UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK
June 9, 1959
Eddie MACHEN, Plaintiff,
Ingemar JOHANSSON, Defendant
The opinion of the court was delivered by: KAUFMAN
In this action tried to me without a jury the plaintiff seeks to enjoin the defendant from engaging in a boxing match with Floyd Patterson, the heavyweight champion of the world, scheduled to be held in New York City on June 25, 1959, approximately two weeks from today. He asks that this injunction continue until the defendant shall have engaged in a return boxing match with the plaintiff.
Plaintiff's claim for an injunction is grounded upon the contention that the defendant had agreed to a rematch with the plaintiff and had also agreed not to engage in any fights in the United States and specifically not to fight Floyd Patterson anywhere in the world before the rematch with the plaintiff had been held. At this juncture a brief statement concerning the factual contentions is in order.
In 1958 and until September 14, 1958, the plaintiff was recognized by the National Boxing Association and 'Ring Magazine' (a recognized publication in the boxing world) as the Number One or Number Two challenger for the world's heavyweight title. The defendant was the European heavyweight champion and ranked 6th or 8th.
In the latter part of April, 1958, negotiations for a boxing match between plaintiff and defendant to be held in Sweden were begun between the Swedish promoter Edwin Ahlquist and Eddie Machen's manager, Sidney Flaherty, or his designated agents.
After preliminary negotiations the plaintiff mailed and Ahlquist received a letter dated June 7, 1958, containing plaintiff's terms for a boxing match in Sweden.
The letter stated among other things 'one of the conditions of Eddie Machen meeting Ingemar Johansson is that should Johansson win then he agrees to a rematch with Machen, said rematch to take place in San Francisco at a date to be agreed upon when we arrive in Sweden.'
On June 27th Flaherty telegraphed Ahlquist urging a reply to his letter of June 7th. Here, a serious cleavage in the facts develops. Ahlquist insists that sometime between June 12th and 15th, or in that vicinity, he replied to Flaherty advising him that Johansson would not agree to a rematch provision. A copy of the purported letter n.3 [Footnote Omitted] was produced at the trial and it was asserted by Ahlquist that he had prepared the letter in handwriting and then gave it to an employee to type and mail, his regular secretary being absent because of illness. In this letter and in his testimony at the trial Ahlquist insisted that the declination of a return match was the direct result of specific instructions received by him from Johansson.
In a subsequent telegram, dated July 18th, Ahlquist agreed to arrange a contest pursuant 'to your terms in previous letter.' There was a further exchange of letters ultimately leading to the signing of an agreement, dated August 3rd, between Ahlquist as 'promoter' and Western Promotions, Inc., a corporation of which Flaherty was President, as 'manager'. This document (Exhibit 10-A) does not contain any provisions for a rematch. Plaintiff's explanation is that he did not expect such a provision in a contract between a promoter and plaintiff's manager and, therefore, did not insist upon the provision in this agreement. Ahlquist, plaintiff claims, was acting in two capacities. He urges that by Ahlquist's telegram of July 18th accepting all of the terms contained in the letter of June 7th, defendant had already agreed to the rematch. Plaintiff asserts that Ahlquist was the promoter of the Swedish fight as well as Johansson's manager and agent. Defendant, on the other hand, points to this agreement as containing all of the terms agreed upon and the absence of the rematch provision as indicating that it was never consented to.
The fight between plaintiff and defendant was scheduled to take place on September 14, 1958, in Gothenburg, Sweden. Plaintiff, has manager and party arrived in Sweden in late August 1958. It is plaintiff's contention that on the day of his arrival his manager Flaherty approached Ahlquist with the demand that the details of a proposed rematch be agreed upon and embodied in a writing. Defendant, on the other hand, introduced testimony to show that Flaherty's first demand for a rematch was made in Sweden on September 12th, two days before the fight. It is Flaherty's position that as plaintiff's agent he had reached an agreement, prior to his departure for Sweden, that there would definitely be a rematch in the event of a defeat of the plaintiff at the hands of the defendant; that only details remained to be worked out and that this was what he was attempting to do in his pursuit of Ahlquist during the days immediately preceding the September 14th match. Ahlquist, of course, denies that there was an agreement for a rematch and insists that it had been specifically rejected in his June 1958 letter. He insists that the conduct of Flaherty on the eve of the Swedish bout constituted coercion and duress; that Flaherty threatened that if a rematch provision was not promptly reduced to writing and the terms finalized, he and his fighter would leave Sweden at once and not fight Johansson. It is conceded by Flaherty that he told Ahlquist on September 12th that there might be no fight unless a rematch agreement were signed. This, Ahlquist insists, had catastrophic implications for him since he had invested over a $ 100,000 as promoter. If the fight were cancelled it would have meant financial ruin for Ahlquist and the end of his reputation as a promoter. In any event, on September 13, 1958, a document prepared by Flaherty
was signed by Ahlquist in the room of Sidney Flaherty at the Park Avenue Hotel in Gothenburg, Sweden. The document was witnessed by Olof Ahlsted, a Swedish lawyer, who represented Mr. Ahlquist, and Sven Holmberg.
On September 14, 1958, the fight was held between plaintiff and the defendant, resulting in the surprise knock-out of the plaintiff by the defendant in the first round. As a result of his dramatic victory over Machen, Johansson was immediately thrust into a position of prominence in the boxing world. The November 1958 issue of Ring Magazine stated that, as of September 16, 1958, Johansson was the number one ranked contender, and Machen number five. The National Boxing Association ratings listed Johansson as second and Machen as fifth. On January 29, 1959, after months of negotiations between Johansson, Ahlquist, promoter Rosensohn and Cus D'Amato, manager for Floyd Patterson, an agreement was signed for a match between Patterson and Johansson. These negotiations began the day after Johansson's victory.
Defendant has refused to honor the alleged agreement for a rematch and to recognize the document of September 13th on several grounds: (1) He contends that Ahlquist was never his agent, actual or apparent, and was never given authority to sign this agreement in his behalf, and that Flaherty had been specifically informed that defendant would not agree to a rematch; (2) that the agreement was obtained by coercion and duress; (3) that the agreement for a rematch in void and unenforceable for lack of consideration and is further invalid because its terms are indefinite and uncertain. Other grounds are urged, such as the inability of the International Boxing Club, named in the document of September 13th as the promoter of the rematch, to perform because of its dissolution pursuant to a decree of Judge Ryan in an anti-trust suit brought against it. United States v. International Boxing Club, D.C., 150 F.Supp. 397; 171 F.Supp. 841; 358 U.S. 242, 79 S. Ct. 245, 3 L. Ed. 2d 270.
As I have already stated, plaintiff seeks drastic relief by his prayer for an injunction restraining the defendant from engaging in the boxing match with Floyd Patterson now scheduled for June 25th and for a continuance of this injunction until Johansson shall have engaged with the plaintiff in a rematch. I am convinced that the applicable law prevents me, in the light of the facts in this case, from granting the equitable relief sought by the plaintiff. Furthermore, even if such relief could be granted, I would deny the injunction in the exercise of my discretion. I, therefore, find it unnecessary to determine whether Ahlquist had actual or apparent authority to enter into the September writing on behalf of Johansson or to agree to any provisions for a rematch in his behalf. Likewise it becomes unnecessary to decide whether the document of September 13th was extracted by duress or coercion or whether it was based on adequate consideration.
By reason of this disposition it follows also that any alleged violation of Judge Ryan's decree or assertion of a conspiracy to violate the Sherman Act, 15 U.S.C.A. §§ 1-7, 15 note, need not be dealt with. In short, I make no findings or conclusions concerning the validity of the writing of September 13, 1958, or the enforceability of any part of that writing except the negative covenant contained in paragraph 5 thereof.
Meaning of the Negative Covenant.
Even were I to assume that the writing of September 13, 1958, constitutes a valid agreement between Machen and Johansson for a return fight in the event of Machen's defeat in the September 14, 1958, fight, I would be compelled to hold that Machen is not entitled to the injunction be seeks.
It is black letter law that although a contract may be valid it may not necessarily provide the basis for equitable relief. This is not to say that the aggrieved party is left without any remedy. The usual form of redress in cases of breach of contract is money damages. Only in the most unusual case will a court of equity act upon the person of the defendant to restrain him from doing some act which the plaintiff claims may cause him irreparable injury. This is particularly true where, as in this case, the plaintiff seeks to restrain the defendant from freely practicing his trade. His right to this relief must be clear, reasonable and well defined.
In order to determine what rights and obligations may flow from the writing of September 13, 1958, I must first determine what the parties intended to achieve by that writing. My task in this case is to examine the words employed by the parties against the background of all of the circumstances under which the contract was drawn. It is only by interpreting the words of others that we may give meaning to their expressions. In the words of Professor Corbin:
'In reading each other's words, men certainly see through a glass darkly; * * * the best that a judge can do is to put himself so far as possible in the position of that person or persons (whose meaning and intention are in issue), knowing their history and experience * * * and then to determine what his own meaning and intention would have been.' 3 Corbin, Contracts 13, 23 (1951).
So viewing the contract, it is clear on its face that the parties intended to ensure Machen an opportunity to fight Johansson in a return match in the event the Machen lost to Johansson in Sweden. The return bout was to be held in Chicago under the auspices of the International Boxing Club specifically during the last week of January or the first two weeks of February, 1959. No provision was made in the agreement for a postponement or for any alternative time within which the fight was to be held. It, therefore, appears that it was the intent of the parties that Johansson was to have performed the affirmative aspect of the contract by the end of the second week of February 1959 and that if he failed to do so he would have breached his obligation. As I have already stated, there was included in the writing of September 13, 1958, a negative covenant providing that Johansson 'will not box anyone in the United States and will not box Floyd Patterson under any conditions any place in the world until the above agreements have been fulfilled.' If plaintiff is entitled to the injunction he seeks, that right flows from this negative covenant. However, while the covenant clearly exhibits an intention to place some restrictions on Johansson's activities as a fighter, it provides me with no clue as to the period of time during which those restrictions were intended to run. The only temporal limitation to be found in the negative covenant is contained in the words 'until the above agreements have been fulfilled.' The 'above agreements' must have reference to the provision relating to the return fight. Thus, the contract is subject to two possible interpretations:
(1) that the negative covenant would run until the time when the return match was scheduled to be held, i.e., no later than February 14, 1959;
(2) that it would run until such time as the return fight was actually held, or until a tender of performance by Johansson was refused by Machen, even if that time ran indefinitely beyond the dates specified in the agreement.
I am compelled to conclude that the parties never intended that the negative covenant run beyond February 14, 1959, the last date for performance of the return bout provision. It may be conjectured that Flaherty was fearful that Johansson, should he defeat Machen and thereby gain a reputation which would be readily saleable in the United States, would not be able to resist the temptation to exploit that reputation in the months between the original Machen-Johansson fight and the return. Had Johansson engaged in an interim bout and lost, it would have seriously impaired his reputation and thus have detracted from the value of the return bout agreement. This is the eventuality against which Flaherty sought to protect his fighter.
However, plaintiff would have me adopt a different interpretation of the covenant. He now urges that, in contracting to fight Johansson, Machen gave to Johansson 'the opportunity to make an important improvement in his competitive position in the boxing world.' The instant covenant, plaintiff argues, was intended to prevent Johansson from utilizing his advanced position in competition with Machen until Machen shall have an opportunity to engage him in a return fight. However, a consideration and evaluation of all of the evidence in the case leads me to the conclusion that the interpretation advanced by plaintiff is the less probable of the two possible alternatives.
Under plaintiff's theory, the negative covenant could run on without restriction for an indefinite length of time. This might conceivably be for the remainder of Johansson's life should he never agree to a return match with Machen. Plaintiff concedes that the possible advancement in Johansson's position as a fighter was one of the primary inducements on Johansson's part in entering into the contract for the September 14, 1958, fight with Machen. It is difficult to believe that Ahlquist, if he was acting in Johansson's behalf, or Johansson himself, would ever agree to a contract term which might forever bar Johansson from the beneficial enjoyment of that advanced position.
I find that plaintiff has failed to establish that at the time the parties entered into the alleged agreement of September 13, 1958, they intended the negative covenant to run beyond February 14, 1959, the last date upon which the return fight was to be held.
The injunctive Relief Sought.
However, even were I to conclude that the parties intended to restrict Johansson's right to fight indefinitely and until such time as he would agree to engage Machen in a return fight, I would not enforce such a covenant by injunction.
Plaintiff urges upon me that the instant covenant is similar to
that category of restrictive covenants ancillary to contracts of employment, where the employee, having gained a professional advantage through the employment, may properly be restrained from using that advantage in such a way as to do serious injury to his employer after the employment has terminated.
Plaintiff argues that, by engaging Johansson in the initial fight, he advanced Johansson's professional standing, and that it was, therefore, reasonable for him to restrain Johansson from using that advanced standing to harm Machen.
Defendant, on the other hand, answers that restrictive covenants based upon a promise to refrain from competition are not valid unless they are ancillary either to a contract for the transfer of good will or other property, or to an existing employment or contract of employment. Restatement of Contracts, § 515. Defendant asserts that he was never an employee of Machen's nor was he ever engaged in a transfer of good will.
I need not pass upon the correctness of this proposition of law. I find that the instant covenant even as interpreted by plaintiff is not enforceable by injunction for two reasons:
(1) It is not reasonable in its terms;
(2) The granting of an injunction would inflict serious injury on the defendant, while not providing the plaintiff with the protection he seeks.
(a) Reasonableness of the terms of the covenant.
Injunctive relief is an extraordinary remedy to be granted sparingly. Worthington Pump & Machinery Corp. v. Douds, D.C.S.D.N.Y.1951, 97 F.Supp. 656, 661. Where restrictive covenants have been enforced they have usually been sharply defined as to time and area. See 9 A.L.R. 1468 et seq. and cases cited therein. While it is true that there are cases in which restrictive covenants, running for the life of the one restrained, have been enforced, in such cases the restriction extended to a very limited area only. See Fitch v. Dewes, 2 A.C. 158 (Eng. 1921). The instant covenant is extremely broad geographically. It prevents Johansson from fighting anyone in the United States and from fighting Floyd Patterson anywhere in the world. If such a restriction is imposed upon Johansson for an indefinite period of time it would be tantamount to denying him the right to advance himself within his trade or to fight in the United States which, it was testified to, offers the most fertile field for fights. I find that this would constitute an unreasonable restraint.
(b) The ineffectiveness of the remedy sought.
Finally there is no way that an injunction could be framed to secure for plaintiff the results he seeks without at the same time placing Johansson under an intolerable restriction.
'Equity not infrequently withholds relief which it is accustomed to give where it would be burdensome to the defendant and of little advantage to the plaintiff.' DiGiovanni v. Camden Fire Ins. Ass'n, 1935, 296 U.S. 64, 71-72, 56 S. Ct. 1, 5, 80 L. Ed. 47.
A restriction running for only a limited period would be ineffective. Let us explore this further. Were I to restrain Johansson from fighting Patterson or fighting anyone in the United States for, let us say, one year, he might well return to Sweden, engage in several contests in Europe during the year, and then, upon the expiration of the injunction, again contract to meet Patterson. This would neither safeguard Machen's reputation nor secure for him a return match.
Nor would a longer term injunction be satisfactory. Were I to restrain Johansson from fighting for two or three years the damage to him would be very great. He would be unable to advance his position by fighting in the United States during a period that might well represent a relatively large portion of his effective ring career. Yet the benefit to plaintiff from such a restriction would be small. Machen would undoubtedly engage in bouts with other fighters during the period when Johansson was under the restriction. Indeed, he has already engaged in one such fight since his defeat by Johansson on September 14, 1958. Each time Machen fought, the outcome would have an impact, for good or ill, upon his standing as a fighter. These subsequent fights, and not any activity upon Johansson's part, would form the basis of the sports world's evaluation of Machen's abilities. Thus, while it may be argued that at this moment Johansson in effect carries Machen's reputation into the ring with him, this is a situation which will be of but short duration.
In summary, I find that plaintiff has failed on a number of grounds to demonstrate his right to the extraordinary relief he seeks:
(1) There is nothing to indicate that the parties intended that the negative covenant was to run beyond February 14, 1959 and in fact it is apparent that the parties intended the restriction to run only until that date.
(2) If the covenant was intended to run indefinitely beyond February 14, 1959, it is unenforceable because it would place an unreasonable restriction upon defendant.
(3) No injunction could be framed which would provide plaintiff with the results he asks without placing defendant under an intolerable and unreasonable burden.
Any one of these grounds would be sufficient in itself to deny plaintiff the relief sought.
In the light of all the foregoing, I deny plaintiff's application for an injunction, leaving him to whatever legal remedies may be available to him.
The foregoing will constitute the findings of fact and conclusions of law of the court under Rule 52, Federal Rules of Civil Procedure, 28 U.S.C.A.