Essex Trust Co. v. Enwright

• Citation: 214 Mass. 507,102 N.E. 441
• Parties: ESSEX TRUST CO. v. ENWRIGHT et al.
• Decision Date: 23 May 1913
• Court: United States State Supreme Judicial Court of Massachusetts

214 Mass. 507

102 N.E. 441

ESSEX TRUST CO. v. ENWRIGHT et al.

Supreme Judicial Court of Massachusetts, Essex.

May 23, 1913

COUNSEL

Johnson Clapp & Underwood, of Boston, for plaintiff.

Chas S. Hill, of Boston, for defendants.

OPINION

LORING J.

The question on which the decision in this case depends is this In case a reporter on a newspaper in the course or by reason of his employment learns that the premises on which the business of publishing the paper is conducted are of peculiar value to his employer or one carrying on his business, has he the right without his employer's knowledge to take a lease of the premises and hold them as his own to the injury of his employer's property?

The case comes before us on a report without the evidence. The statement in the report of the facts of the case is in one or more material points somewhat meager.

The material facts were in substance as follows: The defendant was a reporter on a daily newspaper published in Lynn, which was mortgaged to the plaintiff trust company to secure an issue of bonds the amount of which is not stated. The business of making up and printing the newspaper was carried on in two stories and in the basement of a building in Lynn, of which the Lynn Publishing Company (the mortgagor) was a tenant at will. The printing press of the Publishing Company was 'situated in the basement upon a foundation of concrete, imbedded in the earth underneath the building, and could not be removed from said basement and set up in some other place in less than two weeks' time, and at a very considerable expense. While the press was being taken down and being set up in another place the paper could not be published unless it made arrangements for its printing from some other press, and it appeared in evidence that no press was in Lynn that could be used for that purpose in connection with the electrotyping plant of the company except after expensive alterations in the electrotyping plant.' 'Outside of its machinery, type, fixtures and furniture, it depended for the value of its property on the good will of the business, and upon the ability to get out its paper daily.'

On July 1, 1911, the Publishing Company defaulted on the mortgage interest. By the terms of the mortgage the mortgage turstee could not take possession until 90 days after the default. On Tuesday, October 3, 1911, the plaintiff trust company took possession and proceeded to take the necessary steps to foreclose its mortgage by a sale in accordance with its terms. The trust company continued the publication of the paper.

The defendant had been employed as a reporter by the mortgagor for a period not stated. He did not devote his whole time to the business and was paid 'at the rate of $5 to $7 a week for such services as he rendered in gathering and reporting news.' When the plaintiff trust company took possession on October 3, 1911, it continued to employ the defendant as a reporter. And 'about' that time the defendant applied to one Porter for a lease of the premises in which the business of publishing was conducted by his employer. Porter told him that he was the lessor of the second story only, and that the International Trust Company was the lessor of the first floor and the basement. Porter refused to give the defendant a lease of the second story, the premises owned by him. Thereupon, on October 4, 1911, the defendant applied to the agent of the trust company for a lease of the first floor and basement, telling the agent 'that he represented parties who were going to take over the paper.' 'A few days later' a written lease from October 2d (October 1st being a Sunday) was delivered to the defendant for a term not stated, and on October 31st the defendant gave the plaintiff notice to quit on the following Friday, which was November 3d.

The findings already stated establish the peculiar value which these premises had to the defendant's employer or to any one carrying on the employer's business of publishing this newspaper. And it is evident from the facts found by the judge who heard the case in the superior court that the defendant realized that. It is found that 'during the summer after the interest had been defaulted, the defendant went to various bondholders and endeavored to buy their bonds,' and that 'he offered them 50 cents on the dollar therefor,' and that 'after obtaining the lease he went to various bondholders and offered them 25 cents on the dollar' for the same bonds. It is further found that 'he stated to various persons that the person who had secured the lease would be the winner in the long run, and asked some of these persons if they were going to the funeral, meaning the funeral of the paper published by the Publishing Company.

It is not directly found as a fact, but it is the fair inference to be drawn from the facts found, that the defendant learned in the course or by reason of his employment of the peculiar value which these premises had for his employer. It was directly found (in effect) that knowledge of the fact that his employer was in arrears in payment of rent came to the defendant by reason of his employment. That fact however is a fact of secondary importance.

The doctrine invoked by the plaintiff in this suit had its origin in two decisions by Lord Eldon. In Yovatt v. Winward, 1 Jac. & W. 394, the defendant (formerly employed as a clerk by the plaintiff, who was a veterinary surgeon) was enjoined from using medicines compounded from the plaintiff's recipes which he (the defendant) had surreptitiously copied while in the plaintiff's employ. In Abernethy v. Hutchinson, 3 L. J. (O. S.) Ch. 209, the publication in the Lancet of lectures on surgery delivered by the plaintiff at St. Bartholomew's Hospital, which the defendants had obtained from the students attending the lectures, was enjoined. The ground on which Lord Eldon went in this case was subsequently stated by Turner, V. C., in these words: 'I well remember that upon the first argument he refused to grant the injunction on the ground of copyright, Mr. Abernethy not being able to swear that the whole lecture was written, but that afterwards on a second argument he granted it on the ground of breach of confidence.' See Turner, V. C., in Morison v. Moat, 9 Hare, 241, 257.

Since then the doctrine has been applied in England in a number of cases. In Morison v. Moat, 9 Hare, 241, the defendant was enjoined from using a secret formula for compounding a medicine which had been disclosed to him, in violation of a contract made with the originator of the formula. In Tuck v. Priester, 19 Q. B. D. 629, the defendant, who had been employed by the plaintiff to print two thousand copies of a picture belonging to him, was enjoined from selling further copies of it which he had surreptitiously taken. In Pollard v. Photographic Co., 40 Ch. D 345, a similar decision was made; in that case the defendant printed for his own use further likenesses of the plaintiff from a negative which he had made when photographing the plaintiff in the ordinary course of his business as a photographer. In Helmore v. Smith, 30 Ch. D. 449, a clerk was committed for contempt on its being shown that he had taken a copy of the customers of a business conducted by a receiver appointed by the court and that he had solicited their custom for a competing business which he had set up for himself. A similar decision as to the use of a list of the plaintiff's customers surreptitiously copied by a clerk was made in Robb v. Green, [1895] 2 Q. B. 1. In Merryweather v. Moore, [1892] 2 Ch. 518, a clerk was enjoined from communicating to a subsequent employer the details of machinery...