While a country may treat some relations between its own
citizens a governed by its own law in regions subject to no
sovereign, like the high seas, or to no law recognized as adequate,
the general rule is that the character of an act as lawful or
unlawful must be determined wholly by the law of the country where
it is done.
Page 213 U. S. 348
Law is a statement of the circumstances in which the public
force will be brought to bear upon men through the courts, but the
word commonly is confined to such prophecies or threats when
addressed to persons living within the power of the courts.
A statute will, as a general rule, be construed as intended to
be confined in its operation and effect to the territorial limits
within the jurisdiction of the lawmaker, and words of universal
scope will be construed as meaning only those subject to the
legislation.
The prohibitions of the Sherman Anti-Trust Law of July 2, 1890,
c. 647. 26 Stat. 209, do not extend to acts done in foreign
countries even though done by citizens of the United States and
injuriously affecting other citizens of the United States.
Sovereignty means that the decree of the sovereign makes law,
and foreign courts cannot condemn the influences persuading the
sovereign to make the decree.
Rafael v. Verelst, 2 Wm.Bl.
983, 1055, distinguished.
Acts of soldiers and officials of a foreign government must be
taken to have been done by its order.
A conspiracy in this country to do acts in another jurisdiction
does not draw to itself those acts and make them unlawful if they
are permitted by the local law.
166 F. 261, affirmed.
The facts are stated in the opinion.
Page 213 U. S. 353
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is an action brought to recover threefold damages under the
Act to Protect Trade Against Monopolies. July 2, 1890, c. 647, § 7.
26 Stat. 209, 210. The circuit court dismissed the complaint upon
motion as not setting forth a cause of action. 160 F. 184. This
judgment was affirmed by the circuit court of appeals, 166 F. 261,
and the case then was brought to this Court by writ of error.
Page 213 U. S. 354
The allegations of the complaint may be summed up as follows:
the plaintiff is an Alabama corporation, organized in 1904. The
defendant is a New Jersey corporation, organized in 1899. Long
before the plaintiff was formed, the defendant, with intent to
prevent competition and to control and monopolize the banana trade,
bought the property and business of several of its previous
competitors, with provision against their resuming the trade, made
contracts with others, including a majority of the most important,
regulating the quantity to be purchased and the price to be paid,
and acquired a controlling amount of stock in still others. For the
same purpose, it organized a selling company, of which it held the
stock, that, by agreement sold at fixed prices all the bananas of
the combining parties. By this and other means, it did monopolize
and restrain the trade and maintained unreasonable prices. The
defendant being in this ominous attitude, one McConnell, in 1903,
started a banana plantation in Panama, then part of the United
States of Columbia, and began to build a railway (which would
afford his only means of export), both in accordance with the laws
of the United States of Columbia. He was notified by the defendant
that he must either combine or stop. Two months later, it is
believed at the defendant's instigation, the Governor of Panama
recommended to his national government that Costa Rica be allowed
to administer the territory through which the railroad was to run,
and this although that territory had been awarded to Colombia under
an arbitration agreed to by treaty. The defendant, and afterwards,
in September, the government of Costa Rica, it is believed by the
inducement of the defendant, interfered with McConnell. In
November, 1903, Panama revolted and became an independent republic,
declaring its boundary to be that settled by the award. In June,
1904, the plaintiff bought out McConnell and went on with the work,
as it had a right to do under the laws of Panama. But in July,
Costa Rican soldiers and officials, instigated by the defendant,
seized a part of the plantation and a cargo of supplies and have
held them ever since, and stopped the construction and
operation
Page 213 U. S. 355
of the plantation and railway. In August, one Astua, by
ex
parte proceedings, got a judgment from a Costa Rican court
declaring the plantation to be his, although, it is alleged, the
proceedings were not within the jurisdiction of Costa Rica, and
were contrary to its laws and void. Agents of the defendant then
bought the lands from Astua. The plaintiff has tried to induce the
government of Costa Rica to withdraw its soldiers, and also has
tried to persuade the United States to interfere, but has been
thwarted in both by the defendant and has failed. The government of
Costa Rica remained in possession down to the bringing of the
suit.
As a result of the defendant's acts, the plaintiff has been
deprived of the use of the plantation, and the railway, the
plantation, and supplies have been injured. The defendant also, by
outbidding, has driven purchasers out of the market and has
compelled producers to come to its terms, and it has prevented the
plaintiff from buying for export and sale. This is the substantial
damage alleged. There is thrown in a further allegation that the
defendant has "sought to injure" the plaintiff's business by
offering positions to its employees, and by discharging and
threatening to discharge persons in its own employ who were
stockholders of the plaintiff. But no particular point is made of
this. It is contended, however, that even if the main argument
fails and the defendant is held not to be answerable for acts
depending on the cooperation of the government of Costa Rica for
their effect, a wrongful conspiracy resulting in driving the
plaintiff out of business is to be gathered from the complaint, and
that it was entitled to go to trial upon that.
It is obvious that, however stated, the plaintiff's case depends
on several rather startling propositions. In the first place, the
acts causing the damage were done, so far as appears, outside the
jurisdiction of the United States, and within that of other states.
It is surprising to hear it argued that they were governed by the
act of Congress.
No doubt in regions subject to no sovereign, like the high seas,
or to no law that civilized countries would recognize as
Page 213 U. S. 356
adequate, such countries may treat some relations between their
citizens as governed by their own law, and keep, to some extent,
the old notion of personal sovereignty alive.
See The
Hamilton, 207 U. S. 398,
207 U. S. 403;
Hart v. Gumpach, L.R. 4 P. C. 439, 463-464;
British
South Africa Co. v. Companhia de Mocambique, [1893] A.C. 602.
They go further at times, and declare that they will punish anyone,
subject or not, who shall do certain things, if they can catch him,
as in the case of pirates on the high seas. In cases immediately
affecting national interests they may go further still and may
make, and, if they get the chance, execute, similar threats as to
acts done within another recognized jurisdiction. An illustration
from our statutes is found with regard to criminal correspondence
with foreign governments. Rev.Stat. § 5335.
See further,
Commonwealth v. Macloon, 101 Mass. 1;
Sussex Peerage
Case, 11 Clark & F. 85, 146. And the notion that English
statutes bind British subjects everywhere has found expression in
modern times and has had some startling applications.
Rex v.
Sawyer, 2 C. & K. 101;
The Zollverein, Swabey 96,
98. But the general and almost universal rule is that the character
of an act as lawful or unlawful must be determined wholly by the
law of the country where the act is done.
Slater v. Mexican
National R. Co., 194 U. S. 120,
194 U. S. 126.
This principle was carried to an extreme in
Milliken v.
Pratt, 125 Mass. 374. For another jurisdiction, if it should
happen to lay hold of the actor, to treat him according to its own
notions, rather than those of the place where he did the acts, not
only would be unjust, but would be an interference with the
authority of another sovereign, contrary to the comity of nations,
which the other state concerned justly might resent.
Phillips
v. Eyre, L.R. 4 Q.B. 225, 239, L.R. 6 Q.B. 1, 28; Dicey,
Conflict of Laws (2d ed.) 647.
See also Appendix, 724,
726, note 2,
ibid.
Law is a statement of the circumstances in which the public
force will be brought to bear upon men through the courts. But the
word commonly is confined to such prophecies or threats when
addressed to persons living within the power of
Page 213 U. S. 357
the courts. A threat that depends upon the choice of the party
affected to bring himself within that power hardly would be called
law in the ordinary sense. We do not speak of blockade running by
neutrals as unlawful. And the usages of speech correspond to the
limit of the attempts of the lawmaker, except in extraordinary
cases. It is true that domestic corporations remain always within
the power of the domestic law; but, in the present case, at least,
there is no ground for distinguishing between corporations and
men.
The foregoing considerations would lead, in case of doubt, to a
construction of any statute as intended to be confined in its
operation and effect to the territorial limits over which the
lawmaker has general and legitimate power. "All legislation is
prima facie territorial."
Ex Parte Blain, L.R. 12
Ch.Div. 522, 528;
State v. Carter, 27 N.J.L. 499;
People v. Merrill, 2 Parker, Crim.Rep. 590, 596. Words
having universal scope, such as "every contract in restraint of
trade," "every person who shall monopolize," etc., will be taken as
a matter of course to mean only everyone subject to such
legislation, not all that the legislator subsequently may be able
to catch. In the case of the present statute, the improbability of
the United States' attempting to make acts done in Panama or Costa
Rica criminal is obvious, yet the law begins by making criminal the
acts for which it gives a right to sue. We think it entirely plain
that what the defendant did in Panama or Costa Rica is not within
the scope of the statute so far as the present suit is concerned.
Other objections of a serious nature are urged, but need not be
discussed.
For again, not only were the acts of the defendant in Panama or
Costa Rica not within the Sherman act, but they were not torts by
the law of the place, and therefore were not torts at all, however
contrary to the ethical and economic postulates of that statute.
The substance of the complaint is that, the plantation being within
the
de facto jurisdiction of Costa Rica, that state took
and keeps possession of it by virtue of its sovereign power. But a
seizure by a state is not a thing that can be
Page 213 U. S. 358
complained of elsewhere in the courts.
Underhill v.
Hernandez, 168 U. S. 250. The
fact, if it be one, that
de jure the estate is in Panama
does not matter in the least; sovereignty is pure fact. The fact
has been recognized by the United States, and, by the implications
of the bill, is assented to by Panama.
The fundamental reason why persuading a sovereign power to do
this or that cannot be a tort is not that the sovereign cannot be
joined as a defendant or because it must be assumed to be acting
lawfully. The intervention of parties who had a right knowingly to
produce the harmful result between the defendant and the harm has
been thought to be a nonconductor and to bar responsibility,
Allen v. Flood [1898] A.C. 1. 121, 151 etc., but it is not
clear that this is always true; for instance, in the case of the
privileged repetition of a slander,
Elmer v. Fessenden,
151 Mass. 359, 362-363, or the malicious and unjustified persuasion
to discharge from employment,
Moran v. Dunphy, 177 Mass.
485, 487. The fundamental reason is that it is a contradiction in
terms to say that, within its jurisdiction, it is unlawful to
persuade a sovereign power to being about a result that it declares
by its conduct to be desirable and proper. It does not, and foreign
courts cannot, admit that the influences were improper or the
results bad. It makes the persuasion lawful by its own act. The
very meaning of sovereignty is that the decree of the sovereign
makes law.
See Kawananakoa v. Polyblank, 205 U.
S. 349,
205 U. S. 353.
In the case of private persons, it consistently may assert the
freedom of the immediate parties to an injury and yet declare that
certain persuasions addressed to them are wrong.
See Angle v.
Chicago, St. Paul, Minneapolis & Omaha Ry. Co.,
151 U. S. 1,
151 U. S. 16-21;
Fletcher v.
Peck, 6 Cranch 87,
10 U. S.
130-131.
The plaintiff relied a good deal on
Rafael v. Verelst,
2 Wm.Bl. 983, 1055. But, in that case, although the nabob who
imprisoned the plaintiff was called a sovereign for certain
purposes, he was found to be the mere tool of the defendant, an
English governor. That hardly could be listened to concerning a
really independent state. But, of course, it is not alleged
Page 213 U. S. 359
that Costa Rica stands in that relation to the United Fruit
Company.
The acts of the soldiers and officials of Costa Rica are not
alleged to have been without the consent of the government, and
must be taken to have been done by its order. It ratified them at
all events, and adopted and keeps the possession taken by them.
O'Reilly de Camara v. Brooke, 209 U. S.
45,
209 U. S. 52;
The Paquete Habana, 189 U. S. 453,
189 U. S. 465;
Dempsey v. Chambers, 154 Mass. 330, 332. The injuries to
the plantation and supplies seem to have been the direct effect of
the acts of the Costa Rican government, which is holding them under
an adverse claim of right. The claim for them must fall with the
claim for being deprived of the use and profits of the place. As to
the buying at a high price, etc., it is enough to say that we have
no ground for supposing that it was unlawful in the countries where
the purchases were made. Giving to this complaint every reasonable
latitude of interpretation, we are of opinion that it alleges no
case under the act of Congress, and discloses nothing that we can
suppose to have been a tort where it was done. A conspiracy in this
country to do acts in another jurisdiction does not draw to itself
those acts and make them unlawful, if they are permitted by the
local law.
Further reasons might be given why this complaint should not be
upheld, but we have said enough to dispose of it and to indicate
our general point of view.
Judgment affirmed.
MR. JUSTICE HARLAN concurs in the result.