In Standard Fashion Co. v. Siegel-Cooper Co., 157 N.Y. 60, a contract providing for exclusive rights to conduct a business within the defendant's premises was held to entitle the plaintiff to injunctive relief against violation of the covenant for exclusive rights.Summary of this case from Pratte v. Balatsos
Argued October 4, 1898
Decided October 18, 1898
Edward C. Perkins and Thomas M. Debevoise for appellants. James W. Gerard and John M. Bowers for respondent.
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 plaintiff. 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. ( Lumley v. Wagner, 1 De Gex, M. G. 604; Donnell v. Bennett, L.R. [22 Ch. Div.] 835; Montague v. Flockton, L.R. [16 Eq.] 189; Singer Sewing-Machine Co. v. Union Button-hole E. Co., 1 Holmes, 253; Chicago A.R. Co. v. N.Y., L.E. W.R. Co., 24 Fed. Rep. 516, 521; Goddard v. Wilde, 17 Fed. Rep. 846; Western Union Tel. Co. v. Union Pacific R. Co., 3 Fed. Rep. 423, 429; Western Union Tel. Co. v. Rogers, 42 N.J. Equity, 311.)
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-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.