The plaintiff, Tarleton (a merchant engaged in coastal trade), owned or operated a vessel known as the Bannister, anchored off the coast of Africa (commonly reported as the Cameroons/Cameroon River), to trade with local inhabitants who approached in canoes. The defendant, M'Gawley, commanded a rival vessel, the Othello, stationed nearby for the same purpose. When local traders in canoes were making for the Bannister to deal with the plaintiff, the defendant, seeking to divert the trade to his own ship, ordered a cannon fired toward the approaching canoes. The shot killed one of the local traders and frightened the rest from nearing the Bannister. As a result, the would-be customers refused to trade with the plaintiff, causing him economic loss. Tarleton sued in an action on the case, alleging that the defendant maliciously and unlawfully prevented persons inclined to trade with him from doing so by means of violence and intimidation.
Does an action lie where the defendant, by unlawful means (violence and intimidation), intentionally deters third parties from trading with the plaintiff, thereby causing the plaintiff economic loss, even though no contracts had yet been formed?
A person who, by unlawful means such as violence, threats, or intimidation, intentionally prevents or deters third parties from trading with another is liable in tort for the resulting economic loss. The law permits competition by lawful means, but malicious interference through unlawful acts is actionable even absent a preexisting contract between the plaintiff and the third parties.
Yes. The court held that intentionally and unlawfully frightening away prospective traders from the plaintiff's ship is actionable. The defendant's use of force to prevent trade constituted wrongful interference with the plaintiff's prospective economic relations.
The court recognized a distinction between permissible competition and wrongful interference. It is lawful to seek customers and draw business by fair and peaceable means; however, one may not secure an advantage by employing unlawful measures that are designed to hinder a rival. The defendant's conduct—firing a cannon at approaching traders, killing one and frightening others—constituted an unlawful act directed at deterring third parties from dealing with the plaintiff. This was not mere competition but a malicious and coercive obstruction of the plaintiff's trade. The absence of a finalized contract with the third-party traders did not bar the action. The gist of the wrong was the intentional use of unlawful means to obstruct the plaintiff's freedom to conduct business and the third parties' freedom to choose with whom to trade. In this respect, the court's analysis aligns with the earlier principle in Keeble v. Hickeringill, where malicious disturbances to a lawful enterprise through wrongful acts were actionable. By punishing such conduct, the law encourages fair competition while protecting economic interests from intentional harm achieved through menace or violence.
Tarleton v. M'Gawley is a seminal waypoint in the development of the economic torts, especially interference with prospective economic advantage and the unlawful means/intentional harm paradigm. It underscores that liability can attach even where no contract exists if the defendant uses wrongful means to prevent a plaintiff from obtaining business. The case helps students understand the boundary between privileged competition and actionable interference and anticipates later authorities like Lumley v. Gye (contractual interference) and Mogul Steamship Co. v. McGregor (lawful competition). It also exemplifies the common law's use of actions on the case to supply remedies for intentional, indirect economic harms.
Tarleton v. M'Gawley establishes a core proposition in tort law: while the marketplace tolerates and encourages vigorous competition, the law draws a line at intentional economic harm accomplished through unlawful means. By condemning the use of threats and violence to divert trade, the case recognizes the protection of prospective economic relations as a legitimate legal interest.