Hammond v. Sully

Mr. Chief Justice Smyth delivered the opinion of the Court: The learned trial justice, after a careful review of the evidence, said to the jury: “When we boil this case down to its last analysis, in my opinion, it turns on the motive which induced the action of the board of directors on the 23d of November, 1910, in the passage of the resolution which they adopted.” He charged that there was no evidence of actual damage, and that unless the jury found that Hammond and his associates, in the passage of the resolution of November 23, were actuated by a malignant purpose, their verdict must be for the defendant. The jury was bound to follow these instructions (Kuhn v. Chicago, M. & St. P. R. Co. 74 Iowa, 137, 140, 37 N. W. 116; Bartling v. Behrends, 20 Neb. 211, 29 N. W. 472; Moore v. Hinkle, 151 Ind. 343, 50 N. E. 822), and we must presume that they did so (Shreveport v. Cole, 129 U. S. 36, 42, 32 L. ed. 589, 591, 9 Sup. Ct. Rep. 210), and were governed by them in formulating their verdict. If there was vice in the instructions it inheres in the verdict. Two questions, then, are presented for solution: (a) May the members of a board of directors under any circumstances be subjected to punitive damages because they voted for a resolution which resulted in HO actual damage to the plaintiff ? and (b) If so, may they be amerced in damages for passing a perfectly legal resolution if it be found that their motives in doing so Avere sinister ? Concerning the first question, the authorities are by no means in harmony, as a study of the following Avill show: 2 Sutherland, Damages, 3d ed. sec. 406, p. 1129; Hanewacker v. Forman, 152 Ill. 321, 325, 38 N. E. 924; Kuhn v. Chicago, M. & St. P. R. Co. 74 Iowa, 137, 141, 37 N. W. 116; Girard v. Moore, 86 Tex. 675, 26 S. W. 945; Stacy v. Portland Pub. Co. 68 Me. 279, 287; Wilson v. Vaughn, 23 Fed. 229; Press Pub. Co. v. Monroe, 51 L.R.A. 353, 19 C. C. A. 429, 38 U. S. App. 410, 73 Fed. 201. But we do not find it necessary to decide the point. Whatever its solution may be, it would appear that in any event there must be proof of a tortious act. [329] This brings us to the second question. In our view it would be a dangerous doctrine to announce that a party may be punished for doing that which is legal if in the judgment of a jury his motive was unworthy. Neither the diligence of counsel, nor our own researches, have uncovered any authority, either text or decision, which approves such a principle. For is it in consonance with reason. The motive of an act, as a general thing, has to do with its ethical value, not with its juristic character, and is immaterial where the act itself is legal. To condemn a legal act because of the motive which inspired it would be to subordinate the legal to the ethical, would he to condition the validity of acts upon the motive which called them into existence. This is not within the province of jurisprudence. Until ethical principles are adopted by the law they lie in a domain apart from the field in which jurisprudence operates. “As long as a man keeps himself within the law by doing no act which violates it, we must leave his motives to Him who searches hearts.” Chambers v. Baldwin, 91 Ky. 121, 11 L.R.A. 545, 34 Am. St. Rep. 165, 15 S. W. 57. This is in harmony with many decisions of the Federal courts. We cite a few: Evans v. Sioux City Service Co. 206 Fed. 841, 844; Jacobson v. Chicago, R. I. & P. R. Co. 176 Fed. 1004, 1005; Enos v. Kentucky Distilleries & Warehouse Co. 111 C. C. A. 74, 189 Fed. 342; Warax v. Cincinnati, N. O. & T. P. R. Co. 72 Fed. 637, 640; Welch v. Cincinnati, N. O. & T. P. R. Co. 177 Fed. 760; Chicago, B. & Q. R. Co. v. Willard, 220 U. S. 413, 427, 55 L. ed. 521, 527, 31 Sup. Ct. Rep. 460; Chicago, R. I. & P. R. Co. v. Schwyhart, 227 U. S. 184, 193, 57 L. ed. 473, 477, 33 Sup. Ct. Rep. 250; Adler v. Fenton, 24 How. 407, 410, 16 L. ed. 696, 697; Illinois C. R. Co. v. Sheegog, 215 U. S. 308, 316, 54 L. ed. 208, 211, 30 Sup. Ct. Rep. 101; Chicago, R. I. & P. R. Co. v. Dowell, 229 U. S. 102, 113, 57 L. ed. 1090, 1095, 33 Sup. Ct. Rep. 684. In the Warax Case, Judge Taft said: “If the right exists, the motive for its exercise cannot defeat it.” The court announced in the Adler Case that “an act legal in [330] itself, and violating no right, cannot be made actionable on account of the motive which superinduced it. It is the province of ethics to consider of actions in their relation to motives, but jurisprudence deals with actions in their relation to law, and for the most part independently of motive.” Mr. Justice Holmes, speaking *for the court in the Sheegog Case, said: “In the case of a tort which gives rise to a joint and several liability, the plaintiff has an absolute right to elect, and to sue the tort-feasors jointly if he sees fit, no matter what his motive.” All the foregoing decisions deal with cases in which the element of conspiracy was lacking. , If the jury in the present case had been told by the court that they could not'find for the plaintiff unless the damages of which he complained were the result of a conspiracy between Hammond and others, the above authorities would not be in point, because in the case of a conspiracy the means Fy which the wrpng is accomplished, whether lawful or unlawful in themselves, are immaterial. United States v. Rintelen, 233 Fed. 793, 796; United States v. Moore, 173 Fed. 122, 132; State v. Buchanan, 5 Harr. & J. 317, 9 Am. Dec. 534; 12 C. J. sec. 3, p. 545. The gravamen of the action lies in the conspiracy and the resulting damage. Hollinberger v. Stewart, 41 App. D. C. 197, 199. But the deliberations of the jury were not limited by the court to the conspiracy charged. After stating that a party has a right to rescind a contract “which threatens to turn out disastrously for him, * * * subject, however, to being mulcted in damages by the other party to the contract for whatever loss he may (might) suffer,” the court said: “So that in reaching a conclusion in this case you are to consider all the elements which entered into the consideration of the defendant and his associates on the board of directors in passing the resolution which took away the right’s of the plaintiff under these contracts, on the one hand; and if the motives that inspired that action, if the purposes which they had in view, were for their own protection or were bona fide to release them from an obligation which seemed to be a menace to the com [331] pany, or to the individuals connected with the company, or in good faith was to terminate an agreement which apparently had no possibility or no probability of being carried out by the other party to it, or for any other reason involving good faith on their part, then Mr. Sully is not entitled to recover in this case. On the other hand, if the thing was done maliciously, if this resolution was passed maliciously, for the sake of injuring the property rights of the plaintiff, and not for these other motives which I have described, then he is entitled to a verdict at your hands, to he measured by a rule or an instruction which I will give you later.” Thus, the jury were told in effect that the resolution of November 2o, by which the contracts referred to therein were rescinded, was legal, and if Hammond and his associates were liable, to Sully on account of the passage of that resolution, it must be upon tlie assumption that their motive in passing it was vicious. By this instruction the question of conspiracy was put out of sight. Guided by it the jury could have found that there was no conspiracy and yet returned a verdict against Hammond on account of the motive which actuated him in doing what the court had said was in itself entirely legal. True, the jury were advised in another place that, if they found that plaintiff was injured through the conspiracy charged, they might find for him; but this detracts nothing from the fact that under the above instruction they could have found for him irrespective of the conspiracy. In no place were they ad-. monished that they could not return a verdict for Sully unless they found a conspiracy. We are satisfied that the court erred in giving the instruction quoted. The judgment is reversed, with costs, and the cause remanded for a new trial in harmony with the views expressed herein. Reversed.