Artistic Porcelain Co. v. Boch

• Decision Date: 22 October 1909
• Citation: 76 N.J.E. 533,74 A. 680
• Parties: ARTISTIC PORCELAIN CO. v. BOCH.
• Court: New Jersey Court of Chancery

74 A. 680

76 N.J.E. 533

ARTISTIC PORCELAIN CO.

v. BOCH.

Court of Chancery of New Jersey.

Oct. 22, 1909.

(Syllabus by the Court.)

Bill by the Artistic Porcelain Company against Noah W. Boch, trading as the American Porcelain Works. Preliminary injunction ordered.

W. Holt Apgar, for complainant.

Clark & Case, for defendant.

WALKER, V. C. The bill of complaint alleges that the complainant corporation on July 25, 1906, entered into an agreement in writing with the defendant, which recited that the complainant was then manufacturing black and brown door knobs, shutter knobs, and wheels at the plant of the American Porcelain Works, so called, and the complainant thereby sold to the defendant all right, title and interest it might have in the goods, chattels, stock in trade, chemicals, materials, and other personal property then on the plant of the American Porcelain Works, for which the defendant agreed to pay a certain price, and the agreement then proceeds: "The said Boch further agrees as an important part of the consideration of this sale and transfer that he will abstain from the manufacture or sale directly or indirectly of porcelain, or of any imitation thereof, except tile, until January first, nineteen hundred ten, except as hereinafter provided, and the said Porcelain Co. agrees that so long as the said Boch will promptly furnish it with such black and brown door knobs as may be required of it by the Skillman Hardware Mfg. Co., not to exceed 150,000 in any one month, until May first, nineteen hundred and ten, it will abstain from the manufacture or sale directly or indirectly of black and brown door knobs, mineral knobs, black and brown shutter knobs and black and brown wheels, and the said Boch further agrees that until said May first, nineteen hundred and ten, he will furnish to the Artistic Porcelain Co. for the said Skillman Hardware Mfg. Co. requirements of black and brown door knobs not to exceed 150,000 in any one month, said mineral door knobs to be delivered to the Skillman Hardware Mfg. Co. and charged at $5.00 per M and Jet at $6.00 per M less 3% discount."

The parties had business relations with each other under this agreement, with perhaps some variations of its terms (other than those contained in the above recited part), by mutual agreement, until April 7, 1909, when they entered into another agreement containing, among others, the following stipulation: "It is further covenanted and agreed between the parties hereto that the stipulations, covenants and agreements contained in said contract of July twenty-fifth, nineteen hundred and six between the parties hereto, by which the party of the second part binds himself not to manufacture porcelain ware excepting tile, until January first, nineteen hundred and ten, and the party of the first part binds itself not to manufacture jet or mineral door knobs for the same period, shall be and the same is hereby extended, as part of this agreement, for five years from said date, to wit, until the first day of January, nineteen hundred and fifteen."

On June 3 and 11, 1909, the complainant ordered of the defendant certain jet and mineral knobs which the defendant refused to supply, writing the complainant under date of June 10th that the defendant did not care to fill the order, and recognized no contract by which he might be compelled to do so; and on June 12th he also wrote the complainant referring him to the letter of the 10th, remarking that he meant exactly what he said, and would fill no orders on the complainant's account. The bill and affidavits show that in July and August, 1909, the defendant manufactured thousands of white porcelain door knobs, and has the same in stock ready to be placed on the market and sold. The bill prays that the contract between the parties may be specifically enforced, and that the defendant may be restrained from manufacturing or selling directly or indirectly any white or porcelain knobs during the period in the contracts mentioned, namely, until January 1, 1915.

With the injunctive feature of the bill we are at present alone concerned. Two defenses have been interposed: (1) That the agreements are void as being in restraint of trade; and (2) that the complainant has violated the contract, and the defendant has elected to rescind. A contract that the vendor of a business will not engage in a competitive business, although a contract in restraint of trade, is not opposed to public policy, but is valid and enforceable when the restraint contracted for is partial and is reasonably required for the protection of the purchaser in the use and enjoyment of the business purchased. Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 508, 43 Atl. 723, 46 L. R. A. 255, 78 Am. St. Rep. 612. In that case the contract did not embrace one whole area but several areas disjunctively...