Shubert v. Woodward
| Decision Date | 04 February 1909 |
| Docket Number | 2,954. |
| Citation | 167 F. 47 |
| Parties | SHUBERT et al. v. WOODWARD et al. [1] |
| Court | U.S. Court of Appeals — Eighth Circuit |
Syllabus by the Court
Where in response to an order to show cause why an injunction should not issue, the defendants present admissible opposing affidavits and letters, the court refuses to read or hear them, and orders an injunction until the further order of the court, there is a hearing in equity within the meaning of Act April 14, 1906, c. 1627, 34 Stat. 116 (U.S. Comp. St. Supp. 1907, p. 208), and the order is appealable.
Additional proofs in appellate court without trial de novo, see note to Ridge v. Manker, 67 C.C.A. 600.)
Pertinent affidavits and admissions constitute competent evidence in opposition to an application for an injunction, and, although disregarded by the trial court, they must be considered by the appellate court, for the only question in that court is whether or not the order below is sustained by the admissible evidence in the record.
Where on an appeal from an order for a preliminary injunction or from an order appointing a receiver, the equity of the bill is challenged upon substantial grounds, the appellate court may, and it should, consider the question, whether the court below has done so or not, and if it is of the opinion that the relief sought cannot be ultimately granted it should so decide, to the end that all parties may be saved further expense over the endeavor to secure impossible relief.
An injunction against all breaches of a contract is in effect a decree for its specific performance, and the general rule is that the power and the duty of a court of equity to grant one is measured by the same principles, rules, and practice as its power and duty to grant the other.
The specific performance of contracts and the issue of injunctions are not matters of right. They rest, not in the arbitrary or whimsical will, but in the judicial discretion of the court, informed and guided by the established principles, rules, and practice in equity, which are advisory rather than mandatory.
The general rule is that specific performance of a contract will not be enforced by a court in favor of a party to it against whom the court has no power to effectually compel its performance.
The general rule is that courts of equity will not by order decree, or injunction attempt to compel one to perform a contract to employ, or to continue the employment of, a servant or officer to render personal services which require the exercise of cultivated judgment, special knowledge, experience, skill, or taste, because they are without adequate power to compel such a servant or officer to perform such services effectually.
The general rule is that courts of equity will not enforce the specific performance of a contract, in the absence of a public interest or other controlling equities, where such performance cannot be compelled by a speedy final decree, but will entail upon the courts through many years the supervision and direction of a continuous series of acts involving many details, and will require the frequent exercise of judgment and special knowledge or experience.
Of contracts requiring performance of continuous acts, see note to Berliner Gramophone Co. v. Seaman, 49 C.C.A. 103.)
Courts of equity will not ordinarily compel the specific performance of a contract by decree or by injunction against its violation at the suit of a party who is guilty of substantial breaches of it.
Where the record shows that greater wrong and injury is likely to be inflicted upon the opposing party by granting a decree of specific performance or an application for an injunction than the moving party will suffer from its refusal, a court of equity should generally deny it.
But where the injury to the moving party from a denial will be immediate, certain, and great, while the loss or inconvenience to the opposing party from its grant will be comparatively small and susceptible to indemnification by a bond, and the questions involved are grave and difficult, a temporary injunction will generally be granted and sustained to maintain the status quo.
A corporation, the owner of a theater, and the defendants, the owners of another theater, agreed that for five years the theaters should be separately operated under the control and supervision of the corporation; that W., its president, was appointed the representative of the corporation at a salary of $50 per week, and that he was appointed the representative of the defendants at a like salary to be the general manager of the enterprises subject to the direction and orders of the defendants; that the defendants should appoint a treasurer of their theater, who should act under the supervision of the corporation; that the funds derived from their theaters should be deposited to their account; that they should pay the rent of their theater, and should cause it to be booked and played 30 weeks each season under a penalty of $1,000 per week to be paid into the general fund; and that at the end of each year the profits derived from the two theaters should be put into a general fund, and that fund and the losses, if any, should be equally divided between the corporation and the defendants. W. was not a party to the contract. The defendants put the corporation and W. in possession of their theater, but W. disobeyed their orders relative to the scale of prices for admission to their theater, the day of the midweek matinee, the hiring and discharge of employes and the handling of the fund derived from their theater, and they discharged him and went into possession. The corporation and W. exhibited a bill for an injunction against the violation by the defendants of the contract and their interference with the possession, control, and management of their theater by the complainants, wherein they alleged that unless an injunction was issued they would sustain irreparable injury, in that they had incurred expenses in preparing to operate the theater, and in that they would lose profits to the amount of perhaps $250,000. The defendants presented opposing affidavits and letters. Complainants obtained a temporary injunction as prayed, and an order appointing W. manager of their theater, and the defendants appealed.
Held: There was no such equity in the bill as would sustain the injunction sought, because the contract lacked mutuality of obligation and of remedy, because a grant of the relief would entail upon the courts for many years the supervision of a continuous series of acts, and would require the frequent exercise of judgment and special knowledge or experience, and there was no public interest and no controlling equities demanding it, and because greater wrong and injury would probably be inflicted upon the defendants by its grant than the complainants would suffer from its refusal.
(2) For the same reasons, and because the record, including the opposing affidavits and letters, convinces that the complainants had committed substantial breaches of the contract before they filed their bill, the injunctional orders and the order appointing W. general manager cannot be sustained, and the complainants should surrender the possession of the theater to the defendants.
This is an appeal from an order granting a temporary injunction against the breach by the appellants of an agreement made on May 4, 1908, between the Woodward & Burgess Amusement Company, the complainant below, and the defendants and appellants, Lee Shubert and Jacob J. Shubert, relative to the operation of two theaters at Kansas City owned by them respectively. By that contract the amusement company agreed that it had a lease of its theater for 10 years, that it would pay the rent under that lease, and that its theater should be operated as a place of amusement at prices of admission which should not be higher than $2 nor lower than 25¢. The Shuberts agreed that they had a lease for 10 years of their theater, that they would pay the rent under that lease, that they would cause their theater to be carried on as a place of amusement at prices of admission not higher than $1 nor lower than 25¢, that they would fill at least 30 weeks each season at their theater, and would pay into the general fund $1,000 for each week less than 30 booked and played therein. The amusement company drew the contract, and submitted it to the Shuberts for signature. The Shuberts wrote into the fourth and eighteenth paragraphs of it the words underlined below, and then the contract was signed. The fourth, seventh, eighth, and eighteenth paragraphs read in this way:
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