Court Opinion

ID: 9740998
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:47:08.747812+00
Date Added: 2024-06-11T07:24:21.471627
License: Public Domain

Btjtzel, J.
{dissenting). The sole question before us is the propriety of the trial court’s order granting the preliminary injunction. In Niedzialek v. Journeymen Barbers, Hairdressers & Cosmetologists’ International Union of America, Local 552, AFL, 331 Mich 296, 302, a suit to restrain picketing, we adopted the words of another court in reference to a preliminary injunction (Goldfield Consolidated Mines Co. v. Goldfield Miners’ Union No 220, 159 F 500, 511, 512):
“It is not necessary that the complainant’s rights be clearly established, or that the court find complainant is entitled to prevail on the final hearing; It is sufficient if it appears that there is a real and substantial question between the parties, proper to be investigated in a court of equity, and in order to *61prevent irremediable injury to the complainant, ber fore his claims can be investigated, it is necessary to prohibit any change in the conditions and relations of the property and of the parties during the litigation.”
Is there a real and substantial question involved in this case? At the present time we only consider the cause of action alleging tortious procurement of breach of contract between plaintiff and those with whom it signed contracts to maintain minimum or stipulated resale prices.
In Krause v. Hartford Accident & Indemnity Co., 331 Mich 19, 25, we stated:
“From the early case of Lumley v. Gye, 2 El & B1 216 (118 Eng Rep 749, 22 LJ QB [NS] 463), most of the common-law courts have adopted and enlarged upon the idea that unlawful interference with another’s contract rights constitutes an actionable tort. In general that proposition has been adopted in this jurisdiction. See Morgan v. Andrews, 107 Mich 33; Wilkinson v. Powe, 300 Mich 275. But the interference must be unlawful in character.”
In Wilkinson v. Powe, 300 Mich 275, 282, there referred to, we said:
“A prima facie case is established when plaintiff proves the intentional procurement of a breach of contract, and, upon such proof, it becomes incumbent upon defendant to show justification.”
Quoting from another case, E. L. Husting Co. v. Coca Cola Co., 205 Wis 356, 366 (237 NW 85, 84 ALR 22, 29), we further stated (pp 282, 283):
“The great weight of authority in this country and in England is to the effect that, if A has a legal contract with B, either for the rendition of service or any other purpose, and C, having knowledge of the existence thereof, intentionally and knowingly, *62and without, reasonable justification or excuse, .induces B to break the contract, by reason of which A sustains damage, an action will lie by A against C.to recover the same. * * * The action of C.is-malicious, in that, with the knowledge' of A’s'rights, he intentionally and knowingly and for unworthy or selfish purposes, destroys them by inducing B to break his contract. It is a wrongful act, done Intentionally, without just cause, or excuse, and from this a=malicious motive is to be inferred. This does not necessarily mean actual malice or ill. will, but the intentional doing of a wrongful act without legal or social justification.”
The plaintiff alleges and the defendants admit that they are informed of the plaintiff’s fair-trade contracts and the prices established thereunder. To support their allegation that defendants procured their cameras from, and thus caused breach of contract by, plaintiff’s dealers and distributors, it is alleged in the complaint that:
“The distribution of plaintiff’s products is restricted only to those.wholesalers and retailers who' have voluntarily entered into fair-trade contracts with it.”
In their answer defendants neither admit nor deny this allegation. The affidavit of Dudley J. Scholton, plaintiff’s vice-president in charge of sales, states:
“We have negotiated contracts with all wholesalers handling our product.”
The affidavit of Robert E. Woolson, plaintiff’s field sales manager, states:
“Since 1947, all Argus products have been sold subject to fair-trade contracts in all of the States having fair-trade laws.”
However, in their answer defendants deny the allegation that they induced breach of contract and *63in an affidavit in answer to that of Scholton,'the defendants again '
“deny that they have induced other dealers or wholesalers to breach their fair-trade contract obligation to Argus.” '
i The trial judge, while noting the defendants’ denials; stated: . ” '
“There is no mention in any of the affidavits of how the products were acquired.
' “The plaintiff has shown, by affidavits, that its products were in the hands of the ' défendants. It lias shown that it has religiously refrained from selling any of its products to' anyone other than its contract holders’.' If the plaintiff has given some evi-r dence that the defendants did make such purchases for' their own benefit and that they do ■ have, the plaintiff’s products in their possession, I believe a legitimate inference can be drawn from such circumstances that the products were acquired by the defendants through inducement of contract holders to. breach their contracts.”
The manner-' in which, defendants obtained • the cameras is a matter peculiarly within their own knowledge and their failure to indicate otherwise leaves; no choice but to indulge in that inference. • •■■It-is clear that Michigan recognizes the t.ort alleged and that a cause of,-action is stated by the complaint. While there has been no case in this Court concerned with this precise set of facts as constituting procurement of breach of contract, we note that in a similar case the Federal court considered that such a complaint stated a cause of action. Sunbeam Corp. v. Payless Drug Stores, 113 F Supp 31 (N. D. California 1953). The district court for the eastern district of Michigan has reached the same conclusion in 2 cases. Sunbeam Corp. v. Economy Distributing Co., Inc., civil action No. 13900; Sun*64beam Corp. v. Hall of Distributors, Inc., 131 F Supp 791, civil action No 14000 (preliminary injunctions granted in both, cases).
Defendants contend that assuming arguendo their procurement of breach of contract, they are legally justified in doing so. They raise a question as to the constitutionality of the fair-trade law and consequent illegality of plaintiff’s contracts, as well ¿s our decision in Shakespeare Company v. Lippman’s Tool Shop Sporting Goods Co., 334 Mich 109. I am bound by the majority opinion in that case though I dissented, in part, as to the merits of the issue. However, I cannot agree with my Brother Reid as to the implications and scope of the majority opinion. The only thing there decided was that the nonsigner provision of the act was unconstitutional as to nonsigners of fair-trade agreements. We did not hold that the act was unconstitutional as to signers of such agreements. As we do not here consider the constitutionality of the act as to signers of fair-trade agreements, plaintiff’s contracts must, for purposes of this opinion, be considered valid and enforceable. While the Shakespeare Case solely holds that non-signers are not bound by the contracts, it does not leave nonsigners free to engage in what is otherwise tortious activity. We, therefore, must conclude that there exists a real and substantial controversy between the parties which does afford a basis for preliminary relief.
Other factors are necessarily considered in granting or denying preliminary relief. In Cohen v. Detroit Joint Board Amalgamated Clothing Workers of America, 327 Mich 606, 610, where we reversed a trial court’s refusal to grant a temporary injunction, we said:
“In granting or withholding injunctive relief pendente lite in a case of this character it is highly proper and quite essential for a court to consider *65whether the rights of the respective litigants will best be subserved by granting temporary injunctive relief if sought. If the personal rights or property rights involved will best be preserved by granting temporary injunctive relief in a suit presenting issues of controversial merit, such relief should be granted. Gates v. Detroit & Mackinac Railway Co., 151 Mich 548.”
In Steggles v. National Discount Corp., 326 Mich 44, 50 (15 ALR2d 208), we noted:
“The general rule is that whenever courts have found a mandatory injunction essential to the preservation of the status quo and a serious inconvenience and loss would result to plaintiff and there would be no great loss to defendant, they will grant it.”
We further recognized in that case that the plaintiff’s loss was a continuing one and that the status quo to be preserved was the “last actual, peaceable, noncontested status which preceded the pending controversy.”
It is readily apparent that left unchecked defendants’ conduct would, in a matter of time, result in leaving plaintiff’s good will and distribution system in a substantially irreparable and chaotic condition. As compared with the loss which defendants might suffer by the granting of preliminary relief, plaintiff’s must be more highly regarded and protected.
Plaintiff’s affidavits in support of its claim to temporary injunction are very convincing. They show in no uncertain terms that' plaintiff conducts a very large and well-established business engaged in manufacturing and selling a popular and well known camera and that millions of dollars have been expended in advertising; that defendants are appropriating the good will so established to their own advantage by tortiously inducing others to break their fair-trade agreements. Plaintiff’s business has *66grown to a large extent by protecting the retailer through fair-trade or minimum retail price agreements. Many retailers, and particularly those, conducting smaller camera shops dealing in plaintiff’s products, have thus built up successful businesses which plaintiff alleges now are being destroyed through defendants’ tortious conduct in inducing others to violate their fair-trade agreements with plaintiff. This has had a disastrous effect on the dealers, as well as on plaintiff. As a result many dealers who respected their contracts have been forced out of business, while others threaten to discontinue selling plaintiff’s products. It can readily be seen that a concern that sells a fair-trade article at below the minimum price agreed upon may drive out a legitimate dealer and thus create a monopoly in itself. It can sell at a low price either as a loss leader or as a bait to get customers to buy other products, or through a large volume of sales make a profit. It also affects the manufacturer. The affidavits show that in the first 7 months of 1954, plaintiff’s sales in Michigan declined 37% as against the same period in 1953, while the national sales increased 33%; that during the same period in 1953, 17.4% of plaintiff’s sales were made in Michigan, in 1954 during this period only 8.2% were made in Michigan. The showing in itself is sufficient to fully justify the trial judge to issue a temporary injunction.
It is equally apparent that the “last actual, peaceable, noncontested status which preceded the pending controversy” in this case goes back to the point at which defendants allegedly unlawfully secured the cameras from those under contract with plaintiff. We do not think that the date that plaintiff demanded that defendants cease their practices is determinative of the status quo, but rather we are here *67concerned with status quo consistent with the theory of the cause of action alleged by plaintiff.
Defendants further contend that a sworn answer and counteraffidavits preclude the granting of temporary relief. While possibly this may be a general rule, we have held that it is solely a matter of judicial discretion. Mactavish v. Kent Circuit Judge, 122 Mich 242. We have in the past approved of the granting of an injunction pendente lite “notwithstanding the defendant’s sworn answer refuting the essential allegations of the bill of complaint.” Seifert v. Buhl Optical Co., 276 Mich 692, 695. As the granting of preliminary relief is discretionary with the court of original jurisdiction, the Supreme Court will not interfere except on very clear or strong grounds or where such discretion is palpably abused. Flemming v. Heffner & Flemming, 263 Mich 561; see Seifert v. Buhl Optical Co., supra, at 699, 700, where we affirmed the granting of a temporary injunction saying:
“The trial judge did not abuse his discretion in his attempt to preserve the status quo by providing for plaintiffs’ retention of business which they otherwise might lose through defendant’s unlawful methods of advertising.”
While more doubtful if based upon plaintiff’s other 2 causes of action, the part of the injunction restraining defendants from selling at less than the fair-trade price is necessary to the efficacy of the order prohibiting them from procuring breach of contract. Not to allow it would be to permit defendants to reap the fruits of their alleged tortious conduct.
Since the filing of the briefs and the oral argument our attention has been directed to Sunbeam Corp. v. Masters of Miami, Inc. (CCA), 225 F2d 191, decided July 22, 1955, under Florida law. There the *68court of appeals for the fifth circuit, in a 2 to 1 decision, dismissed a complaint similar to that of Argus in this case, relying upon 4 Restatement, Torts, § 774. The application of the Restatement rule expressly depends upon a determination of the public policy of the jurisdiction in question. The history of the Florida fair-trade laws and the forceful language employed by the Florida court in declaring succeeding nonsigner provisions unconstitutional led the majority of the court of appeals to conclude that the fair-trade contracts in question violated Florida public policy. As of that time Florida had declared the law invalid- as to nonsigners but had never squarely held the remainder of the law unconstitutional. The majority of the court of appeals deemed it unnecessary to decide the validity of the Florida law as to signers of contracts, but nevertheless concluded that the contracts violated public policy. While we agree entirely with the dissenting opinion which questions the majority’s conclusion as to Florida public policy, it is important and decisive to note that neither the judicial nor legislative history of fair trade in Michigan is comparable to that of Florida.. In the Shakespeare Case, supra, we did not attack the theory and economic basis underlying fair-trade laws, as had the Florida court, but rather the majority of our Court limited its decision to the validity of the nonsigner provision depending to a large extent upon a nonfair-trade precedent. Therefore, Michigan has not, as has Florida, expressed repeated and sweeping judicial condemnations of fair trade. On the contrary we have only had the unequivocal expression of the legislature permitting fair-trade contracts such as plaintiff’s. This is the present public policy of Michigan.
Statutes legalizing fair-trade agreements have been enacted in 45 States. The Miller-Tydings amendment to the Sherman Act, 50 Stat 693, amend*69ing 15 USCA, § 1, permits them, and many cases, notably Old Dearborn Distributing Co. v. Seagram-Distillers Corp. (1936), 299 US 183 (57 S Ct 139, 81 L ed 109, 106 ALR 1476), have validated them. "Within the past 6 months the Pennsylvania supreme court has upheld, as against all arguments, the constitutionality of its act as to a nonsigner and thus presumably as to signers as well. Burche Co. v. General Electric Co. (1955), 382 Pa 370 (115 A2d 361). To be sure some 5 States, Michigan included, have held the nonsigner provision invalid. However, we have never held that the law is not valid as to signers. It is not within our province to declare that plaintiff’s contracts violate public policy, and especially not at a preliminary hearing.
We, therefore, should affirm the order appealed from, with costs.
Boyles and Kelly, J J., concurred with Butzel, J.
Smith, J., took no part in the decision of this case.