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McMaster v. Ford Motor Co. et al

Supreme Court of South Carolina
Jan 2, 1923
122 S.C. 244 (S.C. 1923)


In McMaster v. Ford Motor Co., 122 S.C. 244, 115 S.E. 244 (1923), it was held there was no liability upon the defendant for ordering its dealers to refuse to install on Ford automobiles a device manufactured by the plaintiff which would make the automobiles of a wider gauge, or for its conditioning its warranty of Ford automobiles so as to negate such warranty if the plaintiff's device be used thereon.

Summary of this case from Smith v. Ford Motor Co.



October 10, 1921. Rehearing denied January 2, 1923.

Before WILSON, J., Richland, October, 1920. Reversed.

Action by S.B. McMaster against Ford Motor Co. and others. Judgment for plaintiff and the Ford Motor Co. and Universal Auto Co. appeal.

For former appeal in this case see 114 S.C. 100; 103 S.E., 87.

Messrs. Elliott McLain, C.N. Sapp and C.S. Monteith, for appellants, cite: Act which if done by one would not be actionable, will not be made actionable if done by several by agreement: 24 How., 407; 37 L.R.A., 455; 58 L.R.A., 135; 91 N.Y.S., 185. Effect of malice or bad motive: 62 L.R.A., 673; A.C. (1898), 1; A.C. (1892), 25; Cooley, Torts (2d. Ed.), 832, 836. As to action taken in furtherance of trade: 21 L.R.A. (N.S.), 550; 6 A.L. R., 909. Evidence of former recommendation not admissible: 77 S.C. 157; 61 S.C. 304. Agency contract lawful: 75 S.C. 378. On the appeal from order settling case: 110 S.C. 374; 108 S.C. 399; 110 S.C. 266; 110 S.C. 573.

Messrs. H.N. Edmunds and Edward L. Craig, for respondent, cite: Questions which should have been made on former appeal will not now be considered: 6 Rich. Eq., 320; Dud. Eq., 28; 17 S.C. 263; 26 S.C. 588; 32 S.C. 291; 43 S.C. 388; Code Proc. 1912, Sec. 395; 90 S.C. 232; 110 S.C. 122. Exception must be made on ground stated: 90 S.C. 513; 35 S.C. 609; 37 S.C. 572; 30 S.C. 529; 15 S.C. 58. Reasoning of Judge not proper basis of exception: 14 S.C. 286; 15 S.C. 58; 16 S.C. 351; 25 S.C. 525; 28 S.C. 606; 36 S.C. 368. Law against unlawful restraints: 87 S.C. 18; 111 U.S. 746; 165 U.S. 594; 84 S.C. 560; 11 East 574; 2 El. Bl., 216; Ap. Cas., 495; 52 L.R.A., 115; 241 U.S. 257; 68 A.L.R., 202; 90 A.L.R., 126; 31 Am. Dec., 19; 107 Mass. 555; 53 N.J. Eq., 101; 62 Fed., 803; 52 N.J.L., 284; 10 L.R.A., 184; 83 Fed., 912; 195 U.S. 206; 38 Cyc., 519. Recovery may be had against one member of a conspiracy: 28 Atl., 669; 7 Hill, 104; 42 Hum., 154. Combination in restraint of trade: 220 U.S. 373. Act, harmless when done by one, may become a public wrong when done in concert: 217 U.S. 440; 1 B.R.C., 197. Justifiable cause: 35 L.R.A., 722.

October 10, 1921. Rehearing denied January 2, 1923.

The opinion of the Court was delivered by

Action against Ford Motor Company, a Michigan corporation, engaged in manufacturing and selling Ford cars throughout the United States through agents who are granted exclusive rights in certain territories, and against four of these agents, for $500,000.00 damages. The complaint contains two alleged causes of action, but, in view of the fact that the verdict was based upon the first cause of action alone, the second cause of action need not be considered.

The first cause of action alleges, in substance, that the plaintiff invented and patented a device, the application of which to the ends of the axles of narrow-gauge cars increased the distance between the wheels from 56 to 60 inches, the effect of which was to allow the wheels of an original narrow-gauge car to track in the ruts made by the broad or standard gauge cars, thereby saving strain on the steering gear and machinery, without interfering with any part of the car and adding to safety and comfort; that it is especially valuable to the owner of narrow-gauge cars in this and nine other Southern States named, in which the vehicles most in use are broad gauge; that Ford Motor Company manufactures exclusively narrow-gauge cars, and sells a great number of them in said States, through its agents, who afford practically the exclusive market for the sale of the plaintiff's invention, which is peculiarly suitable for Ford cars; that the Ford Company and the other defendants combined and conspired to deprive the plaintiff of the market for his device, and did so; that to accomplish that purpose the company required its agents to agree not to buy, sell, handle, or install the device on any of its cars, on penalty of forfeiting their agencies, and that the agents agreed to and complied with this requirement, advised their customers against the use of the device which they condemned, and threatened to cancel the guaranty under which the cars were sold if the device should be attached thereto.

To this complaint the defendant demurred upon the grounds:

(1) That the complaint fails to state facts sufficient to constitute a cause of action under the Anti-Trust Act of Congress.

(2) That the complaint fails to state facts sufficient to constitute a cause of action at common law.

(3) That, if any cause of action be stated, it is one solely under the Act of Congress, of which the State Court has no jurisdiction.

The demurrer was heard by Judge Memminger, who filed an order overruling the demurrer. It is not clear from his order whether Judge Memminger intended to hold that the complaint stated a cause of action under the Anti-Trust Act (U.S. Comp. St., §§ 8820-8823, 8827-8830), or not; from his conclusion that the Federal Court did not have exclusive jurisdiction of the action, it may be inferred, however, that he intended to so hold. In reference to the cause of action at common law he expressed great doubt, and declares:

"Should I overrule it on the ground of jurisdiction, of course I could not pass upon this point." (Evidently intending to say "sustain," instead of "overrule.")

This Court, however, upon the former appeal in this case ( 114 S.C. 100; 103 S.E., 87), construed the order thus:

"The Court held that sufficient facts are alleged to constitute a cause of action under the Federal Statute, and also at common law, and that the State Courts have jurisdiction of an action brought under the Federal Statute, and overruled the demurrer."

The defendants appealed from Judge Memminger's order, serving the following notice:

"You will please take notice that the above-named defendants intend to appeal to the Supreme Court from the order of his Honor, R.W. Memminger, rendered March 28, 1918, overruling the demurrer heretofore interposed in the above-entitled action to the jurisdiction of this Court over the subject of said action upon a `case' and exceptions to be hereafter served upon you within the time allowed by law; saving and reserving all other questions properly arising upon said demurrer and the order overruling same."

And in their exceptions raised only the questions relating to the Anti-Trust Act and the jurisdiction of the State Court.

Upon the appeal, this Court, under the impression that the whole demurrer was up for review, reversed the order upon both grounds. The plaintiff filed a petition for a rehearing, and this action was taken upon it (quoting from the opinion in 114 S.C. at page 105; 103 S.E., at page 88):

"On hearing the appeal, we considered and decided all the grounds made by the demurrer. But the plaintiff filed a petition for a rehearing, or a modification of the opinion filed, on the ground that the question whether the complaint is sufficient to make out a cause of action at common law was not before us. That position is well taken, and our decision must be limited to the questions made by the exceptions. Therefore, we have stricken out all of it, except so much as disposes of the two questions raised by the exceptions."

The Court then proceeded to reverse the order in so far as it held that the action was one under the Act of Congress.

The case then came on for trial before Judge Wilson and a jury at October Court, 1920, and resulted in a verdict upon the first cause of action in favor of the plaintiff for $50,000.00; $49,999.00 against the Ford Company, and $1.00 against the defendant, Universal Auto Company, as agent of the Ford Company, a North Carolina corporation. From judgment entered upon this verdict, the parties affected have appealed.

The respondent raises a question of pleading and practice which will be determined in the first instance. His contention is that, as the defendant did not appeal from that portion of Judge Memminger's order holding that the complaint stated a sufficient cause of action at common law, they are concluded by it at all stages of the case after it was remanded to the Circuit Court for trial; that they cannot now appeal from it, and that it became the law of the case so far as the motion for a nonsuit, the motion for a directed verdict, and the requests to charge were concerned.

If this Court is satisfied in reason and justice and law that the complaint does not state a sufficient cause of action at common law, that the plaintiff has no case, it will require stronger inducement than the authorities cited by the respondent to secure the sanction of a judicial wrong upon a technical point of this character. While, in the conception of the Court, it is more conducive to the orderly and prompt administration of justice that every question in a cause shall be determined in one appeal after final judgment, this Court does not sit as preceptor or critics of the bar, and no one occupies a reprehensible position in exercising a legal right. The responsibility for intelligent and effective service to their clients is with the attorneys who represent them, and they are entitled to exercise their judgment untrammeled by suggestions or criticisms from the bench, so long as their activities are in harmony with the rules prescribed by this Court.

It is assumed that counsel as reputable as those engaged in this case for the defendants were honestly convinced of the correctness of their position that the complaint stated a cause of action, if any at all, under the Act of Congress, and that for that reason the State Court was without jurisdiction. If that question should be decided in their favor, the case would be ended so far as the State Court was concerned, and the necessity of opening up the merits of the case by demurrer upon the other ground would be unmoved. They had a perfect right to have this question alone decided by this Court, and cannot be held to have waived their right to appeal from the other by not carrying it up with the question of jurisdiction.

The order of Judge Memminger contained two distinct rulings, in response to two distinct grounds of demurrer, one of jurisdictional nature, and the other, distinct from that, a matter of sufficiency of the alleged cause of action at common law. The fact that both rulings were included in the same order does not blend them necessarily into one; he may have issued a separate order for each. It was intermediate in its nature, involved the merits of the case, and under the express provisions of Section 11, Subdivision (D) 1, Code Civ. Proc. 1912, reviewable on appeal from the final judgment as an intermediate order or decree necessarily affecting the judgment. See Hyatt v. McBurney, 17 S.C. 150; Lee v. Fowler, 19 S.C. 607; Thatcher v. Massey, 20 S.C. 547; Bomar v. R. Co., 30 S.C. 450; 9 S.E., 512; Sullivan v. Latimer, 32 S.C. 281; 10 S.E., 1071; McCrudy v. Jones, 36 S.C. 136; 15 S.E., 430; Wallace v. R. Co., 36 S.C. 599; 15 S.E., 452; Morgan v. Smith, 59 S.C. 49; 37 S.E., 44.

The conclusions of the late Justice Hydrick, who prepared that portion of the opinion upon the former appeal that was deleted, so fully conforms to our conclusions that we adopt it as our reasons for holding that the demurrer should have been sustained upon this ground as well as upon the other.

"The next question, then, is: Did plaintiff state a cause of action at common law? In answering that question, we must consider the correlative rights and duties of the parties with reference to the facts and circumstances alleged, in the light of the applicable principles of law, and particularly with reference to the allegations that the acts complained of were done with the malicious intent to injure plaintiff, and in consummation of a conspiracy between defendants to accomplish that purpose.

"The law does not pretend to give indemnity for every harm done. There are some things which it permits a man to do without the fear of consequences, though he may know that in doing them he will damage his neighbor. For instance, he may build on his own land so as to destroy his neighbor's view, or cut off his light and air, or he may set up a business in competition with him and ruin him. He may or may not intend to cause the damage. But his motives may not be questioned, the law regarding his right to do those things is superior to any right of his neighbor to prevent his doing them.

"While there is some difference of opinion, the weight of authority is in favor of the general proposition that an act done in the exercise of a legal right cannot be treated as wrongful and actionable merely because a malicious motive prompted the exercise of the right. The proposition is variously stated thus: `Whatever a man has a legal right to do, he can do with impunity, regardless of his motives'; and, `malicious motives make a bad case worse, but they cannot make that wrong which in its own essence is lawful.' See note on the subject under the case of Passaic Print Works v. Ely Walker Dry Goods Co., 105 Fed., 163; 44 C.C.A., 426; 62 L.R.A., 673, where many cases are collated and reviewed.

"It has been suggested that some apparent conflicts of opinion can be reconciled by observing the difference between absolute and qualified rights, and by limiting the general proposition above stated to the exercise of absolute rights. See note to Globe, Etc., Co. v. Firemen's Fund Ins. Co., 29 L.R.A. (N.S.), 869. The suggestion is not without force, for unquestionably the law regards some rights as absolute and others as qualified. But the cases show that Courts and Judges have differed as to the quality of the same right, some holding it absolute, and others considering it as qualified by the circumstances in which it was exercised. And may not the same right be absolute in some circumstances and qualified in others? It would be difficult, if not impracticable, to make a fixed classification of rights, or to formulate any general rule to be applied in all cases, because of the great variety of rights which men enjoy in their intercourse with each other and the infinitely varying circumstances in which they are exercised. Therefore, while we approve the proposition above stated as a general rule, we are not prepared to hold that it is inflexible, and may not be modified by circumstances. It is sufficient for this case to say that the rights which defendants exercise are superior to any right of plaintiff to prevent the exercise thereof.

"At common law, liability for damages arises from breach of contract or breach of duty. No contract with defendants, or any of them, is alleged. On the contrary, plaintiff complains because none of them would enter into contractual relations with him. But in refusing to deal with him they violated no legal right of his, since they owed him no such duty. The fundamental conception of a contract is that it is an agreement, and that implies mutual consent. Therefore, the law allows one to determine for himself with whom he will contract; hence, one may refuse to contract with another or to buy or sell his goods without incurring liability for resulting damage, even though his refusal be prompted by the intent to injure the other. Cooley on Torts, 278. All authorities agree that the right to refuse to enter into business relations with another is an absolute right.

"It follows that Ford Motor Company has the right to put its cars on the market in such form and with such parts and attachments as it pleases, and to prevent any alteration or modification thereof, so long as it has any legal interest in them. It has the right, therefore, to refuse to allow plaintiff's device to be installed on them, and, consequently, the right to require its agents, as a condition of their employment, to agree that they will not buy, sell, handle, or install it upon them; and, as it may refuse to warrant its cars at all, it may warrant them on condition that plaintiff's device shall not be used on them. In doing these things, the company exercised its own rights, which are superior to any rights of the plaintiff with regard to the things complained of, and if damage resulted therefrom to plaintiff it is damnum absque injuria, since he had no legal right to deal with the company, or with its agents, or with the public, through the company and its agents, without their consent. It follows also that plaintiff has no right to obtrude his scheme for the marketing of his invention upon the company, or its agents, without their consent.

"Nor does the allegation of conspiracy make any difference in the legal consequences, because, as we have seen, in exercising their right to contract with each other and to refuse to contract with plaintiff, defendants did nothing unlawful and resorted to no unlawful means to accomplish their purpose."

The other questions in the case need not, therefore, be considered.

The judgment of this Court is that the judgment of the Circuit Court be reversed, and that the complaint be dismissed.

Summaries of

McMaster v. Ford Motor Co. et al

Supreme Court of South Carolina
Jan 2, 1923
122 S.C. 244 (S.C. 1923)

In McMaster v. Ford Motor Co., 122 S.C. 244, 115 S.E. 244 (1923), it was held there was no liability upon the defendant for ordering its dealers to refuse to install on Ford automobiles a device manufactured by the plaintiff which would make the automobiles of a wider gauge, or for its conditioning its warranty of Ford automobiles so as to negate such warranty if the plaintiff's device be used thereon.

Summary of this case from Smith v. Ford Motor Co.
Case details for

McMaster v. Ford Motor Co. et al

Case Details


Court:Supreme Court of South Carolina

Date published: Jan 2, 1923


122 S.C. 244 (S.C. 1923)
115 S.E. 244

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