Harkinson's Appeal

78 Pa. 196 | Pa. | 1875

Mr. Justice Mercur

delivered the opinion of the court, May 10 th 1875.

The first question which arises in this case is, has the appellant violated her agreement, not to engage, either directly or indirectly, in that business, the good-will of which she sold to the appellee ?

Her husband had owned and carried on a bakery and confectionery establishment, in the Twenty-second Ward, in the city of Philadelphia. .He devised most of his estate to the appellant absolutely, appointed her his sole executrix, and died leaving six children. She continued the business for a time, and then sold to the appellee the establishment, together with the good-will of the business, for a gross sum, in 1868. At the same time, she agreed not to engage in the same business, directly or indirectly, within the limits of the said ward, at any time within ten years from the date of said sale; but, by her advice and counsel, she would endeavor to encourage and promote the business interest of her vendee. During the life of her husband he had furnished one of their sons a few thousand dollars, with which he had entered into business. After the death of her husband the appellant had also furnished the same son several thousand more. She had also furnished a second son with an amount somewhat larger, to start him in business. In each case no obligation was demanded or given, nor had any of the money, or interest thereon, been repaid, nor does it appear that there was any distinct agreement of any kind for its return.

In 1870, appellant purchased a lot at Chestnut Hill, within the said ward, near the county line, but four miles from the establishment sold to the appellee. On it she huilt and fitted up a house, and the other appliances suitable for a bakery and confectionery. The general plan of the house and its appertenances was arranged by a third son, David, and both he and his mother took an active part in superintending the erection and completion of the establishment. Having put over the door the name “ Harkinson,” she gave to her son David the possession of the establishment. He took out license as a retail dealer, and had continued to carry on the business down to the time of the hearing before the master. The master found and reported that “ the whole evidence shows that Mrs. Harkinson did what she had done in pursuance of a plan pursued towards her other children, and which seems to have been understood and been acquiesced in by all of them.”.

There appears to have been no specific binding agreement between David and the appellant, but an understanding that after he should be thoroughly established in business he should pay her interest on the sum advanced, and in case of her death, the property was to be his ; but if its value was more than his share of liis father’s estate, he was to make payment to his brothers and sisters of the exoess. He thus took and held the possession, subject to an equitable adjustment, with his brothers and sisters, of its relative value on the death of his mother. He has paid no rent and no interest qn the investment. Upon the whole evidence, the master reported “ that the business carried on at the store in Chestnut Hill has been and really is the business of David Harkinson, and was and is not. that of the defendant below, and is managed and carried on by him on his own credit, and with his own means, and not by her.” Nevertheless, the master found that by furnishing the means and fitting up the establishment for her son, by which he was enabled to engage in the business, the appellant had violated the true intent and spirit of her contract. The case of Perkins v. Lyman, 9 Mass. 522, goes far towards sustaining that conclusion. • Yet that case is distinguishable from the present in this: there, with an intent to violate his contract, with an intent to engage in the business from which he was excluded, he fitted up and owned a vessel for such a voyage. His design was to be interested in the business;. thus throwing his knowledge, skill and experience into competition with one, in violation of his agreement. In the present case the appellant did not erect nor furnish the establishment with any intention that she would engage in the business, or be in any manner interested therein. In furtherance of her plan for aiding her children, she had substantially advanced to him his supposed share in her estate. It was invested in that particular for his benefit, and not hers. The effect was the same as if she had given or loaned to him money, with a knowledge that he intended so to use it. It is certainly going very far to say that by the general terms used in this agreement a parent has covenanted to control the business of her son by withholding from him his share in her estate. Without deciding adversely to the conclusion of the master and court on this point, we think the case is not free from doubt.

2. Does the appellee present a case which should move a chancellor to enjoin the appellant against permitting the premises to be used in carrying on the business in which her son is qngaged ? Is it a violation of such a character, and to such, an extent, as to justify this specific remedy ?

We have clearly shown that the appellant personally is nowise engaged or interested in the business, otherwise than by the master’s assumed indirectness. So there is no occasion to enjoin her against doing what she has not done, and does not propose to do. Shall she turn her son out, or enjoin him against pursuing his business ? An attempt to do either might not be entirely successful.

It must be borne in mind that agreements in restraint of. trade generally are void. To give validity to them they must be limited in time or partial in their operation, and be supported by a sufficient consideration : Gompers v. Rochester, 6 P. F. Smith 194.

When a court of equity is called upon to enjoin a person against the free exercise of a trade, the violation of the agreement ought not to be doubtful. Hence, a merchant, who, upon selling his stock in trade and business, covenants not to carry on the same business at the same place or within certain limits surrounding, and who thereupon gives up his place of business, will not be enjoined from afterwards soliciting and procuring orders within the specified territory — the question of whether this constitutes a breach of the covenant being regarded as too doubtful to warrant an injunction, without bringing an action: High, on Inj., § 743; Sivener v. Evans, 2 De Gex, M. & G. 740. So, where one undertakes the management of the business of a chemist, having, covenanted against carrying on the same business in his own name and for his own benefit, or in the name and for the benefit of any other person,' within a certain radius, under a specified penalty named by bond, and he afterwards solicits orders for another chemist within the limits specified, the effect of such conduct upon the covenant in question is regarded as too doubtful to warrant a preliminary injunction: High, on Inj., supra; Clark v. Watkins, 9 Jur. N. S. 142. If, however, one agrees not to set up or follow, or practice a particular business, and then act.s as an assistant or manager in the business for another person, it is a violation of his covenant: Dales v. Weber, 18 Weekly Rep. 993. In such a case his covenant not only excluded him from interest or profit in the business, but also from personal employment therein. Nor is a covenant against engaging in a certain trade, or in any matter pertaining thereto, within a certain district, regarded as violated by loaning money to one engaged in such business, the loan being secured by mortgage on the business premises, even though the covenantor may know that the mortgagor's only means of repaying the money is out of the profits of the business: High, on Inj., supra; Bird v. Lake, 1 Hem. & Miller 338.

“There is no power,” said Mr. Justice Baldwin, in Bonaparte v. Camden & Amboy Railroad Co., 1 Bald. Cir. C. R. 218, “ the exercise of which is more delicate, which requires greater caution, deliberation, and sound discretion, or is more dangerous in a doubtful case than the issuing of an injunction. It is the strong arm of equity that never ought to be extended, unless to cases of great injury, where courts of law cannot afford an adequate or commensurate remedy in damages.” It ought, therefore, to be guarded with extreme caution, and applied only in very clear cases : Story’s Eq. Jur., § 959 b. Certainty is an essential element in the contract, whose enforcement is sought by injunction, and where a covenant is uncertain, in its provisions, no injunction will be allowed: High, on Inj., § 720. So, too, it is usually requisite that the party aggrieved should show some appreciable damage, as the result of the breach of covenant which he seeks to restrain: Id. Where damages will compensate either the benefit derived or the loss suffered, equity will not interfere: Grey v. Ohio & Penna. Railroad Co., 1 Grant 412. So, where either party may suffer by the granting or withholding an injunction, the rule in equity requires the court to balance the inconveniences likely to be suffered by the respective parties, by means of the action of the court, and to grant or withhold the injunction according to a sound discretion: Id.; Richards’ Appeal, 7 P. F. Smith 105. A court of equity will not interfere if the damage is slight, and the nuisance is of a temporary character, so that damages at law would furnish an entire and adequate remedy : Bisph. Eq., § 440. It was said in Butler v. Burlesow, 16 Vermont 176, “when there is an express covenant, and an un con tro ver ted mischief arising from the breach of it, equity will grant an injunction to restrain the breach.” In Clark’s Appeal, 12 P. F. Smith 447, Mr. Chief Justice Thompson said, “injunction is a remedy in equity, to restrain or prevent such acts of wrong, as would, if done, result in irreparable injury to. the property of the complainant. No decree should ever be made to be followed by writ of injunction, unless this element be clearly established.” There should be some irreparable injury, either committed or threatened, to justify an injunction.

In McOlurg’s Appeal, 8 P. F. Smith 51, the question of injury sustained is not distinctly presented in the report of the case, yet, in the opinion of Mr. Justice Sharswood, he clearly assumes it to exist, and cites with approbation the case of Butler v. Burlesow, supra.

The appellant denies, in her answer, that she has encouraged and promoted the business of others with the intent and effect of injuring complainant; on the contrary, she alleges and avers that she has advised and encouraged the old customers of her place to continue their custom, and has endeavored to remove objections on their part to purchasing of the appellee. The master has found “ there was no proof of any special damage suffered by plaintiff (below) by reason of the opening of this bakery and confectionery established at Chestnut Hill, or that customers had left him and gone there.”

The master does not find that this establishment will be any more injurious to the appellee in the future than it has been in the past. The proof then not only fails to show irreparable injury to the property of the appellee, which cannot be compensated in damages, but shows that no appreciable damaged has been done to, or suffered by him.

It is not the province of courts to decide abstract questions, but to determine relative rights, and to redress relative wrongs, according to the rules of law and equity.

The complaint here rests on an alleged violation of a contract. The fact of a violation is not free from doubt. The appellee has not sustained, nor has he reason to fear, any substantial injury to his property. Under all the circumstances, it is not a case that now calls for the exercise of the high power invoked. We think the learned judge erred in adopting the conclusion of the master, and in decreeing accordingly.

Decree reversed, and bill dismissed at the cost of appellee.