Court Opinion

ID: 5183924
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:45:49.110891+00
Date Added: 2024-06-11T08:26:40.360134
License: Public Domain

Ingraham, J. (dissenting):
The complaint alleges three causes of action: First, that the plaintiff, a domestic corporation, on and before the 14th of September, 1895, purchased from one Delery a certain manufacturing business, conducted in the city of New. York, which business consisted of a lease of the premises, 502-504 West Forty-fifth street, some old machinery and some secret processes for manufacturing products described in the complaint; that said secret processes were owned by the said Delery, but were not known to him, but were known to the defendant, and were the .most valuable part of the business so owned by the said Delery; that on the 14th day of September, 1895, it was mutually agreed between plaintiff and defendant that if plaintiff would purchase the said business from said Delery and would agree to engage the defendant as its agent at a salary of twenty-five dollars per week, and to give to the defendant an interest in the profits of said business, said defendant would work as the agent of the plaintiff, would disclose and show to the said plaintiff all the secret ¡processes which the plaintiff was about to purchase from the-said Delery, would agree not to communicate the said processes to anybody else, and would agree not to manufacture the articles from said processes himself should lie thereafter leave plaintiff’s ■employ, nor to engage in the same line of business; that plaintiff purchased said business from said Delery, engaged the defendant at a salary of twenty-five dollars per week, gave to said defendant an interest in the profits of its business and performed all parts of its said agreement by it to be performed; but that the said defendant, although duly requested, has failed and refused to disclose and show to the said plaintiff the various secret processes, has failed to perform his part of the said agreement, and has, without just cause or reason, left the employ of the plaintiff, has started a factory for the purpose of manufacturing the said articles from the said processes above herein mentioned, and has notified the plaintiff that he intends to manufacture the same and to stay in that-line, .of business ; that the said defendant has organized.said business- about five blocks distant from that of the plaintiff. , k
For a second cause of action plaintiff alleges that it was mutually agreed between plaintiff and defendant that defendant should work as an agent of plaintiff to improve the secret processes which plain*228tiff had purchased of the said Delery, and to discover other secret processes for making new products; and in consideration of and for defendant’s agreement SO' to work for plaintiff, plaintiff agreed to-give defendant a salary of twenty-five dollars per week and an interest in the profits of its business; that while in the employ of the plaintiff, and while engaged in working on behalf of plaintiff, defendant made improvements in the processes which plaintiff had purchased of said Delery, and defendant also discovered another secret process for the manufacture of plaintiff’s goods ; that the defendant has threatened and is about to use said improvements and the said process which he discovered while in the plaintiff’s employ to manufacture for the company which he has organized, and to disclose the same to the parties interested in the said company, which threat, if carried out by said defendant, would be a great disadvantage to the plaintiff.
For a third cause of action it is alleged that it was mutually agreed between plaintiff and defendant that, in consideration of and for plaintiff’s engaging defendant as above stated, the defendant would agree not to disclose any secrets or secret processes, or other ■information relating to the business of the plaintiff, which said defendant should learn from other employees of the plaintiff, while said defendant was in the plaintiff’s employ; that while in the employ of the' plaintiff said defendant learned certain secret processes described, and that the defendant, has left the plaintiff’s employ, has organized a corporation, and is about to start the manufacture of various articles now manufactured by plaintiff, as in the first and second causes of action alleged; and the plaintiff demands judgment restraining the defendant from disclosing to any. person or persons information concerning the manufacture of the articles mentioned in the complaint, or disclosing to any person or persons any information concerning the improvements in the processes .which said defendant discovered while in the plaintiff’s employ, and from manufacturing any of the articles, described in the complaint, or aiding in the manufacture of the same.
The general manager of the plaintiff corporation, who purchased the business from Delery, testified that before he made the purchase he had a conversation with the defendant, who stated to him that he was acquainted with the secret processes employed in the conduct *229of the business; that he could make the goods “ better than anybody on the market; ” that he had a large trade with several wall paper manufacturers whom he could control, and that if the plaintiff purchased the business he would stay with the plaintiff, disclose all these secrets' and, as the witness stated, “ he promised everything.” “We were to give him so much a week; I believe it was $20 or $25 a week — $25 a week.” Subsequently the witness had another conversation with the defendant. At this conversation the witness told the defendant that he was about to close with Dr. Delery and buy the business, and that the witness wanted the defendant to understand that without him the plaintiff would be practically powerless to go on with the business, because none of them knew anything about the business and had never engaged in any business like it before. “ I said to the defendant that if we buy .this business from Dr. Delery, will you agree -to stay with us,, show us the business—show me particularly, and put down all the formulae, and then after we are in it, and invest more money, you must agree that you will never leave us in the lurch and go out with anybody else, and start any business, or disclose these secrets to anybody else, otherwise we wouldn’t buy the business. He then assured me that if we bought the business from Dr. Delery, and paid him twenty-five dollars, a week as a salary, that he would disclose all these secrets; that he had other things which he thought he could make, and which he would try to make, and he would never go into the same line of business.” The witness further testified that they then purchased the business from Delery, paying $2,700. for it, and that the same was purchased solely on the faith of the representations of the defendant; that-thereafter, on behalf of the plaintiff, the witness engaged the defendant to work for the plaintiff and he started in to work for the plaintiff; that his salary, at that time, was twenty-five dollars a week; that he subsequently -asked the defendant to show him how to make the various articlés which the plaintiff purchased of Delery, ■ but that “he put it off on one pretext or another,” and. failed to disclose such secret processes ; that the defendant was in the employ of the plaintiff until some time in February, 1897, when the defendant called the witness’ attention-to the promise of an interest in the profits of the business, and asked whether it could be arranged so that he (defendant) could get an interest in the business; that the *230witness said, “ Yes, if you do your duty, and we make money, I will see that you get a fair interest in it.” This, was all apparently that was ever done toward giving the defendant an interest in the business which, it is alleged in the complaint, the plaintiff promised the defendant; and immediately after their conversation and" the refusal by the plaintiff to give the defendant an interest in the business, the defendant left the plaintiff’s employ. The bill of sale from Delery to plaintiff was not produced. The witness says that he does-not remember what the bill of sale of the business contained, or whether, it said anything about secret processes, but that he does not think it did. The witness further testified that before he purchased the business the defendant said to him : “ ‘ If you will buy this business I will' show you and instruct you in the manufacture of all these articles.’' 1 said, ‘ Supposing we could not agree, or anything ? ’ He said,I can make-a living; I can go into another line; I have been' in other lines.’ I said, ‘ You know it would ruin us, because I don’t; know the people, and it would take me some time.’ He said, ‘ I will stay with you until you thoroughly know everything.’ He said, 1 ■ won’t agree to.stay with you forever; but if I don’t, I will agree not to go into that line.’ That was before we purchasedthe business.” The witness testified to other conversations with the defendant, but they, were substantially to the same effect. There was no agreement made by the plaintiff that they would employ the defendant for any particular time, or that they would ever pay him any sum of money.Nor was there ever any consideration paid to the defendant.
It is.quite clear that this contract was unilateral. It imposed no obligation upon the plaintiff to do anything. Eor it the defendant received no consideration. The defendant was at the mercy of the plaintiff, and could be dismissed at any moment. The condition ■ upon which the obligation of the defendant arose was, that if the plaintiff would employ him by some valid contract of employment, at a salary of twenty-five dollars a week, and would give him an interest in the profits of the business, the defendant would work as agent of the plaintiff in the management of the business. It is not alleged that plaintiff offered to make any such contract with the defendant. - He was simply continued in the employ - of the plaintiff and paid a salary while so employed; and it expressly appears from the testimony of the plaintiff’s manager that *231the defendant requested the plaintiff to give him an interest in the business, which the plaintiff refused to do; so that, so far as the plaintiff assumed any obligation to the defendant, the plaintiff had refused to perform it. That a court of equity should by decree specifically enforce a contract thus made, when the party seeking such judgment had neglected to perform the covenants which it assumed, and specifically refused to give to the defendant an interest in the business which the plaintiff admits it promised, would be opposed to all principles of equity and would result in merely compelling the defendant to remain in the plaintiff’s employ while the plaintiff, on its part, was under no obligation' to continue such employment and had refused to give the very interest which was the inducement to the defendant to make the promise. It is quite evident that if the defendant were to remain in' the employ of the plaintiff, devoting all his time to the advancement of the business, making inventions for the benefit of the business and disclosing such inventions when made to the plaintiff, his protection required that he should have some binding obligation from the plaintiff by which he would be assured some advantage from his effort's and inventions, and when the plaintiff refused to make any such binding contract which would place the defendant in a position to enforce it so that he would not be subject to a discharge at the mere whim and pleasure of the plaintiff, it would seem to be most inequitable to compel the defendant by injunction specifically to perform the agreement on his part, and thus create by '■ injunction an involuntary servitude which would continue during' the pleasure of the master, but which the servant had no power to terminate, and upon its termination would be entitled to no advantage for the services which he had rendered, except the compensation allowed during the continuance of the employment. There was nothing in the agreement between the plaintiff and the defendant by, which the defendant agreed that his inventions or discoveries during the time of his employment by the plaintiff should belong to the plaintiff, or should be its exclusive property. Nor is it shown that the inventions by the defendant prior to the time that the plaintiff purchased the business were in any sense the property of the former owner of the business. Whatever right this plaintiff acquired by the purchase of the business from Delery, it does not appear that Delery *232in terms attempted to convey to the plaintiff the secret processes that Delery had invented and used. The evidence as to any agreement between plaintiff and the defendant is extremely indefinite, consisting only of conversations by which the defendant sought to induce the plaintiff to purchase the business. It seems to me clear that there was no binding agreement intended to' be made by these conversations, certainly none that was understood to be binding upon the plaintiff, and that the plaintiff, although requested to make some sort of a binding agreement which would give to the defendant ■some assurance that he would have an interest in the business, refused to do so. It seems to me that upon this evidence there was no contract proved which would justify a court of equity in decreeing specific performance. Whatever understanding there was ■ between the jDarties, the plaintiff has failed to perform what was to be performed upon its part. The complaint does not allege that the defendant has threatened, or is about to disclose the secret processes which he used in .the business prior to the time that it was purchased by the. plaintiff. The only allegation as to threatened disclosures is contained in the second cause of action which relates merely to the improvement of the secret processes -made by the defendant subsequent to the purchase of the business ; but it is not alleged, nor was it proved, that there was any agreement by which the plaintiff should be the owner of the secret processes discovered by the defendant after the plaintiff purchased the business, and there is not a particle of evidence in the case to show that the defendant has ever threatened to, or has ever disclosed such secret processes to any one. The only evidence is that when the defendant left the plaintiff’s employ he organized a company to. carry on the business which he had before been employed by the plaintiff- to carry on. In the absence of an allegation that the defendant was about to divulge the processes of which he had acquired a knowledge while engaged in the plaintiff’s business, or in the business that had been acquired by. the plaintiff, it certainly was not entitled to an injunction restraining such disclosures, and the only evidence at all in the case is that the defendant, having left the plaintiff’s employ because the plaintiff had refused to give him an interest in. the business, is about to continue a business to earn his own livelihood, and in continuing. that business on his own account, to use the knowledge that *233be has acquired, and which, it is not alleged or .proved, was the property of the plaintiff.
I think, therefore, that the whole evidence clearly shows that there was no- contract binding upon the defendant which the plaintiff was entitled to enforce, and that there was no evidence to show that the defendant was either about to or had violated any duty which he owed to the plaintiff or that entitled the plaintiff to any relief.
For these reasons I think the complaint was properly dismissed and that the judgment should be affirmed, with costs.
Barrett, J., concurred.