Banker & Campbell Co. v. Stimson — 40 N.Y. St. Rep. 740

Majority

p. 740

The Banker & Campbell Co., Limited, Resp’t, v. Frederick J. Stimson, App’lt.

(Supreme Court, General Term, First Department,

Filed October .16, 1891.)

Headnote

1. Injunction—Contract.

Defendant contracted with plaintiffs to manufacture bicycles for them from materials to be paid for by the latter, and the plaintiff was to sell them and make a certain division of profits with defendant, and the latter-agreed to manufacture bicycles for the plaintiff “ and for itself alone during the continuance hereof * * * and to that end will devote and apply so much of said factory and plant as may be reasonably necessary for the purpose and as may not be actually in use in fulfilling other contracts.” Held, that an injunction was properly granted to prevent defendant from, using the material on hand and his factory for the purpose of manufacturing bicycles for a rival concern; that the reservation in the agreement related to the employment of the facilities of the factory for other work than that of making bicycles.

2. Same.

Under the state of facts disclosed, full relief could not be afforded at. law, and the only remedy was to prevent the wrong by injunction.

3. Same.

It was improper to direct in the order granting tne injunction that a-reference be had to ascertain what plaintiff should pay before defendant was required to deliver the bicycles. Provision should have been mad» that in case the parties could not agree upon the amount, the defendant might, after tendering the bicycles and a refusal by plaintiff to pay, move for a dissolution of the injunction, and the court could then require the payment of whatever sum it deemed just as a condition of retaining the injunction.

Appeal from order continuing an injunction.

E. P. Johnson, for app’lt; J. N. Goldbacher, for resp’t.

This is an appeal from an order continuing, iu a modified form, an injunction restraining the defendant, his servants, etc., from manufacturing bicycles or permitting them to be-manufactured at his works, for any other party or person than the plaintiff. The order was made on a complaint and on affidavits setting forth in substance the following material facts, viz.: that in May, 1890, the plaintiff, a corporation, and the defendant, the owner of a factory, entered into an agreement in writing and under seal by which the former contracted to furnish at all times during the continuance of the agreement materials for manufacing certain bicycles, the defendant to purchase such materials in the name of the plaintiff and to hire workmen, and the plaintiff bound itself to pay all bills for such materials and workmen s

p. 741

wages on presentation; that the plaintiff would accept the bicycles so manufactured, would exert its best endeavors to sell them and after reimbursement of its outlay the defendant was to receive fifty per cent of the net profit as compensation for manufacturing and also twenty per cent of actual expenditure in full satisfaction of charges for the general expense of manufacture. The defendant covenanted that he would, during the continuance of the agreement, use his best efforts faithfully and satisfactorily to manufacture for the plaintiff, “ and for itself alone during the continuance hereof or any other agreement to this effect, bicycles in all reasonable particulars duplicates of the sample bicycle at the date hereof,” etc., and “ to that end will devote and apply so much of said factory and plant as may be reasonably necessary for the purpose and as may not be actually in use in fulfilling other contracts; ” he also agreed to provide at his own expense the necessary tools, and in all ways endeavor to meet the market demand for the machines as evidenced by and in accordance with the orders given him by the plaintiff; that he would keep proper accounts of the cost of materials and of the wages paid to employes, and that the plaintiff should have the right, during the existence of the contract, to designate the defendant’s factory as its own.

It also was further alleged and deposed to that the defendant’s factory was used for the manufacture of other things than bicycles ; that the agreement made with the plaintiff gave it the right to the exclusive product of bicycles within the capacity of the factory and on orders given, and by its terms and intent secured to it a factory where its own goods and not those of other and rival dealers might be made; that under the contract it paid the defendant over $17,000 for materials bought; that only three bicycles were furnished; that with materials on hand, orders were given the defendant to manufacture five hundred bicycles; that he has not done so, but with that material on hand and ability to perform that much of the contract, he has violated his agreement, and although one-half the time of performance of the- whole contract has expired, the defendant is actually using the capacity of the factory and the services of the workmen in making a different kind of bicycle for a rival concern, and that in consequence the plaintiff is seriously injured; that the damages are not susceptible of ascertainment in an action at law, and that unless the defendant is restrained from using the factory as he is now doing, the plaintiff will be without remedy. It further appears that the defendant accepted orders from Bretz, Curtis & Co., after his agreement with the plaintiff, to make bicycles for that firm, and the injunction, as modified, requires the completion of 500 bicycles for the plaintiff on the order given and above referred to, after which it allows the defendant to finish those actually in process of manufacture for Bretz, Curtis & Co. The plaintiff has apparently accepted this modification of the order, and, therefore, comment upon it is unnecessary. The effect of the agreement or its interpretation is the only serious matter in controversy.. That the plaintiff’s construction is right is too clear for argument. What it was seeking to obtain was a factory for

Concurrence

p. 742

the fabrication of its goods, and the whole scope of the agreement, the object had in view, the terms of the contract, the disbursements made under it and all the details, conclusively establish that both parties intended that a place of manufacture for the plaintiff’s bicycles should be secured, and the purchase of materials, the equipment of tools, the employment of men, the system of accounts and the minute details of an entire business were provided for. It is idle to contend that all this might be laid aside by the defendant and he be at liberty to devote the factory, the tools and the labor of the employes for the benefit of a competitor of the plaintiff. The reservation in the agreement related to the employment of the facilities of the factory for other work than that of making bicycles.

The matters set up in the answering affidavits do not meet the case or furnish ground for dissolving the injunction. A prima facie case is clearly made out and unless the plaintiff has an adequate remedy at law the injunction must be maintained. Under the particular state of facts disclosed here full relief could not be afforded at law. It is not the case of a plaintiff seeking to enforce a contract for personal services, as of an actor or artist. It will not do to say it can hire another factory and get some one else to equip that factory and employ men and do all the defendant has agreed to do and make new terms, and then see the defendant and open an inquiry as to damages, remote, uncertain and perhaps not ascertainable by the rigid rules of law. Here the great loss doubtless will arise from the defendant aiding the rival concern and thereby diverting the market of the plaintiff, and absolutely destroying its business and the value of its patents. How can that loss be measured by an exact standard ? As was said by this court in Pratt v. Montegriffo, 10 N. Y. Sup., 904; 32 N. Y. State Rep., 508, “ the only remedy is to prevent the wrong and that can no otherwise be administered than by injunction.”

The order is affirmed, with costs.

I concur in the views expressed by Mr. Justice Patterson, but I think that part of the order appealed from which directs a reference to ascertain what plaintiff should pay before defendant is required to' deliver the bicycles was unauthorized. That part of the order should be reversed and instead a provision made that in case the parties cannot agree upon the amount so payable, the defendant may, upon tendering the bicycles and a refusal thereupon to pay the amount claimed by him, move for a dissolution of the injunction. The court can then, as a condition of retaining the injunction, require payment of whatever sum it deems just.

Van Brunt, P. J., concurs