Schonwald v. Ragains

• Decision Date: 12 March 1912
• Citation: 122 P. 203,32 Okla. 223,1912 OK 210
• Parties: SCHONWALD et al. v. RAGAINS.
• Court: Oklahoma Supreme Court

122 P. 203

32 Okla. 223, 1912 OK 210

SCHONWALD et al. v. RAGAINS.

Supreme Court of Oklahoma

March 12, 1912

Syllabus by the Court.

Legitimate competition, by fair means, is always lawful and no cause of action accrues to one who is unable to compete with his stronger competitor, notwithstanding his business be injured by the competitive strife.But unfair competition is, and always has been, frowned upon by the law, and the trend of the decisions sustains the proposition that it is a violation of a legal right to interfere with contractual relations recognized by law, if there be no sufficient justification for the interference.

It is impossible to formulate any general rule or definition whereby one may determine with accuracy what is fair competition, and what is not.Each case must depend, for its correct solution, upon its own peculiar facts and circumstances.

It is an actionable tort for one to maliciously interfere with a contract between two parties, and induce one of them to break that contract, to the injury of the other.

It is not unlawful for one, by fair means and lawful argument or persuasion, to interfere with the contractual relations of another, and without doubt one person has the legal right to persuade another to leave his employer's service, or to quit trading with another, provided always such persuasion and argument is fair, and not unlawful, and is made with the honest intent and purpose of fairly bettering one's own business, trade, or employment, and not for the primary object of wrongfully destroying honest competition, or wrongfully injuring one's competitor.

"Malice," in the sense used herein, means a wrongful act done intentionally, without just cause or excuse.

Commissioners' Opinion, Division No. 1.Error from District Court, Kay County; W. M. Bowles, Judge.

Action by James G. Ragains against Dave Schonwald and others.Judgment for plaintiff, and defendants bring error.Affirmed.

C. G Hornor, for plaintiffs in error.

John S Burger and Moss, Turner & McInnis, for defendant in error.

ROBERTSON C.(after stating the facts as above).

There is but one question in this case that demands the consideration of the court.Was it an actionable tort for Schonwald and the Blackwell Ice Company to procure, induce and cause, as charged in the petition, the persons who had contracts with Ragains for the purchase of his ice at retail to ignore and violate their contracts under the facts and circumstances of this case?The general verdict of the jury was a finding on all the facts as alleged in the petition necessary to sustain the judgment, so that the real inquiry may be narrowed down to the issue raised by counsel for plaintiffs in error, viz., that the petition did not state facts sufficient to constitute a cause of action.

The question involved is of more than passing interest to the people of this state, the correct solution of which requires, not only careful consideration of the immediate questions primarily involved, but also the careful consideration of the so-called "business interests" of the state, as contradistinguished from the interests of all the people of the state for all, will in a greater or lesser degree be primarily affected.In order to better understand the real issue as submitted to the jury by the court, we will insert the two instructions which deal directly with the question under consideration.They are as follows:

"You are instructed that if you believe from a preponderance of the evidence that the plaintiff in this case, James G. Ragains, in the winter of 1905 made certain contracts and agreements with parties in the city of Blackwell, as alleged in his petition, to agree to purchase ice of and from said plaintiff and that the defendant, the Blackwell Ice Company, through its agent and representative, Dave Schonwald, or by Dave Schonwald alone, with the malicious, wrongful, and unlawful intention of injuring this plaintiff, and destroying his business, and depriving plaintiff of customers for the sale of the said ice, and for the purpose of procuring purchasers of plaintiff's ice with whom the plaintiff had contracts to disregard the same, and to refuse to carry out the contracts theretofore made with the said plaintiff, and that the said patrons did refuse, by reason of the wrongful acts of the defendants, their agents, or employés, to purchase ice of and from the plaintiff, then your verdict should be for the plaintiff and against the defendants, and each of them, for such sums as you believe will fairly and reasonably compensate him for damages sustained, not to exceed the amount prayed for in plaintiff's petition.

"You are instructed that the material and controlling questions for you to determine in this case are: First.Was there a contract by and between the plaintiff and certain customers, as alleged in plaintiff's petition, or any of them, whereby it was agreed by and between the plaintiff and his said customers that the said customers were to purchase of and from the plaintiff ice that he was to deliver upon his delivery of the same?Second.Were the customers of the plaintiff knowingly induced by the defendants, or either of them, or by their agents and employés, under their direction, to break said contracts with the plaintiff, intending thereby to injure said plaintiff and derive a benefit therefrom?Third.Did injuries result to the plaintiff?"

If these instructions fairly and correctly state the law applicable to the case at bar, then the judgment of the trial court is right and must be affirmed; for, while there are other errors assigned, such as the admission and rejection of testimony, yet it is tacitly agreed by counsel that the question first above alluded to is the real and controlling question in the case.

In Nashville, Chattanooga & St. Louis Ry. Co. v. McConnell (C. C.)82 F. 65, Judge Clark said: "It needs no extended statement to make it manifest that the right to carry on a business without interference, without fraud, and without obstruction is one of the most valuable of all rights.Indeed, in the commercial world, the right of greatest value is the right to freely carry on a lawful business without unlawful interruption.It is a substantial right, which may be protected by any remedy known to the court as fully as a constitutional or statutory right, and as fully as a right in the ordinary forms of property."Nims, on Unfair Business Competition, p. 347, in discussing this question, says: "It has long been a recognized principle of common law that the prevention and curbing of competition is an unlawful act.The restriction of the freedom of trade is considered to be against public policy, and injurious to general welfare.During the past few years there has been a growing demand made on courts and Legislatures that they take measures to limit the freedom of competition of the so-called trusts, and also that they take other measures to give the small dealer larger protection and freedom in competition.All these demands are made for the benefit of those who are not able to cope with the great powers of the commercial world that have come into existence under the law as it now exists.These demands are socialistic in their nature.Freedom of competition, under modern conditions, seems to lead to a monopoly-- the very evil which the common law sought to avoid.This condition has been reached, in part, by the application of the very rules laid down by the common law to prevent monopoly.The discussion of these questions by the courts is to be found largely in cases dealing (a) with the right which it is claimed every man has to carry on his trade or calling without molestation or interruption, cases dealing principally with rights of labor organization as to boycott, strikes, lockouts, etc.; (b)with the right of persons under contract with each other as against one who intentionally causes a breach of that contract.Cases of this sort are not usually classed as unfair competition cases, but the principles involved in them go straight to the question of fairness and honesty in business competition.If the limits to the right of one merchant to interfere with, to block, harass, and to injure, the trade of a competitor are not defined clearly, it means that the freedom of use of capital in commercial enterprises will be hampered and restricted unnecessarily.If the business world is not certain of its rights as against those who intentionally and wrongfully procure the breaking of contracts for their own gain, public confidence in the binding force of contracts, which is now none too strong, will be weakened."

Legitimate competition, by fair means, is always lawful and no cause of action accrues to one who is unable to compete with his stronger competitor, notwithstanding his entire business be swept away by the competitive strife.But unfair competition is, and always has been, frowned upon by the law, and the trend of the decisions from Lumley v. Gye, 2 El. &B. 216, to the present time seems to sustain the proposition that it is a violation of a legal right to interfere with contractual relations recognized by law, if there be no sufficient justification for the interference.Prof. Bruce Wyman, in his Control of the Market, tersely states the situation as it now exists, as follows "Generally speaking, a state of free competition has been for several centuries considered to be for the best interest of society; and therefore, in modern times, almost every business has been opened to almost every man, but at all times in economic history both restriction and freedom are to be found in the law; the proportion, however, changing greatly.In one epoch there is much legal limitation with little freedom left; in another age...