Payne v. Western & Atlantic Railroad
81 Tenn. 507 (1884)
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Rule of Law:
An act that is lawful in itself does not become actionable simply because it was performed with a malicious motive. An employer's threat to discharge at-will employees for patronizing a particular business is not an unlawful act and therefore cannot be the basis for a cause of action by the injured business owner, regardless of the employer's malicious intent.
Facts:
- L. Payne was a merchant operating a successful store in Chattanooga, Tennessee, located near the depot and yards of the Western & Atlantic Railroad Company.
- Payne had established a large and profitable business, with a significant portion of his customers being employees of the railroad.
- J. C. Anderson, a general agent for the railroad, allegedly conspired with the company to ruin Payne's business out of malice.
- On February 16, 1883, Anderson, acting for the railroad, issued and circulated a written order to department heads.
- The order stated: 'Any employe of this company on Chattanooga pay-roll who trades with L. Payne from this date will be discharged.'
- As a result of this order, the railroad employees were intimidated and ceased trading with Payne.
- Consequently, Payne's business was severely damaged and ultimately ruined.
Procedural Posture:
- L. Payne filed suit against the Western & Atlantic Railroad Company and J. C. Anderson in the circuit court (trial court).
- The defendants filed a demurrer, arguing that Payne's complaint failed to state a valid cause of action.
- The circuit court judge sustained the demurrer and dismissed the lawsuit.
- The case was then reviewed by the Commission of Referees, an intermediate appellate body.
- The Referees recommended that the judgment of the circuit court be reversed and the case allowed to proceed.
- The Supreme Court of Tennessee then took up the case to rule on the Referees' recommendation and the circuit court's dismissal.
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Issue:
Does an employer commit an actionable legal wrong by maliciously threatening to discharge its at-will employees if they patronize a specific merchant, when the employer has a legal right to discharge the employees for any reason?
Opinions:
Majority - Ingersoll, Sp. J.
No. An employer's threat to discharge at-will employees for any reason is not an unlawful act, and a lawful act does not become actionable merely because it is motivated by malice. The court reasoned that railroad corporations, like any other employer, have the right to dismiss at-will employees for good cause, no cause, or even a morally wrong cause without being guilty of a legal wrong. A 'threat' in the legal sense is a declaration of an intent to commit an unlawful act; since discharging an at-will employee is not unlawful, threatening to do so is not a legally actionable threat or form of intimidation. The court concluded that while the defendants' motives may have been wicked, they only exercised their legal rights in a lawful manner, and a bad motive cannot be the foundation of a civil action.
Dissenting - Freeman, J.
Yes. An employer commits a legal wrong when it exercises its legal right to discharge employees with the sole and malicious purpose of injuring a third party's business. The dissent argued that Payne had a property right in the 'goodwill' of his business, which the defendants intentionally destroyed without a justifiable cause. While the act of discharging an employee may be lawful in itself, using this power as a weapon to maliciously harm another is an abuse of that right and should be actionable. Public policy requires that the immense power of corporations be restrained from crushing competition and controlling the lives of their employees for malicious purposes unrelated to any legitimate business interest.
Analysis:
This case establishes the principle that a lawful act is not made unlawful by a malicious motive, a foundational concept in tort law. The decision strongly reinforces the doctrine of at-will employment, granting employers wide latitude to discharge employees without risking tort liability to third parties who may be financially harmed by such decisions. It sets a high bar for claims of tortious interference, requiring a plaintiff to show that the defendant's conduct was independently unlawful (e.g., involved a breach of contract, defamation, or violence), rather than merely malicious. This ruling prioritizes a defendant's freedom to exercise their legal rights over a plaintiff's interest in being free from intentionally inflicted economic harm.
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