Judgment affirmed. 102 N. E. 590, 208 N. Y. 503. ...135 N. Y. Supp. 939 ...141 N. Y. Supp. 138 See End of Index for Tables of New York Supplement Cases in Other Reports THE NEW YORK SUPPLEMENT VOLUME 143 NORTHLAND RUBBER CO., Inc., v. INTERNATIONAL AUTO- (Supreme Court, Equity Term, Erie County. August, 1913.) 1. INJUNCTION (§ 57*)-VIOLATION OF CONTRACT-CANCELLATION. An injunction will not be granted to restrain defendant's alleged violation of certain written contracts, where it appeared that before suit brought the parties on a sufficient consideration had agreed to cancel the contracts and terminate their relations by a settlement, in the absence of evidence that the settlement agreement had been modified or waived. [Ed. Note. For other cases, see Injunction, Cent. Dig. §§ 111-113, 130; Dec. Dig. § 57.*] 2. SPECIFIC PERFORMANCE (§ 61*)-PARTIAL TERMINATION OF CONTRACT-ENFORCEMENT. Plaintiff, after terminating and canceling part of a contract, cannot enforce its remaining provisions in equity. [Ed. Note. For other cases, see Specific Performance, Cent. Dig. §§ 183-187; Dec. Dig. § 61.*] Suit by the Northland Rubber Company, Incorporated, against the International Automobile League and others, for continuance of a temporary injunction. Denied. George C. Riley, of Buffalo, for the motion. LAUGHLIN, J. This is a suit in equity to enjoin violations of certain contracts made in writing on the 6th day of December, 1911, and the 30th day of September, 1912, respectively, by the plaintiff and the defendant the International Automobile League, which for brevity will be alluded to as the "League," and for damages for such violations and for the sum of $26,306.93, alleged to be a balance due and owing to the plaintiff from the League by virtue of another contract in writing bearing date September 30, 1912, executed by the plaintiff and the League on an accounting in and by which it was agreed that the balance then owing from the League to the plaintiff was the sum of $61,306.93. The allegations of the complaint in so far as they relate to the plaintiff's claim to be entitled to said sum of $26,306.93 may be elimi For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes 143 N.Y.S.-1 nated from consideration on this motion, for they merely show a cause of action at law, and no facts are alleged on which the plaintiff would be entitled to equitable relief with respect to that item. The plaintiff is a domestic corporation. It was incorporated in August, 1910, under the name International Automobile League Tire & Rubber Company, to manufacture and deal in automobile tires, tubes, and accessories. Its name was duly changed to Northland Rubber Company, Inc., by order of the court on the 20th day of January, 1913. The League is also a domestic corporation, and it was incorporated, about a year prior to the incorporation of the plaintiff, to sell automobile tires and accessories to holders of contracts with it at or below dealers' prices, and ever since its incorporation it has been and is, in effect, owned and controlled by the defendant Alfred C. Bidwell, its president, who was instrumental in incorporating the plaintiff for the purpose of co-operating with the League in furnishing automobile tires, tubes, and accessories to the stockholders of the League holding its contracts for such supplies at manufacturers' prices. At the outset Bidwell dominated and controlled both corporations. After the plaintiff and the League had established and continued business relations for some time pursuant to various contracts, they entered into a contract in writing on the 6th day of December, 1911, by which the former agreements were readjusted, modified, and merged in that contract, and the provisions of the former agreements not incorporated in that contract were expressly abrogated. The contract of December 6, 1911, recites that about one-half of the capital stock of the plaintiff had been sold by the League at par and its commissions for sales theretofore made were agreed upon; and it was provided that in an accounting for such sales the League should be allowed a specified amount for the premises No. 270 North Division street and a factory site on Northland avenue, title to which, it was recited, was then in the plaintiff, and the League was constituted plaintiff's sole sales agent, on a specified commission basis, for the unsold capital stock of the plaintiff until 9,500 shares of a total authorized issue of 10,000 shares were sold. It was provided that such sales should be made through the agencies theretofore employed by the League and on a general prospectus to be authorized and approved by it, and that all payments of stock subscriptions should be by checks, drafts, or money orders to the order of the plaintiff and should be immediately delivered by the League to the plaintiff. The plaintiff agreed to issue to each subscriber to its capital stock whose subscription was fully paid a contract obligating it to furnish the tires manufactured by it at cost, and agreed to build and equip a plant to manufacture tires and tubes, and the League agreed to adopt plaintiff's tires and tubes as the official tires and tubes of the League and to advertise the same by pamphlets and circulars and in its official catalogues and journals in all editions sent out to members, and endeavor to advance the sale thereof, and agreed to give plaintiff's officers access to its membership files. Paragraph 12 of that contract provides as follows: "It is further agreed that the said League will, by means of its agency forces established throughout the United States and Canada, and consisting of about three hundred representatives and established agencies, do all things necessary and proper to promote the publicity and sale of the tires, tubes and products manufactured by the tire company, and will use its utmost endeavor to induce all of the contract holders of said League to purchase and use the products of the said tire company; and the said tire company likewise agrees to sell to the said League so long as said League remains in business, all styles of tires and tubes to be manufactured by said company at prevailing automobile manufacture's market prices." With an exception, which need not be considered, it was agreed that not more than ten shares of the capital stock of the plaintiff should be sold to any one party. It was further expressly agreed that the obligation of the League to sell plaintiff's tires and tubes as the official tires and tubes should be operative only while said Bidwell remained. president or general manager of the plaintiff and general manager or in any way connected with the League. On August 24, 1912, Bidwell was removed as general manager of the plaintiff, and it appears by affidavit that on the 13th day of February, 1913, he resigned as its president. It is alleged in the complaint that at the time the agreements of September 30, 1912, were made Bidwell placed his resignation as president and director of the plaintiff in the hands of his attorney under an agreement "that the same should be delivered in the event that he again violated his obligations to the plaintiff, or did anything inimicable to its interests"; and it is further alleged, in effect, that on the discovery by the plaintiff of the fact that the Leagueand Bidwell falsely and fraudulently misrepresented the amounts paid by the League for certain of the tires delivered to the plaintiff under the accounting contract of September 30, 1912, Bidwell tendered his. resignation as president and director of the plaintiff and the same was duly accepted. The agreement of September 30, 1912, recites that the agreement of December 6, 1911, provided, among other things, "for the exclusive services of the League in the sale of the first nine thousand five hundred (9,500) shares of the capital stock of the tire company, and for the services of the League in disposing of the output or product of the factory of the tire company," and that the League had, "or will shortly have," disposed of the amount of the capital stock of the plaintiff which it was authorized by said agreement to sell, and that the subscriptions had been turned over to the plaintiff and were in process of collection, and that the total of 10,000 shares of capital stock of the plaintiff "has been at this time substantially disposed of," and that the parties desired "to arrange for the continuance of the exclusive agency" provided for in the contract of December 6, 1911, "in the sale of at least seven thousand five hundred shares," and desired to provide for the compensation to be paid to the League for such services. parties thereupon agreed, so far as material to this motion, that the League should act as agent for the plaintiff in selling its capital stock. to the extent of 7,500 shares more on substantially the same terms as those embraced in the former contract, but with provisions regulating more definitely the obligations of the respective parties; but the provisions of the former contract with respect to the manufacture and sale of tires was "supplemented and amended" by a provision prescribing that the tires manufactured by the plaintiff should be adopted and The sold by the League as its official tires and should be sold by the plaintiff to the League "at such price as the League shall be able to purchase a tire of equal or better quality of any other manufacturer," and the plaintiff agreed to sell to the League at such prices the entire output of its factory not required to supply its own stockholders, and "to have all orders or requests for tires from its stockholders turned over to the League, to be filled as its distributing agent," and to use its best endeavors to have its stockholders continue as members of the League, and it was provided that, if the League should not render efficient service in filling orders for tires, the plaintiff was to be at liberty "to fill such orders direct," and in the distribution of such tires to the said stockholders the cost of distribution by said League "shall be considered an item of the cost of manufacture, and shall be paid to the League from such cost price obtained from the stockholders." It was further provided that the prices at which tires were to be furnished by the tire company to the League to meet "the demands of its members" should be fixed by mutual agreement, and that if the League should claim, as therein provided, that the prices so fixed were in excess of the price at which tires of equal quality could be obtained by the League in sufficient quantity, or if the plaintiff should claim that the prices were inadequate, and the parties should fail to agree upon a new schedule of prices as therein provided, the question should be arbitrated. It was further provided, in effect, that the output of the plaintiff's factory should be furnished to the League to the extent required to meet its demands, and that the surplus, if any, should not be sold, except to be resold by manufacturers as part of their product, for a price less than that paid by the League. It was mutually agreed that the League should be at liberty to buy and sell other makes of tires "under their respective names," and plaintiff agreed not to establish or maintain any sales agents for the distribution or sale of tires without the approval of the League while the contract remained in force, and the League agreed that it would not promote the organization "of other tire manufacturing companies during the continuance of this contract." The plaintiff also agreed that it would not create or form a league membership, association, or organization, or furnish its stockholders with automobile accessories other than tires. It is alleged that the parties did agree upon the prices at which the tires were to be furnished to the stockholders of the plaintiff and to the stockholders of the League. The theory upon which the plaintiff seeks equitable relief is that it has not an adequate remedy at law, and the complaint and affidavits contain appropriate allegations to entitle the plaintiff to a temporary injunction on that theory. The complaint contains allegations tending to show that the defendants have violated these contracts in many respects, and particularly by making changes in the printed forms of subscriptions for plaintiff's stock by which the subscriptions were to be made payable to the order of the League, in misappropriating such subscriptions when received, in causing misrepresentations to be made. in the use thereof and with respect to the relations between the plaintiff and the League, and in causing its agents to accept checks pay |