Case Name: The Jewelers' Mercantile Agency (Limited), Respondent, v. Alonzo Rothschild and Albert Ulmann, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896
Citations: 6 A.D. 499
Docket Number: 
Parties: The Jewelers’ Mercantile Agency (Limited), Respondent, v. Alonzo Rothschild and Albert Ulmann, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 6
Pages: 499–509

Head Matter:
The Jewelers’ Mercantile Agency (Limited), Respondent, v. Alonzo Rothschild and Albert Ulmann, Appellants.
Injunction — restraining individuáis from republishing mercantile agency reports — organizing a corpoi-ation which republishes them is a contempt—punishment of such contempt.
The complaint in. an action alleged that the plaintiff conducted a mercantile agency relating to the jewelry trade, and regularly issued publications for the use of its subscribers containing important information respecting the persons engaged in such trade; that the matters contained in such publications were confidential as between the plaintiff and its subscribers, and that the defendants, who were not subscribers, were using and publishing information derived from the plaintiff’s publications. Upon the consent of the defendants a judgment was entered perpetually enjoining the defendants from publishing or issuing in the future any information derived from the plaintiff’s books.
Subsequently the defendants employed one Kellar to compile a directory of jewelers, and assigned their rights in such directory and .their contract with Keller to a corporation of which they were the managers and principal stocknolders. The corporation published the directory, which contained matter in violation, of the injunction, and the plaintiff thereupon brought an action against the corporation for an injunction, and instituted proceedings against the defendants for contempt.
Upon an appeal from an order adjudging the defendants guilty of contempt and fining them the amount of the plaintiff’s costs, disbursements and counsel fees in the contempt proceeding and in the action against the corporation and also sentencing them to two months’ imprisonment, it was
Held, that the judgment in the injunction action restrained the defendants from publishing and "issuing information contained in future publications of the . plaintiff, as well as that contained in past publications, and that it was within, the power of the court to grant it;
That the defendants were bound to see to it that their publications contained nothing in violation of the injunction, and that it would be no defense for them to say that they hired a man to compile a list and that they took such list without examination and published it;
That the defendants’ fine properly included the counsel fee in the action against the corporation, as such action was the direct result of the defendants’ violation of the injunction;
That as it did not appear that the contempt w,as willful the defendants should not be punished by imprisonment.
Rumsey, J., dissented.
Semble, that if the plaintiff’s publications were literary property, a judgment restraining the defendants from publishing the plaintiff’s future publications would not have been authorized.
Appeal by the defendants, Alonzo Rothschild and another, 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 Ytli day of March, 1896, punishing them for contempt of court by fine and imprisonment, with notice of- .an intention to bring up for review upon such appeal an order entered in said clerk’s office on the 20th day of August, 1895, adjudging the defendants to be in contempt.
Wheeler H. Peclcham, and Leopold Sondheim, for the appellants.
Howard Mansfield, for the respondent.

Opinion:
Ingraham, J.:
The complaint in this action alleged that the plaintiff was engaged in the business of a mercantile agency, which business consisted in obtaining from various sources information with regard to the names, places of business, street addresses, particular kinds of business, and other information as to individuals, firms and corporations engaged in the jewelry trade throughout the United States and Canada, and in furnishing confidentially for the use of its subscribers the information thus obtained ; that this information so obtained was arranged and tabulated, and that the plaintiff prints twice a year, viz.: On the first day of January and the first day of July, exclusively for the use of its subscribers, a reference book of the jewelry trade in the United States and Canada, containing a full list, of the persons, firms and corporations engaged in the jewelry trade, and that in addition to such reference books the plaintiff prints and issues to its subscribers once a week a confidential Correction sheet, of the nature of a weekly bulletin or current supplement to such reference books, containing information and any news- of events or changes which may be deemed of importance to its subscribers; that said reference books and confidential correction sheets are furnished to its subscribers under a special agreement made with each subscriber by which the title of the books and sheets remain in the said, mercantile agency; that the communications are strictly confidential between the plaintiff and its subscribers, and that the communicated information is 'not to be disclosed to any person or persons; that the defendants were not, and never have, been subscribers, but that they have appropriated and used information taken from the weekly correction sheets and reports, and from the reference books, which information was wrongfully and unlawfully obtained through the plaintiff's subscribers, and that the defendants have published and circulated and are publishing and circulating from time to time by means of a publication called the Jewelers' Weekly, the information thus obtained, though warned by the plaintiff to desist from doing so. And the plaintiff asks for an injunction restraining the defendants from appropriating, printing, publishing or issuing said Jewelers' Weekly, or from using in any way, or for any purpose, information contained in the plaintiff's reference books, weekly correction sheets or reports.
Upon that complaint and upon the consent of the defendants a judgment was entered by which the defendants and each of them, their printers, agents, servants and employees, and all persons claiming to act under them or by their authority, were perpetually enjoined and restrained- from using in any way, or for any purpose whatever, the plaintiff's reference books, correction sheets or reports, and from appropriating, printing, publishing or issuing in any future number of the Jeweleri Weekly, or in any future publication under whatever name, any information obtained from the plaintiff's reference books, correction sheets or reports, and from furnishing to others any such information.
It seems to us quite clear that this injunction was within the power of the court to grant, and having been entered by consent, and having been adopted by the court as the final judgment in the action on the consent of the defendants, the defendants cannot dispute the validity or binding force of that judgment. It is also quite clear that the sole object of the suit was to prevent the defendants from continuing to publish information which the plaintiff had fur nished to its subscribers, either by its reference books, its.weekly bulletin or correction sheets, or current supplement to such reference, books. As each new reference book was published its predecessor became substantially useless, and the business of the plaintiff was in publishing new books with the frequent corrections and giving to its subscribers the latest information as to the trade throughout the United States and Canada.
It would be entirely useless to restrain a person from using the publications issued prior to the commencement of the action and not restrain him from, using a publication issued after the commencement of the action, for long before the action could be tried and disposed of, if there was. a serious litigation, the reference books in force at the time the action was brought would be obsolete. The business of the plaintiff was to furnish this information by means of these books and sheets and to obtain from its subscribers compensation for such information; and the object of the action against the defendants was to protect that business by preventing them from surreptitiously obtaining the information which the plaintiff had collected at great expense, and from publishing it to the world, thus rendering subscriptions to the plaintiff's publication useless and destroying the plaintiff's business. It is quite apparent that it was this appropriation of the plaintiff's business and property, in .violation of the plaintiff's rights, that this injunction restrained ; and it not only restrained the publication of past issues, but such books and information as the plaintiff should subsequently issue.
' This case is very different from a case where a person is restrained from using the literary property of an author. This is not literary property. These reports were not literary works. They contained information obtained by the plaintiff- which it had printed in a convenient form to communicate to those who were willing to pay for it and the defendants' attempt to appropriate the result of the plaintiff's labors and expenditures for the purpose of publishing it for their own benefit, and thus destroying its value to the plaintiff, was what was enjoined by this judgment. This judgment thus having been entered enjoining the- defendants from using any of the publications or communications made by the plaintiff to its customers or subscribers, these defendants were bound to see to it that their publications contained no information derived from the plaintiff's books or communications to its subscribers. It would not do for them to say that they hired a man to get up a list, took the list prepared by him without examination as to whether or not that list contained information obtained from the plaintiff's books or communications, in violation of this injunction, and published it. Such an act would be a plain violation of this injunction.
The court imposed an imprisonment upon the defendants for a term of two months, and, in addition to that, fined them the sum of $2,708.06 as the damages caused by this contempt. This sum was made1 up of the costs, disbursements and counsel fees of the plaintiff in this proceeding, and in an action brought by the plaintiff against these defendants, impleaded with a corporation of which the defendants were the managers and principal stockholders, and to which the publication formerly owned by the defendants had been transferred, to obtain a new injunction to restrain the continued violation-of the plaintiff's rights.
The defendants claim that of this sum it was improper to include in the fine, as damages sustained by the plaintiff in consequence of a violation of the injunction, the amount of the counsel fee paid to counsel in the .new action brought to restrain this violation of the plaintiff's right by the corporation to whom the defendants had transferred the publication of this paper and directory. "We think, however, that the necessity of paying such counsel fee was the direct result of the defendants' refusal to obey the injunction. The defendants had employed one Keller to make up a directory of jewelers. After such employment the publication business and the contract with Keller were assigned by the defendants to and accepted by the corporation defendant. The corporation thus proceeded to publish the book made up by Keller, which was a violation of this injunction. It was thus the transfer by the defendants of a contract, the execution of which violated this injunction, to a corporation which was under the exclusive control and management of the defendants, which rendered necessary an action to restrain the corporation from doing the acts which the defendants had been restrained from doing. The transfer of this book or publication by the defendants to Keller, and the defendants authorizing the corporation to publish the book which. Keller had prepared and superintended the compiling of, and their being engaged in its manufacture and sale, were in violation of the injunction; and the transfer of their business to the corporation, so' that to protect the plaintiff it was necessary that the corporation should be enjoined from the publication, were acts of the defendants which tended to render the injunction nugatory, and in consequence of these acts of the defendants, which were violations of the injunction, it was necessary for the plaintiff to commence a new action and obtain an injunction against the corporation. By this misconduct of the defendants the plaintiff's right was defeated, impaired, impeded or prejudiced, and the damages which it sustained in consequence of such conduct were the expenses in prosecuting the new action and were what the court was justified in compelling the defendants to pay.
The only other question is as to whether or not the court was justified in this case in punishing the defendants with an • actual imprisonment of two months. This is a civil contempt, and the power to punish is given by section 14 of the Code of Civil Procedure, where the right or remedy of a party to a cause of action or special proceeding may be defeated or impaired. By subdivision 3 of section 14 it is provided that a court of record has power to punish by fine and imprisonment a party to an action or special proceeding for any disobedience to a lawful mandate of the court, but to enforce the right of a party to a civil action or special proceeding is the main object of the, section, and when such right is protected, except where there is a willful refusal to recognize the authority of the court, the aim is attained.
We hesitate somewhat to review the discretion exercised by the. court in imposing a penalty for the violation of the judgment, but as this was a civil contempt where the court acted upon affidavits which were before it, and which are now before us, and where it is impossible to give the same consideration to questions of this- kind in the hurry of the decision of motions at chambers, as in the appellate court, we think it our duty to say just what punishment this, record satisfies us should be imposed. The court has imposed as a penalty two months' imprisonment. Considering all the circumstances and the absence of evidence of any willful disobedience of this injunction, the fact that it seems to have been proved that neither the defendants nor their employees ever had a copy of the plaintiff's publications, the fact that this book. was not made up directly from the plaintiff's publications, but from a list furnished by another person; that there is no evidence to show that the defendants or their employee who made up this new directory had direct knowledge that the book which they were about to publish did contain any information taken from the plaintiff's publications, would seem to indicate that this contempt was not so much a willful disobedience as a failure to exercise the reasonable care and prudence which the injunction required the defendants to exercise, and we are inclined to think that full justice will be done to the plaintiff by modifying the order so as to inflict upon the defendants the fine sufficient to indemnify the plaintiff for all damages sustained by it, instead of the imprisonment provided for in the order; and the order as thus modified is affirmed, without costs.
Barrett and Williams, JJ., concurred.