Kinney v. Pocock

BabcooK, J. I. N. Kinney and Albert Dix sue for themselves and some eleven hundred. others voluntarily associated as the board of trade of Wooster, Ohio. The defendants entered into a contract with the members of this association for locating and building glass works in said city of Wooster, in which some two hundred workmen should find employment, the defendants agreeing .to keep the factory running ten months' in the year for ten years. The board of trade of said city, assuming to act for and in the name of the citizens of Wooster, agreed to pay the defendants $20,000 for the things so stipulated by them to be done. Among other things in the contract was one providing for a return of the money without interest so paid by the plaintiffs to the defendants in case default was made by them in carrying out the terms of the contract above outlined. The plaintiffs sue for breach of the contract and ask judgment for $18,500, the amount actually advanced to the defendants under the contract. To the petition is attached as an exhibit a copy of the contract. It recites that it is entered into by and between James F. Pocock and the three other defendants (naming them), parties of the first part, and “the citizens of Wooster, parties of the second part, pursuant to a proposition made by said parties of the first part to the citizens of Wooster through its board of trade.” The last clause of ,the contract is as follows: “And we hereby authorize the president and secretary of said board of trade -to execute said contract for and in behalf of the board of trade of the city of Wooster as party of the second part. ’ ’ The contract is signed by each of the defendants and by “I. N. Kinney, president pro iem” and by “Albert Dix, secretary.” — 123 — The defendants answer, among other things: (1). That .the plaintiffs have brought this action without authority from the several subscribers of said fund other than themselves. (2). That they were engaged in the manufacture of glass bottles at Massillon, Ohio, being largely engaged in a bottle factory .there; that early in 1902 the defendants were contemplating building another plant where labor, might be readily obtained, and the plaintiffs learning of this, offered to contribute liberally toward the construction of a plant, at Wooster similar to the defendants’ plant in Massillon, Ohio; that plaintiffs invited defendants to Wooster and showed them the premises upon which the factory was afterwards built; that it lay near a stream of water called “Killbuck,” and “'defendants being solicitous lest .the land might be subject to flood and overflow from said stream during high water, made inquiry of plaintiffs and its committee with respect to the fact concerning such danger of flood and overflow, and were thereupon assured by them that there was no such danger, they stating and representing -to the defendants that said proposed site was and would be entirely safe from all flood or overflow 'from said stream. Thereupon, relying upon said representations and the further one that the citizens of Wooster were desirous of having the proposed factory located in that town, the proposed site was selected and the contract was entered into. (3). The defendants say the factory was thereupon constructed by the defendants upon said' site, was completed and full operation begun in January, 1903, but that in January, 1904, said factory was flooded with, water from the high water and overflow of said stream. They say that the flood caused great damage to the factory, ruining the machinery and the manufactured product to a great extent, greatly damaging the defendants and making it impossible for them to operate the factory without making expensive repairs and replacements of great cost and necessitating in any event a delay of many months before the factory could again be got ready for operation. (4). That as soon as the factory could be operated a spirit of hostility against the same was manifested by the citizens of — 124 — said city; that it was necessary for the successful operation of the factory for the defendants to employ a large number of boys because of the cost of adult labor in such work, making it impossible to operate the same with such labor at a profit; that the plaintiffs and the board of trade were aware of this fact, and .that it would be necessary for the defendants to employ a large number of boys in the operation of the proposed factory at the time defendants were solicited to locate the factory in Wooster; but after having prevailed upon them to locate a factory in the town, they urged the citizens of the town not to permit their boys to enter into defendants’ employ in said factory by the use of public statements and by articles published in the public press stating that it was not proper for boys in a factory where beer bottles were manufactured; that these statements and utterances were made generally by members of the board of trade and by a large number of the leading citizens of said city and by many of the persons claimed to be represented by plaiptiffs in this suit, and that these statements and utterances stored .up and created such a feeling of hostility against the defendants and said factory in the community as deterred parents .from permitting their boys from entering the said employment, so that the defendants were unable to procure boys to do the work customarily performed by. boys in such factories, and were compelled to employ men to do the work of boys, at more than twice the cost, entailing great loss on defendants and making it impossible to operate the factory at a profit. The defendants say that in spite of the hostility manifested by the citizens of said city and by the persons whom plaintiffs represented, and in spite of the fact that about $1'5,00 of the amount agreed to be paid under said contract had not been paid; the- defendants in good faith went forward with the contract on their part and proceeded to put the factory in shape for commencing operations for the year 1904, when the factory was flooded with water from the high water and overflow of said stream. They say that by reason of this hostility which was stirred up in the town by -the citizens .and persons represented by the plaintiffs, it has made it impossible for the defendants to procure necessary labor to operate the factory, and by reason — 125 — of the damage done to the factory by the flood, making necessary the expense of repairs and the loss of nearly an entire season of operation, they suffered a loss amounting to more than the $20,000 and were unable to go forward with the enterprise, and to save themselves from still greater loss were compelled to and did, in September, 1904, sell the factory to the Ohio Bottle Company. That said sale was made at a price less than the cost of the factory and that the defendants sustained loss on account of entering info the contract existing in the sum of $35,000. They say that by reason of the conduct of the citizens of Wooster, and of the persons who subscribed to the fund to be paid the defendants whom plaintiffs •claim to represent, and by reason of the said misrepresentations with respect to the factory site they were entitled to terminate the contract on their part and were justified in so' doing. Wherefore, .théy pray to be dismissed with their costs. ■ . On November 14, 1907, Hugh Bowers and eight others by leave of court became parties defendant and filed their cross-petition against the defendants, saying that they were parties to the contract signed by the defendants and contributed to the fund raised by the citizens of Wooster, as alleged in the petition; and after setting up their respective subscriptions, they say “they adopt all the allegations of .the plaintiffs’ petition and make the same a part hereof as fully as if rewritten herein and join in the prayer of the petition and ask that judgment may be rendered in favor of the said I. N. Kinney and Albert Dix, plaintiffs. ’ ’ On .the same day, by leave of court, Walter D. Foss, Charles M. Gray and Albert Dix, trustees for the board of trade of the city of Wooster, leave having been obtained to become parties . defendant, filed their cross-petition, and, after alleging that about three hundred of the members of said board of trade, who were subscribers to the fund, have transferred and assigned all their rights against the defendants in the cause of action set out in the petition to them as trustees, make the same allegations as in the cross-petition of Bowers and others, praying that judgment may be rendered in favor of said plaintiffs against said defendants. — 126 — Thereupon the defendants moved to strike from the files the cross-petition of Hugh Bowers and others, and by separate motion they ask that the cross-petition of Walter D. Foss and others, trustees, be stricken from the files for the reason that said persons are not proper parties to this cause and such cross-petitions are not such pleadings as are authorized by law to be filed herein. The plaintiffs file a motion to strike out of the first defense in the defendant’s amended answer certain redundant and irrelevant matter, to-wit, the allegation that the plaintiffs have brought the action without authority from the several subscribers of the fund and without their knowledge or consent, and that the defendants be required to make the second defense more definite and certain by stating the period in the manufacturing season of 1902-3 the factory was operated, and during what months and for what part of the season 1904-5 the factory was operated by the Ohio Bottle Company. They also ask that the third defense be made more definite and certain (a) by stating the name or names of those who assured the defendants that there was no danger of flood and overflow from said stream, and that the site was and would be entirely safe from flood and overflow; (5) by stating the name or names of those who represented to defendants that The citizens of Wooster were desirous of having the proposed factory located in that town; (c) by stating the names of those who manifested a spirit of hostility against the operation of said factory, and how the same was manifested; (d) by stating the name or names of those who by public statements and by articles published in the public press and by circulars urged the citizens of the town not to permit their boys to enter into the defendants’ employ; (e) by stating what statements were made, and what articles published, by each of said persons; (†) by stating more fully and explicitly the injury done to the machinery and the manufactured produce by reason of flood, and the expense for repairs occasioned thereby. Plaintiffs demur to 'the defendants’ third defense on the ground that the same does not constitute a defense to the plaintiffs’ cause of action. — 127 — The right of the cross-petitioning defendants to intervene will be first considered. It has already been held on demurrer that the action is maintainable by the plaintiffs in its present form under Section 5005, Revised Statutes, giving the right to “all persons having an interest in the subject of -the action and in obtaining the relief demanded” to join as plaintiffs, supplemented by Section 5008, Revised Statutes, which provides “when the question is one of a common or general interest of many persons, or when the parties are very numerous and it is impracticable to bring them .all before -the court, one or more may sue or defend for the benefit of all”; or, if not under these provisions, then under Section 4995, Revised Statutes, authorizing an action by the -trustee .of .an express trust, or one “with whom or in whose name a contract is made for the benefit of another. ’ ’ The court is of opinion that all subscribers to the fund might have joined under the first named section and that by reason of numbers the action was properly brought by two of them for the benefit of all. Upington v. Oviatt, 24 O. S., 232; Platt v. Colvin, 50 O. S., 703, and Farmers M. F. & L. Ins. Co. v. Ward et al, 5 C. C.—N. S., 509 (24 O. C. C., 156), are believed to sustain this position. When such a case is brought the parties represented, but n-ot appearing of record, are as much interested in and bound by the determination of the suit as they would be if named and brought upon the record. May they not, then, take part in the trial and be heard in the production of witnesses and the advocacy of their rights? To deny them this would seem to be a denial of justice, and how may they avail themselves of these rights except by having their names entered on the record and their relation to the issue brought to the attention of the court? These cross-petitions are criticized as multiplying and confusing the issues and involving defendants in the necessity of filing a thousand or more answers, if each subscriber to the fund is permitted to intervene and he sees fit to avail himself of the privilege. This, if true, is no valid . objection, unless some right of the defendants is violated. One who contracts with a thousand may involve himself with them in complicated situations; but if so, the embarrassment results from the complicated con — 128 — tractual relations he has voluntarily assumed. This embarrassment can be overcome, but the denial of a right to intervene in a suit which is binding upon a party is insurmountable. But, in fact, the embarrassment complained of in this case does not exist. No new issue is tendered by any of the cross-petitioners, and no answer to their pleadings is required. They simply join in the prayer of the petition, and thereby align themselves on the side of the plaintiffs in the controversy. It therefore follows that the motions to strike off -the intervening crossvpetitions should be overruled. The plaintiffs move to strike out of the first defense the allegation that “plaintiffs have brought the action without authority from the several subscribers of the fund and without their knowledge or consent.” If authorization or consent is necessary to the maintenance of this action by the plaintiffs, then this allegation is relevant; otherwise not. The authority is given by the statute or it does not exist, for parties can not invest others with the right to sue for them except by clothing them with an interest or a trust, and in"that case the right to sue grows out of the rights so vested and not by direction or consent subsequently given. If these defendants have any defense in bar or otherwise to the claims of any or all of the subscribers to the fund, they may plead the same; but the allegation that the plaintiffs were not given authority to bring suit raises no issue. Motion to strike out is sustained. Plaintiffs move for an order requiring defendants to make more definite and certain the allegations of the second defense by stating the period in the manufacturing season of 1902-3 that the factory was operated, and during what months and for ‘what part of the season of 1904 the factory was operated by the Ohio Bottling Company. The defendants concede the propriety of this motion. It will, therefore, be granted. The plaintiffs move with six specifications as to the third defense, and at the same time demur to it on the ground that it does not constitute a defense to the plaintiffs’ cause of action. If the demurrer is well taken, the motion needs no consideration. It will therefore be considered first. This defense sets forth the claim that the plaintiffs represented “that said proposed site was and would be entirely safe from all flood and overflow — 129 — from said stream.” This seems to be more than the expression of an opinion, and to amount to -the statement of a fact. The fact stated is that this land does not overflow from the high water of Killbuek creek. “Where a person, by means of false representations of facts materially affecting the identity and value of certain real estate, induces another to enter into a contract for the purchase thereof, upon the faith of such representations and upon which he was justified in relying, the purchaser may, in an action brought by the vendor for the purchase price, recoup the damages which he has sustained by reason of such false representations, although the vendor believed them to be true when made and had good reason for so believing.” Mulvey v. King, 39 O. S., 491. This rule is fixed between vendor and vendee, but we see no reason why it may not be extended to parties'in the present relation. The rule thus stated is most favorable for the protection of those induced to enter into contracts through representations which are false. On authority of this case, fraudulent intent in making the misrepresentation as to “facts materially affecting the identity and value” of the property need not be alleged, but it is necessary to allege that the representation was false. This is not done unless the statement that the factory was flooded from the high water of said stream a year afterwards amounts to such allegation. If the stream had never overflowed this factory site up to the time that the representation was made, then it was true when made, and the subsequent overflow would not make it false. Therefore, to state -that it overflowed a year later does not challenge the truth of the representation alleged to have been made. The allegations taken together. state a misfortune rather than a misrepresentation. They fail to charge either false representation or false warranty. These defendants also allege that it was necessary for the successful operation of the factory for the defendants -to employ a large number of boys because of the cost of adult labor in such work, making it impossible to operate the same with such labor at a profit; that the plaintiffs and the board of trade were aware of this fact, and that it would be necessary for the defendants to employ a large number of boys in the operation of the proposed factory at the time defendants were solicited to — 130 — locate the factory in Wooster, but after having prevailed upon them to locate a factory in the town, they urged the citizens of the town not to permit their boys to enter into defendants’ employ in said factory, by the use of public statements and by articles published in the public press, stating that it was not proper for boys to work in a factory where beer bottles were manufactured; that these statements and utterances were made generally by members of the board of trade and by a large number of the leading citizens of said city and by many persons claimed to be represented by plaintiffs in this suit, and that these statements and utterances stirred up and created such a feeling of hostility against the defendants and said factory in the community as deterred parents from permitting their boys from entering the-said employment, so that the defendants were unable to'procure boys to do the work customarily performed by boys in such factory, and were compelled to employ men to do the work -of boys at more than twice the cost, entailing great loss on defendants and making it impossible to operate the factory at a profit. They further say that by reason of this hostility stirred up by the citizens of the town and persons represented by plaintiff, .together with the damage done to the factory by the flood, they suffered a loss amounting to more than $20,000; that.they were unable to go forward with the enterprise, and, to save themselves from still greater loss, were compelled to and did, in September, 1904, sell the factory to the Ohio Bottling Company; and they allege a loss by reason of the premises of more than $35,000.- The principle of law invoked by defendants is aptly stated in Taylor v. Risley, 28 Hun. (N. Y.), 141: “The law will not permit a party who has become entitled to the performance of an agreement by another to intervene so as to prevent such performance being made, and then, on the basis of such failure, to claim damages against the party because of his omission to perform his agreement.” The above rule unquestionably states the law and in apt terms, but the difficulty presented here is in its application to the ease at bar. Are the plaintiffs here charged with interfering with defendants’ performance-uf the contract? Certainly, third par — 131 — ties might urge the impropriety of boys or adults engaging in the manufacture of beer bottles or any other article of manufacture, if they saw fit. The doctrine applied to labor conspiracies is not applicable to this controversy since conspiracy is not charged. The cases applicable thereto will not, therefore, be considered. The interference, if it .is alleged to exist at all, is by reason of a contract relation having been assumed and violated, to the defendants’ damage. The case last above named involved the charge of interfering with the defendants’ performance of his contract to deliver a certain quantity of yellow pine timber to plaintiff at Brooklyn, New York, on or before a fixed time. The defendant alleged in his answer his inability to get the timber at the usual southern ports because of the yellow fever epidemic, but that he entered into negotiations with one Bacon of Savannah, Ga.; 'for the purchase of the requisite lumber, and would have succeeded in purchasing and delivering it but for the interference of plaintiff, who, learning that defendant was negotiating with Bacon for the lumber, for the purpose of preventing defendant from purchasing it, induced Bacon to decline and .refuse to sell it to defendant, whereby he was unable to deliver any portion of the lumber to plaintiff as he had agreed to do. Taylor’s interference was by negotiating the purchase of the lumber himself with knowledge that Risley was negotiating for it, and the answer charged him with doing it so as to prevent the defendant from purchasing and performing his contract. “Held: That the facts stated in the answer .would, if proved, have defeated the action, and that the court erred in refusing to allow the defense to prove them. ’ ’ Taylor’s interference was not alone in negotiating for the lumber, but with doing it for the purpose of preventing the defendant from performing his contract; it was in fact the act of the plaintiff which caused the breach, and not that of the defendant.