Dunshee v. The Standard Oil Company

• Decision Date: 21 October 1911
• Parties: F. S. DUNSHEE, Appellee, v. THE STANDARD OIL COMPANY ET AL., Appellants
• Court: Iowa Supreme Court

132 N.W. 371

152 Iowa 618

F. S. DUNSHEE, Appellee, v. THE STANDARD OIL COMPANY ET AL., Appellants

Supreme Court of Iowa, Des Moines

October 21, 1911

Appeal from Polk District Court.--HON. JESSE A. MILLER, Judge.

ACTION at law to recover damages for unlawful interference with trade. Judgment for plaintiff, and defendants appeal. The plaintiff also appeals, but in the discussion of the case defendants only will be spoken of as appellants. Reversed and remanded for new trial.

Reversed.

Hewitt & Wright, Carr, Carr & Evans and C. L. Nourse, for appellants.

C. C Cole and Dunshee & Haines, for appellee.

OPINION

WEAVER, J.

During all the period covered by this controversy, the Standard Oil Company had been a wholesale dealer in oil at the city of Des Moines. In the year 1893 the Crystal Oil Company (plaintiff's assignor), a local corporation, entered the retail trade in oil, selling its goods from tank wagons hauled about the streets, and delivered to its customers at their homes. Its business grew from year to year until, in 1898, it employed from four to eight wagons, covering the territory of the city very generally. During the period mentioned, the Crystal Company purchased its supplies from the defendant, but in 1898 it for some reason began to make purchases from other wholesale dealers. Trouble at once ensued. The defendant, which, up to that time, had abstained from the retail trade, proceeded to equip itself with tank wagons, teams, and drivers substantially equal in number to those of the Crystal Company, and began active solicitation for the patronage of the "ultimate consumer." At the end of some months of strife, the Crystal Company abandoned the contest and quit the business at a loss claiming to have been driven out by the tactics of its rival. The plaintiff, as assignee of said company, brings this action for damages, alleging a conspiracy between the Standard Oil Company and its managers agents, and employees to ruin the business of said Crystal Company, and setting forth wrongful acts done in pursuance of such conspiracy by which said company's business was destroyed. To the petition as at first filed, the defendant demurred, and a ruling was entered sustaining the demurrer, but no judgment was entered thereon and the cause was allowed to sleep in that condition for a period of six years, when plaintiff filed an amended and substituted petition. Defendant's motion to strike the last pleading was overruled. Upon this ruling error is assigned. We think, however, that the amended petition was not a mere repetition of the pleading demurred to, and the trial court rightfully refused to strike it. It was not as specific as could well have been required, and may have been open to a motion for a more definite statement, but it was not vulnerable to the objection made and relied upon.

I. Upon the issues of fact, we shall attempt no general review of the testimony. For present purposes it is enough to say that the case as made by the plaintiff tends strongly to show that defendant installed its scheme of retail distribution of oil in the city of Des Moines not for the purpose of establishing a retail trade, but as a more temporary expedient to drive out the Crystal Company, and that, this being accomplished and having the field to itself, it with-drew its wagons and drivers, and gave its whole attention to its wholesale business. In the prosecution of its business, the Crystal Company was accustomed to supply its customers with cards to be displayed from a window or other conspicuous place, indicating a desire to purchase oil and inviting the distributor to stop and furnish the needed supply. The evidence further tends to show that when the Standard entered the field its drivers were directed to give special attention to the Crystal Company's "green cards," and that, at the outset at least, there was little or no attempt to build up a retail trade with the public generally, but to take away or destroy the trade of the Crystal Company. Some of the witnesses say the Standard's drivers would make it a point to get in advance of the Crystal's wagons, and wherever a green card was displayed would stop and make the sale if possible, sometimes permitting the buyer to suppose that he or she was dealing with a Crystal agent, and in other cases appropriating or carrying away the Crystal's cards. The Standard's hand in these efforts was not disclosed to the public. The drivers were instructed to do business ostensibly as independent dealers, driving their own wagons, none of which were marked with the Standard's name, though in fact the outfits were furnished and all expenses paid by it, and the entire business was carried on under the secret management of its agent, who held frequent meetings with the drivers, urging them to "go after the green cards," to "hustle the green cards," to "go after the Crystal Oil Company," and at the same time cautioned them to "keep quiet" about the real ownership and management. It is further testified that when the Crystal Company had been eliminated the manager in charge had a final meeting of the drivers at his residence, where he said, "The fight is over and we have bought them out. "Plaintiff also shows that defendants' movement in the matter followed closely upon the Crystal Company's exercise of its right to purchase part of its oil from another dealer, and its refusal to yield to the Standard's insistence that it wanted "all or none" of the Crystal's trade. In short, the record as a whole is sufficient to justify the inference that the real end sought to be accomplished was to bar or exclude from the retail trade one who would not give the Standard Company, as a wholesale dealer, its exclusive patronage. The defendants take issue upon the charge as thus preferred, but the jury could properly find the facts to be as above outlined.

As we understand appellants' contention, it is that their conduct did not transgress the bounds of legitimate competition, and that so long as they kept within this limitation the question of the alleged malice or motive inspiring their acts is wholly immaterial. Cases involving the question thus suggested have frequently arisen, both in this country and in England, and there is much confusion in the expressions of judicial opinion thereon. Many authorities may be found holding without apparent qualification or exception, that the law takes no account whatever of motives as constituting an element of civil wrong. In other words, if a man do a thing which is otherwise lawful, the fact that he does it maliciously and for the express purpose of injuring his neighbor affords the latter no remedy at law. Such is the net effect of Raycroft v. Tayntor, 68 Vt. 219 (35 A. 53, 33 L. R. A. 225, 54 Am. St. Rep. 882); Jenkins v. Fowler, 24 Pa. 308, and others of that class. If this be the correct view of the law, a man may excavate the earth near the boundary of his own land for the mere purpose of seeing the foundation of the house of his neighbor slide into the pit thus prepared for it; he may dig through his own soil to the subterranean sources of his neighbor's spring or well and divert the water into a ditch, where it will serve no purpose of use or profit to himself or anyone else; if a banker or merchant, he may punish the blacksmith who refuses to patronize him by temporarily establishing a shop on the next lot and hiring men to shoe horses without money and without price, until he has driven the offending smith to come to his terms or to go out of business; and if a farmer, dependent upon a subterranean supply of water for the irrigation of his soil or watering of his live stock, he may contrive to ruin his competing neighbor by wasting the surplus not reasonably required for his own use. The laws of competition in business are harsh enough at best; but if the rule here suggested were to be carried to its logical and seemingly unavoidable extreme, there is no practical limit to the wrongs which may be justified upon the theory that "it is business." Fortunately, we think, there has for many years been a distinct and growing tendency of the courts to look beneath the letter of the law and give some effect to its beneficent spirit, thereby preventing the perversion of the rules intended for the protection of human rights into engines of oppression and wrong.

It is doubtless true that under many circumstances an act is legally right and defensible without regard to the motive which induces or characterizes it; but there is abundance of authority for saying that this is by no means the universal rule, and that an act which is legally right when done without malice may become legally wrong when done maliciously, wantonly, or without reasonable cause. In Panton v. Holland, 17 Johns. 92 (8 Am. Dec. 369), it is stated as a general rule that, "In the exercise of a lawful right, a party may become liable to an action where it appears that the act was done maliciously." See, also Greenleaf v. Francis, 35 Mass. 117; Chesley v. King, 74 Me. 164 (43 Am. Rep. 569); Flaherty v. Moran, 81 Mich. 52 (45 N.W. 381, 8 L. R. A. 183, 21 Am. St. Rep. 510); Sankey v. St. Mary's, 8 Mont. 265 (21 P. 23); Harbison v. White, 46 Conn. 106; Stillwater v. Farmer, 89 Minn. 58 (93 N.W. 907, 60 L. R. A. 875, 99 Am. St. Rep. 541); Ohio Oil Company v. Indiana, 150 Ind. 698 (58 N.E. 1124; Barclay v. Abraham, 121 Iowa 619, 96 N.W. 1080. The same principle has been frequently applied in the decision of trade and labor controversies, though not without other instances in which it has been repudiated. See People v. Petheram, 64 Mich. 252 (31 N.W. 188); Walker v. Cronin, 107 Mass. 555; Van Horn v. Van Horn, 52 N.J.L. 284 (20 A. 485, 10 L. R. A. 184); Hawarden v. Coal Co., 111 Wis. 545 (87 N.W....