Opinion
10-24-1908
M. REDGRAVE CO. et al. v. REDGRAVE.
Ziegener & Lane, for complainants. James A. Gordon, for defendant.
Suit by the M. Redgrave Company and others against Montague Redgrave to enjoin the enforcement of a judgment, and for other relief. Injunction denied.
This is an application for a preliminary injunction to restrain the execution of a judgment of ouster or dispossession obtained in the district court of Jersey City by Montague Redgrave, the defendant, against the M. Redgrave Company, one of the complainants.
The bill charges: That Redgrave was engaged in the business of manufacturing games and toys at Nos. 9 and 11 Willow Court, Jersey City, N. J., a property owned by him; that he had been engaged in such business for 20 years preceding the incorporation of the complainant company, which took place on the 10th of September, 1906; that they purchased from him his business and patents, issuing stock to him therefor; that the individual complainants purchased their stock upon the understanding that the corporation could occupy the building occupied by Redgrave and there carry on its business and remain as long as it, the corporation, pleased; that they presented a lease to him for five years, which he said it was unnecessary to sign, because the company could remain as long as it pleased; that the building is fitted for the business there carried on; that in the month of January, 1908, it was discovered that Redgrave had retained in his possession moneys of the company approximating $3,000, there being a dispute between him and the directors as to whether the sum was greater than $2,300; that Redgrave was deposed from his position as president and manager, and thereafter communicated with customers of the company and ordered raw materials of the character theretofore ordered by the company to be delivered at the premises; that on the 29th of May, 1908, a notice terminating the tenancy on the 1st of July, 1908, was served by Redgrave upon the company, and on the 2d of July a summons in dispossess proceedings, returnable July 8, 1908, was issued out of the Second district court of Jersey City; that on the 15th of July, 1908, this case was tried, and judgment for possession given in favor of Redgrave against the company. It is charged in the bill that the judgment is erroneous and illegal, because the districtcourt had no jurisdiction, and that it will appear that evidence offered by the complainant company was ruled out, and that no appeal or writ of certiorari can be taken to the action of the district court. There are other allegations that it was the purpose of Redgrave to enter into the same business as that carried on by the company, and that he intends unfairly to compete with them. The bill prays for an injunction forbidding Redgrave from infringing upon certain patents and carrying on under his own name, or any similar name, a business similar to that carried on by the complainant company, and from holding himself out as selling the same kind of goods as the complainant company under his name, or any similar name, and from prosecuting his dispossess action against the complainant company, and from taking advantage of any judgment ousting the complainant company from the premises; and also prays an accounting as between Redgrave and the company.
The proofs on behalf of the complainants' tend to support the charges of the bill just stated. The proofs on behalf of the defendant dispute many of the important allegations of the complainants' case. The defendant directly and distinctly denies that he ever induced the individual complainants to purchase stock by statements that the company could carry on business in his building as long as it pleased, or that he ever made such statements to the individuals or to the representatives of the corporation. He sets forth that only one complainant paid anything for stock, and that was §200. He asserts: That there is no machinery in the building, excepting two mitering machines run by foot power, which weigh less than 300 pounds each, and are easily portable; that the only fixtures are four or five wooden benches, made out of plain boards, and one plain wooden shelf; that all of the goods are sold by agents who go to the customers, and it is not the fact that customers come to the building to purchase. It is shown by the defendant that at a meeting of the board of directors of the complainant corporation In January, 1907, a motion was made and unanimously carried that the company pay Redgrave $25 a month for the building. The defendant's statement concerning the company's money collected by him and retained by him is given, he justifying his action in that respect, and further facts concerning the trial in the district court and the application by the complainant corporation to the Supreme Court for a writ of certiorari are set forth.
Ziegener & Lane, for complainants.
James A. Gordon, for defendant.
GARRISON, V. C. (after stating the facts as above). It will be observed that the bill of complaint prays for various kinds of relief: It calls for an accounting, for an in junction to restrain what may be termed unfair competition, to restrain infringement of patents, and to restrain the use by the defendant of a judgment obtained at law by him against the complainant corporation. It is objected by the defendant that the bill is multifarious, and that no preliminary injunction should therefore be granted based upon it. I do not propose to consider and determine whether this is so or not. The immediate question before the court is whether such a showing is made by the proofs on behalf of the complainants as to entitle them to a preliminary injunction restraining the defendant from using the judgment which he has obtained at law to oust them from the premises occupied by them which belong to him.
When the complainants' case is analyzed upon this point, it resolves itself into this: The individual incorporators were induced to go into the company because Redgrave, the owner of the business and the building, agreed to transfer the business and permit the company to occupy the building as long as it chose to do so. It is therefore inequitable for him now to take advantage of any legal right he may have to oust the company from the building. I do not think there is any proof before me of the length of time during which the life of this company might, under its charter, continue, but this is immaterial, because, under our corporation law (Laws 1896, p. 277, c. 185), it may by proper proceedings continue indefinitely; and the claim therefore practically is, on behalf of the complainant company, that it may occupy this building indefinitely. Since the original agreement, or whatever it may be called, as pleaded by them, did not include anything by way of compensation to the owner for rent or occupation, the claim therefore is that by what he said at that time he has, in effect, given to this company the right to occupy his building for all time free of rent. It is not necessary to cite the language of the statute of frauds or the numerous cases thereon to dispose of this contention. It certainly has never been held in any case called to my attention that an owner of real estate will be held to have conceded the right of possession of his property forever without any writing and without any provision for any compensation to himself.
Furthermore, the action of the corporation was not in keeping with what it is now attempted to be shown was the original understanding. A few months after the company takes possession of the building, a resolution is passed providing for rent, and rent is thereafter paid to the defendant, month by month; and at the same time, or shortly thereafter, a lease for a term of five years is prepared on behalf of the company and submitted to Redgrave for his signature, which he declines to make. It has been settled at law—and I will not disturb that finding— that the legal result of the relations betweenthe parties was to constitute a monthly tenancy. Whether, by reason of certain promises or inducements or representations made by Redgrave to the company or to the individual complainants, the company bad a right to a larger estate in the lands of Redgrave, and he was under obligation to give it, I do not have to determine, because, if it is true, the failure upon his part is remedial at law.
The complainant urges upon the court that this is a case calling for the application of the doctrine of equitable estoppel. It is urged that the court should find that Redgrave is estopped to oust the complainant corporation because of the original statements or representations made by him of willingness that it should continue to occupy his building as long as it pleased. The result of giving this effect to the circumstances would be, as above stated, to create in the complainant company a perpetual right of occupancy without rent, or, at least, a perpetual right of occupancy, and this without any agreement satisfying the statute of frauds, and in the face of the action of the company in the matter of the resolution to pay rent and of the lease which it desired Redgrave to sign.
I have omitted to say anything about the lack of mutuality in the alleged contract or agreement, the fact that it is not pretended that the company was under any obligation to remain in the premises for any time, and also to the further important fact that in the original undertaking, as stated by the complainants, there is no suggestion of any consideration moving from the complainant company to Redgrave which would make the contract a binding one. So far as appears in this case, this business could be equally well carried on elsewhere. It is not shown that this building is peculiarly fitted for this business, or is specially fitted up for it There is no machinery of any moment, and what there is is light in weight and easily moved. There are, in fact, no special circumstances shown which it can be argued would give equity jurisdiction if the existence of such special circumstances were otherwise efficient for that purpose.
I have not felt it necessary to go into the numerous cases cited by the complainants, because it seems to me that they are not applicable to the case, as I view it. There is no doubt about the availability of equitable estoppel in many cases, but I do not think that this is one of them. I think that the circumstances proven in this case do not warrant the court in restraining this owner of property from obtaining possession thereof under a judgment obtained at law authorizing him so to do. I find that whatever rights the corporation or the individual complainants may have can be obtained by proper actions at law for the damages accruing to them by reason of the breach of any agreement they are able to prove.
To find with the complainants here would be, in effect, deciding that a contract without consideration and not in writing would be binding upon a landlord which cedes the possession of his property in perpetuity to another, without any obligation upon that other to either remain there subject to liability for quantum meruit, or at an agreed rent, and in the face of a legal determination by a court of competent jurisdiction that the legal relation between the parties as to renting has been terminated, and the landlord is entitled to possession.
I will advise an order refusing the application for preliminary injunction.