Tode v. Gross

4 N.Y.S. 402, 22 N.Y. St. Rep. 818, 51 Hun 644, 1889 N.Y. Misc. LEXIS 348

• Court: New York Supreme Court
• Decided: February 11, 1889
• Status: Published

Opinion

Barnard, P. J.

The facts are not in dispute. The defendant was the owner of certain lands in Orange county, with buildings and necessary fixtures and appurtenances for manufacturing cheese. The business was conducted by defendants, aided by Conrad Gross, her husband, John Huffman and August Gross. The cheese was of a certain kind, and was manufactured by a secret process known to them. It was part of the arrangement of the sale of the land that this secret was to be communicated to the plaintiffs, and that they were to continue the manufacture of the cheese under the same names, and that they were to have the sole right. To that end this covenant was made and executed by the defendant, and delivered to the plaintiffs; “and that •she [meaning the defendant herein] and the said Conrad B. Gross, John Huffman, and August Gross will refrain from communicating the secret, recipe, and instructions for the manufacture of said cheese, or either of them, to any and •all persons other than the aboved-named parties of the second part, [meaning the plaintiffs herein,] and will also, after the 1st day of April, 1885, refrain from engaging in the business of making, manufacturing, or vending of said ■cheeses, or either of them, and from' the use of the trade-mark or names of ■either of them, hereby agreed to be transferred in connection with the said cheeses, or either of them, or with any similar product, under a penalty of five thousand dollars, which sum is hereby named as stipulated damages to be paid by the party of the first part, [meaning the defendant herein,] or her heirs, ■executors, administrators, or assigns, in case of a violation of the party of the first part [meaning the defendant herein] of this covenant, of this contract, or any part thereof, within five years of the date hereof. ” The deed and covenant were delivered in 1884, and the plaintiffs entered upon the business of manufacturing cheese under this secret process. In May following the defendant’s husband, Conrad B. Gross, who was in business in Hew York, selling cheeses, was discovered to be selling cheese with the same makes, and being a similar product to that made by defendants before the sale to plaintiffs, and by them afterwards. It was part of the covenant that the defendant’s husband, with the others, should not sell.

A married woman may contract with respect to her separate property the same as if she was single. The covenant is not one in restraint of trade. She sold a secret process, and the trade-mark of the product manufactured. Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. Rep. 419; Jarvis v. Peck, 10 Paige, 118; Hodge v. Sloan, 107 N. Y. 244, 17 N. E. Rep. 335. The agreement ■established $5,000 as liquidated damages. The words mention a penalty of ■$5,000, but add the words “ which sum is hereby named as stipulated damages, ” to be paid in case of a violation within five years. In view of the extreme difficulty, if not the entire impossibility, of definite proof of damages in cases •of breach, the words should be held to convey their strict meaning. Bagley v. Peddle, 16 N. Y. 469. The plaintiffs sold to the defendants the secret process, and received a large sum. The secret was known to three other persons. She covenated that they would refrain from communicating the process, and from selling the product. She must perform her covenant. Tompkins v. Dudley, 25 N. Y. 272; Beebe v. Johnson, 19 Wend. 500. The judgment should be affirmed, with costs. All concur.