43 F. 711 | U.S. Circuit Court for the District of Eastern Missouri | 1890
The material facts on which the decision of the present motion depends are substantially as follows:
The Taylor Manufacturing Company is a corporation duly organized under the laws of Missouri, and for several years has been engaged in
“ That for * * * the period of twenty-five years, the contemplated duration-of the trust, or until its earlier termination in the manner provided for*713 by the terms of the agreement of association, they [Taylor and the Norrises] would not, within the territory of the United States of America, engage, be employed, or become interested, either personally or by representative, pecuniarily or in any manner, except through the medium of the American Preservers’ Trust, in the manufacture or sale of preserves, jellies, fruit-butters, and mince-meat, or in any way obstruct the work of said trust, or in any manner assume a position adverse thereto, but at all times, and in every way, * * * would give it cordial * * * support, ” etc.
The Taylor Manufacturing Company did not sign the first covenant entered into by its stockholders with the St. Louis Preserving Company on or about June lo, 1888, nor the subsequent “agreement of co-operation,” as it is termed, for the reason that it was advised by counsel that it could not lawfully become concerned in a trust, either directly or indirectly. The trustees of the American Preservers’Trust have recently assigned all their rights under the agreement of co-operation, to the present plaintiff, the American Preservers’ Company, a West Virginia corporation. Although the fact is not averred in the bill, yet from affidavits on file it appears that the present complainant has recently acquired all the properties and manufacturing plants heretofore controlled by the trustees of the trust, and is, in one sense, at least, the successor of the trust. All of its stock appears to he vested at present in those persons who have heretofore acted as trustees of the trust. Within the past three months, the Taylor Manufacturing Company has erected a new plant for the manufacture of preserves, jellies, fruit-butters, etc., and has-actually begun to manufacture such articles, but does not make use of any of the trade-marks, brands, etc., formerly in use in that department of its business. The purpose of this suit is to restrain such manufacture, the theory on which the suit is prosecuted being, that the prosecution of such business by the Taylor Manufacturing Company, is in violation of the agreement of co-operation above^ mentioned; that such agreement was and is binding on the Taylor Manufacturing Company, although not signed by it; that the rights acquired by the trustees of the American Preservers’ Trust under and by virtue of that agreement, as against the Taylor Manufacturing Company and its principal stockholders, were and are assignable, and may be enforced by an assignee of the agreement; and that, as such assignee, the present complainant is entitled to an injunction restraining the defendants from engaging in the manufacture of preserves.
The complainant professes itself willing to supply the defendants with, all the preserves, jellies, etc., that they, or either of them, may need in the transaction of their business. As the case is now before the court merely on a motion for a preliminary injunction, the questions now considered and decided will, of course, be open for further discussion, if counsel so desire, either on final hearing, or on the hearing of a general demurrer to the bill.
It is obvious that an injunction, to be effectual to preserve the complainant’s alleged rights pending the suit, must run against the Taylor Manufacturing Company, as well as against the other defendants; and,
In the case of Beal v. Chase, 31 Mich. 490, which bears a stronger resemblance to the case at bar than any other cited by complainant’s counsel, a corporation was enjoined from engaging in a certain publishing business, at a given place, which one of its largest stockholders, previous .far the formation of the corporation, had covenanted not to engage in. ■ But in that case it appeared that all the stockholders of the corporation before its formation were aware of the covenant incapacitating the .principal stockholder from engaging in the business in question, and that one: purpose, had in view in organizing the corporation was to enable him
I conclude, therefore, from the consideration given to this question alone, that the corporation defendant has the right to resume the manufacture of preserves, jellies, etc., because it never agreed to abandon the manufacture of the same, and that an injunction restraining it from so doing would bo an improper order.
There are several other important questions also raised by the present motion, notably the question whether a covenant, such as is contained in the agreement of co-operation, not to engage in a given business anywhere in the United States, is a va lid covenant; also the question whether, under the circumstances disclosed by the affidavits, that agreement was supported by a consideration that would render it enforceable in equity, even assuming it to be in other respects valid; also the question whether the covenant sought to be enforced is assignable, and, under the circumstances disclosed by the affidavits, may be enforced by the present complainant; and, finally, the question arises whether the trust agreement itself, in pursuance of which the other agreements appear to have been executed, was not in violation of public policy, and for that reason void.
With reference to all of these questions, and without undertaking to decide either, it is sufficient to say that they are questions of so much importance, arid are involved in so much doubt, that it would be manifestly improper to grant an injunction in a case where such questions are involved, and where, as in this case, the defendants are abundantly solvent, prior to a final hearing.
The motion for an interlocutory injunction is accordingly overruled.