American Malting Co. v. Keitel

209 F. 351, 126 C.C.A. 277, 1913 U.S. App. LEXIS 1803
CourtCourt of Appeals for the Second Circuit
DecidedNovember 20, 1913
DocketNo. 155
StatusPublished
Cited by72 cases

This text of 209 F. 351 (American Malting Co. v. Keitel) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Malting Co. v. Keitel, 209 F. 351, 126 C.C.A. 277, 1913 U.S. App. LEXIS 1803 (2d Cir. 1913).

Opinion

ROGERS, Circuit Judge.

The plaintiff seeks to restrain the defendant from issuing printed circulars alleged to contain matters which tend greatly to injure the business, credit, and property-of the plaintiff. The American Malting Company is a corporation organized under the laws of the state of New Jersey. Its capital stock is $30,000,000. It does a business of from $7,000,000 to $12,000,000 a year; the amount of its business varying with the price of barley. It is said to be the largest manufacturer of malt 'in the United States. The deféndant is a citizen and resident of the state of New York and holds no stock in the complainant company. The circulars complained of began to make their appearance in 1907 and since July, 1912, have been issued at intervals of a week. They have been mailed to brewers and consumers of malt throughout the United States, as well as to banks and to complainant’s stockholders. The corporate name of the plaintiff is mentioned in only a few of the circulars. They contain references, however, to the “gold-brick swindle,” the “gold-brick pool,” “trust,” “malt combine,” which plaintiff says were intended to be understood to refer to it, and it alleges that they are so understood by the person's to‘whom they were sent. The defendant denies that the circulars show that the complainant was mentioned to its damage or that it can be said that' the plaintiff in fact was intended. The plaintiff claims that defendant is persistently attempting maliciously to interfere with its existing contracts, is seeking maliciously to induce parties to refrain from dealing with plaintiff and to resist the payment of their debts to it, and is endeavoring maliciously to destroy its business credit and property.

[1] The defendant was convicted of criminal libel in 1911 because of a circular dated January 6, 1910, which he issued. But that conviction is not res ad judicata as to statements made in the subsequent cir-' culars. And we have no exact knowledge as to what the statements were in the January 6, 1910, circular which the jury found to be libelous. The subsequent circulars are unquestionably full of libels on various persons if the allegations they contain are false. They are not libelous so far as the allegations are true. The campaign he is evidently engaged in is against the combination of makers which he alleges is illegal. He charges the combination with keeping up the price of malt by false statements and artifices and with inducing brewers to contract for future delivery at unreasonable prices. He advises brewers not to buy for future delivery and those who have purchased in the season of 1911-1912 to repudiate their contracts. He charges the American Malt Corporation with trying to get the stockholders of the American Malting Company to exchange their stock by means of false representations and also perhaps that the officers of the making company have made false statements in circulars about its financial condition. The American Malt Corporation is a separate organization distinct from the American Malting Company, and is also organized under the laws of New Jersey, and at the time of this suit held 98 per cent, of the capital stock of the American Making Company. It is alleged that the American Malt Corporation does not own or control the stock of any other corporation.

[353]*353The court below awarded a very drastic injunction pendente lite, restraining the publication of the circulars. It, however, added a clause to the effect that, if defendant would accompany each future circular with the statement that his charges were not directed against this particular plaintiff, he might continue issuing them. As one ground of his defense is that the charges are not against the plaintiff, his purpose would not be thwarted by embodying such a statement in each subsequent circular. But he appeals to this court, and it becomes necessary to consider whether the court below had jurisdiction of the subject-matter. If it had not, the preliminary injunction should be vacated and the bill dismissed. This makes it necessary 'to inquire what power the courts of equity possess to restrain the publication of libels.

[2] Courts of equity like courts of law follow established precedents. They cannot usurp powers they do not possess. We recognize the fact that equity is an elastic system; that its procedure is progressive and is capable of accommodating itself to the changing emergencies and demands of the age. If it were otherwise it could not so well have met the nee’ds of our civilization. At the same time courts are not to usurp powers they do not possess. In a country which has constitutional guaranties of freedom of speech and of the press and of trial by jury, courts of equity should be slow to assume that they possess a power to deal with the publication of libels that the High Court of Chancery in England disclaimed.

Lord Chancellor Eldon in 1818, speaking of the powers of the equity courts, said:

“Tb.e doctrines of this court ought to be as well settled and made as uniform almost as those of the common law, laying down fixed' principles, 'but taking care that they are [not] to be applied according to the circumstances of each case. I cannot agree that the doctrines of this court are to be changed with every succeeding judge. Nothing would inflict on me greater pain, in quitting this place, than the recollection that I had done anything to justify the reproach that the equity of this court varies like the chancellor’s foot.” Gee v. Pritchard, 2 Swanton, 428.

Lord Chancellor Hardwicke in 1742 (Huggonson’s Case, 2 Atk. 469) declared that:

“Notwithstanding this should be a libel, yet, unless it is a contempt of the court, I have no cognizance of it, for, whether it is a libel against the public or private persons, the only method is to proceed at law.”

It .should be said, however, that in that case equity was asked to punish a past tort, not to restrain a future one. Lord Ellenborough in 1810, in a common-law court (Du Bost v. Beresford, 2 Camp. 511), said, in speaking of a picture, that, if it was a libel upon the persons introduced into it, “upon an application to the Lord Chancellor he would have granted an injunction against its exhibition.” But this dictum is known to have excited much astonishment in the minds of all practitioners in the court of chancery. Thus matters stood in England until 1869, when Vice Chancellor Malins granted injunctions against libels. Springhead Spinning Co. v. Riley, L. R. 6 Eq. 551; Dixon v. Holden, L. R. 13 Eq. 355. These decisions were, however, speedily overruled in 1875 in Prudential Assurance Co. v. Knotts, L. R. 10 [354]*354Ch. App. 142. In Collard v. Marshall (1892) 1 Ch. 571, Chitty, J., said that, before the Judiciary Act, equity had no power to try a libel. In Monson v. Tussands Limited (1894) 12 B. 671, Lopes, L. J., said:

“Prior to the Common-Law Procedure Act 1854, no Court could grant any injunction ‘in a case of iibel. The Court of Chancery could grant no injunction in such a case, because it could not try a libel. Neither could courts of common law until the Common-Law Procedure Act of 1854, because they had no power to grant injunctions. Whether they had power to grant interlocutory injunctions after 1854, I think doubtful. As a matter of practice they never did.”

The Common-Law Procedure Act of 1854 conferred on the English courts of common law tlfe power to grant injunctions in all personal actions of contract or tort, with no limitation as to defamation.

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Bluebook (online)
209 F. 351, 126 C.C.A. 277, 1913 U.S. App. LEXIS 1803, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-malting-co-v-keitel-ca2-1913.