Standard Fashion Co. v. Siegel-Cooper Co.

O’Brien, J.:

The contention that it does not appear from the complaint that there is no adequate remedy at law, we do not think is sustained; for, whatever may be the rule as to the extent of proof which in support of that allegation the plaintiff must present upon the trial, a more liberal rule must be indulged in in determining the sufficiency of the complaint upon demurrer. It is in effect alleged that the plaintiff has no adequate remedy at law, and that is sufficient.

The further contention that the contract relied upon is not one which the court can decree should be specifically performed, because the business would be of a continuous nature and thus brought under the management of the court — a burden which it is well settled a court of equity will not assume — must be regarded as established, not only by a long line of authorities, but also by the reasoning in the opinion in Fargo v. N. Y. & N. E. R. R. Co. (3 Misc. Rep. 205). This case the learned judge at SjDecial Term regarded as an authority, not only for the proposition that the court should not decree specific performance of the affirmative covenants of the agreement, but also to sustain the proposition that it would not enjoin the violation of the negative covenant by which the Siegel-Oooper Company agreed “ not to sell or allow to be sold on its premises during the duration of this contract, any other make of paper patterns.” It is true that in the opinion in the Fan-go Case (supra) there are some expressions which lend support to this view; but it must be read in the light of the precise questions there under discussion and directly involved and passed upon. As correctly stated in the syllabus, there the plaintiff brought action for specific performance of a contract, and on application for a mandatory injunction pendente lite it appeared that the contract in question was exceedingly comprehensive and most minute in its working details; that those details provided for special and varying contingencies and the elements of discretion and judgment with regard thereto ; that the due execution thereof would involve the ascertainment of what it was right and proper that the parties thereto should do from day to day with regard to ever-varying circumstances. Held, that the action could not be maintained and the injunction should be denied. It will be noticed that what was there sought was a mandatory injunction pendente lite, and that was the purpose for which the action itself was brought, namely, to require the defendants specifically to carryout their contract;'and the court having reached the conclusion that it would not decree any such final relief, the preliminary injunction was properly denied. As therein said, “ The question, therefore, is whether a case for specific performance is here made out, and that depends, in the first instance, upon the nature of the contract sought to be enforced. The general rule is not to decree a specific performance of contracts which, by their terms, stipulate for a succession of facts whose performance cannot be consummated by one transaction, but will be continuous and require protracted supervision and direction.” It appears that there was an exclusive contract made with the plaintiff, but it does not appear that an attempt was made to prevent the defendants entering into a contract with some one else. What was sought in the action was a preliminary and final mandatory injunction compelling the defendant to carry out its contract. The precise question here involved, as to the right of the court to enforce by injunction the negative covenants, was not there presented nor decided.

The relief here demanded is twofold, namely, to compel the defendant the Siegel-Cooper Company specifically to perform and to prevent that company from selling or permitting any rival or competitor of the plaintiff to sell on the premises, during the term of the contract, any other make of paper patterns. The right of a court of equity to prevent the violation of negative covenants contained in a contract which, in its entirety, it could not decree should not be specifically performed, is not a new question ; and although there are decisions to the contrary in the courts of our own State and of the United States, the entire drift of the later cases tends to support the right of the court to prevent the violation of negative covenants by injunction. In Singer Sewing Machine Company v. Union Buttonhole, etc., Company (1 Holmes, 253) this question is very ably and thoroughly discussed. As therein said: “ The two points of law are not without difficulty. The relief asked is specific performance and injunction. It is argued with great ability by the defendants that the complainant is not entitled to specific performance, and that, therefore, it cannot have an injunction which is merely auxiliary. Granting the premises, I am not prepared to concede the conclusion. If the court cannot order a contract for the making of button-hole machines to be specifically performed by reason of the impossibility of superintending the details of such a business, it does not follow that the bill may not be retained as an injunction bill. It was formerly thought that an injunction would not be granted to restrain the breach of any contract, unless the contract were of such a character that the court could fully enforce the performance of it on both sides.” And the judge writing the opinion in that case, after an examination of all the cases, thus concluded: “ I think the fair result of the later cases may be thus expressed : If the case is-one in which the negative remedy of injunction will do substantial justice between the parties, by obliging the defendant either to carry out his contract or lose all benefit of the breach, and the remedy at law is inadequate, and there is no reason of policy against it, the court will interfere to restrain conduct which is contrary to the contract, although it may be unable to enforce a specific performance of it. * * * The court cannot, perhaps, superintend the performance of a contract to manufacture machines, but it can restrain the defendants from selling in violation of their agreement.” And in Chicago, etc., R. Co. v. N. Y., etc., R. Co. (24 Fed. Rep. 521) it is said: “It is one thing, however, to stop a party from doing that which he cannot rightfully do, and another to undertake to compel him to do an act involving the exercise of faculties and judgment which are peculiar and personal to himself; and the argument from inconvenience which may properly be invoked when the court is asked to decree a specific performance would, if it should be controlling when the court is asked to restrain the doing of an unlawful act, apply to all cases in which the corrective power by injunction is exercised.”

That a departure has been made from the rule laid down in the earlier cases, even to the extent of decreeing the specific performance of a continuous contract with varied and extensive details, requiring the frequent intervention of the court, is further shown by two other cases, one in the Supreme Court of the United States, which has been followed by our own Court of Appeals. (Joy v. St. Louis, 138 U. S. 1; Prospect Park & Coney Island R. R. Co. v. C. I. & B. R. R. Co., 144 N. Y. 152.) It is urged, however, by the respondents that these cases are exceptions to the principle laid down in the earlier cases, wherein the courts, departing from the general ride, have decreed specific performance of contracts relative to the management of railroads on the ground that, railroads being public functionaries, this burden should be assumed by the court, not out of consideration for the plaintiff, but out of regard for the rights of the public at large. Though we regard these as exceptions to the general rule that courts will not decree the specific performance of contracts which stipulate for a succession of continuous acts, demanding of the courts constant supervision during the term of such contract, yet they indicate a tendency upon the part of courts of equity to extend the former jurisdiction, exercised by it, to new cases which, under more modern conditions, are constantly arising. As well expressed by Pomeroy in his work on Equity Jurisprudence (§ 111), “ Equity has followed the true principle of contriving its remedies, so that they shall correspond both to the primary right of the injured party, and to the wrong by which that right has been violated. It has, therefore, never placed any limits to the remedies which it can grant, either with respect to their substance, their form or their extent, but has always preserved the elements of flexibility and expansiveness, so that new ones may be invented or old ones modified, in order to meet the requirements of every case, and to satisfy the needs of a progressive social condition in which new primary rights and duties are constantly arising, and new kinds of wrongs are constantly committed.” It cannot be doubted that courts are instituted to enforce rights, to redress injuries and to restrain contemplated wrongs, and it is difficult to see any sound reason which should prevent a court from granting any relief, because it cannot give all the relief to which the party may be entitled. "We think that no sound principle is violated in holding that the court should extend its relief as far as it is able, and where it cannot, as in this case, enforce the specific performance of the affirmative covenants by compelling the defendant to carry out its contract, it has the power, and it should exercise it, to prevent the defendant the Siegel-Oooper Company, from obtaining an advantage from a breach of its agreement, and inflicting a double wrong,, first, in depriving plaintiff of the right to sell, and, secondly, by conferring such rights on a business competitor.

In addition to railroad cases, we are all familiar with others affecting singers, actors and persons skilled in particular arts, wherein it was held that, though the court could not compel them to perform their agreement, it would prevent the employment of their talent or skill for others during the contract term. It is insisted, however,, that these, like the railroad cases, are exceptions to the general rule,, and that they are to be distinguished from the case of a contract such as is here involved, upon the ground, as claimed, that in all these cases the injunction practically amounted to a complete decree of specific performance of the contract, and that the enforcement of the negative covenant, express or implied, covered the whole ground of controversy between the parties, while here negative covenants are but a portion of the contract; and that it would be inequitable to enforce a part without enforcing the whole. We do not regard the distinction thus sought to be made as sound, because the cases referred to cannot be reconciled upon the theory that the enforcement of the negative covenant, enjoining a person from exhibiting his skill for any one else, was a complete enforcement of a contract which required the exhibition of such personal services on behalf of the one in whose favor the injunction was awarded. The real ground, we take it, is that where a contract is made of such a character that the court cannot decree specific performance, but it is right that it should prevent a contemplated wrong, the court, because it could not afford all, has not hesitated to afford such relief as was practicable.

We think what was said in Lacy v. Heuck (12 Wkly. Law Bull. 209) is pertinent: “ Why should not a plaintiff in such case have an inj unction of this sort ? His contract rights are clear; the proposed violation of them is clear, and here is a remedy not impracticable. It would seem to be a sound general rule that where the right of one party is plain, and the wrong done or intended to be done by the other equally plain, the court should not be sparing in the application of its remedies, but rather should grant them with a liberal hand.” In view of the very extended and able discussion which the question here involved has received in a number of cases, which we may concede cannot be reconciled, it is unnecessary to extend this opinion, as we are entirely satisfied to rest it upon the reasoning and the cases cited in the decision "from which we have ■already quoted of Singer Sewing Machine Company v. Union Buttonhole, etc., Company (supra).

As to the defendant, the Butterick Company, which separately demurs, the complaint alleges in substance that, with knowledge of the existence of the contract between the plaintiff and the SiegelCooper Company, it induced the Siegel-Cooper Company to break its agreement with plaintiff, and promised to save such company harmless because of such breach, and further agreed to defend at its own cost and expense any action that might be brought against that company because of the breach. To permit the Butterick Company upon the facts alleged to obtain a benefit would be to allow it to profit by its own wrong. In New York Bank Note Company v. Hamilton Bank Note, etc., Company (28 App. Div. 411) this court decided that, where there was an exclusive contract between the plaintiff and one defendant, the plaintiff, as against the other defendant, who, with notice of the plaintiff’s rights had contracted with its co-defendant, was entitled to relief upon the ground, not of - any contractual relation, but that such other defendant had engaged knowingly in a plan or contract to wrong and injure the plaintiff.

Taking the facts stated in the complaint, therefore, as true, we think that the plaintiff was entitled to relief by way of injunction to restrain the violation of the negative covenant contained in the contract, and that the decision below, that the plaintiff was entitled to no relief, was error. The judgment, accordingly, should be reversed, with costs to the appellant, with leave, however, to the defendants to withdraw demurrers and answer over on payment of costs.

Yan Brunt, P. J., Patterson and McLaughlin, JL, concurred; Ingraham, J., dissented.