apart 'from the feelings which prompted it, legal, the civil law ought to take no cognizance of its motive." The question as to how far and under what circumstances a bad purpose will render an act actionable which, considered by itself, and without reference to the purpose which prompted it, is lawful, has been so much discussed since the decision, in Allen v. Flood [1898] 1 App. Cas. 1, that it would be profitless to indulge in further comment. It' has been well observed that'it would be dangerous to the peace of society to admit the doc trine that any lawful act can be transformed prima facie into an actionable wrong by a simple allegation that the act was inspired by malice or ill will, or by an improper motive. It is wiser, therefore, to exclude any inquiry into the motives of men when their actions are lawful, except in those cases where it is well established that malice is an essential ingredient of the cause of action, or in those cases where, the act done being wrongful, proof of a bad motive will serve to exaggerate the damages.
The case at bar falls within neither of the exceptions to the general rule above stated, — that, if an act is done in the exercise of an undoubted right, and is lawful, the motive of the actor is immaterial. No one can dispute the right of the defendant company to offer for sale goods tha t it owned and were in its possession, whether the quantity was great or small, for such a price as it deemed proper. This was the outward visible act of which complaint is made, and, being lawful, the law will not hold it to be otherwise because of a secret purpose entertained by the defendant company io inflict loss on the plaintiff by compelling- it to reduce the cost of a certain kind of its prints or calicoes.
Nor is the complaint aided in any respect by reference to the law of conspiracy, since the only object that the defendants had in view which the law will consider was the disposition or sale of certain goods which the defendant corporation had the right to sell; and tiie means employed to accomplish that end, namely, placing them on the market at a reduced cost, were also lawful.
In the brief filed in behalf of the plaintiff in error it is suggested finally that the complaint may be sustained on tlie ground that it states 'a good cause of action for maliciously causing certain persons to break or cancel their contracts with the plaintiff, but we think it quite obvious that the complaint was not framed with a view of stating a cause of action of that nature, and that it is insufficient for that purpose. It does not give the name of any person or corporation with whom the plaintiff had a contract for the sale of its prints which was subsequently broken in consequence of the wrongful acts of the defendant. Neither does it show that it had accepted any orders for goods which the jobber was not privileged to cancel at his* pleasure. Nor does it allege any special damage incident to the breach of any particular contract. In view of all the allegations which the complaint contains it is manifest, we think, that it was framed with a view of .recovering on the broad ground that the issuance of the circular was unlawful and actionable, provided the motive of the defendant company in issuing it was to occasion loss or inconvenience to the plaintiff.
We are of opinion that the complaint did not state a cause of action, as the trial court held, and the judgment below is therefore affirmed.