JUDICIAL OPINION IN THE CASE OF THE MOGUL STEAMSHIP COMPANY AGAINST MCGREGOR AND OTHERS, IN THE COURT OF APPEAL, 1889. STATEMENT. This important and timely case involved the legal limits of trade competition. The defendants, who were firms of shipowners trading between China and Europe, with a view to obtaining for themselves a monopoly of the homeward tea trade, and thereby keeping up the rate of freight, formed themselves into an association, and offered to such merchants in China as shipped their tea exclusively in vessels belonging to members of the association a rebate of five per cent. on all freights paid by them. The plaintiffs, who were rival shipowners trading between China and Europe, were excluded by the defendants from all the benefits of the association, and, in consequence of such exclusion, sustained damage. The issue was, therefore, whether the defendant's acts were unlawful. On the trial before Lord Chief Justice Coleridge and a jury it was decided that they were not. In the court of appeal, this decision was affirmed, Lord Esher, the master of the rolls, dissenting.2 OPINION. We are presented in this case with an apparent conflict or antinomy between two rights that are equally regarded by the law, -the right of the plaintiffs to be protected in the legitimate exercise of their trade, and the right of the defendants to carry on their business as seems best to them, provided they commit no wrong to others. The plaintiffs complain that the defendants have crossed the line which the common law permits; and inasmuch as, for the purposes of the present case, we are to assume some possible damage to the plaintiffs, the real question to be decided is whether, on such an assumption, the defendants, in the conduct of their commercial affairs, have done anything that is unjustifiable in law. The defendants are a number of shipowners who formed themselves into a league or conference for the purpose of ultimately keeping in their own hands the control of the tea carriage from certain Chinese ports, and for the purpose of driving the plaintiffs and other competitors from the field. In order to succeed in this object, and to discourage the plaintiffs' vessels from resorting to those ports, the defendants, during the "tea harvest" of 1885, combined to offer to the local shippers very low freights, with a view of generally reducing or "smashing" rates, and thus 121 Q. B. Div. 544. 223 Q. B. Div. 598. rendering it unprofitable for the plaintiffs to send their ships thither. They offered, moreover, a rebate of five per cent. to all local shippers and agents who would deal exclusively with vessels belonging to the conference, and any agent who broke the condition was to forfeit the entire rebate on all shipments made on behalf of any and every one of his principals during the whole year,—a forfeiture of rebate or allowance which was denominated as "penal" by the plaintiffs' counsel. It must, however, be taken as established that the rebate was one which the defendants need never have allowed at all to their customers. It must also be taken that the defendants had no personal ill will to the plaintiffs, nor any desire to harm them except such as is involved in the wish and intention to discourage, by such measures, the plaintiffs from sending rival vessels to such ports. The acts of which the plaintiffs particularly complained were as follows: First, a circular of May 10, 1885, by which the defendants offered to the local shippers and their agents a benefit by way of rebate if they would not deal with the plaintiffs, which was to be lost if this condition was not fulfilled; secondly, the sending of special ships to Hankow in order, by competition, to deprive the plaintiffs' vessels of profitable freight; thirdly, the offer at Hankow of freights at a level which would not repay a shipowner for his adventure, in order to "smash" freights, and frighten the plaintiffs from the field; fourthly, pressure put on the defendants' own agents to induce them to ship only by the defendants' vessels, and not by those of the plaintiffs. It is to be observed, with regard to all these acts of which complaint is made, that they were acts that, in themselves, could not be said to be illegal unless made so by the object with which, or the combination in the course of which, they were done; and that, in reality, what is complained of is the pursuing of trade competition to a length which the plaintiffs consider oppressive and prejudicial to themselves. We were invited by the plaintiffs' counsel to accept the position from which their argument started, that an action will lie if a man maliciously and wrongfully conducts himself so as to injure another in that other's trade. Obscurity resides in the language used to state this proposition. The terms "maliciously" and "wrongfully” and “injure” are words all of which have accurate meanings, well known to the law, but which also have a popular and less precise signification, into which it is necessary to see that the argument does not imperceptibly slide. An intent to "injure," in strictness, means more than an intent to harm. It connotes an intent to do wrongful harm. "Maliciously," in like manner, means and implies an intention to do an act which is wrongful, to the detriment of another. The term "wrongful" imports, in its turn, the infringement of some right. The ambiguous proposition to which we were invited by the plaintiffs' counsel still, therefore, leaves unsolved the question of what, as between the plaintiffs and defendants, are the rights of trade. For the purpose of clearness, I desire, as far as possible, to avoid terms in their popular use so slippery, and to translate them into less fallacious language wherever possible. The English law, which, in its earlier stages, began with but an imperfect line of demarkation between torts and breaches of contract, presents us with no scientific analysis of the degree to which the intent to harm, or, in the language of the civil law, the animus vicino nocendi, may enter into or affect the conception of a personal wrong.1 All personal wrong means the infringement of some personal right. "It is essential in tort," say the privy council in Rogers v. Rajendro Dutt," "that the act complained of should, under the circumstances, be legally wrongful as regards the party complaining, that is, it must prejudicially affect him in some legal right; merely that it will, however directly, do a man harm in his interests, is not enough." What, then, were the rights of the plaintiffs as traders as against the defendants? The plaintiffs had a right to be protected against certain kind of conduct; and we have to consider what conduct would pass this legal line or boundary. Now, intentionally to do that which is calculated, in the ordinary course of events, to damage, and which does, in fact, damage, another in that other person's property or trade, is actionable if done without just cause or excuse. Such intentional action, when done without just cause or excuse, is what the law calls a malicious wrong. The acts of the defendants which are complained of here were intentional, and were also calculated, no doubt, to do the plaintiffs damage in their trade; but in order to see whether they were wrongful, we have still to discuss the question whether they were done without any just cause or excuse. Such just cause or excuse the defendants, on their side, assert to be found in their own positive right (subject to certain limitations) to carry on their own trade freely in the mode and manner that best suits them, and which they think best calculated to secure their own advantage. 3 What, then, are the limitations which the law imposes on a 1 See Chasemore v. Richards, 7 H. L. Cas. 349, at page 388. 2 13 Moore, P. C. 209. See Bromage v. Prosser, 4 Barn. & C. 247; Capital & Counties Bank v. Henty (per Lord Blackburn) 7 App. Cas. 741, at page 772. trader in the conduct of his business as between himself and other traders? There seem to be no burdens or restrictions in law upon a trader which arise merely from the fact that he is a trader, and which are not equally laid on all other subjects of the crown. His right to trade freely is a right which the law recognizes and encourages, but it is one which places him at no special disadvantage as compared with others. No man, whether trader or not, can, however, justify damaging another in his commercial business by fraud or misrepresentation. Intimidation, obstruction, and molestation are forbidden; so is the intentional procurement of a violation of individual rights, contractual or other, assuming, always, that there is no just cause for it. The intentional driving away of customers by show of violence; the obstruction of actors on the stage by preconcerted hissing; the disturbance of wild fowl in decoys by the firing of guns; the impeding or threatening of servants or workmen; the inducing person under personal contracts to break their contracts,8-all are instances of such forbidden acts. But the defendants have been guilty of none of of these acts. They have done nothing more against the plaintiffs than pursue to the bitter end a war of competition waged in the interest of their own trade. To the argument that a competition so pursued ceases to have a just cause or excuse when there is ill will or a personal intention to harm, it is sufficient to reply (as I have already pointed out) that there was here no personal intention to do any other or greater harm to the plaintiffs than such as was necessarily involved in the desire to attract to the defendants' ships the entire tea freights of the ports, a portion of which would otherwise have fallen to the plaintiffs' share. I can find no authority for the doctrine that such a commercial motive deprives of "just cause or excuse" acts done in the course of trade, which would, but for such a motive, be justifiable. So to hold would be to convert into an illegal motive the instinct of self-advancement and self-protection, which is the very incentive to all trade. To say that a man is to trade freely, but that he is to stop short at any act which is calculated to harm other tradesmen, and which is designed to attract business to his own shop, would be a strange and impossible counsel of perfection. But we were told that competition ceases to be the lawful exercise of trade, and so to be a lawful excuse for what will harm another, if carried to a • Tarleton v. McGawley, Peak, N. P. C. 270. Clifford v. Brandon, 2 Camp. 358. • Carrington v. Taylor, 11 East, 571, and Keeble v. Hickeringill, 11 East, 574, note. Garret v. Taylor, Cro. Jac. 567. Bowen v. Hall, 6 Q. B. Div. 333; Lumley v. Gye, 2 El. & Bl. 216. length which is not fair or reasonable. The offering of reduced rates by the defendants in the present case is said to have been "unfair." This seems to assume that, apart from fraud, intimidation, molestation, or obstruction of some other personal right in rem or in personam, there is some natural standard of "fairness" or "reasonableness" (to be determined by the internal consciousness of judges and juries), beyond which competition ought not, in law, to go. There seems to be no authority, and I think, with submission, that there is no sufficient reason, for such a proposition. It would impose a novel fetter upon trade. The defendants, we are told by the plaintiffs' counsel, might lawfully lower rates, provided they did not lower them beyond a "fair freight," whatever that may mean. But where is it established that there is any such restriction upon commerce? And what is to be the definition of a "fair freight"? It is said that it ought to be a normal rate of freight, such as is reasonably remunerative to the shipowner. But over what period of time is the average of this reasonable remunerativeness to be calculated? All commercial men with capital are acquainted with the ordinary expedient of sowing one year a crop of apparently unfruitful prices, in order, by driving competition away, to reap a fuller harvest of profit in the future; and, until the present argument at the bar, it may be doubted whether shipowners or merchants were ever deemed to be bound by law to conform to some imaginary "normal" standard of freights or prices, or that law courts had a right to say to them, in respect of their competitive tariffs: "Thus far shalt thou go, and no further." To attempt to limit English competition in this way would probably be as hopeless an endeavor as the experiment of King Canute. But on ordinary principles of law, no such fetter on freedom of trade can, in my opinion, be warranted. A man is bound not to use his property so as to infringe upon another's right. Sic utere tuo, ut alienum non laedas. If engaged in actions which may involve danger to others, he ought, speaking generally, to take reasonable care to avoid endangering them. But there is surely no doctrine of law which compels him to use his property in a way that judges and juries may consider reasonable. If there is no such fetter upon the use of property known to the English law, why should there be any such a fetter upon trade? It is urged, however, on the part of the plaintiffs, that, even if the acts complained of would not be wrongful had they been com See Chasemore v. Richards, 7 H. L. Cas. 349. |