S.C. Posner Co. v. Jackson

• Decision Date: 23 April 1918
• Citation: 223 N.Y. 325,119 N.E. 573
• Parties: S. C. POSNER CO., Inc., v. JACKSON et al.
• Court: New York Court of Appeals Court of Appeals

223 N.Y. 325

119 N.E. 573

S. C. POSNER CO., Inc.,

v.JACKSON et al.

Court of Appeals of New York.

April 23, 1918.

Appeal from Supreme Court, Appellate Division, First Department.

Suit by S. C. Posner Co., Incorporated, against Emanuel A. Jackson and E. A. Jackson, Incorporated. There was judgment on pleadings for plaintiff, and defendant appealed. The Appellate Division reversed the judgment, sustained demurrer to the complaint, and allowed 20 days to amend. On her failure to amend, the Special Term dismissed the complaint. From a judgment of the Appellate Division (170 App. Div. 972,155 N. Y. Supp. 1140), affirming judgment of the Special Term dismissing the complaint, plaintiff appeals. Reversed, and original judgment of Special Term affirmed.

The plaintiff by its complaint alleged that:

It is a corporation, and that it ‘was and still is engaged in the business of designing, manufacturing, and selling at wholesale ladies' gowns and wearing appearel in the borough of Manhattan, city of New York,’ and that the defendant E. A. Jackson, Incorporated, is a corporation ‘likewise engaged in the business of designing and selling at wholesale ladies' gowns and wearing apparel in the borough of Manhattan in competition with the plaintiff, * * * and said Emanuel Jackson is the chief stockholder of said corporation and member of the board of directors and its president, and actively engaged in the conduct and management of said business.

‘Third. That heretofore Sarah C. Posner had for a number of years been engaged in the business of designing gowns and ladies' garments, and had acquired great skill and displayed great taste in making such designs, and had become so proficient as a designer that she achieved a great reputation throughout the markets where ladies' gowns and wearing apparel are sold, and her name as a designer added value to garments and secured a readier sale for them and made her services unique.

‘Fourth. On information and belief, said Sarah C. Posner, on or about the 25th day of October, 1911, organized and incorporated the plaintiff corporation and thereafter, in reliance upon said Sarah C. Posner's skill and reputation as a designer, various persons were induced to subscribe to or purchase the stock of said corporation for its face value, and said Sarah C. Posner thereafter became a member of the board of directors of said corporation, and at all times hereinafter mentioned continued to be such director, and was elected president of said corporation, and thereafter and at all times hereinafter mentioned continued to be such president, and on or about the 25th day of July, 1912, the said Sarah C. Posner entered into a written agreement with the said corporation, and with a majority of the stockholders of the said corporation and others, wherein and whereby she agreed to and did enter the services of the said corporation as a designer and manager for the period of five years, from the 25th day of July, 1912, subject to the general control of the corporation, and agreed, subject to such control, to perform all such services as the said corporation should require. She also agreed to devote the whole of her time, attention, and energy to the performance of her said duties, and agreed not until the expiration of said contract, or any extended term thereof, either directly or indirectly, alone or in partnership, to be connected with or concerned in any other business or pursuit whatsoever, and that she would not until the expiration of such contract, or any extended term thereof, either directly or indirectly, engage in or become associated in the business of manufacturing or selling any kind of ladies' garments, apparel, or other similar articles, either as principal, agent or employe, or in any other relation or capacity, or as stockholder, general officer, or employ engaged in such or similar business without the consent of the plaintiff or its successor or assigns. * * *

‘Sixth. Thereafter said Sarah C. Posner duly entered upon the performance of the duties assumed by her under said contract, and received and accepted the salary of $75 per week. During the latter half of the year 1913 the defendant Emanuel Jackson, acting in behalf of himself and of the defendant corporation, E. A. Jackson, Incorporated, and others to this plaintiff unknown, to injure the plaintiff in its business, wrongfully, corruptly, and maliciously, and for the purpose of enticing the said Sarah C. Posner and inducing her to break her contract with the plaintiff corporation, and of depriving it of her services and of securing such services for a competitor, and of thereby injuring this corporation, offered and agreed to give to the said Sarah C. Posner and additional and increased compensation if she would break her contract with the plaintiff and leave its employ, and, by means of said persuasions and inducements and increase of compensation offered, the said defendants enticed said Sarah C. Posner from the employ of this plaintiff, and persuaded her to break her contract with this plaintiff and to enter into a contract of employment with the defendant E. A. Jackson, Incorporated, and said Sarah C. Posner thereupon, on or about the 10th day of January, 1914, did abandon and break her aforesaid contract, and in violation of the same did enter into the employ of the defendant E. A. Jackson, Incorporated, a competing business, and is at present, as plaintiff is informed and believes, in said employ, and she has utterly failed and refused to perform her contract with the plaintiff, and has wrongfully broken the same, to the great damage and injury of this plaintiff.

‘Seventh. That at the time the said defendants and the others who are to this plaintiff unknown, conspired to and did wrongfully entice said Sarah C. Posner from the employ of the plaintiff, and persuaded and induced her to wrongfully break her contract with this plaintiff, and it was well known to them that the plaintiff had been organized by said Sarah C. Posner; that she was one of the principal persons engaged in its management; that she had loaned to its enterprise her name; that she was then a director and the president thereof, and in the employ of the plaintiff; and that she was a party to a written contract of employment for her exclusive services for a period of years to come.’

The complaint also alleged injury and damage to the extent of $25,000, and demanded judgment for that amount.

The defendants demurred to the complaint upon the ground that it does not state facts sufficient to constitute a cause of action. The plaintiff asked that the demurrer be overruled, and for judgment upon the pleadings. Its motion was granted. Posner Co., Inc., v. Jackson, N. Y. L. J., May 2, 1914, Justice Greenbaum. An appeal was taken from the judgment entered thereon to the Appellate Division, where it was reversed and the demurrer sustained, but the plaintiff was given 20 days in which to serve an amended complaint. Posner Co., Inc., v. Jackson, 166 App. Div. 920,152 N. Y. Supp. 1105. The plaintiff failed to amend its complaint, and judgment was entered at Special Term, dismissing the same. An appeal was taken from that judgment to the Appellate Division, where it was affirmed. Posner Co., Inc., v. Jackson, 170 App. Div. 972,155 N. Y. Supp. 1140. From the judgment of the Appellate Division an appeal is taken to this court.Edmond E. Wise, of New York City, for appellant.

Julius Henry Cohen, of New York City, for respondents.

CHASE, J. (after stating the facts as above).

The sufficiency of the complaint is challenged. In considering this appeal we must take its allegations as true. The plaintiff's right to recover thereon, if at all, depends: (1) Upon its right to the employe's services pursuant to the express contract for a definite period of time; (2) the defendants' knowledge of the contract and of the same being valuable, important, and essential to the plaintiff in...