Court Opinion

ID: 5740685
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:41:12.061595+00
Date Added: 2024-06-11T08:41:03.749869
License: Public Domain

Valente, J. (dissenting).
An injunction pendente lite was properly denied in this case. Plaintiff’s entire case is predicated on the efficacy of the license agreements made with merchants for the use of plaintiff’s trading stamps. Under such agreements the plaintiff authorizes merchants to use its Gold Bond Stamp Plan and agrees to supply the necessary books and advertising literature for the merchant’s use. The licensee agrees to purchase stamps from plaintiff at a stipulated price. There is provision that the agreement shall remain in force for one year with the proviso that the licensor or licensee shall have the option of canceling upon 45 days’ written notice. Finally the licensee agrees that in the event it discontinues the Gold Bond Stamp Plan, it will not use a competitive stamp or coupon plan for a period of 60 days after the termination.
As I view these license agreements, they do not impose on merchants a duty to deal exclusively in plaintiff’s stamps. Hence, defendant’s activities in selling their trading stamps to merchants who had license agreements with plaintiff did not constitute wrongful interference with valid contracts. The restrictive termination clauses contained in plaintiff’s contracts constitute a penalty or forfeiture which a court of equity should *21not enforce. In fact, they constitute unreasonable restraints of trade prohibited by section 340 of the General Business Law and the Federal statutes.
Therefore, I dissent, and would affirm the denial of a temporary injunction.
McNally and Eager, JJ., concur with Steuer, J.; Valente, J. P., dissents in opinion.
Order entered on May 4,1962 insofar as it denies temporary injunction as against defendants E. F. MacDonald Stamp Co., Andrich, MeArdle and Fallon reversed, on the law and the facts and in the exercise of discretion, and in other respects affirmed, with $20 costs and disbursements to appellant. Settle order on notice.