Christian Feigenspan v. Nizolek

• Decision Date: 01 February 1907
• Citation: 71 N.J.E. 382,65 A. 703
• Parties: CHRISTIAN FEIGENSPAN v. NIZOLEK.
• Court: New Jersey Court of Chancery

65 A. 703

71 N.J.E. 382

CHRISTIAN FEIGENSPAN

v. NIZOLEK.

Court of Chancery of New Jersey.

Feb. 1, 1907.

Bill by Christian Feigenspan, a corporation, against Joseph Nizolek, to enforce a written contract. Decree for complainant.

The object of the bill is to enforce a written contract by enjoining the breach of a negative covenant therein. The contract is as follows: "Know all men by these presents, that I, Joseph Nizolek, of the city of Elizabeth, county of Union, and state of New Jersey, in consideration of the sum of one dollar and other valuable considerations, do hereby agree to purchase from Christian Feigenspan, a corporation, all ales, lager beer, and porter, as sold in my saloon at No. 73 Florida street, in the city of Elizabeth, New Jersey, for the period of five years. And I further agree that I will not sell or offer for sale any ale, lager beer, or porter in my saloon at No. 73 Florida street, in the city of Elizabeth, New Jersey, except that manufactured by the said Christian Feigenspan, for the same period as above mentioned, and it is further understood that this agreement is to bind the successor or successors of the said party of the first part in the purchase of the property or said saloon business; and the said party of the first part agrees not to dispose of said saloon business unless his purchaser shall sign the above stipulation relative to the sale of the beers, ales, and porter of the said party of the second part exclusively. In witness whereof, I have hereto set my hand and seal this sixteenth of August, nineteen hundred and five. Joseph Nizolek [L. S.] Signed, sealed, and delivered in the presence of Abram H. Cornish." The allegation of the bill is that the contract was part of an arrangement by which the complainant loaned to the defendant the sum of $4,800 to enable him, the defendant, to purchase the premises mentioned in the contract, and took in security therefor the bond and mortgage of the defendant at one year with Interest. It farther alleges that the complainant is a brewer, and was ready and willing at all times to deliver beer to the defendant and the defendant commenced and continued to purchase beer from it for a period of about three weeks, and then declined to purchase any more from complainant, but continued the business and purchased his beer from another brewer. Upon filing the bill, November 27, 1905, with affidavits annexed, an order to show cause, returnable on December 5th, was made, without interim restraint

On that day the defendant filed his answer, with several affidavits annexed, in which he admits the loan of the money for the purposes mentioned, and that he was at that time requested to sign such an agreement as that set out in the bill, and positively declined to sign it, and that if his actual signature was annexed to the agreement it was procured by fraud, and made upon some subsequent occasion; and he says that he declined to sell the complainant's beer, because he could sell the beer of other brewers to a greater advantage and with better profit. The answer further sets forth that at the same date the defendant executed a chattel mortgage to the complainant with a note payable on demand. it sets out the chattel mortgage as an annex to the answer, and it appears to contain an agreement on defendant's part to do certain things, among others that he will not sell any beer except that manufactured by the complainant. On the filing of this answer and the affidavits annexed, the complainant asked leave to file rebutting affidavits, and the hearing was for that purpose adjourned to the 19th of December. On that day, beside the reading of the affidavits, the vice chancellor, with the consent of the counsel for the defendant, compared the signature to the alleged agreement with the admitted signatures of the defendant to the bond and mortgage covering the house and lot and the chattel mortgage and promissory note, and expressed his belief upon that comparison, in connection with the several affidavits, that the signature was genuine, and thereupon an order for an injunction and interim restraint was made. Subsequently the defendant, or some one in his behalf, tendered to the complainant the sum of $4,800, with interest, in payment of the promissory note secured by the chattel mortgage, and the complainant accepted such payment, and delivered up the chattel mortgage and note, and released the real estate from the lien of the mortgage upon it. The defendant then set up such payment in an amendment to his answer, and by a cross-bill prayed that the contract might be declared no longer binding upon him.

The complainant by replication admits the payment of the money on the 20th of December, 1906, after the filing of the defendant's original answer, and after the issuing of the order for interim restraint, and denies the allegation that the amount of the mortgage was ever tendered to complainant prior to that time. The cause was brought to final hearing May 31, 1906.

Herbert Boggs, for complainant. James C. Connolly and Alfred A. Stein, for defendant

PITNEY, V. C. (after stating the facts). The only questions of fact and of law raised by the pleadings are, first, whether the agreement set out in the bill was entered into by the defendant intelligently; and, second, whether, if it were so entered Into, in view of the fact that the defendant or some one in his behalf has discharged the pecuniary obligations to the complainant incurred at the same time the contract was entered into, it is still binding on the defendant. The question of the jurisdiction of this court to enforce by injunction the negative covenant contained in the agreement was not raised either by the pleadings or on the order to show cause, and was raised for the first time at the hearing. The question of fact was determined by me on the spot at the hearing in favor of the complainant for reasons stated orally, substantially as follows:

Prior to about the 1st of August, 1905, one Frederick Schwitzgabel was the owner of a house and premises at No. 73 Florida street, Elizabeth, N. J., and there conducted a beer saloon, and was a customer of the complainant, and was indebted to it for a balance on current account, for which complainant held, as usual in such cases, a chattel mortgage. Early in August, 1905, the defendant Nizolek negotiated with Schwitzgabel to purchase the premises and saloon, and they seem to have agreed upon the price; but the defendant had not sufficient ready money or capital to complete the purchase, whereupon, naturally enough, resort was had to the complainant. It was not the business of the complainant to loan money on bond and mortgage, except in aid of the extension and maintenance of its business as a brewer. A visit to complainant's place of business brought the defendant and Schwitzgabel in contact with the complainant's agents, Messrs. Stengel, one of whom is the president of the complainant corporation, and the other a subofficer, and with Mr. Sutherland, who is, or was at the time, the general bookkeeper of complainant and had charge of the department which made loans to customers. The defendant spoke English with difficulty, if at all, but probably, as appeared at the hearing, understood it a little better than he could speak it. He was accompanied upon his visits to complainant's office by Schwitzgabel, who did understand English. At that interview the amount complainant would loan was fixed at $4,800, which amount was accepted by Schwitzgabel; but the parties were given clearly and distinctly to understand that the loan would be made only upon condition that the defendant would enter into a covenant to purchase his beer of complainant and no one else for a period of five years. The evidence was entirely satisfactory to me on that point. Directions were then given by complainant to a title guaranty company, whose representative in Elizabeth was Mr. A. H. Cornish, a counselor at law, to examine the title and superintend the transaction on behalf of the complainant. He examined the title, and the parties met at his office in Elizabeth on the 16th of August, 1905, to complete the transaction. There were present Schwitzgabel and his wife, the defendant and his wife, and defendant's counsel, Mr. Louis Graaf. No one represented the complainant, except Mr. Cornish. While there assembled, a messenger arrived from complainant's office bringing the draft for $4,800, a chattel mortgage and promissory note, the contract in question, and a letter of instructions in these words: "Fidelity Trust Co., Elizabeth, N. J.—Gentlemen: Enclosed please find our check for $4,800.00, which is to be loaned to Joseph Nizolek, at 6%, to be secured by first mortgage on property No. 73 Florida street, Elizabeth, N. J. We are to receive as collateral security a chattel mortgage for the same amount, also note, form of which we enclose. In addition to this Nizolek is to enter into an agreement by which he agrees to use our lager beer, ales, and porter exclusively for a period of five years, and to further agree that he will not dispose of his business unless his successor is accepted by us as a customer and will enter into the same agreement. He is to sign a power of attorney on the license, and insurance is to be taken out to protect our loan. The costs of search and drawing papers in this matter is to be paid by the mortgagor. If the property is free from all liens you may close the transaction as above. Kindly inform Joseph Nizolek that he must pay $5 per week from now on, on account of license. Please withhold the sum of $1,300 on account of the indebtedness due us from Mr. Schwitzgabel, which account we shall adjust with him later. Yours truly, Christian Feigenspan, a Corporation, per N. Sutherland."

The papers to be executed were as follows: A deed from Schwitzgabel and his wife to the defendant, a bond and mortgage from the defendant and his wife to the complainant, a bond and...