Simmons Hardware Co. v. Waibel

• Decision Date: 30 January 1891
• Citation: 1 S.D. 488,47 N.W. 814
• Parties: SIMMONS HARDWARE COMPANY, Plaintiff/Appellant, v. WAIBEL et al., Defendant/Respondent.
• Court: South Dakota Supreme Court

1 S.D. 488, 47 N.W. 814 (1891)

SIMMONS HARDWARE COMPANY,

Plaintiff/Appellant,

v.WAIBEL et al.,

Defendant/Respondent.

Appeal from District Court, Beadle County, SD

Hon. James Spencer, Judge

Mouser & Vollrath

Attorneys for appellants.

A. B. Melville and E H. Aplin

Attorneys for respondents.

Argued April 16, 1890. Opinion filed Jan. 30, 1891.

CORSON, P. J.

On March 1, 1889, the plaintiff filed its verified complaint in the district court, in which it is alleged, in substance, that it is engaged in the wholesale and retail hardware business in the city of St. Louis; that it has a large amount of capital invested in its said business, several hundred clerks and about ninety traveling salesmen engaged in selling its wares and merchandise in nearly all the states and territories; that it has prepared and published, at great expense, an illustrated and printed catalogue containing about 1,500 pages, for distribution among its customers; that it has invented and prepared, at a cost of many thousand dollars, a secret code or system, represented by letters, figures and characters, showing the cost and selling price of its many articles of merchandise, which is marked in such of its catalogues as are intended for use in its said business by its traveling salesmen, and which said secret code or system is not marked in the catalogues distributed to its customers; that in January, 1887, it employed one Frank Meech as one of its traveling salesmen, and intrusted to him, as such, one of its catalogues containing its said secret code or system of letters, figures and characters marked therein, with the key thereto; that in his business as such traveling salesman, said Meech frequently visited the city of Huron, in Dakota, and made sales of goods to the defendants, who were customers of plaintiff, and engaged in the hardware business; that during the year 1888, the defendants, in collusion with said Meech, who still continued in the employment of plaintiff as such traveling salesman, wrongfully and fraudulently obtained from said Meech the said privately marked catalogue, containing its secret code or system of letters, figures and characters, showing the cost and selling price of its said wares and merchandise, with the key thereto, and copied the same therefrom into one of plaintiff's catalogues that had been furnished to defendants as customers of plaintiff, and that defendants thereby wrongfully and fraudulently became possessed of a knowledge of plaintiff's said secret code or system, and a copy of the same; that plaintiff, upon ascertaining said fact, demanded of defendants the said copy of its secret catalogue so wrongfully and fraudulently made by them, and that on or about February 19, 1889, defendants returned to plaintiff said marked copy, but before doing so they fraudulently and wrongfully copied said secret code or system into one of plaintiff's said catalogues it had furnished to Shefler Bros., also customers of plaintiff, from whom defendants had obtained it, and that said defendants now retain said last-mentioned or Shefler copy, refuse to return same to plaintiff, and threaten to make known said secret code or system, with the key thereto, to customers of plaintiff, to the great damage and injury of plaintiff; that to invent and prepare a new code or system will cost the plaintiff several thousand dollars and require at least six months' time, and that during such change of system plaintiff will be greatly embarrassed in the transaction of its business. An injunction, receiver, etc., are prayed for.

On filing the complaint, and two supporting affidavits, the court granted ex parte a temporary injunction, and appointed a receiver, to whom defendants were required to deliver said (Shefler) copy of the catalogue alleged to have been copied by them from the former copy returned to plaintiff. On April 18th the defendants moved the court, upon the affidavit of defendant Donaldson, pleadings, proceedings, etc., in the case, to vacate said order made March 1st. The court on the hearing refused to vacate said order, but made an order modifying it by directing that receiver to return said (Shefler) copy of catalogue to defendants. From so much of said order of April 18th as required the receiver to return said copy of catalogue to defendants, plaintiff appeals to this court, and assigns such modification of the original order as error.

The appointing or refusing a receiver is within the sound judicial discretion of the court to which application is made, and this court will not interfere with the exercise of this discretion by the lower court when the evidence is conflicting, unless this court is satisfied such lower court has abused its discretion. Mays v. Rose, Freem. Ch. (Miss.) 703; Chicago & A. O. M. Co. v. United States P. Co., 57 Pa. St. 83; Whelpley v. Railroad Co., 6 Blatchf. 271; Story, Eq. Jur. § 831, 832; High. Rec. § 7-25; Pom. Eq. Jur. § 1331. Was there, then, a substantial conflict in the evidence upon the material facts in this case? and, if there was such conflict, was there an abuse of discretion by the court? The respondents contend that the affidavit of Donaldson denies all the equities of the bill relating to the Shefler catalogue, and invoke the rule of the courts of equity applicable to injunctions, that, when the equities of the bill are denied by the answer, the injunction will be denied. Anderson v. Reed, 11 Iowa, 177; Stevens v. Myers, Id. 184. But that rule does not apply to this case, for the reason that the receiver was appointed, not upon the complaint alone, but on the complaint and supporting affidavits, and upon the hearing additional affidavits were read on the part of the plaintiff; and the rule itself is subject to many qualifications and exceptions not necessary now to be noticed. This affidavit will therefore be considered as the other affidavits in the case.

The only evidence introduced on the part of the defendants on the hearing was the affidavit of defendant Donaldson, before referred to. This affidavit, while it denies each and every allegation in the complaint in general terms, does not deny the various allegations of the complaint and supporting affidavits in that clear and specific manner that entitles it to much weight in a court of equity. It is evasive and unsatisfactory, and leaves upon the mind the impression that, while there is an attempt to deny the allegations of the complaint and supporting affidavits, there is a want of good faith on the part of Donaldson, and an effort on his part to conceal the real facts in the case. All the material facts stated in the complaint were fully sustained by affidavits introduced and read in evidence on the part of the plaintiff. That defendant Donaldson did, in collusion...