Bohn Manufacturing Co. v. Hollis
| Decision Date | 20 July 1893 |
| Citation | 55 N.W. 1119,54 Minn. 223 |
| Parties | Bohn Manufacturing Co. v. W. G. Hollis et al |
| Court | Minnesota Supreme Court |
Argued April 18, 1893.
Appeal by defendants, W. G. Hollis and the Northwestern Lumbermen's Association, from an order of the District Court of Ramsey County, W. D. Cornish, J., made December 27 1892, refusing to dissolve an injunction.
In the year 1890 a large number, about one-half, of the retail dealers in lumber in Iowa, Minnesota, Nebraska and the Dakotas associated together under the name Northwestern Lumbermen's Association and adopted a constitution and by-laws. Their principal place of business was St. Paul. They employed defendant W. G. Hollis as secretary. Some of their by-laws were as follows:
Sec. 3. Whenever, and as often as, any wholesale dealer shall sell lumber, or any article manufactured from lumber and generally sold by retail lumber dealers, to any person not a regular dealer, any member doing business in the town to which such shipments are made, must notify the secretary of this association within thirty days after the arrival of the shipment at the point of destination, who thereupon shall notify the manufacturer or wholesale dealer who made such shipment that he has a claim of ten per cent. of the value of such sale at the point of shipment, against him for such shipment. If the secretary is unable to adjust such claim either by correspondence or by personal presentation of the case, he shall refer the matter to the Board of Directors whose duty it shall be to hear both sides of the case and determine the claim. If the manufacturer or wholesale dealer refuses to abide by the decision of the Board of Directors it shall be the duty of the secretary to immediately notify the members of the Association, stating the name of such wholesale dealer or manufacturer. If any member continues to deal with such wholesale dealer or manufacturer, he shall be expelled from the Association.
Sec. 3 1/2. The provisions of section three shall also apply to manufacturers or wholesalers who ship to contractors or consumers on the order of dealers not members of the Association, at points where said dealers do not maintain a retail yard, and where a member of the Association is located.
Sec. 4. Whenever the secretary of this Association shall succeed in collecting any claim made against a wholesaler or manufacturer, upon lumber sold to the consumer as provided for in section three of these by-laws, the sum so collected shall be paid in equal parts to the members of this Association who shall be located at the point where such sale is made, and if there be but one member then all the sum so collected shall be paid to him.
Sec. 6. The secretary shall prepare and cause to be published, every three months, a list of all the members of this Association both active and honorary, and mail the same to all retail dealers. Also the list of all wholesale dealers and manufacturers of lumber who shall refuse to comply with the rules prescribed in section 3 of the by-laws, and mail one of each of such lists to the members of this Association.
The plaintiff, Bohn Manufacturing Company, a corporation dealing in lumber at wholesale at St. Paul, sold in 1891 to one Rakestraw, who was not a dealer, lumber for his own use to the value of $ 819.85, to be shipped to Worthington; and sold to Father Plut another bill of lumber of the value of $ 444.69, to be shipped to New Ulm for a Catholic church. The Association, hearing of these sales, demanded of the plaintiff ten per cent. of the amount of the two sales, $ 126.45, and threatened, unless this sum was paid, to notify each member of the Association of the sales and refusal pursuant to said by-laws.
Thereupon plaintiff commenced this action, charging that Hollis and the other members of the Association had entered into a combination and conspiracy to monopolize and restrain trade in lumber, and to fix and control prices and compel dealers and consumers to pay the prices so fixed, and to limit the retail trade in lumber to its own members, and to extort money from any wholesale dealer who should deal directly with the consumer, and to compel all wholesale dealers to join the Association and act and deal only with its members. Plaintiff further charged that the defendants and various persons unknown to it have secretly and solemnly bound themselves under penalties to compel plaintiff and all others similarly situated to sell lumber only to them, and to wreck and destroy their business, if they sold to others not members of the Association. The plaintiff prayed an injunction restraining defendants from issuing such notice, and from stating or mailing any matter that might tend to injure plaintiff's trade or business, and from combining with others to hinder or limit its sales and transactions in lumber.
A temporary injunction was granted ex parte May 17, 1892, enjoining defendants as prayed. The defendants obtained an order May 25, 1892, requiring the plaintiff to show cause June 1, 1892, why this injunction should not be dissolved. The court filed its order December 27, 1892, refusing to dissolve, and from that order this appeal is taken.
Order reversed, and injunction dissolved.
Wm. A. Lancaster, for appellants.
Experience demonstrates that undue and unnatural competition, though it may for a time benefit the consumer, generally results in the crushing out of small competitors and a rise in prices. Only fanciful theorists of the Bellamy type indulge the hope that the producer and consumer will ever deal directly with each other. Such a condition has always been and will probably always be an unrealized dream. This Association says to the wholesalers: This is the full purpose and object of the organization. Its constitution and by-laws contemplate no more than this, and there has been no attempt to do more. There is not, and never has been, anything like resort to force, fraud, libel, threats or intimidation by the Association. Nor is there any secrecy about its constitution or by-laws, or its proceedings or its members, active or honorary.
In case any wholesaler sells to a consumer within the territory of a member of the Association, he is given the option of either paying ten per cent. of the gross price of such lumber to the member with whom he has competed, or of being placed upon the list of those wholesalers who sell at retail, in direct competition with the retailer. In the latter case each member agrees to thereafter buy no material of such wholesaler. In case a member should trade with such wholesaler, after being notified that the latter is competing with the members of the Association, he is simply dropped from membership.
If this combination or agreement is unlawful as in restraint of trade, it is only so in the sense of being void and unenforceable between the parties, but is not actionable at the instance of an outsider or stranger to it.
It is a part of every man's civil rights that he be at liberty to refuse business relations with any person whomsoever, whether the refusal rests upon reason or is the result of whim, caprice, prejudice or malice. Cooley, Torts, 278; Carew v. Rutherford, 106 Mass. 1; Bowen v. Matheson, 14 Allen, 499; Snow v. Wheeler, 113 Mass. 179; Walker v. Cronin, 107 Mass. 555; Payne v. Western & Atlantic R. Co., 13 Lea, 507.
What a party has a right to do cannot be rendered actionable, simply because the party is moved or induced to do it through ill will or malice. This proposition is reasonable and supported by authority. For it has been held many times that a man cannot be made liable to an action for use of legal process, upon a good cause of action, though he made use of it knowing and intending that it would ruin or bankrupt the defendant. Morris v. Tuthill, 72 N.Y. 575; Mahan v. Brown, 13 Wend. 261; Phelps v. Nowlen, 72 N.Y. 39.
Plaintiff maintains that the agreement among the defendants not to trade with any wholesaler who persists in selling at retail, in competition with any of the members of said Association, is in restraint of trade and against public policy and void, and actionable at the instance of any outsider who finds his trade reduced or affected thereby. There is not, and never has been, any authority for this claim. Not a single case can be found where anything more was ever held than simply that a contract in general restraint of trade is void or unenforceable between the parties thereto. There is not even an intimation in any of the cases that such a contract, though void, is actionable at the instance of third parties. In some of the cases the courts have used the words, unlawful or illegal, but in every such case the context shows that they were used only in the sense of void. It has always been considered a sufficient remedy or protection to the public that such contracts would not be enforced by the courts, but that parties thereto must rely wholly upon their voluntary performance. Hilton v. Eckersley, 6 E. & B. 64; Hornby v. Close, L. R. 2 Q. B. 153.
I desire to call the court's attention to the case of Mogul Steamship Co. v. McGregor, which first appears in 15 Q. B Div. 476, (1885) upon an application for an ad interim injunction, which was denied; and again in the 21 Q. B. Div. 544, (1888) where Lord C. J. Coleridge's decision upon the merits in favor of defendants is reported; and again in the 23 Q. B. Div., (1889) where the decision of Lord Coleridge was affirmed by the Court of Appeals; and again in [1892] App. Cas., 25, where it was finally affirmed. I respectfully submit the...
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