Case Name: Pabst Brewing Company, Appellant, v. Ralph Sloane, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-03-20
Citations: 155 A.D. 580
Docket Number: 
Parties: Pabst Brewing Company, Appellant, v. Ralph Sloane, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 155
Pages: 580–583

Head Matter:
Pabst Brewing Company, Appellant, v. Ralph Sloane, Respondent.
First Department,
March 20, 1913.
Contract — suit to enforce negative covenant — complaint —injunction.
A complaint in a suit by a brewing company against the lessee of premises occupied as a café and restaurant which alleges that the plaintiff loaned money to the defendant for the payment of his liquor tax, and also loaned him the necessary fixtures in consideration of defendant’s agreement to deal exclusively in plaintiff’s beer, permission being-granted him, however, to handle imported and one local domestic bottled beer; that the plaintiff has advanced certain moneys to the defendant on which a balance is still due; that the defendant has refused to comply with the contract in that he has sold domestic draft beer manufactured by another brewing company and intends to continue to do so; tha j the defendant, being financially irresponsible, a judgment against him for damages will be uncollectible and that plaintiff is without adequate remedy at law, states a good cause of action.
The negative covenant on the part of the defendant in such contract may be enforced by injunction.
Appeal by the plaintiff, Pabst Brewing Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 14th day of January5 1913, as resettled by an order entered in said clerk’s office on the 24th day of January, 1913, denying the plaintiff’s motion for judgment, on the pleadings.
A. S. Gilbert, for the appellant.
Anson Burlingame Cole, for the respondent.

Opinion:
Dowling, J.:
The sole ground for the order appealed from seems to be that a prior motion for an injunction pendente lite was denied by the learned justice at Special Term upon the ground that the "moving papers fail to show irreparable injury to the plaintiff from the breach of the contract, and that damages in an action at law will not afford adequate relief," citing Ringler & Co. v. Mold (115 App. Div. 549).
The complaint herein sets forth that defendant, the lessee of premises occupied by him as a café and restaurant, had applied to plaintiff, a domestic corporation, on August 20,1910, for the loan of money for the payment of a liquor tax necessary for the obtaining of a certificate permitting the traffic in liquor by the defendant at said premises, and also for the loan of certain fixtures to be used by him in his business; that thereupon plaintiff did loan defendant the sum of $1,200 to enable him to pay the liquor tax, and did loan him the fixtures desired, whereupon the parties entered into a contract in writing, pursuant to which, after reciting defendant's application for the loans, defendant agreed to pay back the money advanced in certain proportions and further continuing:
" (C) The said Sloane stipulates and agrees, in consideration of all of the terms and conditions of this agreement, that there shall not be sold or offered for sale in the premises hereinbefore mentioned, any lager beer of any kind, character or description, except the beer manufactured by the Pabst Brewing Company of Milwaukee, Wisconsin, and sold by the Pabst Brewing Company, but permission is hereby granted to the said Sloane by the Pabst Brewing Company to handle imported and one local domestic bottled beer during the term of the present lease of said premises to him, the said Sloane, and which expires September 31/13 [sic], and during the term of any renewals thereof to him or to any firm of which he may be a member, or to any corporation of which the said Sloane shall be a stockholder or employee, and to that end and purpose the said Sloane stipulates and agrées that he will not assign the said lease or any renewals thereof to any person, firm or corporation, save upon the express agreement that such assignment shall be subject to the terms of this contract."
The complaint then sets forth the advance of certain other moneys to defendant, on which a balance of $250 is still due, and avers: ' ' 9. That the plaintiff was induced to make the various loans of money to the defendant, as hereinbefore set forth, and to loan to the defendant the various chattels and fixtures hereinbefore referred to, in consideration of the defendant entering into the contract marked ' Exhibit A ' hereof, wherein and whereby the defendant stipulated and agreed that there shall not be sold or offered for sale in the premises conducted by him as a café and restaurant and hereinbefore referred to, any domestic beer on draft, of any kind, character or description, except the beer manufactured by the Pabst Brewing Company of Milwaukee, Wisconsin, and sold by this plaintiff, during the term of his lease of said premises, which expires September 30, 1913."
It further sets forth full performance on its part of all the conditions of the agreement between them, but that defendant, since October 30, 1912, has refused to comply with the terms thereof, in that he has sold draft domestic beer manufactured by the Joseph Fallert Brewing Company, and intends so to continue; that the chattels loaned by plaintiff to defendant were furnished at an expense to plaintiff of 81,235.36, and that they will be greatly depreciated in value if removed from the premises where they are now installed; that if defendant is permitted to violate the terms of the agreement plaintiff will be deprived of large sales of beer, and will suffer irreparable injury; that defendant is not financially responsible, and any judgment that may be recovered against defendant for damages suffered by plaintiff, by reason of defendant's breach of contract, will be uncollectible; that plaintiff is without adequate remedy at law.
We believe that this complaint sets forth a good cause of action in equity. It is apparent upon an examination of the agreement annexed to the complaint that the inducing cause of plaintiff's loan of money and chattels to the defendant was the performance of the covenant upon the latter's part not to sell any draft beer save that of plaintiff, and that its sole purpose in entering into the contract was to extend and enlarge its trade, and not to acquire litigation. In Diamond Match Co. v. Roeber (106 N. Y. 473), where a negative covenant was enjoined, the court held that the equitable jurisdiction of the court to enforce such a covenant by injunction was not excluded by the fact that the defendant, in connection with the covenant, executed a bond for its performance, with a stipulation for liquidated damages. For, as the court said: " It is a question of intention, to be deduced from the whole instrument and the circumstances; and if it appear that the performance of the covenant was intended, and not merely the payment of damages in case of a breach, the covenant will be enforced." In the case at bar it amply appears that what both parties deemed of importance and sought to insure was the performance of the contract, and not some recourse for its breach. It further affirmatively appears that defendant is financially irresponsible, and that even the damages would not be recoverable. The right to enforce such a negative covenant as this by injunction has been expressly recognized by the courts of the State of New Jersey. [Feigenspan v. Nizolek,. 71 N. J. Eq. 382; affd., 72 id. 949; Peoples Brewing Co. v. Levin, 18 id. 583.)
The case of Ringler & Co. v. Mohl (115 App. Div. 549), relied upon by the learned court at Special Term, is not an authority to the contrary. That was a case of an injunction sought pendente lite, which was a matter of discretion. All the plaintiff's allegations were denied by defendant, who further averred that plaintiff had refused to sell him beer, by reason of which he was forced to buy it elsewhere. The court called attention to the fact that under the injunction sought, if plaintiff refused to sell beer to the defendant the latter would have to go out of business, as he could purchase no beer save that of plaintiff, which was under no obligations to sell him any. That is not this case.
The order appealed from will, therefore, be reversed, with ten dollars costs and disbursements, and the motion for judgment denied, with ten dollars costs, with leave to the defendant to answer within twenty days on payment of said costs.
Ingraham, P. J., Laughlin, Clarke and Scott, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs, with leave to defendant to answer on payment of costs.