Sorenson v. Chevrolet Motor Co. , 171 Minn. 260 ( 1927 )

It is easy to say that "wrongful interference" with the contract rights of another resulting in his damage is an actionable wrong. That is undoubted law, except in those jurisdictions which have refused to apply the rule of Lumley v. Gye, 2 El. Bl. 216, 75 E.C.L. 216, 244. The difficulty arises in determining what makes a case of "wrongful interference," and is enhanced by considering malice an element instead of merely a frequent attendant of the offense. The word in the present connection is "a mere title" and "its use always occasions question and requires definition and explanation. * * * `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 * * * and so avoid all misunderstanding.'" R an W Hat Shop v. Sculley, 98 Conn. 1,118 A. 55, 29 A.L.R. 551. Anyway, as all concede, positive ill will, while so often present in wrongful acts, cannot of itself make a lawful act unlawful. It is not the motive of a wrongdoer but the fact that, whatever his motive, he is a wrongdoer, that is material. Carnes v. St. Paul Union Stockyards Co. 164 Minn. 457,205 N.W. 630, 206 N.W. 396.

Is it wrongful for one employer merely to say to a man in the service of another, "When you are ready to quit your present job, I will pay you a substantial increase in wages?" The answer, of course, must be no, and it must remain so even though the offer was made with knowledge of the existing contract, and results in its breach. If that was the intent, is the result different? If so, a mere mental operation of the actor has changed the legal quality of his act. Suppose another case — that of a retail merchant who, having just contracted to purchase a line of goods from one manufacturer, is approached by the salesman of another. If the latter is told of the contract but has a much better line of goods at lower prices and convinces the merchant of that and, quite incidentally, that it would be to his advantage to breach his first contract and buy the goods last offered, has an actionable wrong been committed? Certainly not if the salesman has been talking only with an eye to the future and in the hope of procuring for his own house the next contract. Will the result be changed solely because he hoped that a breach of the present agreement might flow from his honest praise of his own goods?

The salesman has been truthful. He has done nothing more than present the facts concerning his own line. Upon what theory can it be said that he has done anything wrongful — has committed a tort for which his employer should answer in damages? None, unless one which attaches to rights of contract a sanctity which they do not possess. "Inviolability of contract" is a misleading phrase, for no contract has the quality it assumes. The law has no prohibition of breach of contract and is satisfied if the delinquent answers in damages. Cases are conceivable where the breach may be laudable morally and the inciting advice legally blameless.

The gist of the cause of action is not the violation of contract. It is rather the wrongful invasion of one's personal rights. Rights given by contract as property rights are on no higher plane than personal rights. They are no more immune from wrongful interference than the latter. And after all, the privilege of contracting is considered a property right as is also that to pursue one's vocation without unlawful interference. 3 Words Phrases (2d Ser.) 1302. So the attempt to distinguish between personal and property rights, for the purpose of determining the essentials of wrongful interference, is futile, at least as to all contracts which are not specifically enforceable. They present peculiar problems which are not now involved. This objection to the distinction attempted for present purposes between personal rights and contract rights is advanced with much hesitation because it appears not only in the opinion of the chief justice but also in Beekman v. Marsters,195 Mass. 205, 80 N.E. 817, 11 L.R.A. (N.S.) 201, 122 Am. St. 232,11 Ann. Cas. 332. The statement is there made that, "Where the plaintiff comes into court to get protection from interference with his right of possible contracts, — that is, of his right to pursue his business, — acts of interference are justified when done by a defendant for the purpose of furthering his (the defendant's) interests as a competitor." The inference is that the same acts of interference may not be justified if perchance they result directly in the breach of an existing contract. But how can that be when the right of freedom of contract, as one of personal liberty, stands on as high a plane, is of as much dignity and should be as much the object of the law's protection as a contract right?

The absence from the decision of a definition of "wrongful interference" is probably as it should be, for there is inherent in definition the danger of excluding a case which progress, unhindered by definition, would include. But we are at least safe in examining the cases for the elements, the minimum requirements, so to speak, of liability. My own hasty and incomplete examination of the authorities suggests very strongly that there is no "wrongful interference" unless there has been the purposeful procuring of a breach of contract by a stranger to it who has no legitimate interest to serve or, having one, uses unlawful means to effect his purpose. Tuttle v. Buck, 107 Minn. 145, 119 N.W. 946,22 L.R.A. (N.S.) 599, 131 Am. St. 446, 16 Ann. Cas. 807, is a case of wrongful interference with a plaintiff's business. The defendant having no proper interest of his own to serve, the legitimacy of his method did not avoid liability. That case is the first cited by Judge Taylor in Roraback v. Motion Picture Mach. Op. Union, 140 Minn. 481, 168 N.W. 766, 169 N.W. 529,3 A.L.R. 1290, in support of the proposition that "No person * * * has the right maliciously to injure or destroy the business of another by acts which serve no legitimate purpose of his own." That essential qualification is being almost if not quite overlooked in the opinion of the majority.

Decision in the Roraback case was placed also upon Ertz v. Produce Exch. of Minneapolis, 79 Minn. 140, 81 N.W. 737,48 L.R.A. 90, 79 Am. St. 433, and particularly its enunciation of the principle that interference in the nature of a boycott by a defendant "having no legitimate interests to protect" was wrongful. In Bohn Mfg. Co. v. Hollis, 54 Minn. 223, 55 N.W. 1119,21 L.R.A. 337, 30 Am. St. 319, the acts of defendants were justified because they did have legitimate interests to protect. In Victor Talking Machine Co. v. Lucker, 128 Minn. 171,150 N.W. 790, the questioned method of competition was held innocent because not accomplished by "threat, coercion, misrepresentation, fraud or other harassing methods." The legitimate interest being present and the means for its protection in and of themselves lawful, the defendant was absolved from liability. The opposite situation was developed in Mealey v. Bemidji Lbr. Co. 118 Minn. 427,136 N.W. 1090, the performance of plaintiff's logging contract having been prevented by the defendant's success in causing "the men to quit the work and leave the camp and break up the same." The case had the harassing circumstances, the vexatious intrusion, absent from the Victor Talking Machine Co. case, supra.

In Joyce v. G.N. Ry. Co. 100 Minn. 225, 110 N.W. 975,8 L.R.A. (N.S.) 756, liability was predicated upon the absence of "excuse or justification." That is but another way of saying that interference is not actionable unless wrongful. It advances our inquiry only to the extent of indicating that interference is not wrongful if excusable or justifiable. How is it better excusable or justifiable in law than by being exerted in the service of a legitimate interest and by lawful means? What other inference is possible from Minnesota W.G. Co-Op. M. Assn. v. Radke, 163 Minn. 403,204 N.W. 314, where we went so far as to hold unconstitutional a statute prohibiting third parties from buying from the producers goods known by the purchaser to be under contract to others?

Many of the cases involving the efforts of labor unions to serve their members show legitimate interests but the use of improper means. Roraback v. Motion Picture Mach. Op. Union, supra, is such a case. R an W Hat Shop v. Sculley, 98 Conn. 1,118 A. 55, 29 A.L.R. 551, is another. Retaliatory action promised there was coercion of the plainest sort. The court said: "Though the defendants' purpose was commendable, the means * * * cannot be justified." Without that sentence, the next would be misleading and but a partial expression of the controlling thought of the decision. It is this: "The knowingly procuring McLachlan to breach his contracts * * * were wrongful acts of defendants and done intentionally by them, and for the resulting damage they are liable." The next sentence itself a quotation, and the numerous authorities cited, show why the "knowingly procuring" was wrongful. "`The gist of the action is not the intent to injure, but to interfere without justification with plaintiff's contractual rights with knowledge thereof.'" The court having just said that the "purpose was commendable" but that "the means used to carry it through cannot be justified," the decision of course rests on the latter ground. Martell v. White, 185 Mass. 255, 258, 69 N.E. 1085, 64 L.R.A. 260,102 Am. St. 341, presents another case of coercion, boycott enforced by a fine.

It is equally clear that misrepresentation, fraud, mere vexatious intrusion, or officious and harassing intermeddling may constitute unlawful means of such nature as to create liability. Angle v. C. St. P.M. O. Ry. Co. 151 U.S. 1, 14 Sup. Ct. 240,38 L. ed. 55, was a case of the latter type. The liability there arose from "wrongful conduct," its actionable quality accentuated but not made by its malice. Of course, where the rule of Lumley v. Gye has not found favor the use of unlawful means is alone the test. 2 Cooley, Torts, (3d ed.) 593, citing, inter alia, Boysen v. Thorn, 98 Cal. 578, 33 P. 492, 21 L.R.A. 233, and Chambers Marshall v. Baldwin, 91 Ky. 121, 15 S.W. 57, 11 L.R.A. 545,34 Am. St. 165.

So far as defendant Sander is concerned, the instant complaint appears to me plainly deficient. Sander was himself an automobile dealer having a perfect right to continue in that business and to sell Chevrolet cars if he could get the agency for them. The one result charged against him is that he succeeded in securing the agency which plaintiff had enjoyed. Stripped of its characterizations of supposed motive, the complaint charges nothing more. We may assume that Sander was actuated in part by ill will towards plaintiff. That alone does not make lawful means unlawful, and not a single unlawful act is charged against Sander. He wanted the Chevrolet agency; he had a right to want it and to get it, if he could, by lawful means. No others are alleged against him.

So far as defendant Chevrolet Motor Company is concerned, the utmost wrong charged against it is that it terminated without notice the contract which it had a right to terminate on ten days' notice. Subject to that requirement, plaintiff's agency was terminable at will. So, while the Chevrolet company may be liable to the extent that it breached the contract by terminating it without ten days' notice, the fact remains that a third party is not generally liable for inducing the breach of a contract which is terminable at will. So held with respect to a partnership at will, McGuire v. Gerstley, 204 U.S. 489, 27 Sup. Ct. 332,51 L.ed. 581, 589. The complaint having failed to show a wrongful interference otherwise by either defendant with contract rights, it seems to me that the demurrers were properly sustained, certainly so as to defendant Sander.

But if that construction of the complaint is strict to the point of error, I still urge that, while we are reiterating that liability arises from a wrongful interference with contract rights which results in damage, we should say also that there is no wrongful interference where the defendant has a legitimate interest to protect and uses means which are in and of themselves lawful.

The tests thus suggested by the decisions by no means remove all the difficulty. It remains in each case to determine what is a legitimate interest and what are lawful means for its protection. What is a legitimate interest probably will not present as much difficulty as will arise in passing upon the propriety of the means employed. That problem will have to depend ultimately upon the fundamental principle of all liability for tort, that each must so use his own as not to interfere unduly with the enjoyment of the rights of others. It is altogether a question of what duty a stranger to a contract owes the parties to it. It is correct generalization to say that he at least is obligated to abstain from officious intermeddling calculated to induce a breach. But how far must he abstain from advancing his own interests by proper means? Do one's good faith and truth make an actionable tort solely because they result in another's breach of contract? They certainly may if the theory of this decision is legally correct. For that reason I dissent from it and submit that the demurrer of defendant Sander at least should be sustained.