74 N.Y.S. 361 | N.Y. Sup. Ct. | 1902
Plaintiff, a corporation, is engaged in the business of quilting and doing other kinds of sewing. Defendant was the sole manufacturer of a quilting machine which enables the operator, by running the work through the machine only once, j;o stitch a large number of seams at one and the same time. By the operation of a device called a carriage, the operator can execute different designs of stitching upon the machine, resulting in a very large reduction in the cost of production. The defendant is the only person who has manufactured the machine and
This is an equity suit to restrain defendant from a threatened breach of said contract; a preliminary injunction was issued and this is a motion to continue said injunction pendente lite. The motion is opposed on the ground that the contracts upon which this action is based are void, as being in unlawful restraint of trade.
The cases bearing on this subject will be found in two principal groups; the one, in which combinations to regulate a market are held contrary to sound public policy and void; and the other, in. which agreements by the vendor of a business not to compete with the vendee, of by other acts injure the sale, are generally upheld. The first class is described by Judge Landon in Cummings v. Union Blue Stone Co., 164 N. Y. 401: “ It is one of such a combination among many dealers as threatened a monopoly, with which the individual would be practically powerless to compete, and the many consumers who would be severally exposed and coerced would be either compelled to submit to its exactions, or to forego the purchase of the commodity of customary use needful to them, and but for this monopoly obtainable in the market at a reasonable price. The same evil principle pervades both large and small combinations; all are alike offenders, differing in degree, but not in kind. And hence it is that contracts by which the parties to them combine for the purpose of creating a monopoly in restraint of trade, to prevent competition, to control and thus to limit production, to increase prices
In the second class of cases, a business is purchased and continued by a new concern, and the public receives the benefit of the same product, though made by others. Diamond Match Co. v. Roeber, 106 N. Y. 473; Tode v. Gross, 127 id. 480; Water-town Thermometer Co. v. Pool, 51 Hun, 157. The agreement before this court does not fall exactly in either class. It does not contemplate a sale of the business of manufacturing quilting machines, nor is it made for the purpose of forming any combination to regulate the market. It is really one of individual right, with which the question of public policy has little, if anything, to do. The defendant is a manufacturer of machinery. He had, in 1895, eight quilting machines, and the plaintiff bought the lot, and, as part consideration, arranged with the defendant that no more like them should be made by him. The patents on these machines had long since expired. The patterns and designs can be obtained by any manufacturer of machinery who desires to enter into the making of them. Although this case does not fall directly within the second class, the reasoning applied by Judge Andrews in the Diamond Match Company case, supra, to a sale of business applies with equal force here: “ to the extent that the contract prevents the vendor from carrying
The further question is whether it interferes with the interests of the public. Judge Landon in Cummings v. Union Blue Stone Co., 164 N. Y. 404, says: “It may be conceded that the law, as now understood, restrains no one from selling his property, nor does it compel any one to continue a business which he can sell, or finds it to his interest to abandon; much less to continue it for any time or in any particular manner or place. However it may have been when trade was small, money scarce, opportunities and markets few, at present the public has little to fear from any individual renouncing his calling and business in favor of another, and seeking a new field of activity. Contracts between individuals to that effect are not in general restraint of trade.” It is, therefore, clear that had the defendant sold these machines to a manufacturer of machinery and agreed not to continue making them himself, the contract would have been valid. The only difference is that the plaintiff proposed to use the machines and not to make others for the general trade, and it is urged that, as the defendant was the sole manufacturer, a useful machine was lost to the public, and the plaintiff secured a monopoly of this class of quilting business. The obvious answer is that these parties do not control the business: they cannot interfere with the interests of the public, for all manufacturers of machines except the defendant may make and sell these same machines. The effect of the contract is that the plaintiff has prevented one manufacturer from furnishing these machines to its rivals in the quilt
Injunction pendente lite granted. Ten dollars costs to abide, event.
Injunction granted. Ten dollars costs to abide event