Court Opinion

ID: 5184306
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:46:20.567191+00
Date Added: 2024-06-11T08:26:41.072896
License: Public Domain

Ingraham, J. (dissenting):
I dissent. The judgment entered enjoins and restrains for a period of twenty years from March 28, 1896, the defendants, and each of them, from buying and selling or dealing in soap under the name, brand or trade mark of “ Coal Oil Johnny’s Petroleum Soap,” or any colorable variation thereof, liable to deceive the public, except the soap procured from the plaintiff or its assigns, excepting only such soap as they or either of them may procure from Messrs. Bell & Bogart, or their assigns, until the 16th of July, .1900; and, further, that the defendants, and each of them, be enjoined and restrained from resorting to any other subterfuge to render nugatory, by unfair business methods, the prohibitions of this court. The said judgment further gives to the plaintiff a money judgment for-$19,802.06 for a violation by the defendants of this covenant. The terms of this judgment are somewhat remarkable. The action is brought to enforce a covenant to buy a certain amount of goods from the plaintiff; and to enforce that covenant the defendants are *411enjoined from buying or selling, or dealing in soap under the name, brand or trade mark of “Goal Oil Johnny’s Petroleum Soap,” or any colorable variation thereof, liable to deceive the public, except the soap procured from the plaintiff or its assigns. It would seem that this injunction goes much further than a specific performance of the "clause of the contract between the plaintiff and the defendants. I do not think that this clause of the contract is one that can be specifically performed in equity for two reasons: First. The plaintiff has an adequate remedy at law for any breach of this contract by the defendants. The contract itself provides for the price to be paid to the plaintiff for the soap when delivered, and the price for which the defendants are to sell it. The plaintiff, upon the trial, proved the cost of manufacturing this soap. Thus, the defendants had no difficulty in proving, and the court has awarded judgment for the damages that the plaintiff sustained in consequence of the alleged breach of the agreement by the defendants prior to the time of the trial. A specific performance of this agreement was not necessary to give to the plaintiff all the remedy that it was entitled to, namely, damages for the breach of the contract by the defendants. The contract is merely 'an agreement by the defendants to purchase all the soap of this brand that the plaintiff may sell; that is, whatever soap the defendants sold should be purchased from the plaintiff, and there would seem to be no difficulty in ascertaining just how much soap the defendants sold and just what plaintiff would have made if such soap had been purchased from it.
I also think that this contract is one that the court should not specifically enforce. As was said by Lord Cranworth, in Blackett v. Bates (L. R. [1 Ch. App.] 117): “In order that the court may interfere, there must be mutual rights capable of being enforced by the court.” The defendants could not have filed a bill for specific performance of the agreement of the plaintiff to procure the plant. (See Marble, Co. v. Ripley, 10 Wall. 339.) It is entirely clear, moreover, that the injunction granted is too broad. The injunction is absolute, upon no conditions, but restrains the defendants from buying, selling or dealing in this soap, except it be procured from the plaintiff, or its assigns. The contract itself contains covenants to be performed on the part of the plaintiff, but nowhere does plain*412tiff agree to manufacture or sell to the defendants any of the soap that the defendants are to purchase. Some of these covenants, as will hereafter appear, have never been performed by the plaintiff, and the plaintiff is not now in a position to furnish to the defendants 400 boxes of soap per day, although it covenanted that it would procure a plant which would have a capacity of furnishing that amount. Nor does it appear that the plaintiff is or will be able to furnish to the defendants all the soap that they may require. The injunction is not conditioned upon such ability and inclination of the plaintiff to sell to the defendants all of such soap that they may wish to purchase. If the plaintiff should close its factory and refuse to manufacture soap for the defendants, the injunction would still be applicable, and would simply close up the defendants’ business. The difficulty of formulating an injunction which would make it applicable only to the case of the plaintiff’s being able and willing to furnish all the soap that the defendants should require is, it seems to me, in itself an answer to an action of this character which seeks to enforce such an agreement. I think, also, that it clearly appears from the evidence that the plaintiff has never performed the agreement upon its part; has never manufactured the Coal Oil Johnny soap required by the defendants, but has distinctly and emphatically refused to manufacture and supply to the defendants the soap which they require for their business.
Under the contract the parties of the first part (plaintiff’s assignors) “ agree to and with the said party of the second part to procure a building suitable for the purpose in New York city or vicinity, and to place therein a soap manufacturing plant for the manufacture of certain brands of soap known as ‘Coal Oil Johnny,’ ‘Petrolia’ and ‘ Bahn of Gilead,’ which said plant shall have a capacity of not less than four hundred (400) boxes per diem? It seems to me that the evidence clearly shows that the plaintiff has never performed this covenant. Prior to the time that this contract was made the defendant Maross Jenkins and the defendant corporation had been manufacturing and selling a soap known as the Coal Oil Johnny soap. On February 23, 1893, the defendant Jenkins had registered with the United States Patent Office a trade mark for petroleum soap under the name of “ Coal Oil Johnny’s Petroleum Soap.” Such trade mark was adopted “ for soap made with a liberal use of *413petroleum.” This soap had been manufactured under the direction-of one William A. Grant, who seems to have brought the plaintiff and the defendants into negotiation in regard to this contract, and who was trusted by both parties to furnish the formula and information necessary to manufacture the defendants’ soap. Some time before the execution of this contract, and on February 11, 1896, Grant made a contract with the plaintiff’s assignors by which he (Grant) agreed to select a building, suitable for the purpose of manufacturing soap, at a rent not exceeding $2,400 a year, which rental the plaintiff’s assignors agreed to assume; and to construct, build and erect therein a plant or machinery for the production of a certain kind of soap commonly known as “ Petrolia,” which said plant or machinery shall be so constructed as to produce two hundred boxes (200) of said soap per day; and agreed to deliver said plant or machinery within thirty days from the date thereof free from debt, and Grant agreed further to furnish an operator competent in all respects to run said machinery, the wages of whom were to be paid by the plaintiff’s assignors; and to deliver to plaintiff’s assignors a written formula under which the said Petrolia soap could be manufactured, and to instruct free of charge the plaintiff’s assignors in all matters appertaining to the manufacture of the said brand of soap. And plaintiff’s assignors agreed to pay to Grant the sum of $5,000 for the formula used in manufacturing a brand of soap known as “ Balm of Gilead,” and further agreed to pay to said Grant the sum of $10,000 for the plant and formula of Petrolia soap, the last installment of which was to be paid when the said plant or machinery was in all respects completed and ready to operate. Under this contract Grant procured a building, a lease of which was taken in the name of the plaintiff’s assignors, and erected a planto which was capable of producing 200 boxes of soap per day and received from plaintiff’s assignor the sum of $15,000. The plant thus erected by Grant under this contract was the only plant that the plaintiff’s assignor or the plaintiff ever constructed or procured; and the evidence is quite clear that this plant was not able to produce more than 200 boxes per day, and was also not constructed to manufacture a soap like that called for by the contract sought to be enforced in this action, which is entirely different in its character from the soap which was to be manufactured under the contract between Grant and the plain*414-tiff’s assignor. Grant himself testified for the defendants, and his testimony tended to show that this machinery was not fitted for making the Coal Oil Johnny soap, for reasons stated by him. Grant seems to have been the person relied upon by both the plaintiff and the defendants for furnishing this formula to make this soap-and to superintend its manufacture; and his testimony is certainly not at all met by any testimony offered by the plaintiff as to the suitability of this machinery for making the Goal Oil Johnny soap as it had been made for the defendants and in the form and of the ingredients that they wished it made. Grant expressly testified, and I do not find that it is disputed, that it would require an expenditure of at least $75,000 to procure a plant capable of making 400 boxes daily of the Coal Oil Johnny soap. One of the plaintiff’s assignors testified that, after dissatisfaction had been expressed by the defendants with . the soap the plaintiff was making, he asked Grant the cost of the machinery that would be necessary to put a larger amount of the petroleum in this soap, and that Grant answered that it would cost about $25,000. However, the plaintiff never did procure a plant that would make 400 boxes of soap per day. The only plant that it did procure was the one that Grant furnished under the contract made prior to the time of the execution of this agreement sought to be enforced, and that, it is clear, had not a capacity of manufacturing more than 200 boxes per day; and the plaintiff expressly refused when required, by the defendants and Grant, to furnish any more capital for the purpose of procuring a plant which could comply with the covenants of this contract. There was, however, a plant procured under which the plaintiff attempted to manufacture this Goal Oil Johnny soap; and there was evidence offered by plaintiff to showo that, after the manufacture of the soap commenced, Grant was present generally superintending the operation of the plaintiff’s plant. Under Grant's direction, at first six pounds of petroleum, which would be about six-teutlis of one per cent, was used in the soap; and subsequently, four pounds were substituted, which would be between four and five-tenths of one per cent. During this time the plaintiff endeavored to make this soap for the defendants and a quantity of it was made and delivered to them, but on September 16, 1896, a letter was received from the defendant Jenkins in which he said that in order to protect his trade *415and to increase the same, also that he might protect his trade mark against all comers, títere needed to he a larger amount of petroleum put in Coal Oil Johnny-soap at once. “The quantity of petroleum you are now putting in is too small and allows the soap to waste. If this can be overcome I am confident that the sales would be many times larger than they ever have been. From the consumer — this is the only fault they have — and I believe that jrou will agree with me that a perfect soap is desirable in order to defy the whole world to produce its equal.” As no answer appears to have been made to this letter, on September 18, 1896, Jenkins wrote another letter to Pitcher, one of the plaintiff’s assignors, who was president of the plaintiff corporation, which is as follows: “ Upon information received from the Patent Office to-day, I find that it would be simply impossible for me to hold my trade or my brand if the Coal Oil Johnny Soap is not made to contain a percentage of petroleum which would be of commercial use. With a soap so made I can defy the whole world. Mr. Grant has assured me many times that this can be done, and when I come out with a photo of the analysis of the Burk’s Coaline Soap-—-it will open the gates for him and others to shoot at my brand. I trust that you will be able to arrahge this so that the very next batch of soap will be just what I am asking for.” Before this time it seems that Grant and the plaintiff had had some negotiations about procuring a plant which would enable the plaintiff to put more petroleum in this soap, and that Grant had said that it would take a great deal of time, trouble and money to make the changes; and in answer to a question as to what it would cost, Grant said about $25,000. Pitcher swore that subsequent to the writing of these letters he called upon Jenkins and that Jenkius referred him to Grant. Subsequently, on November 19, 1896, Jenkins wrote to the plaintiff as follows: “Gentlemen.— I send you by bearer an order for thirty boxes of Coal Oil Johnny’s Petroleum Soap and have instructed you not to ship, unless you can fill the order with soap containing petroleum to the amount of at least ten per cent. It is nearly three months since I notified you that I could not accept any Coal Oil Johnny’s Petroleum Soap unless it contained a commercial amount of petroleum.” The letter goes on to state the reasons why the defendants required that more petroleum should be put in the soap. The plaintiff *416did not fill this order, and since that no order has been received from the defendants. The plaintiff does not claim that it ever had a plant that was able to make the soap containing the amount of petroleum that the defendants demanded and required, or that they ever did make or offer to make any such soap for the defendants. Subsequent to the plaintiff’s refusal to make the soap as required by the defendants, the defendants procured some of this soap from a corporation known as the “ Bell & Bogart Soap Co.,” and it would seem that this soap contained a much larger percentage of petroleum than that manufactured by the plaintiff, viz., about four per cent of the body of the soap, while that manufactured by the plaintiff contained but four-tenths of one per cent.
It thus appears without contradiction that the plant that the plaintiff agreed to furnish, namely, a }ilant capable of manufacturing 400 boxes of this soap per day, was not furnished by the plaintiff. It also appears that the soap as actually furnished by the plaintiff contained a very small quantity of petroleum ; that the defendants insisted that the soap as manufactured should contain more; that other manufacturers were able to manufacture a soap which did contain a very much larger quantity of petroleum ; that the plaintiff refused to comply with the defendants’ request to make the soap as they required it to be made, and refused to furnish such soap as defendants required. It seems to me that this was such a breach of the plaintiff’s agreement under the contract as to preclude it from recovering in this action. At the time this contract was made, it does not appear that there was any formula for the manufacture of this soap. Grant seems to have been the only one who understood the process of manufacture. Experiments had been made in the manufacture of soap in which a considerable portion of petroleum had been used,' and apparently with success, and the defendants, in registering their trade mark, evidently contemplated a soap which would contain a substantial quantity of petroleum. It was this soap, a soap that would comply with the trade mark which the defendants had registered, a soap which would be a petroleum soap, containing a substantial amount of petroleum, that the plaintiff’s agreement required it to make. The defendants had the right to prescribe the formula to be used in the manufacture of the soap that they were to purchase, and the plaintiff was bound, so far *417as practicable, to comply with their demands. It was the defendants’ soap that was being manufactured. It was to be purchased by the defendants and paid for by them, and as the contract did not contain any formula by which the soap to be manufactured by the plaintiff for the defendants was to be made, and as there was no proof that there was a special formula by which the soap had been made before, or that there was any understanding between the parties what the soap that the contract provided for was to be made of, or how it was to be made, the formula to be used in the manufacture of the soap was necessarily such as should be prescribed by the defendants. The evidence is quite conclusive that a soap could be manufactured which would be commercially a valuable soap, with petroleum much in excess of the ten per cent required by the defendants ; and the evidence conclusively shows that the only objection that the plaintiff had to manufacturing the soap called for by the contract was that it would require an additional outlay in ¡irocuring a plant suitable for such manufacture, and yet it was this plant which the plaintiff by its contract had agreed to furnish, and which it is conceded it never did furnish. The plaintiff was bound at least to make some effort to comply with the requirements of the defendants as to the soap it should manufacture for them, and certainly the defendants were not bound to continue to receive from the plaintiff soap that they did not want and could not use; and when the plaintiff refused to furnish them with a soap which complied with the order that they had given, I think it was the plaintiff that broke the contract and not the defendants.
There was a great deal of evidence in the case as to whether or not the addition of this extra petroleum would improve the soap, but it seems to me that all of this testimony is immaterial. Looking at the contract as I do, I think that it was for the defendants to furnish the formula upon which the soap was to be manufactured, and that they had a right to insist that the soap should be manufactured by the plaintiff as they wished it; and the mere fact that the plaintiff imagined that the soap that it was making was a better soap than the soap that the defendants wanted, it seems to me was not a valid excuse for the plaintiff’s refusal to make the soap as directed by the defendants.
*418I think, therefore, that the judgment should, be reversed and a new trial granted, with costs to the appellants to abide the event.
Van Brunt, P. J., concurred.
Judgment modified, so as to provide that the injunction is conditional upon the plaintiff’s performance of its obligations under the contract, and, as thus modified, affirmed, with costs to the plaintiff.