Lanston Monotype Machine Co. v. Times-Dispatch Co.

115 Va. 797 | Va. | 1914

Buchanan, J.

(after making the foregoing statement), delivered the opinion of the court.

One of the errors assigned, and the only one that it is necessary to consider, in the view the court takes of the case, is that the trial court erred in sustaining the demurrer to the bill and dismissing the same.

It is conceded, and if it were not it is clear, that the agreement between the parties is of such a nature that it is not susceptible of specific enforcement by the court. But it is insisted that, although the court was unable to specifically execute the contract, yet the case made by the bill entitled the complainant to an injunction restraining the defendant from violating the covenant contained in clause “P” of the agreement, by which it bound itself not to install in its printing establishment more than two composing or type-setting machines other than monotypes.

The general rule is that an injunction will not be granted to restrain a defendant from violating negative covenants when the agreement is of such a nature that it cannot be specifically enforced where specific performance is the object of the suit. 2 High on Injunctions (4th ed.), secs. 1109, 1162; 4 Pom. Eq. Jur. (3d. ed.), sec. 1341; 3 Elliott on Contracts, sec. 2345; 22 Cyc. 850-1.

Where the object of the suit is not to enforce specific performance of the agreement, which contains both affirmative and negative covenants, there are cases which hold that a court of equity may interfere by injunction to prevent the breach of a negative covenant, although the affirmative stipulations are of such a nature that they could not be specifically enforced; but, as said by High on Injunctions, section 1164, the cases upon this question are exceedingly conflicting and irreconcilable. While the authorities are conflicting as to whether or not such relief can be granted and under what circumstances it may be done, all the authorities seem to concur in the view that in no case will such an injunction be granted unless it appears that the complainant has no adequate remedy at law.

Pomeroy, in his work on Equity Jurisprudence, vol. 4, section 1341, says that “an injunction restraining the breach of a contract is a negative enforcement of that contract. The jurisdiction of equity to grant such injunction is substantially coincident with its jurisdiction to compel specific performance.” Grubb v. Moore, 108 Va. 83, 60 S. E. 757.

• Where the contract which is sought to be specifically decreed, or a breach of its negative covenants enjoined, relates to chattels, the universal test of the jurisdiction of a court of equity to grant such relief, both in England and in this country, is the inadequacy of th’e legal remedy of damages. 4 Pom. Eq. Jur., sec. 1341; 5 Do., sec. 299.

“The fact that ample remedy exists at law for the violation of an agreement,” says High on Injunctions, sec. 1107, “is always sufficient objection to the interference of equity.” 3 Elliott on Contracts, sec. 2279.

Unless, therefore, the facts alleged in the bill show that the remedy at law is inadequate, the demurrer was properly sustained and the bill dismissed. Hudson v. Kleve, 9 Gratt. (50 Va.) 379, 384-6; Morrison v. Spear, 10 Gratt. (51 Va.) 229, 230; Ely, &c., v. Johnson, 114 Va. 31, 75 S. E. 748.

It appears from the bill and the agreement of the parties filed therewith as an exhibit that the complainant desired very much to make sale of its monotype machines to the defendant and to have the latter operate them, and thereby to supplant the use of the linotype machines, and that if this result could be accomplished, the complainant expected that its business would be materially enhanced from having its machines used by the defendant, a leading and influential newspaper. It further appears from the complainant’s pleading that the officers and some of the managing employees of the defendant were not satisfied that the complainant’s monotypes Avere the best machines for the purpose of the defendant. The obligations of the defendant, under the agreement, were to install and operate the monotype machines of the complainant with a view of ultimately becoming the absolute owner of them at the price of $15,000, payable by installments becoming due, respectively, in the years 1913, to and including the year 1918, subject to the right of the defendant to cease their use and return them after notice at any time after. January 1, 1914. The payment or payments made or installments due under the contract, up to the time the right to return, if the machines were returned, was exercised, were to be retained by the complainant as compensation for the use of its machines and equipment furnished under the contract. The defendant further bound itself to use reasonable efforts to operate the monotype efficiently and not to install more than two machines in its neAvspaper building other than monotypes.

While there are various stipulations in the agreement as to what the complainant Avas to perform and might be called upon to perform, the contract, as we understand and construe it, was for the sale of the complainant’s machines upon the terms named therein, and not an independent agreement by which the defendant undertook and agreed to operate the machines for the benefit of the complainant. The operation of the machines provided for in the contract was not for the purpose of showing to the public or to those using type-setting machines generally that the complainant’s machines were efficient in'newspaper publishing, and thereby to increase the reputation and market value of the machines, but the object or purpose of operating the machines in the manner provided for in the agreement was merely to satisfy the defendant, its officers and employees, of the suitableness and efficiency of the machines for the purposes for which they were sold. In other words, as said by the trial court, taking the various stipulations op both sides in connection with the right to terminate after the end of the first year, it seems clear that the obligation of the parties to install and operate was only for the purpose, on the part of the complainant, to have the defendant give the machines a fair trial, and, on the part of the Times-Dispatch people, to satisfy themselves that the machines would produce type efficiently and economically for them.

If this be the correct construction of the agreement between the parties, it is clear that there could be no recovery at law or in equity for such injury to its business as the bill alleges would result, viz.: “If the monotype machines of your complainant are removed from the Times-Dispatch office and linotype machines substituted in their place, it Avill damage this complainant many thousands of dollars in excess of the amount agreed to be paid for the machines installed, and prevent their introduction into innumerable other printing establishments and greatly retard the steady progress which your complainant has made in supplanting the linotype machines. Indeed, it is impossible to ’estimate or calculate the damage and loss which Avould result therefrom, and for which your complainant could not be compensated in damage in an action at law.”

Injuries frequently result in one way or another to the business of one party to a contract by its breach on the part of the other party, but damages cannot be recovered for the breach of any contract unless they be such as may be fairly supposed to have entered into the contemplation of the parties when they made the contract—that is, such as might naturally be expected to follow its violation; they must be certain both in their nature and in respect to the cause from which they proceed, and they must be proximate and certain, or capable of being made certain, and not remote, speculative or contingent. Perry Tie and Lumber Co. v. Reynolds, 100 Va. 264, 269-70, 40 S. E. 919; Western Union Tel. Co. v. Hall, 125 U. S. 444, 8 Sup. Ct. 577, 31 L. Ed. 479, 483; 3 Elliott on Contracts, sec. 2131.

The damages, as was said in Fox v. Harding, 7 Cush. 516, and quoted with approval in Western Union Tel. Co. v. Hall, supra, “must be part and parcel of the contract itself, and must have been in contemplation of the parties when the agreement was entered into. But if they are such as would have been realized from other independent and collateral undertakings, although entered into in consequence and on the faith of the principal contract, then they are too uncertain and remote to be taken into consideration! as a part of the damages by breach of the contract in suit.” 3 Elliott on Contr., sec. 2133.

Tested by these well settled rules, it is clear that the complainant was not entitled to recover damages for injury to its business by reason of the defendant’s breach. There is no allegation of fact in the bill which shows that the complainant did not have an adequate remedy at law to recover any and all damages to which it would b'e entitled resulting from breach of the agreement on the part of the defendant. This being so, the demurrer to the bill was properly sustained and the bill dismissed by the trial court.

Affirmed.