Harrison v. Glucose Sugar Refining Co.

• Decision Date: 06 May 1902
• Docket Number: 830.
• Citation: 116 F. 304
• Parties: HARRISON v. GLUCOSE SUGAR REFINING CO.
• Court: U.S. Court of Appeals — Seventh Circuit

116 F. 304

HARRISON v. GLUCOSE SUGAR REFINING CO.

No. 830.

United States Court of Appeals, Seventh Circuit.

May 6, 1902

Chester E. Cleveland and Thomas Cratty, for appellant.

William Z. Calhoun, for appellee.

Appeal from the Circuit Court of the United States for the Northern District of Illinois.

On August 14, 1897, the appellant, Lee S. Harrison, entered into a written agreement with the appellee as follows:

'This agreement, made at Chicago, Illinois, on this 14th day of August, A.D. 1897, by and between Lee Harrison, of Peoria the first party hereto, and the Glucose Sugar Refining Company, a corporation organized under the laws of the state of New Jersey, the second party hereto, witnesseth Whereas, the first party has been for several years last past engaged in the business of manufacturing and selling glucose grape sugar, starch, and kindred products of a glucose factory, and hereby represents that he has acquired exceptional skill and thorough knowledge of the said business; and whereas, the first party is desirous of entering the employ of the second party, which is engaged in the business of manufacturing and selling glucose, grape sugar, starch, and kindred products and the various products of a glucose factory; Now, therefore, in consideration of the foregoing recitals and other good and valuable considerations, and the mutual covenants herein contained, it is hereby covenanted and agreed by and between the parties hereto as follows: (1) The second party hereby agrees to and does employ the first party, and the first party hereby agrees to and does accept such employment, for the term of five years from the 14th day of August, 1897, in such capacity, and for the performance of such services, in and about the said business of the second party, as the second party may from time to time require the first party to perform. (2) The first party shall, during the time of said employment hereby created, devote all his time and attention exclusively to the business and interests of the second party, and to the performance to the satisfaction of the second party of such duties as may be assigned to him in the premises by the second party, and he will do his utmost to further enhance and develop the best interests and welfare of the second party. (3) The first party hereby agrees and covenants with the second party that during said term of years he will not directly or indirectly, enter the employment of or render any service of any kind to any individual, individuals, partnership, association, or corporation whatsoever (other than the second party); and during said term of years he will not, under any circumstances or conditions whatsoever (whether said employment be in force or not), engage in, or be or become interested, directly or indirectly, as an individual, partner stockholder, director, officer, clerk, principal, agent, employe, trustee, lender of money, or in any other relation or capacity whatsoever, in or to the business (other than that of second party) of buying, manufacturing, or selling glucose, grape sugar, starch, or any kindred products, or any of the products of a glucose factory, within a radius of fifteen hundred miles of the city of Chicago, Illinois. (4) In consideration of the continuous faithful performance of the covenant herein contained by the first party to be performed, and of the making of this contract, the second party hereby covenants and agrees that it will pay to the first party during said term of years the sum of three hundred thirty-three and one-third dollars per month, payable on the last day of each and every month.

'In witness whereof the parties herein have duly signed and sealed this instrument the day, date, and place first above written.

'Lee S. Harrison. 'The Glucose Sugar Refining Company, 'By C. H. Matthiessen, Pt.'

At the date of the contract the appellee was, and is now, the owner of and operating factories in Chicago, Peoria, and Rockford, in the state of Illinois, and in Davenport and Marshalltown, in the state of Iowa, wherein are manufactured glucose, starch, grape sugar, and other kindred products. It sells its manufactured product throughout the United States and in various foreign countries and places, and particularly throughout a territory circumscribed by a radius of not less than 1,500 miles from the city of Chicago. It is claimed by the appellee that in the manufacture of these products it possesses many new and original processes which it was to its interest to keep secret; that it was essential to confide these secrets to Harrison, the appellant, because he was one of its superintendents, having charge of the factory at Davenport, in the state of Iowa; that he was taken through all the factories, and fully instructed with respect to the methods and processes used. The record discloses interesting facts touching the manufacture of these articles of commerce. The ordinary commercial starch, glucose, and grape sugar are produced from the starch granule in the corn kernel. At an early period in the history of the manufacture of these products, after the separation of the starch the remainder of the kernel went off from the factory in the nature of slops or offal, which was lost, except as it was fed to cattle in pens near the factory. Processes were devised whereby this slop or offal was treated so as to separate the hull, the gluten, and the germ. From the hull, bran is made; from the gluten, gluten meal; and the germ has proven a most interesting by-product. From it are made corn oil and oil cake and rubber used for belting and other similar purposes. The hull and gluten are dried, pressed, and shipped in large quantities to New England and Europe as food for cattle. The corn oil has proven a valuable product, and is used in making soap and dressing leather, etc., and both the oil and oil cake are exported in large quantities to Europe. There are also manufactured from the starch seven or eight grades of glucose used by the syrup mixer, the jelly maker, the confectioner, and the brewer, each grade adapted for use in the special line of manufacture in which it is used. From the starch are made different grades of sugar, various grades of corn starch, and several grades of dextrine used in the finish of cotton goods and wall paper, and American gum, a product nearly identical in its chemical properties with gum arabic. There is also a process for the recovery of the steep water; that is, recovering all the slops from the water in which the corn is steeped in the process of separating the starch. These solids are used to enrich the feeds produced from the hull and gluten. It also appears that there are some 28 different grades of syrup, each involving a difference in ingredients, proportions, and temperature; the work requiring delicacy in planning and skill in treatment. The evidence shows that the art, by study and experiment, is still advancing. The superintendent and the chemist are constantly engaged in making experiments, that the greatest possible yield from the corn might be derived with the least expense. These processes are sought to be kept secret, that they may not come to the knowledge of competitors. The factories of the appellee are surrounded by high board fences to exclude the public. Watchmen are stationed at the several entrances, and no one is allowed to enter without a pass from the president or general manager. The laborers employed in the factories, except those employed in the laboratories, are required to stay in their respective departments. The processes adopted are communicated in confidence, and only to those having supervision, and there is constant intercourse between the superintendents of the different factories with respect to the experiments made. The appellant served in the capacity of superintendent of the factory at Davenport until June 8, 1900, when without cause he abandoned the service of the appellee and resigned his position. On the next day the appellee notified him that his contract had not expired, and instructed him to report at the general office for conference with the president, to which notice he paid no attention, but soon thereafter entered the service of the Illinois Sugar Refining Company as superintendent of its factory at Pekin, in the state of Illinois. The business of that company was originally the manufacture of sugar from beets, which business was not in competition with that of the appellee. But on the 15th of May, 1901, that company began the manufacture of glucose and kindred products from corn, with the appellant as its superintendent, and became an active competitor of the appellee in its line of business. On May 25, 1901, the appellee addressed a letter to the appellant protesting against his entering the employment of the Illinois Sugar Refining Company or otherwise engaging in business in violation of his contract, protesting against his using any information acquired by him while in the service of the appellee, and notifying him that the appellee was willing that he should re-enter its service under the terms and conditions of the agreement and during the period therein stated. The appellant, however, persisted in actively managing the business of manufacturing glucose and kindred products for the Illinois Sugar Refining Company, and on June 24, 1901, the appellee filed its bill in the court below, seeking to enjoin him from so doing until August 14, 1902, the date of the expiration of his contract term, as prayed in its bill.

The answer charges that the appellee is 'an unlawful pool combination, monopoly, or trust'; that the district circumscribed by a radius of not less than 1,500 miles from the city of Chicago comprises the entire territory in the United States within which...