Scherman v. Stern

• Decision Date: 10 June 1922
• Docket Number: No. 42.,42.
• Citation: 117 A. 631
• Parties: SCHERMAN et al. v. STERN et ux.
• Court: New Jersey Supreme Court

117 A. 631

SCHERMAN et al.

v. STERN et ux.

No. 42.

Court of Errors and Appeals of New Jersey.

June 10, 1922.

(Syllabus by the Court.)

Black, J., dissenting.

Appeal from Court of Chancery.

Action by Charles Scherman and another against Jack Stern and wife. From an order granting a preliminary Injunction, the defendants appeal. Affirmed.

Stein, Stein & Hannoch, of Newark (Herbert J. Hannoch, of Newark, on the brief), for. appellants.

Blatt & Lesser, of Newark (Louis B. Lesser, of Newark, on the brief), for respondents.

TRENCHARD, J. This is an appeal from an order of the court of chancery granting a preliminary injunction restraining the defendants, until the further order of the court, from engaging, directly or indirectly, in the selling of candy, stationery, and tobacco, at the Post Office building in Metuchen, in this state, in competition with the complainants.

Without regard to certain particulars hereinafter to be noted, the situation, as disclosed by the bill and affidavits, was this:

Prior to October, 1921, the defendant Jack Stern was employed by Abraham Miller as manager and salesman in his candy, stationery, and tobacco store at Metuchen. He was assisted at intervals by his wife, May Stern, the other defendant. Miller desired to sell the business and good will to the complainants. The complainants knew that the defendants had considerable acquaintance in Metuchen, and had personal influence with the local trade, and refused to buy unless both the defendants and Miller would agree not to compete with that business in Metuchen. After exacting a promise from the complainants to employ Stern for one month at the same salary and to allow him and his wife to live upon the premises rent and light free for that period, the Sterns, with full knowledge of the complainants' attitude, signed a contract, under seal, dated October 22, 1921, covenanting therein, for a stated consideration of one dollar (which was paid) not to open or to be engaged or employed in, directly or indirectly, any business in Metuchen, N. J., similar to the one sold by Miller to the complainants, and further covenanted that this obligation was to "remain in force after the abovementioned store will be sold to other parties."

Complainants then paid Miller $8,000, and he conveyed to them, their executors, administrators, and assigns, the business and good will in question, and further covenated not to engage in competition with the business. The complainants immediately took over the business, retained the services of Mr. Stern for one month, and permitted him and his wife to occupy the apartment on the second floor, rent and light free. At the end of that month, the Sterns opened a cigar, stationery, and candy store in the Post Office building in Metuchen, within 200 feet of the business purchased and conducted by the complainants. It was the conduct of that business which was enjoined by the order under review.

We are of the opinion that the injunction should stand until final hearing.

There is no merit in the first contention of the appellants that the injunction was improper, because their agreement not to engage in a competitive business was without a sufficient consideration. The rule is that there is a sufficient consideration for a promise, if there is any benefit to the promisor or any loss or detriment to the promisee. W. G. Root Construction Co. v. West Jersey & S. S. R. R. Co., 85 N. J. Law, 6i5, 90 Atl. 271; Burgesser v. Wendel, 73 N. J. Law, 286, 02 Atl. 994. It is not necessary that a benefit should accrue to the person making the promise; it is sufficient that something valuable flows from the person to whom it is made, or that he suffers some prejudice or inconvenience, and that the promise is the inducement to the transaction. Holt v. U. S. Security L. Ins. Co., 74 N. J. Law, 795, 67 Atl. 118, 11 L. R. A. (N. S.) 100, 12 Ann. Cas. 1105. Accordingly, in the present case, the payment of the $8,000 by complainants to the owner of the business upon the inducement of the promise of the Sterns not to engage in a similar business, and the agreement of the complainants to employ Stern at the same salary for one month and to furnish him and his wife living quarters free for the same period, was a sufficient consideration for the covenant not to compete.

In this same connection, the appellants further contend that the agreement upon which the complainants' right to relief is based is invalid because the true consideration on which it was founded has failed. But we see no merit in this conteution. It is based solely on the unsupported statement of Jack Stern, in his answering affidavit, that, pending the negotiations for the sale of the business, the complainants agreed to pay him $300 upon the consummation of the sale, and that such payment was not made. The complainants deny that any such promise was made.

Of course the existence of a right violated is a prerequisite to the granting of an injunction. The general rule is that a preliminary injunction will not issue where the material fact in complainant's bill and affidavits, on which the complainant's right depends, is met by a lull, explicit, and circumstantial denial under oath. Brunetto v. Montclair, 87 N. J. Eq. 338, 100 Atl. 201; Meyer v. Somerville Water Co., 79 N. J. Eq, 613, 82 Atl. 915; Citizens' Coach...