152 Ky. 280 | Ky. Ct. App. | 1913
Opinion of the Court by
Reversing.
The Grant 'ooiunty Board of Control and the Bnrley Tobacco Society filed suit in toe Fayette circuit court against A. 'S. Allphin, in which- they sought to' enjoin him
Counsel for appellee, in brief, insists that the judgment ¡of the lower court ¡should be affirmed upon two grounds. First, it is urged that appellants had an adequate remedy at law, and they were not, therefore, entitled to injunctive relief; and second, that 'the evidence supports the finding of the chancellor upon the question of fact as to whether or not the tobacco was pooled.
The alleged pooling agreement contains the following provision: “Upon our failure to fully comply with the terms and conditions; ¡of this contract, we hereby agree to pay to said ¡society as liquidated damages, twenty per cent., (20%) of the value ¡of said' tobacco, for the benefit of the members ¡of ¡said society.” Counsel for appellee contends that a court of equity is without jurisdiction to' enjoin ¡a breach of the contract, and thus indirectly compel its specific performance, because, by this provision stipulating the damages payable or recoverable for the breach, appellants are remitted to ¡their action for damages. It is not, and cannot, be claimed that, without such stipulation, the damages resulting from a breach' are ¡susceptible of ascertainment with such certainty, as would not ¡authorize a court of equity
“If -liquidated -damages -are provided for in case of a breach, .and it -appears that the intention was to give the party -the alternative to perform or -pay, the breach will not be enjoined. Where -the contract is an absolute one, and cannot be construed -as meaning that defendant shall have the right to -do the prohibited acts on paying the sum named, .an injunction will be granted to restrain him, whether or not the sum to- be .paid be regarded as liquidated damages.”
The Supreme court of Massachusetts had under consideration this question in the case of Ropes v. Upton, 125 Mass., 258. There, Ropes and Upton were partners, engaged in manufacturing -and selling stoves and tinware in Denvers, Mass. Upton sold 'his interest to Ropes and in the contract of sale, there was this provision: “I hereby agree not to manufacture or sell (stoves or tinware) or become engaged -in said business, either for myself or others, hereafter in the town -of Denvers, under the forfeiture of $1,000, to be paid to said Ropes in cash of breach of these conditions.” Upton having violated his -agreement by. engaging in said business, Ropes sought to enjoin him from so doing. Defense was made upon the ground of want o'f equity, in that plaintiff had a plain, adequate and complete remedy at law, and must bring his action for the damages stipulated in the contract. The court there reviewed many English authorities, from which it deduced and adopted the following rule:
“It is often stated that a court -of -equity will not*283 Interfere to prevent a party from doing an act which, he has agreed not to do, when liquidated damages are provided in ease he does the act. But this must ibe taken with some qualifications; for it must appear from the whole contract, that the stipulated 'sum was to be paid in lieu of the strict performance of the agreement, and was an alternative which the party making the covenant had the right or option to adopt.”
In applying the rule to the facts of that dase, that court said that a court of equity fastens on the real contract, and compels the execution; o'f the very thing covenanted to he done; that there was nothing to show a right or option in the defendant to manufacture, upon the payment of the money, or that the agreement would be satisfied by the payment of the sum stated; that it is an- absolute engagement not to do certain acts, and thereby interfere with plaintiff’s business; 'that .this is a distinct covenant, independent of the stipulation to pay a sum of money in case of a violation of the agreement ; and that the court would interfere by injunction.
In Wills v. Forester, 124 S. W., 1090, the Missouri Oourt of Appeals had before it this identical question. There Wills sought to. enjoin Forester from operating and conducting ia retail lumber business in St. James, Mo., in violation of an agreement not to do so. The agreement contained the following provision: “In case of any violation of the agreement by the. parties of the first part they hereby acknowledge themselves indebted to the isaid parties of the second part, either collectively or singly, in the snm of one thousand dollars.” The court, after reviewing many authorities, said:
i ‘ Thus, reason and authority show that contracts with a stipulation like that in the present case which provide for a remedy at law do not oust equity of its jurisdiction. The remedy at law for damages and the remedy .in equity for specific performance .are not exclusive of each other, hut are cumulative. The determining criteria as -to the ouster of equity jurisdiction comes, in its last analysis, to the intention of the parties to begathered from the agreement itself in each particular case. * * * The fact that the damages are liquidated does not of itself change the rule. It is a question of the real intention of the parties to he deduced from the Whole 'instrument and the snrrounding circumstance's, and if it appear from these that 'the performance of the*284 contract was intended, .and not merely the payment oí damages in case of its breach, the agreement will then be enforced by .specific performance.”
In the' case at bar, the very life and success of the undertaking in which appellants were engaged depended upon whether or not a considerable number of growers would pool their tobacco for sale through appellants. The clause providing for liquidated damages was not inserted in the pooling contract for the purpose of giving to appellee the right to pay the damages stipulated and dispose of his tobacco otherwise than as provided in his agreement. It was inserted rather as security, for the performance of the contract. The object of the society was, as stated, the commingling, grading, handling and sale of tobacco so as to make it .bring its fair cash value, and it is apparent that, if those entering the pool were permitted at will to sell their tobacco in- violation of their contracts, the very aim of the society would be defeated, and the sum agreed upon in the contract as liquidated damages would be no adequate compensation for the breach of the contract. Indeed, its breach, under such, circumstances', could not well be measured in damages. Such a breach, if indulged in by any considerable number of the poolers or signers of the agreement, would not only work an irreparable injury to "the society hut result in its utter ruin. Appellee covenanted not to sell his tobacco, except through the society, and this covenant is wholly independent of his agreement to pay, upon breach of the contract, the damages .stipulated therein. The facts of this case call, with peculiar aptness and force, for the exercise of injunctive relief. The court correctly held that the petition stated a cause of 'action.
Upon the question of fact, the evidence for appellants shows that A. S. Allp'hin lived with his father, H. Z. Allphin, in Grant county in the Cross Roads precinct. He cultivated some tobacco on his own land and some on -rented land. G. S. Brumback was the pool solicitor for the society in that precinct. J. C. Hedger was the pooler for the society in the Downingisville prec-inclt, which adjoins the 'Cross Roads precinct. Part of .this tobacco was grown, -in one preCinet, and part in the other. Hedger solicited appellee on several occasions to pool his tobacco, .and finally appellee announced to him .that he was ready to do' so. and .asked' him if he
Judgment reversed and cause remanded, with instructions to enter judgment in conformity with this opinion.