Oxford Chemical Corp. v. Detrex Chemical Industries, Inc.

• Decision Date: 10 July 1961
• Docket Number: No. 21276,21276
• Citation: 217 Ga. 126,121 S.E.2d 130
• Parties: OXFORD CHEMICAL CORP. et al. v. DETREX CHEMICAL INDUSTRIES, INC.
• Court: Georgia Supreme Court

Page 130

121 S.E.2d 130

217 Ga. 126

OXFORD CHEMICAL CORP. et al. v. DETREX CHEMICAL INDUSTRIES, INC.

No. 21276.

Supreme Court of Georgia.

July 10, 1961.

Syllabus by the Court

1. The petition was multifarious in seeking to join distinct and separate causes of action against different defendants, in which each defendant did not have an interest common to all, and was, therefore, subject to the special demurrers raising this objection.

2. Accordingly, it was error to grant the interlocutory injunctions against the defendants.

3. No ruling is, therefore, made upon the other demurrers, general or special.

Troutman, Sams, Schroder & Lockerman, Harold C. McKenzie, Jr., Cohen & Kohler, Atlanta, for plaintiff in error.

Smith, Swift, Currie, McGhee & Hancock, Charles L. Weltner, Atlanta, for defendant in error.

GRICE, Justice.

This is a suit by an industrial chemical company against a competitor and two of its employees, former employees of the plaintiff, for injunctions forbidding disclosure of trade secrets and other confidential data alleged to have been acquired by such employees while in the service of plaintiff. Joinder of these defendants is predicated on conspiracy. Upon the overruling of their demurrers to the petition and the grant of interlocutory injunctions against them, the defendants assigned error. A recital of the petition, demurrers, and injunctions, to the extent necessary for our purposes here, follows:

Detrex Chemical Industries, Inc., herein referred to as 'the plaintiff,' filed suit in the Superior Court of Fulton County, Georgia, against Oxford Chemical Corporation, Ira J. Duncan, and Robert B. Preston, herein referred to respectively as 'the defendant Oxford,' 'the defendant Duncan' and 'the defendant Preston.' In its final form the petition alleged the following: jurisdiction of the defendants; the execution by the defendants Duncan and Preston of separate employment contracts with the plaintiff (copies of which were attached as exhibits); the work performed by the defendant Preston in a stated geographical area while in the employ of the plaintiff; the resignation from the plaintiff of the defendants Preston and Duncan, and their present employment by the defendant Oxford in work corresponding to that previously performed for the plaintiff; the re-entry of the defendant Oxford in the field of industrial chemicals, the two concerns thus being competitors in the same field; and the constantly changing nature of the plaintiff's research and products, making it unfeasible to acquire patent protection for all of its new developments and its consequent necessity to rely upon its right to trade secrets.

Then, in general terms, the petition alleged the existence of a conspiracy among the three defendants to utilize the plaintiff's trade secrets and formulae and to deprive it of accounts and customers formerly serviced for it by the defendant Preston. The particular acts of each of the defendants which were relied upon to establish the alleged conspiracy were specified. Recital of these will not be made at this point since the paragraphs of the petition containing these alleged acts will be set forth verbatim subsequently in this opinion.

After alleging that, unless the defendants are enjoined 'from the aforesaid conspiracy,' plaintiff would suffer irreparable damage for which it had no adequate remedy at law, the petition prayed for several items of relief, including temporary and permanent injunctions against disclosure or use of any trade secrets, confidential knowledge, or data acquired from plaintiff without first obtaining its written consent.

To this petition each of the defendants interposed demurrers as follows: (1) generally, that the petition failed to set out any cause of action; (2) specially, that the petition as a whole was too vague, general, and indefinite and did not distinctly set forth any cause of action; (3) specially, that the petition as a whole was multifarious; and (4) other grounds of special demurrer not now insisted upon.

The trial court overruled all of the demurrers. It also temporarily enjoined the defendants Preston and Duncan from disclosing, in violation of the aforesaid employment contracts, any of the trade secrets or other confidential information, knowledge, or data concerning the plaintiff's business without its written consent, and also enjoined the defendant Oxford from aiding and abetting in such violations and from using for its own benefit any secret or confidential information, trade secrets, or knowledge concerning the business of plaintiff without first obtaining the written consent of plaintiff. Another phase of the injunctive relief has since become moot, and, therefore reference will not be made to it.

Each of the defendants assigned error on the overruling of its general and special demurrers and the grant of the interlocutory injunction.

1. As we view this record, it is necessary only to review the ruling upon the special demurrer as to multifariousness and its controlling effect upon the grant of the injunction. Thus, we do not decide whether the petition alleged that any of the defendants were, until temporarily enjoined, utilizing for the benefit of the defendant Oxford any trade secrets, formulae, methods, or other confidential data of the plaintiff.

This attack upon the petition, made by each defendant, is that it 'involves matters and causes distinct to the [other] defendants named therein in which this defendant is not in any manner interested or concerned and that the petition is altogether multifarious.' This ground of demurrer is based upon Code, § 3-110, which provides as follows: 'Joinder of claims by or against different persons.--Distinct and separate claims of or against different persons shall not be joined in the same action. Where the damage as well as the interest is several, each party injured shall sue separately.'

On the other hand, the plaintiff takes the position that, instead of being multifarious, the petition properly joins the three defendants and their acts, thus constituting a conspiracy in an equitable proceeding to enjoin a wrong. Its position is predicated upon cases to be referred to presently, and also upon Code, § 37-1007, which declares that, 'Where there is one common right to be established by or against several, and one is asserting the right against many, or many against one, equity will determine the whole matter in one action.'

We begin the determination of this issue--whether the petition is void as multifarious or vaild as alleging conspiracy--by referring to the allegations themselves. After reciting such matters as the previous employment relationship of the defendants Preston and Duncan with the plaintiff, the duties which these two individuals now perform for the defendant Oxford, and the type of businesses which the plaintiff and the defendant Oxford carry on, the the petition makes allegations as to the conspiracy relied upon. In substance, those are as follows:

Firts, there is the general allegation as to a conspiracy: '12. * * * that Defendants are presently and have been since the employment by [defendant Oxford] of the [defendants Preston and Duncan] engaged in a conspiracy to utilize trade secrets and formulae developed by and owned by petitioner, and to deprive petitioner of its accounts and customers serviced by Defendant Preston during the term of his employment with petitioner.'

Immediately following are the allegations relating to the acts of the defendant Preston: '13. * * * that Defendant Preston has called upon various customers of petitioner advising them that [defendant Oxford] had for sale products and chemical products similar to and the same as those of [plaintiff]. 14. * * * that during the course of his employment with plaintiff, Defendant [Preston] acquired an extensive knowledge of trade secrets and confidential information and data concerning the business of the plaintiff, together with the processes and procedures employed by the plaintiff in the manufacture of its several products, and that, subsequent to the date of his employment by [defendant Oxford], the said Preston has repeatedly and continually, both directly and indirectly, disclosed and used for the benefit of the said [defendant Oxford] such trade secrets, knowledge, and data, in violation of the contract between plaintiff and said Preston, specifically the fourth paragraph thereof, attached hereto as Exhibit 'A.' 15. Defendant Preston has in his possession customer lists, quotations, and specifications acquired by him while employed by Petitioner, which he has failed to return subsequent to the termination of his employment. 16. Defendant Preston has, among others, called upon Buick Division of General Motors at Flint, Michigan, and sold to it a product known as Oxford 40, in replacement of Petitioner's product known as Detrex 37. 17. * * * defendant Preston did, on May 27, 1960, in Wayne County, Michigan, propose to an employee of petitioner, one Wilford H. Ross, Jr., that he turn over to him, preston, the formula of a product referred to as 'Detrex 547' in return for a consideration which 'would make it worth his...