Sedberry v. Gwynn

• Decision Date: 02 June 1920
• Citation: 222 S.W. 783,282 Mo. 632
• Parties: HERVEY H. SEDBERRY v. WILLIAM GWYNN
• Court: Missouri Supreme Court

222 S.W. 783

282 Mo. 632

HERVEY H. SEDBERRY v. WILLIAM GWYNN

Supreme Court of Missouri, First Division

June 2, 1920

Appeal from St. Louis City Circuit Court. -- Hon. Victor H Falkenhainer, Judge.

Reversed (with directions).

J. D Johnson for appellant.

(1) The contract in suit was violative of Secs. 10398, 10299, 10301 R. S. 1909, and amendments thereto; therefore, no suit could be legally maintained thereon. Sprague v. Rooney, 104 Mo. 349; Haggerty v. Storage Co., 143 Mo. 238; Kitchen v. Greenbaum, 61 Mo. 110; Downing v. Ringer, 7 Mo. 586. The interlocutory decree adjudging specific performance of said contract was likewise violative of said sections of the statutes; therefore, the lower court erred in making said order appointing a receiver and in overruling appellant's motion to revoke the same. See: Pope-Turnbow v. Bedford, 147 Mo.App. 697; State ex inf. v. Lumber Co., 260 Mo. 212; Bank v. Glass Co., 243 Mo. 411; State ex inf. v. Standard Oil Co., 218 Mo. 382; Finck v. Granite Co., 187 Mo. 244; State ex inf. v. Armour, 173 Mo. 382; State ex inf. v. Insurance Co., 152 Mo. 42; State ex rel. v. People's Ice Co., 246 Mo. 221. The fact that said contract and decree dealt in part with a patented article does not in any way alter or avoid the operation and effect of said sections of the Missouri statutes. See: Boston Store Co. v. American Graph. Co., 246 U.S. 8, 62 Law Ed 551. (2) The lower court had no power to appoint a receiver, as it did in this instance, for the purpose of executing the interlocutory decree for specific performance of the contract in suit. Price v. Bankers' Trust Co., 178 S.W. 749; Blades v. Mercantile Co., 154 Mo.App. 353; 37 Cyc. 23; R. S. 1909, secs. 3881 and 2122. (3) The lower court had no jurisdiction over appellant's property and business empowering it to legally appoint a receiver to take possession and operate the same as provided in said order. Miller v. Perkins, 154 Mo. 638; State v. Ross, 122 Mo. 461; Price v. Bankers' Trust Co., 178 S.W. 749. (4) In view of the fact that plaintiff under the provisions of said contract has the right to at any time terminate said contract as well as said decree, the lower court had no jurisdiction in equity to decree specific performance of the contract, nor to make said order appointing a receiver. Marble v. Ripley, 71 U.S. 339; Taussig v. Corbin, 142 F. 666; Pullman Car Co. v. Railroad Co., 11 F. 625; Staunton v. Singleton, 47 L. R. A. 334; Federal Oil Co. v. Oil Co., 112 F. 376; Federal Oil Co. v. Western Oil Co., 121 F. 674; Sturgis v. Galindo, 59 Cal. 28; Fry on Spec. Performance, sec. 460, 461, 468. (5) Plaintiff had a complete and adequate remedy at law for the recovery of damages occasioned to him by the alleged breach of the contract in suit. Wilt v. Hammond, 178 Mo.App. 418; Young v. Tilley, 190 S.W. 95. Therefore, the lower court had no jurisdiction in equity to decree the specific performance of said contract, nor to make the order appointing a receiver. Kocurek v. Matychowiak, 185 S.W. 740; Houtz v. Hellmay, 228 Mo. 671; Marble Co. v. Ripley, 77 U.S. 339; 6 Pom. Eq. Jur. 748; 36 Cyc. 554, 556. (6) Neither the petition in the main case, nor plaintiff's petition or application on which said order appointing a receiver was made, states facts sufficient to authorize the making of said order. The order was therefore invalid. Pullis v. Pullis, 157 Mo. 565; Cantwell v. Lead Co., 199 Mo. 42. (7) Said order appointing a receiver is contrary to and violative of Sec. 30, Art. II, Mo. Constitution, in that, if enforced, it would deprive appellant of his property and of liberty to conduct his business without the unlawful interference of others. Jones v. Yore, 142 Mo. 44.

D'Arcy & Neun and Rippey & Kingsland for respondent.

(1) The only question involved on this appeal is as to whether the order appointing the receiver was providently granted under the facts set out in the application of plaintiff for appointment of a receiver. Abramskey v. Abramskey, 261 Mo. 117; Love v. Love, 145 Ill App. 150; Naylor v. Sidener, 106 Ind. 179; Iron Hill v. Baker, 33 N.E. 1131. (2) The court had jurisdiction to appoint a receiver, both under the statutes, Secs. 2018, 2122, R. S. 1909, and also on general equitable principles. 1 Clark on Receivers, secs. 191, 192 and cases infra. (3) The case is one of equitable cognizance and the court had jurisdiction to decree specific performance and, as an incident thereto, to grant an accounting and to appoint a receiver. (a) Because the case is within the class involving peculiar subject-matter such as lands, articles covered by patents and copyrights, or other monopolized articles obtainable only from single source. Adams v. Messinger, 147 Mass. 185; Hapgood v. Rosenstock, 23 F. 86; Binney v. Annan, 107 Mass. 94; Paris v. Haley, 61 Mo. 453; Secret Service Co. v. Gill, 125 Mo. 140; 36 Cyc. 554; Baumhoff v. Railroad, 205 Mo. 262; St. Davids Parish v. Woods, 24 Ore. 396; 36 Cyc. p. 552, note 68; p. 558, note 27; p. 565, notes 49 and 50; p. 567, note 58; p. 559, note 34. (b) Because an injunction was necessary to enforce the negative covenants of the contract, preventing appellant from selling to other parties, which feature of the case, without more, of itself gives equitable jurisdiction. Pope-Turnbow v. Bedford, 147 Mo.App. 699; Schlitz Brew. Assn. v. Neilsen, 8 L. R. A. (N. S.) 494; Dickerson v. Canal Co., 15 Beav. 260; Huline v. Shreve, 4 N.J.Eq. 116; 3 Pomeroy, Eq. Jur. sec. 1342; 2 High, Injunctions, sec. 1142. (c) Because the contract in suit created a confidential relation or trust between appellant and respondent, whereby the appellant became a trustee for the respondent to turn over to him all orders that might be received direct by the appellant. 39 Cyc. 182, note 66; 34 Cyc. 60, note 11; 1 Clark on Injunctions, secs. 127, 195; Pierce v. Finerty, 76 N.H. 48.

GRAVES J. Woodson, J., absent.

OPINION

GRAVES, J.

This is an appeal from an order of the Circuit Court of the City of St. Louis, refusing to vacate a previous order appointing a receiver to take charge of defendant's business. The pertinent facts are few. March 15, 1918, the plaintiff filed a petition in said circuit court, in which he prayed:

"Wherefore, plaintiff prays judgment that defendant may be decreed to deliver to plaintiff all apparatus, appliances and parts that may be ordered by plaintiff under said contract, and to otherwise fully comply with and carry out the terms of said contract; that the defendant be enjoined from selling any of said apparatus, appliances or parts thereof to any person or persons other than plaintiff or from disposing of said inventions and patents to any third party, or from otherwise placing it beyond his power to comply with his contract with plaintiff; that defendant be enjoined from enticing away or interfering with or employing plaintiff's salesman or in any other way interfering with or injuring plaintiff's business; that defendant be ordered to account to plaintiff, as provided in said contract, for all sums to which plaintiff is entitled on sales of said goods made by defendant as above set forth and for all other sums of money which may be due to plaintiff under said contract and for all moneys due to plaintiff which defendant has collected; that plaintiff may recover his costs herein, and for such other and further relief as to this Honorable Court may seem proper."

By the petition it was charged that the defendant was the owner of certain letters-patent from the U.S. Government to use and vend certain vulcanizers, known as the "Gwynn-Bacon Vulcanizers;" that plaintiff had a written contract as to the sale of the same with defendant, who was manufacturing them; that defendant had declared that said contract was void, and was threatening to sell his business, including his patent, to another, so that plaintiff could not get from him the vulcanizers to carry on his (plaintiff's) business in the sale thereof; that prior to defendant's cancellation or ignoring of such contract, plaintiff had orders for goods which could not be filled by him, but were being filled by defendant with plaintiff's customers: that the conduct of defendant was destroying plaintiff's business, which was dependent upon his contract with defendant.

The answer admitted that defendant was doing business under the name of "Gwynn-Bacon Vulcanizer Company," which was accompanied by specific denials of many things charged in the petition. The answer admitted the execution of the contract pleaded by plaintiff, but averred that certain provisions therein rendered said contract void, as one in restraint of trade.

Motion was made to strike out portions of the answer, which was sustained, which is duly preserved in a term bill of exceptions. Reply was a general denial. Such is a very general outline of the case made by the pleadings.

On May 19, 1919, a trial of the issues under the pleadings was had, and the court entered the following decree:

"Now on this day come the plaintiff and the defendant, and this cause being called for hearing upon the issues raised under the pleadings herein as to the right of plaintiff to an injunction against, and an accounting by, defendant, and the evidence of both plaintiff and defendant upon said issues having been introduced and heard by the court, and arguments and briefs of counsel for plaintiff and defendant, upon said issues, having been heard and considered by the court, and said issues having been fully submitted to the court for adjudication, the court thereupon finds said issues in favor of the plaintiff and against the defendant.

"The court further finds the facts to be as follows:

"1. That plaintiff and defendant are residents and citizens of the City of St. Louis, State of Missouri, and that defendant ...