H . opL. 1
Mo g u l St e a m s h ip Co m p a n y McGr e g o r, Go w, a n d Co., a n d o t h e r s. [H . opL.
to i t would n o t be indictable. I t ought to be enough to say th a t there is no case where there has been a conviction fo r such an offence as is alleged against the defendants. I t is to be remembered th a t i t is fo r the p la in tiffs to make out the case that the defendants have comm itted an indictable offence, not fo r the defendants to disprove it. There needs no argum ent to prove
the negative. r
There are some observations to be made.
I t is adm itted th a t there may be fa ir competi tio n in trade, th a t tw o may offer to jo in and compete against a th ird . I f so, what is the definition of fa ir com petition? W hat is u n fa ir th a t is neither forcible nor fraudulent ? I t does seem strange that, to enforce freedom of trade, of action, the law should punish those Who make a perfectly honest agreement w ith a belief th a t i t is fa irly required fo r th e ir protection. There is one th in g th a t is to me decisive. I have always said th a t a combination of workmen, an agreement among them to cease w ork except fo r
i1 a6?" waSes’ and' a strike in consequence, was law ful at common law. Perhaps not enforceable
i n t e r se, but not indictable ; the Legislature has now so declared. The enactment is express, th a t agreements among workmen shall be binding, whether they would or would not but fo r the A cts have been deemed unlaw ful, as no re stra in t of trade. _ Is i t supposable th a t i t would have done so in the way i t has had the w orkm an’s combination been a punishable misdemeanour ? Impossible. This seems to me conclusive, th a t though agreements w hich fe tte r the freedom of action in the parties to i t may not be enforceable
c ir ar? r0* ln ^ !ctaM e- See also the judgm ent of P ry , L.J. on th is point. Where is such a con
tention to stop? Suppose the case p u t in the a rg u m e n t: In a small town there are tw o shops sufficient fo r the wants of the neighbourhood, m aking only a reasonable p rofit. They are threatened w ith a th ird . The tw o shopkeepers agree to warn the in te n d in g shopkeeper th a t if he comes they w ill lower prices, and can afford i t longer than he. Have they com m itted an indictable ofience ? Remember the conspiracy is the offence, and they have conspired. I f he being warned, does not set up his shop, has he a cause of action P H e m ig h t prove damages. He m ig h t show th a t from his s k ill he would have beaten one or both of the others. See in th is case the judgm ent of L o rd Esher, M.R., th a t the p la in tiffs m ig h t recover fo r “ damages at large fo r fu tu re years.” W ould a shipowner who had intended to send his ship to Shanghai, but desisted owing to the defendants’ agreement, and on being to ld by them they would deal w ith h im as they had w ith the pla in tiffs, be e n title d to m aintain an action against the defendants;
w hy n o t ? I f yes, w hy not every shipowner who could say he had a ship fit fo r the trade, but was deterred from using it. The M aster of the Rolls cites S ir W illia m E rie (the Law re la tin g to Trade Unions) th a t “ a combination to, violate a p riva te r i g h t i n w hich the public has a suffi
cient interest, is a crime, such violation being an actionable w rong.” True. S ir W illia m E rie means that, where the vio la tio n of a p riva te r ig h t is an actionable wrong, a combination to violate it, i f the public has a sufficient interest, is a crime. B u t in this case I hold th a t there is no private rig h t violated. H is
Lordship fu rth e r says : “ I f one goes beyond the exercise of the course of trade, and does an act beyond what is the course of trade, in order, th a t is to say, w ith in te n t to molest the other’s free course of trade, he is not exercising his own freedom of a course of trade, he is not acting in but beyond the course of trade, and then i t follows th a t his act is an u n la w ful obstruction of the other’s r ig h t to a free course of trade, and i f such obstruction causes damage to the other he is e n titled to m aintain an action fo r the wrong.” I may be perm itted to say th a t this is not v e ry plain. I th in k i t means th a t i t is not in the course of trade fo r one trader to do acts the motive of w hich is to damage the trade of another. W hether I should agree depends on the meaning to be put on “ course of trade ” and
“ molest.” B u t i t is clear th a t the M aster of the Rolls means conduct w hich would give a- cause of action against an in d iv id u a l. He cites S ir W . E rie in support of his proposition, who clearly is speaking of acts w hich would be actionable in an in d ivid u a l, and there is no such act here. The M aster of the Rolls says the low ering o f the fre ig h t fa r beyond a low ering fo r any purpose of trade was not an act done in the exercise o f th e ir own free rig h t o f trade, b u t fo r the purpose of in te rfe rin g w ith the p la in tiffs ’ r ig h t to a free course of tra d e ; therefore a w ro n g fu l act as against the p la in tiffs ’ rig h t, and as in ju ry to the p la in tiffs followed they had a rig h t of action.
I cannot agree. I f there are two shopkeepers in a village and one sold an a rticle at cost price, not fo r p ro fit therefrom , but to a ttra c t customers, o r cause his riv a l to leave off selling the article only, it could not be said he was liable to an action. I cannot th in k th a t the defendants did more than they had a legal rig h t to do. I adopt the vigorous language and opinion of F ry , L . J . :
“ To draw a line between fa ir and u n fa ir competi
tion, between what is reasonable and unreasonable, passes the power of the courts.” I t is a strong th in g fo r the p la in tiffs to complain of the very practices they wished to share in, and once did. I am of opinion the judgm ent should be affirmed.
L o rd Ma c n a g h t e nconcurred.
L o rd Mo r r is.—M y L o rd s : The facts of this case demonstrate th a t the defendants had no other, or fu rth e r, object than to appropriate the trade of the p la in tiffs. The means used w e re : first, a rebate to those who dealt exclusively w ith them ; secondly, the sending of ships to compete w ith the p la in tiffs ’ sh ip s; th ird ly , the lowering of the fre ig h ts ; fo u rth ly , the indem nifying other vessels th a t would compete w ith the p la in tiffs ’ ; fifth ly , the dismissal of agents who were acting fo r them and the pla in tiffs. The object was a la w fu l one. I t is not ille g a l fo r a tra d e r to aim at d riv in g a com petitor out of trade, provided the m otive be his own gain by appropriation of the trade, and the means he uses be la w fu l weapons. O f the firs t fo u r of the means used by the defendants, the rebate to customers and the lowering of the freights are the same in principle, being a bonus by the defendants to customers to come and deal exclusively w ith them. The sending of ships to compete and the indem ni
fy in g other ships was “ the com petition ” entered on by the defendants w ith the plaintiffs. The fifth means used, viz., the dismissal of agents,
m a r i t im e l a w o a s e s
.
1 2 7H . o fL .] Mo g u l St e a m s h ip Co m p any * . McGr e g o r, Gow, a n d Co., a n d o t h e r s. [H . ofL . m ig h t be questionable according to th e c irc u m
stances ; b u t in th e present case the agents fille d an irre c o n c ila b le p o s itio n in be in g agents or tw o riv a ls , th e p la in tiffs and th e detendan is dism issal u n d e r such circum stances became, perhaps, a necessary in c id e n t o f th e w a rfa re m tra d e A l l th e acts done, and th e means used by the defendants, were acts o f c o m p e titio n fo r th e trade. There was n o th in g in the defendants acts to d is tu rb any e x is tin g c o n tra c t ot th e P jai - tiffs , o r to in du ce anyone to bre ak such, a c tio n was aim ed a t m a k in g i t u n lik e ly a 7 one w o u ld e n te r in to con tra cts w ith < e p a » th e defendants o ffe rin g such c o m p e titiv e in du ce
m ents as w o u ld p ro b a b ly p re ve n t them . i hei use of rhetorical phrases in th e correspondence affect the real substance and meaning ° ■ Again, what one trader may do m respec o petition a body or set of traders can iawluDy do, otherwise a large capitalist could do "w number of small capitalists combining og could not do, and thus a blow would be struck at the very principle of co-operation and joint-stock enterprise. I entertain no doubt that a body traders, whose motive object is to promote their own trade, can combine to acquire, and there by in so far to injure, the trade of competitors, provided they do no more than is incident to such motive object, and use no unlawful means.
And the defendants’ case clearly comes within the principle I have stated.
N o w , as to th e c o n tentio n th a t the combma- tio n was in re s tra in t o f trade , and there- fo re ille g a l. I n th e f ir s t place, was i t m re s tr a in t o f tra d e ? I t was a v o lu n ta ry com b in a tio n . I t was n o t to con tinu e fo r any fixed period, n o r was the re an y p e n a lty attached to a breach o f th e engagement. The op e ra tio n ot a tte m p tin g to exclude others fro m th e _ tra d e m ig h t be, and was in fa c t, be neficial to fre ig h te rs . W h en eve r a m onopoly was lik e ly to arise, w ith a consequent ris e o f rates, c om p eti
tio n w o u ld n a tu ra lly arise. I cannot see w h y ju dg es should be considered specially g ifte d w ith prescience o f w h a t m ay ham per o r w h a t m ay increase tra d e , o r of w h a t is to be th e ,tes adequate re m u ne ration . I n these days o ms co m m u n ica tio n w ith alm ost a ll p a rts ° w o rld co m p e titio n is the life o f tra d e an n o t aware o f any stage of c o m p e titio n ,c a lle d
“ fa ir ,” in te rm e d ia te between la w fu l a
fu l. The question o f “ fairness w o u ld be rele
gated to the idiosyncracies o f m d iv id u a 3 S • I can see no li m it to com p etitio n, excep y sha ll n o t invade th e r ig h ts o f another. B u t suppose th e c o m b in a tio n in th is case w
m ig h t be he ld to be in re s tra m t o f trade , w h a t fo llo w s ? I t could no t be enforced. N one o f the p a rtie s to i t cou ld sue each other.
be he ld v o id because its tendency m ig h t be he ld to be ag ainst the p u b lic interests. Does th a t make, p e r se, the com bination g W h a t a fa lla c y w o u ld i t be th a t w h a t is v o id and n o t enforceable becomes a c r im e , a 1 abound o f agreem ents w h ic h th e la w wou enforce, b u t w h ic h are n o t ille g a l, w h y m ay e n te r in to i f yo u lik e , b u t w h ich
n o t g e t any assistance to enforce, b b a v V summarised my views, because a P entirely the principles laid down bj >
L.J. in his judgment, with such felicitous illustrations, and I concur in the opinion already
announced b y y o u r L o rdsh ips, th a t th e ju d g m ent of th e C o u rt o f A ppeal should be affirm ed
L o rd Fie ld.—M y L o rd s : I t h in k th a t th is appeal m ay be decided upon the p rin c ip le s la id rlnwn b v H o lt, C.J. as fa r back as th e case of K e e b l e v . H i c l c e r i n g h i l l , c ite d fo r the ap pe lla nt (11 Mod. 73 and 131, and note to C a r r i n g t o n j . T a y l o r, 11 East, 574). I n th a t case th e p la in tiff com plained o f the disturbance of h is decoy by the defendant h a v in g discharged guns near to it , and so d riv e n away th e w ild fo w l, w ith th e in te n tio n and effect of th e consequent in ju r y to his trade U p o n the t r ia l a v e rd ic t passed fo r the p la in tiff, b u t in a rre s t o f ju d g m e n t i t was alleged th a t the d e cla ration d id n o t disclose any cause o f action. H o lt, C.J., however, h e ld th a t th e actio n, a lth o u g h new in instance, was n o t new in reason o r p rin c ip le , and w e ll la y , fo r he said th a t the use o f a “ decoy ” was a la w fu l trade , and th a t he w ho hind ers an othe r in h is tra d e o r livelihood, is lia b le to an actio n i f th e in ju r y is caused b y a v io le n t o r m alicio us a c t ; sl(PPose>. f°.r instance,” he said, “ the defendant had shot m h is own grounds, i f he had occasion to shoot i t w o u ld have been one th in g , b u t to shoot on p u r pose to damage th e p la in tiff is an othe r th in g and a w ro n g .” B u t, he added, i f th e defendant,
“ u s in g th e same em ploym ent as the
had set up another decoy so near as to spoil the p la in t if f ’s custom, no actio n w o u ld lie, because th e defendant bad “ as m uch lib e r ty to make and use a decoy ” as th e p la in tiff. I n s u p p o rt of th is v ie w he re fe rre d to e a rlie r a u th o ritie s . I n one o fT h e m I t had been held th a t fo r th e s e ttin g up of a new school to th e damage o f an ancient one b y a llu r in g th e scholars no actio n w o u ld he, a lth o u g h i t w o u ld have been ^ e ™ . 18® >f p scholars had been d riv e n away b y violence ° r threa ts. I t fo llo w s the re fo re fro m th is au th o r it y , and is undo ub te d law , n o t o n ly th a t i t is not7 every act causing damage to a n othe r m h is tra ilp n o r even every in te n tio n a l act ot such damage w h ic h is actionable, b u t also th a t acts done bv’ a tra d e r in th e la w fu l w ay of his business, a lth o u g h by th e necessary re s u lts o f effective c o m p e titio n in te r fe r in g in ju rio u s ly w ith th e tra d e of another, are n o t th e subject o f any action. O f course, i t is otherwise, as p o in te d o u t b v L o rd H o lt, i f th e acts com plained of, a lth o u g h done in the w ay and un de r the guise o f com p eti
tio n o r o th e r la w fu l r ig h t, are in themselves v io le n t o r p u re ly m alicious, o r have fo r th e ir u ltim a te ob je ct in ju r y to an o th e r fro m il l- w i ll to him , and n o t th e p u rs u it o f la w fu l rig h ts . N o doubt, also, th e re have been cases in w h ic h agreem ents to do acts in ju rio u s to others have been he ld to be in d ic ta b le as a m o u n tin g to conspiracy, th e u ltim a te object o r the means being u n la w fu l, a lth o u g h i f done b y an in d iv id u a l no such consequence w o u ld fo llo w . B u t I t h in k th a t in a ll such cases i t w ill be fo u n d th a t th e re existed e ith e r an u ltim a te o b je ct of m alice o r wron<r, o r w r o n g fu l means o f execution in v o lv in g elements o f in ju r y to the p u b lic , or, a t least, n e g a tiv in g th e p u rs u it o f a la w fu l object. ( H is L o rd s h ip the n de alt w ith th e facts o t th e case, and concluded as fo llo w s :] E v e ry th in g th a t was done by the respondents was done in th e exercise o f th e ir r ig h t to c a rry on t h e ir ow n trade , and was bona fide so done. T here was n o t o n ly no m alice o r in d ire c t o b je ct in fa c t, b u t th e existence of th e r ig h t to exercise a la w fu l em ploym ent, in
H. o r L.] Mogul Steamship Company v. McGregor, Gow, and Co., and others. [H . opL.
the pursuance of w hich the respondents acted, negatives the presum ption of malice w hich arises when the purposed in flic tio n of loss and in ju ry upon another cannot be a ttrib u te d to any le g iti
mate cause, and is therefore presumably due to n o thing b u t its obvious object of harm. A ll the acts complained of were in themselves la w fu l, and i f they caused loss to the appellants, th a t was one of the necessary results of competition.
I t remains to consider the fu rth e r contention of the appellants th a t these acts of the respon
dents, even i f la w fu l in themselves i f done by an in d ivid u a l, are ille g a l and give rise to an action as having been done in the execution of the conference agreement, w hich is said to amount to a conspiracy, as being in re s tra in t of trade and so against public policy and ille g a l;
b u t th is contention, I th in k , also fails. I cannot say upon tho evidence th a t the agreement in question was calculated to have or had any such result, nor, even i f i t had, has any a u th o rity (except one, no doubt e n title d to great weight, but cne which has not been generally approved) been cited to show th a t such an agreement, even i f void, is ille g a l; nor any th a t, even i f i t be so, any action lies by an in d iv id u a l. For these reasons I th in k th a t the appeal ought to be dismissed.
L o rd Ha n n e n.— M y Lords : I t is not necessary th a t I should recapitulate the facts of th is case ; they have been fu lly stated in the opinions w hich have been already delivered. The charge against the defendants is th a t they conspired together to prevent the p la in tiffs from obtaining cargoes fo r th e ir ships by b rib in g , coercing, and inducing shippers to forbear from shipping cargoes by the p la in tiffs steam ers; and i t is fu rth e r complained th a t the defendants, w ith in te n t to in ju re the p la in tiffs, agreed to refuse, and refused to accept cargoes, except upon the term s th a t the shippers should not ship any cargoes by the p la in tiffs ’ steamers. The means b y w hich those alleged objects were sought to be attained were : (1) O ffering to shippers and th e ir agents a rebate o f 5 per cent, on the agreed fre ig h t, to be made to those who. d u rin g a fixed period, shipped only by the defendants’ steamers ; (2) sending steamers to H ankow to compete w ith the steamers of persons not members of the defendants’ conference or combination, so as to drive them fro m the trade of th a t place; (3) rem oving from the agency of defendants’ steamers those persons who acted in the interest of non
conference steamers. I t was contended th a t the agreement between the defendants to act in combination, w hich was proved to exist, was ille g a l as being in re s tra in t of trade. I th in k th a t i t was so, in the sense th a t i t was void, and could not have been enforced against any of the defendants who m ig h t have violated i t : ( H i l t o n v.
E c k e r s le y . 6 E. & B. 47.) B u t i t does not follow th a t the entering in to such an agreement would, as contended, subject the persons doing so to an in d ictm e n t fo r conspiracy; and I th in k th a t the opinion to th a t effect expressed by Crompton, J.
in H i l t o n v. E c k e r s le y is erroneous. The ques
tion, however, raised fo r our consideration in th is case, is whether a person, who has suffered loss in his business by the jo in t action of those who have entered in to such an agreement, can recover damages from them fo r the in ju ry so
tion, however, raised fo r our consideration in th is case, is whether a person, who has suffered loss in his business by the jo in t action of those who have entered in to such an agreement, can recover damages from them fo r the in ju ry so