Fahey v. Shafer

• Decision Date: 17 October 1917
• Docket Number: 13674.
• Citation: 167 P. 1118,98 Wash. 517
• Parties: FAHEY et al. v. SHAFER et al.
• Court: Washington Supreme Court

167 P. 1118

98 Wash. 517

FAHEY et al. v. SHAFER et al.

No. 13674.

Supreme Court of Washington

October 17, 1917

Department 2. Appeal from Superior Court, King County; John S. Jurey Judge.

Action by T. P. Fahey and another, copartners, against Julius Shafer and others, as the Seattle Retail Clothiers' Association. Judgment for defendants, and plaintiffs appeal. Affirmed.

John H Perry, of New York City, and O. L. Willett, of Seattle, for appellants.

Peters & Powell and Arthur Hutchinson, all of Seattle, for respondents.

ELLIS C.J.

In this action plaintiffs, copartners in the retail clothing business, sought to recover damages claimed as the result of certain acts and utterances of defendants, as Seattle, Retail Clothiers' Association, which it was charged were done and made in furtherance of a conspiracy to injure plaintiffs' business and destroy their credit.

Plaintiffs charged: (1) That defendants, on February 17, 1915, wrongfully and maliciously and by certain detailed false statements persuaded the Times Printing Company to break an advertising contract with plaintiffs, and for three weeks to refuse to accept advertising from them and thereafter to accept only censored advertising from them; (2) that on or about April 1, 1915, defendants maliciously and without justification and by certain detailed false statements attempted to persuade and procure the Seattle Ad Club to prosecute plaintiffs for the alleged crime of false advertising; (3) that defendants, about April 1, 1915, by certain detailed false statements and by threats not to trade with certain enumerated wholesale clothing manufacturers, attempted to persuade and prevent such manufacturers from giving credit to or selling goods to plaintiffs. Damages were claimed in the sum of $20,000.

Defendants answered by general and special denials, and alleged as an affirmative defense that they themselves were advertisers in the Times newspaper, and that plaintiffs' advertisements therein were to the effect that plaintiffs occupied upstairs business quarters, comparatively inexpensive, and other merchants in the city occupied expensive ground floor rooms with luxurious and extravagant fixtures involving large rentals, and that plaintiffs were thus able to undersell and did undersell such ground floor merchants, who were imposing on the public by charging in the cost of their goods their extravagant rents, so that plaintiffs were able to sell and were selling $25 suits for $15, which competition the ground floor clothiers were unable to meet; that defendants interviewed the general manager and the advertising manager of the Times, objected to such advertising, and requested them to look into the matter and correct it in fairness to the defendants; that this was done in good faith without any attempt to injure the plaintiffs or other upstairs business; and that the statements made to the representatives of the Times were true.

The oral evidence was extremely voluminous, and was supplemented by a large number of exhibits. We find it impracticable within the reasonable compass of an opinion more than broadly to notice its salient features. Plaintiffs were doing a men's clothing business on the third floor of the Arcade Building in Seattle, and were what is known as upstairs clothing merchants. Defendants were doing the same kind of business at different locations in street level store rooms, and are known as street level or downstairs clothiers. Most of the latter were members of the Seattle Retail Clothiers' Association, but there was no evidence that such association was formed for the purpose of attacking plaintiffs or in furtherance of any conspiracy against them or any one else. Its purpose was to promote the legitimate business interests of its members. There was no evidence that plaintiffs could not have become members had they so desired. Plaintiffs had a long time advertising contract with the Seattle Times. Defendants were also advertisers in the same newspaper. For a considerable time prior to the present controversy plaintiffs had been running in that paper conspicuous advertisements, samples of which are in evidence, impliedly charging the street level dealers with adding the expense of their high street level rents, luxurious outfittings, extravagant fixtures, and the like, to the selling price of their goods, and stating that plaintiffs were selling for $15 the same suits sold for $25 in street level stores, and that by cutting out exorbitant street level rents and useless store fronts plaintiffs were able to do this 'every day in the year.' Some of these advertisements also in substance charged the street level merchants with advertising 'fake' reduction sales after having asked 'two or three profits on each garment during the rest of the year.'

The evidence shows that defendants resented these imputations, and that one of two of them threatened to withdraw their own advertisements from the Times if it continued to publish advertisements of the character complained of. It was finally arranged on request of Joseph Blethen, the general manager of the Times, that he and J. Fred Braid, its advertising manager, meet with the Retail Clothiers' Association at a luncheon and discuss the matter. Blethen, whose testimony was given in an evident spirit of fairness, testified to the effect that defendants' objection to plaintiffs' advertisements was directed to the continual reference to the fancy store fronts, exorbitant rents, and expensively run stores of the street level merchants, and to the claim that plaintiffs were selling $25 suits for $15; that some of those present at the luncheon asserted that plaintiffs could not continue in business and pay their bills and sell what are known as $25 suits for $15 continuously; that if they were doing business that way sooner or later there would be a crash. He said:

'They made it plain that in their belief it could not be done. They slammed the table and said, 'They can't do it;' that there must be something Fahey & Brockman were keeping back; that a business carried on in that way could not succeed.' Braid substantially corroborated this version of the conference, and added that somebody made the statement that Fahey & Brockman were a 'fly-by-night' concern, and that the history of upstairs stores had been that most of them had 'gone broke.' The result of the conference was that Blethen and Braid agreed to make an investigation, and the president, speaking for the association, stated that the members would be satisfied with whatever conclusion was reached. There was no evidence that at this meeting there was any threat of withdrawal of defendants' advertisements or of any coercive measures. Pending the investigation plaintiffs' advertisements were suspended for a period of about two weeks. Thereafter they were censored, as Blethen testified, in accordance with the general policy of the paper not to permit adverse criticisms of competitors, and the only change made was to require plaintiffs to refrain from specific criticism of ground floor dealers. Plaintiffs were still permitted to exploit their own economical management and to repeat ad libitum the statement that they were selling $25 suits for $15.

The Seattle Ad Club is composed of advertising and newspaper men, and has a 'vigilance committee' for the purpose of looking after questionable advertising. It appears that at the luncheon Braid suggested that the matter be taken up with the Ad Club, and pointed out the fact that there was a state statute against false advertising. Some of the defendants accordingly took the matter up with the president of the Ad Club and chairman of the 'vigilance committee' asking them to investigate plaintiffs' advertisements and take some action. Nothing, however, was done by the club except to send to plaintiffs a copy of the state law with certain portions underscored. No prosecution was attempted, or even seriously considered.

As to the third charge it appeared that two or three of the defendants did threaten not to deal with certain wholesalers so long as they continued to sell goods to upstairs merchants who were running the objectionable advertisements. The evidence was uncontradicted, however, that this was not done as the result of any action of the Retail Clothiers' Association, and that the association never even considered such a course. There was no evidence that any wholesaler refused to sell to plaintiffs on account of the threatened loss of any of defendants' business, nor was there any evidence that such threats caused any impairment of the plaintiffs' credit with any wholesaler.

The trial court was of the opinion that plaintiffs were the aggressors in the controversy, and that defendants were justified in stating their views to Blethen, Braid, and the Ad Club, and in asking them to investigate. He was also of the opinion that in so doing they were acting within the rule of privilege, and did not make any unqualified charges of dishonesty against plaintiff...