A. Booth & Co. v. Seibold

74 N.Y.S. 776 | N.Y. Sup. Ct. | 1902

S'cott, J.

The numerous and interesting questions- raised upon this motion to continue the injunction pendente lite, invite a more extended discussion than circumstances will permit me to indulge in.. I must, therefore, content myself with a brief and general statement of the conclusion at which I have arrived after an exhaustive examination of the affidavits and briefs submitted. That the agreement sought to be enforced is not void as being in general restraint of trade is, in my opinion, quite clear. It was expressly limited both as to its territorial scope and as to the length of time during which it is to be operative. Similar contracts-, often comprising much wider and more sweeping restrictions, have been upheld by the courts of this State. Diamond Match Co. v. Roeber, 106 N. Y. 473; Leslie v. Lorillard, 110 id. 533; Central Fireworks Co. v. Charlton, 42 App. Div. 104; Tode v. Gross, 127 N. Y. 485; Wood v. Whitehead Bros. Co., 165 id. 545. The plaintiff paid a large price for the property and good will of the Buffalo Fish Company, and the restraint contemplated by the contract, as to the further prosecution of the same business by that company and. its individual stockholders is certainly no greater than is reasonably necessary to afford a fair protection to the purchaser. Hor is the contract void as tending to create a monopoly. The business concerning which the contract is made is that of-dealing in and selling fish, a commodity which is practically limitless, and to be had for the catching not only in the sea, but in all of our fresh water lakes and rivers. It does not appear that'the attempted expansion of the plaintiff’s- business by purchasing and absorbing the stock in trade and good will of rival dealers was in any sense a combination to control the sale and enhance the prices of food fishes. It does not, therefore, fall within the prohibition of the anti-monopoly statutes. U. S. v. Joint Traffic Assn., 171 U. S. 505; Dueber Watch Case Co. v. Howard Watch & Clock Co., 66 Fed. Rep. 645. I am quite unable to discern any analogy between the contract involved in this action and those condemned by the courts of this State in the cases cited by defendants. Cummings v. Union Blue Stone Co., 164 N. Y. 401; Judd v. Harrington, 139 id. 109; People v. Milk Exchange, 145 id. 267; People v. Sheldon, 139 id. 251. It has been said by the Court of Appeals that the anti-monopoly law of this State is “ little more than a codification of the common law upon the subject.” Matter of Davis, 168 N. Y. 101. Such an agreement as the plaintiff seeks to enforce is not deemed to be one closing the field of competition except as to the particular parties affected by it (Wood v. Whitehead, supra), nor is its validity affected, so far as concerns the parties to it, by the fact that the'plaintiff has purchased the business of other dealers and has made similar contracts with them. Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 508. I do not d.eem it necessary to consider at length the claim that the agreement, so far as regards the restriction upon carrying on the business, was without consideration or was induced by fraudulent or false representations. I find no sufficient support for this contention in the affidavits. The fact that the defendants have organized a corporation to carry on business in violation of S'eibold’s agreement with- plaintiff’s assignor will not avail them as a defense to this action. In enforcing such an agreement a court of equity looks at the substance and not merely at the form. All the parties who joined with Seibold in organizing the Seibold-Stocker Company either had executed similar restrictive contracts, or were in such a position that they must have known of the terms of the contract which he had executed. So far as they attempt to deny such knowledge, their denials must be considered as incredible, and I can only regard the organization of the defendant corporation as a device to evade the restrictive contract. Under these circumstances the injunction properly runs against the corporation and the corporators other than Seibold, as well as against him. Beal v. Chase, 31 Mich. 490. That William Vernon Booth, with whom Seibold originally contracted, could lawfully and effectually assign the contract, with the business, to the plaintiff is undoubted. Francisco v. Smithy 143 N. Y. 488. Upon the case as disclosed by the affidavits I am of opinion that the temporary injunction should be continued in its present form and scope against the defendants Seibold and the Seibold-Stocker Company. The other defendants, however, were not parties to the contract with the Buffalo Fish Company and are not restrained by the terms of that contract from engaging in the fish business. Having knowledge of that contract it is unlawful and inequitable for them to associate in the business with Seibold and thereby assist him in violating the contract. They are, however, at liberty, so far as the contract in suit is concerned, to engage in the business so long as they do not so engage in conjunction with Seibold. If some of them are forbidden by another and different contract to engage in business in this city they mtist be enjoined, if at all, in an action brought to enforce that contract. In the present action we are concerned only with the contract with the Buffalo Fish Company. So far, therefore, as concerns the defendants Stocker, Smith, Davis and Edson, the injunction will be modified so as to restrain them from engaging in the business in connection with the defendant Seibold or the Seibold-Stocker Company or wherein the said Seibold may be interested. As to the defendants Seibold and the Seibold-Stocker Company, the injunction is continued in full force. The interests involved are very large, and the facts may so develop upon the trial as to put a different complexion upon the case. The plain-, tiff should, therefore, give an undertaking in the sum of five thousand dollars, conditioned for the payment of such damages as the defendants may sustain by reason of the injunction if the court finally decides that the plaintiff was not entitled thereto.

Ordered accordingly.