Contour Chair Lounge Co. v. Aljean Furniture Manufacturing Co.

403 S.W.2d 922, 1966 Mo. App. LEXIS 648
Missouri Court of Appeals·Decided April 19, 1966·No. 32158·Published·Cited by 16 cases

Opinion

DOERNER, Commissioner.

Defendants appeal from a judgment and decree enjoining them from competing with plaintiffs, in violation of a contract containing a covenant not to compete executed only by defendant Joseph F. Laskowitz.

Laskowitz is the designer and inventor of a distinctive type of chair with a movable one-piece top, shaped to fit the body, which moves in an arc on a stationary base. He caused the plaintiff Contour Chair Lounge Company, Inc., to be incorporated in 1947 to manufacture the chair, and the co-plaintiff Contour Sales, Inc., to be formed to sell the same, and was president of the former company and vice-president of the latter. Six design patents on the chair were granted to Laskowitz by the Commissioner of Patents, the principal one of which was No. 157,269, issued on February 14, 1950, for a term of 14 years. Las-kowitz granted plaintiff Contour Chair Lounge Company, Inc. the exclusive right to manufacture and sell the contour-type chair, in return for royalties to be paid to him. The evidence indicates that Lasko-witz was an officer of the plaintiff companies until 1955, when, presumably, he sold his stock in them. Thereafter he continued to receive royalties from plaintiff Contour Chair, and for the five years preceding December 17, 1958 was paid $66,804.50.

On that day, December 17, 1958, Lasko-witz and plaintiff Contour Chair entered into a written agreement whereby Laskowitz sold and assigned his patents to Contour Chair in return for the sum of $180,000. The basic patent was then due to expire in slightly more than 5 years, on February 14, 1964. As part of the consideration Las-kowitz agreed that for a period of 10 years from December 17, 1958, he would not:

“(a) Engage in or enter into, directly or indirectly, any business, enterprise or undertaking in competition with the First Party or the Contour Sales, Inc., a Missouri corporation, or any franchise or other dealer thereof; except as to conventional living room furniture, chairs convertible from a sitting to a reclining position, bed room suites, or kitchen, dinette or dining room furniture.
“(b) Directly or indirectly enter into, finance, invest in, or otherwise engage in any manufacture, development, research, sales or other business activity in the United States, its possessions or Canada relating to or involving furniture or *924 any other product or component of a product of the same general nature as those produced or sold by or for First Party; except as to conventional living room furniture, chairs convertible from a sitting to a reclining position, bed room suites, or kitchen, dinette or dining room furniture.
“(c) Sell, license, or otherwise transfer any mechanical or design patent now owned by or hereafter obtained by Second Party covering furniture or any other product or component of a product of the same general nature as those produced or sold by or for First Party; except as to conventional living room furniture, chairs convertible from a sitting to a reclining position, bed room suites, or kitchen, dinette or dining room furniture.
“(d) Use, attempt to use, directly or indirectly the names ‘Contour’, ‘Contour Chair’, ‘Contour Chair Lounge’, or any similar names in any form or relationship. In this connection Second Party acknowledges full title and ownership of said names to be in First Party.”

On November 6, 1958, shortly before the execution of the foregoing agreement, Las-kowitz and defendants Henry Koerner and William Neiner, his sons-in-law, executed articles of incorporation for defendant Al-jean Furniture Manufacturing Company, the certificate for which was issued by the Secretary of State the following day. Las-kowitz subscribed for 3 shares and Koerner and Neiner for 1 each, all at $100 per share. Laskowitz was elected president, Neiner vice-president, and Koerner secretary-treasurer, and the three composed the board of directors. Shortly thereafter, on December 11, 1958, pursuant to the board’s action, Laskowitz sold $10,000 worth of machinery, equipment and raw materials to defendant Aljean Furniture in exchange for 100 shares of the company’s stock. Within a short time he also loaned Aljean Furniture $13,943.11 in cash, and on October 19, 1959, this indebtedness was evidenced by a promissory note for that sum executed by Neiner as vice-president on behalf of the Aljean Furniture, payable on demand. Laskowitz, in addition, owns the real estate occupied by Aljean Furniture, and the evidence indicates that little, if any, rent was paid or an obligation therefor recognized prior to 1964.

According to the minute book of defendant Aljean, introduced in evidence, Lasko-witz tendered his written resignation as the president and a director of that company, dated March 22, 1963. On or about the same day Laskowitz transferred 51½ of his 103 shares in Aljean to his daughter, Althea Koerner, and her husband, Henry Koerner, jointly; and his remaining 51½ shares jointly, to his other daughter, Jeanne Neiner, and her husband, William Neiner. He also assigned his note from Aljean Furniture to his daughters, jointly. On the following day, according to the minute book, the board of directors of Aljean Furniture accepted Laskowitz’s resignations and elected Henry Koerner president, William Neiner secretary, and Althea Koerner a director.

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Contour Chair Lounge Co. v. Aljean Furniture Manufacturing Co., 403 S.W.2d 922, 1966 Mo. App. LEXIS 648 (Mo. Ct. App. 1966).

403 S.W.2d 922 (Contour Chair Lounge Co. v. Aljean Furniture Manufacturing Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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