Page images
PDF
EPUB

more was wanted to call attention to the fact that there was no averment in the bill that the complainant was in possession of the premises, or that they were vacant and unoccupied. We are clearly of opinion the demurrer to the bill should have been sustained.

The decree is reversed, and the cause remanded for further proceedings in conformity with this opinion.

Decree reversed.1

STANDARD FASHION CO. v. SIEGEL-COOPER CO. COURT OF APPEALS, NEW YORK. 1898.

157 New York 60.

APPEAL, by permission, from an order of the Appellate Division of the Supreme Court in the first judicial department, entered July 14, 1898, as resettled by an order made August 19, 1898, reversing an interlocutory judgment entered upon a decision of the Special Term sustaining separate demurrers to the complaint.

The complaint, after setting forth the corporate character of each party to the action, alleges that the plaintiff and the defendant, the Butterick Publishing Company, are rivals and competitors in the business of preparing and selling paper dress patterns and designs; that the defendant, the Siegel-Cooper Company, is engaged in the business of selling at retail all articles required by people for consumption and use, and that it occupies and carries on the greatest department store in the world, covering half a block in the city of New York, that on the 16th day of July, 1897, the plaintiff and the Siegel-Cooper Company entered into an agreement of which, omitting the formal parts, the following is a copy:

"The Siegel-Cooper Company is hereby appointed an agent for the sale of Standard patterns and Standard fashion publications for a term of two years from the date the contract goes into effect — and said term to be extended from year to year thereafter until closed by three months' notice in writing by either party, to be given within thirty days after said two years or any one year thereafter.

"The Standard Fashion Company agrees to conduct at its own expense and risk a pattern department on the ground floor of the Siegel-Cooper Company's store on Sixth avenue and 18th street, New York city, said Standard Fashion Company furnishing its own employees, such employees to be subject to the employees' rules of the Siegel-Cooper Company. The Standard Fashion Company further agrees to furnish, free of charge, not less than two hundred and fifty

1 See Story, Equity Pleadings (10th ed. 1892) §§ 472-480. Cf. Langdell, Summary of Equity Pleading (2d ed. 1883) § 94. Could the court have dismissed the bill on its own motion if no objection to the "jurisdiction" of the court as a court of equity had been made by the defendant? See McClintock, Equity (1936) § 39. Cf. p. 683 and n. 1, infra.

thousand eight-page fashion sheets, of the kinds sold at ten dollars per thousand to the Siegel-Cooper Company, per annum as long as this contract continues, and to print the advertisements of said SiegelCooper Company on front and back thereof without charge, to be changed monthly if so desired; such fashion sheets to be distributed by the Siegel-Cooper Company from its store, or from pattern counter or any other of the business, without expense to the Standard Fashion Company. The Siegel-Cooper Company to furnish wrapping paper and twine, free delivery and other store facilities. Said Siegel-Cooper Company agrees not to sell, or allow to be sold on its premises during the duration of this contract, any other make of paper patterns. "Siegel-Cooper Company agrees to pay over to the Standard Fashion Company two-thirds of all the moneys received from the sale of patterns and fashion publications, making weekly settlements with the Standard Fashion Company, said Siegel-Cooper Company to make no charge for cashiering. The remaining one-third to be the remuneration of said Siegel-Cooper Company for the permission to the Standard Fashion Company to conduct said department.

"The said Siegel-Cooper Company agrees to allow the use of the present pattern fixtures and the present position for paper patterns, but in case a change of location should be deemed advisable, such new location not to be less prominent, nor to occupy less space than the present one, except between Thanksgiving and Christmas of each

year.

"This contract to go into effect either on September 12th or December 12th, 1897, according to the choice of said Siegel-Cooper Company, such choice depending upon the question of whether the contract between the said Siegel-Cooper Company and the Butterick Publishing Company, now existing, will be terminated in September or December of this year.

"The Standard Fashion Company agrees to assume all risk of loss by fire, water, etc., or risk of theft or other unforseen damage to or destruction of pattern stock, and to hold the Siegel-Cooper Company harmless in that respect. Said Siegel-Cooper Company to make, at the expense of the Standard Fashion Company, frequent mention of the fact that they are agents for the sale of the Standard Patterns in its daily New York newspaper advertisements, and also to allow reasonable display of attractive show cards and signs furnished by the Standard Fashion Company and subject to the approval of said Siegel-Cooper Company at convenient places in its store, the expense of such signs to be entirely borne by the Standard Fashion Company."

The complaint further alleges that said agreement "as defendant, the Siegel-Cooper Company, well knew, at the time it was entered into," was for the purpose of securing to the plaintiff the great advantage and prestige to be obtained from the sale of its paper patterns exclusively in said store and to prevent the Siegel-Cooper Company from selling or allowing to be sold on its premises any make of paper patterns other than those of the plaintiff. After alleging willingness to perform on its part the plaintiff alleged refusal to perform on the

part of the Siegel-Cooper Company, and that it has entered into an agreement with its co-defendant to sell in said store the paper patterns made by the Butterick Publishing Company during the whole or part of the term of the agreement made with the plaintiff; that it has given notice that it will not sell the paper patterns of the plaintiff, nor allow the plaintiff to sell its paper patterns in said store, nor permit plaintiff to enter or occupy said store or any part thereof; that the Butterick Publishing Company knew of said agreement with the plaintiff and induced the Siegel-Cooper Company to break the same, promising to save it harmless against any recovery by the plaintiff on account of the said breach, and to defend at its own expense any action brought on account thereof; that the plaintiff will be put to irreparable loss and injury if the Siegel-Cooper Company is suffered to break its agreement; that it will be damaged in its business if that company sells the patterns of the Butterick Publishing Company, the rival and competitor of the plaintiff, by loss of the prestige aforesaid, as well as by the loss of receipts from the sales of its patterns in said store in a manner altogether impossible to be compensated for in an action for money damages, and that in no place can the plaintiff obtain the same advantages for the sale of its patterns as in said store.

The relief demanded is that the Siegel-Cooper Company be required to specifically perform its contract with the plaintiff, and that both defendants be restrained from selling in said store any paper patterns except those made by the plaintiff "from December 12th, 1897, to December 12th, 1899, and for three months thereafter." There is also a prayer for damages and general relief.

The separate demurrers, interposed to this complaint on the ground that it did not state facts sufficient to constitute a cause of action, were sustained at Special Term, but upon appeal the Appellate Division reversed the interlocutory judgment entered below, holding that, while the plaintiff could not have a specific performance of the contract, as it would impose too great a burden upon the court, still, it was entitled to an injunction to enforce the negative covenant of the Siegel-Cooper Company that it would not sell or allow to be sold on its premises, during the duration of the contract, any other make of paper patterns. The defendants appealed to this court by permission of the Appellate Division, which certified the following question: "Does the complaint in this action state facts constituting a cause of action against either of the defendants?"

VANN, J. Contracts which require the performance of varied and continuous acts, or the exercise of special skill, taste and judgment, will not, as a general rule, be enforced by courts of equity, because the execution of the decree would require such constant superintendence as to make judicial control a matter of extreme difficulty. (Marble Co. v. Ripley, 10 Wall. 339, 358; Beck v. Allison, 56 N. Y. 366, 370; Gervais v. Edwards, 2 Dr. & W. 80; Blackett v. Bates, L. R.

[1 Ch. App.] 117; Fargo v. N. Y. & N. E. R. R. Co., 3 Misc. Rep. 205; Pomeroy Spec. Per. § 312; Fry Spec. Per. § 69.) An exception to this rule, founded upon the rights of the public rather than those of the plaintiff, obtains with reference to contracts relating to the management and control of railroads and other agencies of transportation which enjoy special privileges conferred by statute and promote the general welfare. Joy v. St. Louis, 138 U. S. 1, 47; Prospect Park & C. I. R. R. Co. v. Coney Island & B. R. R. Co., 144 N. Y. 152.) When the inconvenience of the courts in acting is more than counterbalanced by the inconvenience of the public if they do not act, the interest of the public will prevail. But, even if, upon a trial of the action, specific performance of the contract in its entirety were refused as impracticable, still the bill should be retained as one permitting an injunction, in the sound discretion of the court, to restrain the defendants from violating the negative and severable covenant of the Siegel-Cooper Company that it would not "sell, or allow to be sold on its premises during the duration of this (the) contract any other make of paper patterns" than those of the plain

The learned Appellate Division, one of the judges dissenting, overruled the demurrers on this ground, holding that the court should extend its remedy as far as it is able and thus prevent the principal defendant not only from making money by breaking its agreement, but from inflicting a double wrong upon the plaintiff by depriving it of the right to sell and conferring that right on a business competitor. We think this is a sound and just conclusion, because it will compel the Siegel-Cooper Company to either perform its agreement, or lose all benefit from breaking it and at the same time will shield the plaintiff from part of the loss caused by the breach, if persisted in.* . .

The injunction, when granted, may not be absolute, but may be based on some equitable condition that will prevent either party from taking advantage of the other, such as the waiver by the plaintiff of the breach of the contract by the principal defendant. The question raised by the demurrer does not relate to any matter of discretion or propriety, but to the power of the court to grant any relief,.conditional or otherwise. We are satisfied with the opinion below upon the subject, and should adopt it as our own without comment, but for a point, not thus far considered, which seems to us a conclusive answer to the demurrers, and which, if overlooked, might lead to some confusion. The action is for the specific performance of a lawful contract, duly executed by both the parties thereto. It is capable of performance by both, and there is no reason for non

1 Square brackets in original report.

2 Difficulty of supervision as a defense to specific enforcement of contracts is considered in the courses on Equity.

3 The problems involved in this form of indirect specific enforcement of a contract by injunction are considered in the course on Equity.

4 Citations omitted.

performance by either. A court of equity has jurisdiction of such actions, and the complaint sets forth the contract — readiness to perform on one side, a refusal to perform on the other, and facts showing no adequate remedy at law. A complete cause of action is, therefore, alleged, and the only reason for not awarding general relief to the plaintiff is that its nature is so complicated as possibly to require a multiplicity of, orders by the court in its efforts to superintend the details of an extensive and peculiar business. This fact does not deprive the court of jurisdiction, but justifies a refusal in its sound discretion to exercise it. It confers no right upon either party. The court does not refuse to act because the defendants object to its acting, for it would refuse, under the circumstances, if both parties requested it to proceed; but it refuses because the execution of its decree would require protracted supervision. It is the difficulty of enforcing, not of rendering judgment, that causes it to hesitate. The office of a demurrer is to sweep away a defective pleading, and in the case before us it attacks the substance of the complaint; yet the complaint is good in substance, for it sets forth a cause of action in equity. While it is true that the court, in its discretion, may not hear the cause, or, after a hearing, may refuse relief owing to the difficulty of enforcing its decree, still this does not make the complaint defective, nor authorize a general demurrer, which "must be founded upon the absolute, certain and clear proposition that, taking the charges in the bill to be true, the bill would be dismissed at the hearing." (Beach on Equity Practice, § 225.) Upon the facts before us, it is in the power of the court to enforce the agreement the same as in the case of railroad contracts, but the difficulties attending the enforcement are so great that the court would ordinarily refuse to undertake it, as there is no public interest involved. As there was complete jurisdiction and a perfect cause of action against both defendants, the demurrers must be overruled. (Coatsworth v. Lehigh Valley R. Co., 156 N. Y. 451.)

The order of the Appellate Division should be affirmed, with costs, and the question certified answered in the affirmative.

All concur.

Order affirmed.1

1 See, accord, Butterick Pub. Co. v. Frederick Loeser & Co., 232 N. Y. 86 (1921) (uncertainty). In that case Hiscock, Ch. J., said (p. 92): "The fact that the court notwithstanding its jurisdiction may as a matter of discretion refuse to give relief for the reason stated does not warrant the decision that the complaint is insufficient under the challenge of a general demurrer [citing the principal case]." Compare Gunter v. Arlington Mills, 271 Mass. 314 (1930). [The record in this case is given at pp. 643–647, supra.]

Suppose that the plaintiff and defendant enter into a contract whereby the defendant agrees to convey Blackacre to the plaintiff forthwith and the defendant agrees to care for and support the plaintiff for the remainder of the latter's life, and that the plaintiff enters upon performance but the defendant refuses to convey and repudiates the contract. Will a bill by the plaintiff setting forth

« PreviousContinue »