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John T. Stanley Co. v. Lagomarsino

May 4, 1931

JOHN T. STANLEY CO., INC.,
v.
LAGOMARSINO



Appeal from the District Court of the United States for the Southern District of New York.

Author: Hand

Before MANTON, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge.

This is an appeal from an order granting a preliminary injunction, and the question is whether it was properly allowed on the record before the District Court.

The defendant was for a time engaged on his own account in collecting grease and fat from restaurants for sale to soap makers. His business was conducted in the states of New York and New Jersey under the name of Jersey Fat Corporation.

The complainant was a corporation engaged in buying fats, grease, bones, and similar materials suitable for the manufacture of soap and certain other by-products which it sometimes rendered into soap and at times sold. It had been in business many years, and had built up a large trade and good will.

The story as told in complainant's affidavits is that the defendant in August, 1926, sold his business good will and two trucks to one James Carty under a written agreement whereby defendant was to receive $10,000 therefor, and was not to engage in the same or a similar business within the states of New York or New Jersey, or to solicit customers in such a business on his own account, for a period of ten years, and was to work for Carty for that period at $50 per week. The written contract contained no promise by Carty to employ the defendant. It provided that the covenants should inure to the benefit of any assignee of Carty who transferred to the complainant all his rights under it.

The written agreement contained the following clause specially bearing upon the negative covenants on the part of the defendant not to engage in the business referred to:

"It is however understood and agreed that this agreement and the covenants herein contained shall in no wise be affected by reason of the fact that the undersigned shall be employed by the said James L. Carty, his legal representatives or assigns, it being intended that this agreement shall be in full force and effect in any event during the said period and time and within said territory at any time after the undersigned shall leave the employ of the said James L. Carty, his legal representatives or assigns.

"The undersigned has agreed to be employed by the said James L. Carty and said employment shall in no wise affect the operation of this agreement."

The defendant was paid the $10,000 for his trucks and good will and worked for the complainant at wages of $50 per week until October 24, 1930, when the latter terminated the employment. The defendant then began to do business in New York and New Jersey on his own account and to solicit complainant's customers. Thereupon complainant filed its bill to enjoin defendant from doing business contrary to the terms of the agreement and obtained a preliminary injunction. It is from the decree granting such injunction that this appeal has been taken.

The written contract is part of the moving papers, and the only issue of fact raised by the defendant is that it did not represent the real agreement between the parties.

The defendant filed an affidavit in opposition to the motion for an injunction in which he said that the contract which he signed was prepared by a lawyer at the instance of one Harry Daiber, who was the general manager of the collection and rendering department of the complainant; that the latter told him that he would be employed by the complainant for ten years at a salary of $50 a week and that he did not need any lawyer or anybody else to attend with him at the time the contract was to be signed. The affidavit also stated that the defendant did not read English very well and did not read the contract at all; that Daiber had the papers in front of him and professed to read parts of them, or rather to paraphrase parts of them to him; that Daiber repeatedly assured defendant that by the papers he was selling the trucks and business to a person named Carty for the sum of $10,000, and that by the contract he was to be employed by the complainant for a period of ten years at a salary of $50 a week, and that for the next ten years he "was all fixed and would have nothing to worry about." The affidavit also said that upon the strength of this statement the defendant signed the papers presented to him by Daiber; that he asked the latter for a copy of the papers which he had signed, but was told that it was not the practice to allow copies of papers of that kind to leave the office, and that it was not necessary for him to have a copy of the papers because the arrangement was just as had been explained. The defendant swore that he never saw either the original papers which he had signed, or a copy, from the time of signing until November, 1930, when he was discharged, without any cause except that lower priced workmen could be obtained. No affidavit was filed by complainant denying the foregoing statements.

The affidavit of the defendant read upon the hearing for the preliminary injunction thus indicates (1) that he was an illiterate man who was misled by the complainant's agent as to the contents of the writing; and (2) that ...


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