Doremus v. Hennessy
176 Ill. 608 (1898)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
One who maliciously procures the breach of an existing contract, with the intent to injure another's lawful business, commits an actionable wrong, as existing contracts are considered a property right. Such malicious interference, distinct from legitimate competition, is unlawful and actionable if damages result.
Facts:
- In 1890 and several years prior, Appellee operated a profitable laundry office in Chicago, where she received clothing from customers and employed other laundries to perform the actual washing.
- Appellants, affiliated with the Chicago Laundrymen’s Association, conspired to injure Appellee's business because she refused to increase her prices to match the association's fixed scale.
- Appellants induced Miller, who had a contract to do Appellee's work and give two weeks’ notice before quitting, to refuse to continue work without providing the agreed-upon notice.
- Appellants, through threats and unlawful inducements, caused Joseph Apple to break his one-year written contract with Appellee, instructing him to delay and retain parts of Appellee's work.
- Appellants offered Joseph Apple $300, a horse, a wagon, and enough work if he would keep back Appellee’s work to her detriment, and later threatened to ruin his business if he refused.
- Appellants induced other laundrymen, who had agreed to do Appellee's work, to cease their business connections with her through threats of destroying their businesses.
- Appellants' actions were done for no justifiable purpose, but solely to cause loss to Appellee and destroy her business.
Procedural Posture:
- Appellee instituted an action on the case against appellants in the circuit court of Cook county.
- Issues were joined, and upon a trial, a jury found the defendants (appellants) guilty and assessed the plaintiff's (appellee's) damages at $6000.
- Motions for a new trial and in arrest of judgment were overruled by the circuit court, and judgment was entered on the verdict.
- Appellants excepted to the judgment and appealed to the Appellate Court for the First District (appellants were the appellants, appellee was the appellee).
- The Appellate Court for the First District affirmed the judgment of the circuit court.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does maliciously inducing third parties to breach existing contracts with another, with the intent to injure that other's business, constitute an actionable wrong, even if the third parties were not coerced by physical force or fraud?
Opinions:
Majority - Mr. Justice Phillips
Yes, maliciously inducing third parties to breach existing contracts with another, with the intent to injure that other's business, constitutes an actionable wrong. The common law protects every person against wrongful acts that cause loss in the enjoyment of any right or privilege or property. Individuals or combinations of persons do not have the right to interfere with another's lawful business for the purpose of compelling them to do an act against their own interest. Losses willfully caused by another, from motives of malice (defined as an intent to do a wrongful harm and injury), are actionable. While lawful competition is protected, an act maliciously done with the intent and purpose of injuring another is not lawful competition. Here, existing contracts, which the court identifies as a property right, were broken due to the appellants' actions. The court distinguishes this case from Allen v. Flood, where no existing contract was involved, emphasizing that inducing the breach of a valid contract with malicious intent to destroy a business is a distinct and actionable wrong. The question of whether the injury resulted from appellants' acts or an independent intervening cause was a question of fact resolved by the lower courts and not subject to review by this court.
Analysis:
This case significantly broadens the scope of tortious interference by clarifying that malicious inducement of contract breach, even without physical coercion or traditional fraud, is an actionable wrong. It establishes that existing contracts are protected property rights, and interference with them for an anti-competitive or wrongful purpose is unlawful. The distinction between 'malice' as an intent to do wrongful harm versus mere intent to harm within legitimate competition is critical, providing a framework for courts to differentiate between aggressive business practices and illegal interference. This precedent solidifies protection for contractual relations against third-party interference, particularly when driven by unlawful motives like price-fixing schemes, thus impacting future cases involving unfair trade practices and concerted actions against competitors.
