Chain Belt Co. v. Von Spreckelsen

Cassoday, O. J. The case is peculiar, and for that reason tbe facts upon which tbe preliminary injunction was dissolved are pretty fully stated. Tbe essential allegations of tbe complaint are flatly denied in tbe answer, but that did not necessarily make it improper for tbe court to continue tbe preliminary injunction. Valley I. W. M. Co. v. Goodrick, 103 Wis. 436, 78 N. W. 1096. That was an action for tbe specific performance of a contract securing to tbe plaintiff tbe right to manufacture and sell machines embodying tbe defendant’s invention; and in that case it was held, in effect, that tbe plaintiff, having given tbe requisite bond to protect tbe defendant, was entitled to tbe continuance of tbe injunction to preserve tbe status quo and prevent irreparable damage during tbe pendency of tbe action. It was there said by my Brother Marshall, that “the whole subject of granting or refusing interlocutory injunctions rests in tbe sound discretion of tbe court.” And in a later case, speaking for tbe court, be said that “it is only where it is clear that temporary relief for tbe purpose indicated is essential, if all tbe equities of tbe complaint are denied under oath, .that judicial discretion is liable to be abused by not granting it on such terms — 119 — as will adequately protect tbe defendant from serious injury or inconvenience if tbe court shall finally decide that tbe plaintiff is not entitled to tbe relief demanded in tbe complaint.” Chicago & N. W. R. Co. v. Langlade Co. 104 Wis. 374, 375, 80 N. W. 599. See, also, Ward v. Sweeney, 106 Wis. 44, 50, 60, 82 N. W. 169; Milwaukee E. R. & L. Co. v. Bradley, 108 Wis. 468, 486, 84 N. W. 877. In this last case it is said by tbe same justice that: “Notwithstanding tbe conflict between complaint and answer as to tbe facts or tbe law, it'is still within tbe discretionary power of tbe court, by a temporary injunction, to preserve tbe status quo between tbe parties pending tbe final decree and to prevent tbe doing of tbe acts complained of during such pendency if that be necessary to save tbe plaintiff or tbe defendant from irreparable injury by tbe conduct of bis adversary in tbe meantime. . . . The situation of tbe respective parties should receive careful consideration.” In another of tbe cases cited it-was said that: “If a person, on tbe facts alleged, be clearly entitled to a particular remedy, and there be reasonable ground to apprehend tbe facts may be established by proof, and, without a temporary restraining order preserving tbe status quo till the termination of tbe litigation, tbe purpose of the action will be entirely defeated, such temporary restraint should be applied under such circumstances as to reasonably protect all parties to tbe litigation.” Ward v. Sweeney, 106 Wis. 60, 82 N. W. 174. These excerpts would seem to be sufficient to indicate the rule which should govern in tbe granting or refusing of a preliminary injunction. Tbe complaint alleges that "Von Spreckelsen has not sufficient pecuniary resources to respond to any judgftient for damages for breach of such contract” with tbe plaintiff, and that, unless tbe defendants are restrained from carrying out tbe conspiracy, tbe plaintiff will be without remedy, and will suffer great and irreparable damage. In that connection it may be observed that there is no allegation as to the insolv120 oncy of any of tbe other defendants, and tbe wrongful and unlawful acts alleged as to sucb other defendants may perhaps be sufficient to bring the case within the ruling of the Queen’s Bench in a case cited by the plaintiff’s counsel, wherein it was held that an action at law “lies for maliciously procuring a breach of contract to give exclusive personal services for a time certain, equally whether the employment has commenced or is only in fieri, provided the procurement be during the subsistence of the contract and produces damage, and that, to sustain such an action, it is not necessary that the employer and employed should stand in the strict relation of master and servant.” Lumley v. Gye, 2 Ellis & Bl. 216; Walker v. Cronin, 107 Mass. 555. But see Boyson v. Thorn, 98 Cal. 578, 33 Pac. 492, 21 L. R. A. 233. The real purpose of this action is to restrain Von Bpreckel-sen from quitting the service of the plaintiff, in whose employ he had been for ten years, in violation of his contract; and to restrain the other defendants from employing Von Spreckelsen, with the shill, knowledge, and secrets of the plaintiff’s business acquired by him during such ten years’ services, to use the same for the benefit of the defendant corporation, and thus build up a rival business to the injury of the plaintiff. The question as to how far a court of equity may properly go in restraining a person from quitting the employment of one person and entering that of another has been the subject of much controversy. It is conceded by counsel for the plaintiff that courts of equity have always refused to enforce specific performance of contracts for personal services, and that this arises from the inherent weakness and inability of the court to enforce its decrees in such a case. The general rule undoubtedly is that equity will not restrain an employee from quitting the service of his employer in violation of his contract. Fothergill v. Rowland, L. R. 17 Eq. Cas. 132. Thus is it held by the United States circuit court of appeals for this circuit, in a case cited by counsel for the plaintiff, that — 121 — “equity will not enjoin employees of a receiver of a railroad from quitting bis service, although the effect of such action will be to cripple the property or prevent or hinder the operation of the road.” Arthur v. Oakes, 25 L. R. A. 414, 425, 63 Fed. 310, reversing Farmers’ L. T. Co. v. N. P. R. Co. 60 Fed. 803. But there are numerous exceptions to such general rule. In the case last cited it is conceded by Mr. Justice HablaN, speaking for the court, that “courts of equity have sometimes sought to sustain a contract for services requiring special knowledge or peculiar skill, by enjoining acts or conduct that would constitute a breach of such contract. To this class belong the cases of singers, actors, or musicians who, after agreeing for a valuable consideration to give their professional service at a named place and during a specified time for the benefit of certain parties, refused to meet their engagement and undertake to appear during the same period for the benefit of other parties at other places”; citing the leading case of Lumley v. Wagner, 1 De Gex, M. & G. 604. For numerous cases coming within the general rule or the exceptions, see 27 Cent. Dig. 1706-1710, §§ 117, 113. So it has been held in Massachusetts that the “inventor or discoverer of secret process of manufacture, whether patentable or not, has property therein which equity will protect against one who, in violation of contract and breach of confidence, undertakes to apply it to his own use or to disclose it to third persons, and as against third persons having notice of such relations, although he may not have an exclusive right to it as against the public, or against those who in good faith acquire knowledge of it.” Peabody v. Norfolk, 98 Mass. 452, 96 Am. Dec. 664. So it has been held in New Jersey that “an injunction may be allowed to restrain defendants, who were lately employed by complainant, from using in their own factory, or divulging to other persons, certain secrets used by complainant in manufacturing, which they, in consideration of their employment by complainant, had agreed not to di — 122 — vulge; and such injunction should be retained until the final hearing, although all the facts alleged in the bill are denied in the answer.” Salomon v. Hertz, 40 N. J. Eq. 400, 2 Atl. 379. To a similar effect, Fralich v. Despar, 165 Pa. St. 24, 30 Atl. 521; Tabor v. Hoffman, 118 N. Y. 30, 23 N. E. 12; National G. & M. Co. v. Braendly, 27 App. Div. (N. Y.) 219, 51 N. Y. Supp. 93; Harrison v. Glucose S. R. Co. 116 Fed. 304; Cort v. Lassard, 18 Oreg. 221, 6 L. R. A. 653, and note. It is sought to bring the case within this line of decisions, and if it were to be determined upon the allegations of the complaint and the mere denials in the answer, it would probably be successful. But, as more fully set forth in the statement of facts, Von Spreokelsen states on oath that, long prior to the time when he entered the employment of the plaintiff, he was employed as foreman of the pattern and machine department of the Ewart Manufacturing Company of Indianapolis, the originator and founder and first manufacturer of chain belt and chain links, such as the plaintiff now makes, and that the Ewart Manufacturing Company is now the largest manufacturer of such products in the world; that while so employed by the Ewart Company he acquired his knowledge, experience, and skill in the making of all records, drawings, designs, gauges, prints, patterns, and models pertaining to the manufacture of chain belt and chain links, and the reproduction thereof, and of the methods of such manufacture, and the disposition, sale, and shipment of such products, which knowledge he brought with him when he entered the employment of the plaintiff, and that he freely and fully gave to the plaintiff the benefit and advantage thereof, and which knowledge and skill are possessed by many other men engaged in the same line of business; and that his assistant while in the employ of the plaintiff, and who is still in the plaintiff’s employ, and is performing for the plaintiff the services formerly rendered by Von Spreokelsen, is capable of discharging the duties of that position, with the aid of the — 123 — records, designs, drawings, prints, gauges, patterns, and models wbicb bad been prepared by Von Spreckelsen or under bis directions, all of wbicb are now'in tbe plaintiff’s possession. Sucb statements are emphasized by denials and further allegations in other parts of tbe answer. If they are true, Von Spreckelsen has no secrets or secret respecting tbe plaintiff’s business, and no peculiar skill not possessed by others, some of whom are now in tbe employ of tbe plaintiff. If they are not true, it would have been a very easy matter to show it. No attempt has been made to dispute or disprove sucb statements. They must be accepted, therefore, as verities in tbe case. In view of sucb admitted facts, was it an abuse of discretion to dissolve tbe preliminary injunction ? In Wm. Rogers Mfg. Co. v. Rogers, 58 Conn. 356, 20 Atl. 461, 7 L. R. A. 779, 781, 782, tbe complaint alleged, in effect, that tbe defendant bad agreed to serve tbe company for tbe period of twenty-five years, if be lived so long, at a salary named, as general agent and manager, and to give bis entire time and service to tbe business of tbe company, and not to engage or allow bis name to be employed, in any manner, in any other similar business, but in violation of bis agreement he conspired with others to form a new corporation to enter upon a similar business to tbe injury of tbe plaintiff. Tbe trial court sustained a demurrer to tbe complaint, and rendered judgment thereon, refusing to enjoin tbe defendant from leaving tbe employment of tbe plaintiff or engaging in other business in violation of bis contract; and the same was affirmed by tbe supreme court, where it was held that “contracts for personal services will not be specifically enforced in equity. Tbe negative enforcement of a contract for personal services by an injunction will not be made where tbe services are not purely intellectual, peculiar, or individual in their character.” So in a ease in New York tbe court reversed an order continuing a preliminary injunction “to restrain defendant from working for a certain firm, or for any — 124 — other person or corporation, as a lithographic designer or lithographic sketch artist, in violation of a contract of employment by plaintiff. It appeared that much of the work for which he was employed by the plaintiff was purely mechanical, and that there was nothing uncommon in his qualifications. There was no proof that his place could not be adequately supplied, and none of damage or actual injury.” Strobridge L. Co. v. Grane, 12 N. Y. Supp. 898. So in another case in the same state a judgment was affirmed which refused to restrain defendant from giving his services to a rival newspaper in violation of his contract with the plaintiff, with which he had long been connected, and was familiar with its methods — particularly in the advertising department — on the ground that the services rendered were not so unique and extraordinary that they could not be performed by a substitute; that, although they had heen performed by a substitute at a loss, yet it was not a proper case for ¿m injunction. W. J. Johnston Co. v. Hunt, 66 Hun, 504, 21 N. Y. Supp. 314, affirmed in 142 N. Y. 621, 37 N. E. 564. So it is held in Georgia that “unless personal services are individual and peculiar, because of their special merit or unique character, a negative covenant (even when express) not to render them to others than the plaintiff, will not be enforced by injunction.” Burney v. Ryle & Co. 91 Ga. 701, 17 S. E. 986. See, also, Whitwood Chemical Co. v. Hardman [1891] 2 Ch. 416. Applying the principles of law embodied in these cases to the admitted facts in the case at bar, and it is obvious that the plaintiff is not entitled to an injunction, unless upon the final hearing it produces proof not suggested in the record before us. We are unable to say that there was any abuse of discretion in dissolving the preliminary injunction. By the Court. — The order of the circuit court is affirmed.