240 F. 222 | S.D.N.Y. | 1917
The defendant the Guaranty Securities Company is engaged in the business of financing the
The Guaranty Securities Corporation, in order to deal with the notes secured by the automobiles, entered into a trust agreement with the Metropolitan Trust Company, whereby the latter was to hold the trugt notes as trustee for the parties interested therein, together with a duplicate participation certificate in the insurance furnished by the complainant ; another certificate being held b.y the Guaranty Securities Corporation covering each automobile.
The contract of insurance contained an indorsement reading as follows :
“Indorsement. — As evidenced by the insured’s acceptance of this indorsement and the policy to which it is attached, and of which it is made a part, it is understood and agreed by all the parties hereto as follows: * * *
“(0) That this insurance contract is written for a period of not less than three years from December 1, 1915, and, in consideration of the reduced rates of premium at which it is written and of the waiver of conditions ‘f’ and ‘n’ of the policy as hereinafter provided, that the Guaranty Securities Company of Toledo, Ohio, its successors and assigns and other parties in interest will in good faith require and undertake to provide coverage hereinunder as respects all new automobiles whose sale at retail within said period of not less than three years is or shall be wholly or in part financed by them (then follows an exception which is not germane to the discussion).
“(10) That condition ‘f’ of the policy is hereby waived in its entirety, and condition ‘n’ is hereby waived from December 1, 1915, to December, 1916, except as provided in condition ‘9’ above, but the insurance herein be subject otherwise to all conditions and stipulations of the policy, except so far as same may be at variance with the conditions and provisions of this indorsement.”
After the foregoing contract was made, differences arose between the Guaranty Securities Corporation and the complainant, and on January 4, 1917, the Securities Corporation mailed a notice of cancellation of the policy to become effective January 15th. The Securities Corporation had also prior to that time notified the complainant that it would refuse to recognize tire latter’s exclusive rights under the con
Upon the foregoing state of facts, the complainant has moved for an injunction pendente lite restraining the Guaranty Securities Corporation from taking out insurance with other companies and restraining the London & Lancashire Fire Insurance Company, ■ Limited, from carrying out any arrangement as to insurance with the Securities Corporation.
The indorsement attached to the contract for insurance between the complainant and the Guaranty Securities Corporation, which I have quoted above, was made for an adequate consideration, and the only questions for this court are: (1) Whether ground appears under any circumstances for equitable relief, and (2) whether the agreement of insurance can be canceled.
“We fail to discover any satisfactory distinction between an attempt to induce employés to break a contract of employment and an attempt to induce customers to break tbeir business contracts for tlie purchase or sale of goods.”
See, also, Bitterman v. Louisville & Nashville R. Co., 207 U. S. 205, 28 Sup. Ct. 91, 52 L. Ed. 171, 12 Ann. Cas. 693; Dr. Miles Medical Co. v. Park & Sons Company, 220 U. S. 373, 31 Sup. Ct. 376, 55 L. Ed. 502.
I think it clear that the defendant the London & Lancashire Fire Insurance Company, by its agents, knew of the contract of the plaintiff to furnish insurance to the Guaranty Securities Corporation, and persuaded the latter company to break it and enter into a contract with itself. It therefore has committed a tort and, if the contract between the original parties subsists, should be enjoined.
I think the difficulty of proving damages, the multiplicity of litigation which would be necessary if the complainant choose to assert its rights to recover for each loss, and the embarrassment caused by the fact that the possession of all data as to profits would be in the possession of the defendants, are all justifications for the intervention of a court of equity in this case.
A somewhat similar situation arose in Standard Fashion Co. v. Siegel-Copper Co. and Butterick Publishing Co., 157 N. Y. 60, 51 N. E. 408, 43 L. R. A. 854, 68 Am. St. Rep. 749. There a demurrer to a complaint was interposed. The Siegel-Cooper Company had agreed to sell the Standard patterns, and Standard fashion publications of the plaintiff for two years, and had contracted not to sell on its premises any other make of paper patterns. The Butterick Publishing Company, a rival of the plaintiff, had persuaded the Siegel-Cooper Company to contract with it and to bréale its contract with the plaintiff. The New York Court of Appeals there said, per Vann, J., in an opinion overruling the demurrer:
“Contracts which require the performance of varied and continuous acts, or the exercise of special shill, 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. * * * 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.”
This case considerably resembles a case of unfair competition. The complainant entered into business arrangements with the Guaranty Securities Corporation involving all the automobile insurance of the latter for three years. A competitor in business, doubtless by offering more satisfactory terms, is securing this business and inducing the breach of the contract with the complainant. I think the injunction prayed for should be granted provided the insurance contract is not at an end. ' (,
“A fire insurance company doing business under tbe laws of this state which issue policies of insurance covering, property located herein, and on such policies receives from the persons insured either cash payments of premium, or notes subject to assessment for payment of losses, or notes for the installments of premium, shall be required to insert in every policy so issued an obligation to cancel it, upon the written request of the person insured on conditions as provided in the nest following five sections.”
The complainant when writing insurance in Ohio was undoubtedly bound by the provisions of the Ohio law affecting the public policy of that state, and it is urged by counsel for defendant that the foregoing provisions of the Ohio law make every policy of insurance where that law applies subject to cancellation. If this is so, I have little doubt that the attempt of the parties to waive the provisions of the policy relating to cancellation for the alleged consideration, of the reduced premium provided for in the contract was inoperative. I do not find, however, in the provision of the Ohio statute above quoted any attempt to lay down a general policy as to contracts made in Ohio even by Ohio corporations. The clause quoted apparently limits the requirements of a cancellation clause to policies covering property located in Ohio. 1
The waiver by agreement of the parties of the, provision of cancellation would therefore seem to have been good under the Connecticut law.
“Any corporatioñ, person, company or association transacting the - business of fire insurance in this state shall cancel any policy of insurance upon the request of the insured or his legal representatives, and shall return to him or to such representative the amount of premium paid, less the customary*228 short rate premium for the expired time of the full term for which the policy has been issued or renewed, notwithstanding anything in the policy to the contrary.”
I do not see that this section affects the provision waiving a cancellation clause, although it would doubtless render policies written upon New York business capable of cancellation at the instance of the insured.
Under all the circumstances, I think a preliminary injunction should be granted upon the filing of a bond to be fixed in the order.