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mon carriers, for the avowed purpose of absorbing, and controlling, the entire transportation of tea from Canton, and all the ports on the Hankow River, in China. The means to be used to accomplish that purpose included the fixing of rates by one common authority for all the combining owners, the boycotting of all outside competitors, the refusal to do business with parties who did business with any outside competitors, and the putting down of freights to any figure that might be necessary to drive away those competitors, with the intent to subsequently restore rates to a profitable figure after the suppression of the outside competition.
A few extracts from the opinions are here selected, in order to give an authoritative statement of the facts and the decision of the court.
The opinion of Lord Coleridge, C. J., was in part:
“The plaintiffs are a company of shipowners trading, or desirous of trading, between Australia and this country, taking China by the way ; and desirous in particular of sharing in the transport of what has been called the 'tea harvest,' the time of which is in the late spring and early summer months, and the places for loading which, as far as this case is concerned, are Shangbai at the mouth of the Yangtze-kiang and Hankow, a place about 600 miles up the stream of that great river. The defendants are a number of great shipowners, companies, and private partnerships, trading for the most part from this country to China and from China to this country direct, and who, being desirous to keep this very valuable trade in their own hands, and to prevent, if they can, the lowering of freights (the ruinous lowering as they contend), which must follow, as they say, from absolutely unrestricted competition, entered into what they call a conference for the purpose of working the homeward trade, by offering a rebate of 5 per cent. upon all freights paid by the shippers to the conference vessels, such rebate not to be paid to any shipper who shipped any tea at Shanghai or Hankow (the rebate was not confined to these ports, but I think that an immaterial circumstance) in any vessels but those belonging to the conference.
“The complaint, then, is this, that the defendants unlawfully combined or conspired to prevent the plaintiffs from carrying on their trade, that they did prevent them by the use of unlawful means in furtherance of such unlawful combination or conspiracy, and that from such unlawful combination or conspiracy therefore damage has resulted to the plaintiffs.
“ The defendants answer that reither was their combination unlawful in itself, nor were any unlawful means used in furtherance of it ; but that the damage, if any, to the plaintiffs was the necessary and inevitable result of the defendants carrying on their lawful trade in a lawful manner.
These are the contentions on the two sides. Is there anything in the law applicable to this subject in which they are agreed ? In the statement of the law, as might be expected from the counsel who argued the case, there was often a close apparent agreement ; but when it came to the application of it, the same words were evidently not always used on both sides in the same sense. I have carefully read over again and considered the arguments, and it seerns to me it will be better that I should endeavour to state what I conceive to be the law upon the matter in dispute, and then apply it to the facts before me, which, as most of them depended upon written documents, can hardly be said to have been much disputed.
“ It cannot be, nor indeed was it, denied that in order to found this action there must be an element of unlawfulness in the combination on which it is founded, and that this element of unlawful. ness must exist alike whether the combination is the subject of an indictment or the subject of an action. But in an indictment it suffices if the combination exists, and is unlawful, because it is the combination itself which is mischievous, and which gives the public an interest to interfere by indictment. Nothing need be actually done in furtherance of it. In the Bridgewater Case(1), referred to at the bar, and in which I was counsel, nothing was done in fact ; yet a gentleman was convicted because he had entered into an unlawful combination from which almost on the spot he withdrew, and withdrew altogether. No one was harmed, but the public offence was complete. This is in accordance with the express words of Bayley, J., in Rex v. De Berenger. (2) It is otherwise in a civil action : it is the damage which results from the unlawful combination itself with which the civil action is concerned. It is not every combination which is unlawful, and if the combination is lawful, that is to
(2) 3 M. & S. 67, at p. 76.
say, is for a lawful end pursued by lawful means, or being unlawful there is no damage from it to the plaintiff, the action will not lie. In these last sentences damage means legal injury ; mere loss or disadvantage will not sustain the action.
“ Once more, to state the proposition somewhat differently with a view to some of the arguments addressed to me, the law may be put thus. If the combination is unlawful, then the parties to it commit a misdemeanour, and are offenders against the State ; and if, as the result of such unlawful combination and misdemeanour, a private person receives a private injury, that gives such person a right of private action.
“ It is, therefore, no doubt necessary to consider the object of the combination as well as the means employed to effect the object, in order to determine the legality or illegality of the combination. And in this case it is clear that if the object were unlawful, or if the object were lawful, but the means employed to effect it were unlaw. ful, and if there were a combination either to effect the unlawful object or to use the unlawful means, then the combination was unlawful, then those who formed it were misdemeanants, and a person injured by their misdemeanour has an action in respect of his injury.
' It will appear from the statement which I have given of what I believe to be the law, that I cannot assent without some qualification to the propositions which were pressed upon me by the learned counsel for the contending parties in this case. For the same reason I do not propose to enter into a detailed examination of the many cases which were cited in argument. I believe that, fairly considered and rightly looked at, every case, including the much canvassed one of Rex v. Turner, (1) will be found to be consistent with the principles I have stated, although there are isolated dicta of very great judges, probably in their actual terms—if the terms are rightly reported-going beyond the law, certainly quite at variance with each other. On one side are extreme cases, such as Keble v. Hickringill(2), in which at first Lord Holt doubted, but finally gave judgment for the plaintiff, and Reg v. Druitt(3), in which, unless he is misreported, Bramwell, B., said he thought a combination to treat a man with black looks' was an indictable inisdemeanour
(1) 13 East, 228.
(2) 11 Mod. 74, 131.
(3) 10 Cox, C. C. 592.
(a decision, if it be one, which might assuredly land us in unex. pected and singular results); and the very broad dictum of Pratt, C. J., in Rex v. Journeyman Tailors of Cambridge(1), that'a conspiracy of any kind is illegal, though the matter they conspired about might have been quite lawful for them to do.' These are perhaps as extreme as can be found on one side ; on the other is the questioned and possibly overruled case of Rex v. Turner(2), de. cided by Lord Ellenborough, C. J., and Grose, Le Blanc and Bayley, JJ. The view which Lord Ellenborough took of the facts of that case appears rather from his interlocutory observation at p. 230 than from his judgment on the page following. It is difficult not to acquiesce in the good sense of Lord Ellenborough's observations, and speaking, as I wish, and, indeed, ought to speak, with grateful respect of Lord Campbell, I do not feel so sure that Lord Ellenborough was wrong simply because Lord Campbell in Reg v. Rowlands(3) says he has no doubt he was so. Be that as it may, and if Lord Ellenborough and the Court did wrongly apply the principles of law in Rex v. Turner(2), the principles are clearly and forcibly stated in accordance with what I have endeavoured to express by. Lord Ellenborough himself. The case of Rex v. Eccles(4), before Lord Mansfield, C. J., Willes and Buller, JJ., turned upon pleading ; the motion was in arrest of judgment; the decision was that after verdict the indictment was good ; and the case itself is expressly commented on, explained and distinguished by Lord Ellenborough in Rex v. Turner.(2)
“ There were a number of cases, of which Winsmore v. Green: bank(5), Lumley v. Gye(6), and Bowen v. Hall(7), were examples, in which the question of conspiracy did not arise ; but they were cited to shew what cases of interference with what sort of contracts had been held actionable by the courts at the suit of one individual against another. Now all these cases bind me sitting here, and I neither question nor desire to evade their authority. But they do not help me much. I do not doubt the acts done by the defendants here, if done wrongfully and maliciously, or if done in furtherance of a wrongful and malicious combination, would be
(1) 8 Mod. 11.
(5) Willes, 577.
ground for an action on the case at the suit of one who suffered injury from them. The question comes at last to this, what was the character of these acts, and what was the motive of the defendants in doing them ? The defendants are traders with enormous sums of money embarked in their adventures, and naturally and allowably desirous to reap a profit from their trade. They have a right to push their lawful trade by all lawful ineans. They have a right to endeavour by lawful means to keep their trade in their own hands and by the same means to exclude others from its benefits, if they can. Amongst lawful means is certainly included the inducing by profitable offers customers to deal with them rather than with their rivals. It follows that they may, if they think fit, endeavour to induce customers to deal with them exclusively by giving notice that only to exclusive customers will they give the advantage of their profitable offers. I do not think it matters that the withdrawal of the advantages is out of all proportion to the injury inflicted on those who withdraw them by the customers, who decline to deal exclusively with them, dealing with other traders. It is a bargain
, . a which persons in the position of the defendants here had a right to make, and those who are parties to the bargain must take it or leave it as a whole. Of coercion, of bribing, I see no evidence ; of inducing, in the sense in which that word is used in the class of cases to which Lumley v. Gye(1) belongs, I see none either.
“One word in passing only on the contention that this combination of the defendants was unlawful because it was in restraint of trade. It seems to me it was no more in restraint of trade, as that phrase is used for the purpose of avoiding contracts, than if two tailors in a village agreed to give their customers five per cent. off their bills at Christmas on condition of their customers dealing with them and with them only. Restraint of trade, with deference, has in its legal sense nothing to do with this question.
“ But it is said that the motive of these acts was to ruin the plaintiffs, and that such a motive, it has been held, will render the combination itself wrongful and malicious, and that if damage has resulted to the plaintiffs an action will lie. I concede that if the premises are established the conclusion follows. It is too late to dispute, if I desired it, as I do not, that a wrongful and malicious combination to ruin a man in his trade may be ground for such an
(1) 2 E. & B. 216.