Automatic Phonograph Exhibition Co. v. North American Phonograph Co.

45 F. 1, 1891 U.S. App. LEXIS 1694

• Court: U.S. Circuit Court for the District of Southern New York
• Decided: January 21, 1891
• Status: Published

Opinion

Lacombe, Circuit Judge.

This motion must be determined upon the papers as they stand. It is not disputed that the six-party agreement to which both defendant and complainant were parties was in the form set forth in the bill. Its fourth clause, therefore, contained an agreement on the part of the defendant to use its best endeavors, so far as it could legally do so, to induce its licensees to enter into agreements with the complainant similar to the one annexed to such six-party agreement, and which did not contain the reservations which had been inserted in contracts made with such licensees before the friendly offices of the defendant had been thus secured. It is insisted that the six-j)arty agreement was signed in such form by a mistake, and defendant prays, or is about to pray, that it be reformed in that respect. It is, however, manifestly an important document, formally executed under seal, presumably with all the deliberation which attends the execution of such instruments, and upon this motion for a preliminary injunction it must be held as correctly expressing the intention of the parties, certainly unless a perfectly clear case of fraud or mutual mistake of fact were made out.

The objections that the complainant is not lawfully organized as a corporation, and that for various reasons such contracts are ultra vires, should not avail to defeat this motion under the principles laid down in Arms Co. v. Barlow, 63 N. Y. 62, and Railway Co. v. McCarthy, 96 U. , as the defendant has received under tho contract, and si ill holds, 15,000 shares of the complainant’s stock.

Tho injunction may continue until further action of the court in the terms of the ad interim order, but with an express reservation of the graphophones.