American Preservers' Co. v. Norris

• Decision Date: 01 September 1890
• Citation: 43 F. 711
• Court: U.S. District Court — Eastern District of Missouri
• Parties: AMERICAN PRESERVERS' CO. v. NORRIS et al.

43 F. 711

AMERICAN PRESERVERS' CO. v. NORRIS et al.

United States Circuit Court, E.D. Missouri, Eastern Division.

September 1, 1890

Chester H. Krum, Frank K. Ryan, A. Leo Weil, and M. F. Elliott, for complainant.

Judson & Reyburn, for defendants.

THAYER J.

The material facts on which the decision of the present motion depends are substantially as follows:

The Taylor Manufacturing Company is a corporation duly organized under the laws of Missouri, and for several years has been engaged in manufacturing and selling flavoring extracts, baking-powders shelf-goods, and grocers' sundries, and until about the 15th of June, 1888, was also engaged in manufacturing preserves, jellies, fruit-butters, etc. The other defendants that is to say, L. E. Taylor, James N. and E. R. Norris, are its principal stockholders, and for some years have been officers and directors of the company, and have had full control of its business and have directed its policy. On the 22d of March, 1888, all of the defendants, including the Taylor Manufacturing Company, signed an agreement, the purpose of which was to form an association styled the 'American Preservers' Trust,' composed of a large number of firms and corporations then engaged in the fruit-preserving business in various parts of the country. The object of forming such a trust, as stated in the bill was 'to consolidate the property and business, and to identify the interests of the respective members of the association, to the end that they might secure an economical, profitable, and satisfactory conduct of the fruit-preserving business. ' After the trust had been duly organized and put in operation, the Taylor Manufacturing Company conveyed to defendants Taylor and E. R. and James N. Norris all of its machinery and tools for the manufacture of preserves, jellies, fruit-butters, etc., as well as all of its trade-marks and brands in use in that department of its business, at an agreed valuation of $17,850, which sum was charged against the purchasers on the books of the company, and thenceforth the company ceased to manufacture preserves, jellies, fruit-butters, etc. Thereafter, on June 15, 1888, Taylor and E. R. and James N. Norris transferred the same property to the St. Louis Preserving Company, a Missouri corporation, then recently organized, whose stock was all owned by the trustees of the American Preservers' Trust. For the conveyance thus made to the St. Louis Preserving Company, Taylor and the Norrises received 1,145 trust certificates of the American Preservers' Trust, each of the par value of $100. The trustees of the trust agreed at the time to find a purchaser for these certificates at the price of $17,850, whenever Taylor and the Norrises desired to sell the same; and the last-named parties entered into a covenant with the St. Louis Preserving Company, that, so long as the trust existed, they would not, either directly or indirectly, engage in the manufacture of preserves, jellies, fruit-butters, etc., within 20 miles of the city of St. Louis, and that they would not buy or deal in such articles, unless they had been prepared by persons or corporations concerned in the trust. A year afterwards, that is, on or about May 15, 1889, the Messrs. Taylor and Norris elected to sell the 1,145 trust certificates by them acquired, as aforesaid; but, before the trustees of the trust would fulfill their obligation to find a purchaser for the same, they required the Messrs. Taylor and Norris to sign what is termed an 'agreement of co-operation.' By the terms of the last-mentioned agreement, the defendants L. E. Taylor, E. R. and James N. Norris agreed with the trustees of the trust, among other things--

'That for * * * the period of twenty-five years, the contemplated duration of the trust, or until its earlier termination in the manner provided for by the terms of the agreement of association, they (Taylor and the Norrises) would not, within the territory of the United States of America, engage, be employed, or become interested, either personally or by representative, pecuniarily or in any manner, except through the medium of the American Preservers' Trust, in the manufacture or sale of preserves, jellies, fruit-butters, and mince-meat, or in any way obstruct the work of said trust, or in any manner assume a position adverse thereto, but at all times, and in every way, * * * would give it cordial * * * support,' etc.

The Taylor Manufacturing Company did not sign the first covenant entered into by its stockholders with the St. Louis Preserving Company on or about June 15, 1888, nor the subsequent 'agreement of co-operation,' as it is termed, for the reason that it was advised by counsel that it could not lawfully become concerned in a trust, either directly or indirectly. The trustees of the American Preservers' Trust have recently assigned all their rights under the agreement of co-operation, to the present plaintiff, the American Preservers' Company...