Hendler Creamery Co. v. Lillich

Digges, J., delivered the opinion of the Court. The bill of complaint in this case was filed by the appellant .seeking an injunction to restrain the appellee from breaching ¹⁹² a written contract entered into between them; or, in other words, the appellant is seeking by his bill to secure specific performance of this contract by way of injunction restraining its breach. Thereafter the appellee filed a paper containing a demurrer to the whole bill, and- an answer to the specific paragraphs of the bill and also to the whole bill. To this paper the appellant demurred.

The case was heard by the lower court upon this state of the pleadings, and it resulted in the overruling of the plaintiff’s demurrer, and sustaining the defendant’s demurrer to the bill of complaint. From this action the plaintiff below has appealed. The plaintiff’s demurrer, to the paper containing the demurrer and answer of the defendant to the plaintiff’s bill, was upon the theory that a demurrer and answer could not be contained in the same paper. This contention is fully answered by the provisions of the statute, Code, art. 16, sec. 179 (General'Equity Rule Ho. 20), which provides: “The defendant shall be entitled in all cases by answer to insist upon all matters of defense in law or equity, to the merits of the bill of wMch he may be entitled to avail himself by demurrer.” Since the adoption of this rule, the practice has been frequently employed and has been approved by this Court.

Ruhl v. Wagner, 1 46 Md. 601 . The plaintiff’s demurrer was therefore properly overruled. The real question in the case is presented here by the' action of the court in sustaining the defendant’s demurrer to the plaintiff’s bill. The appellant is a Maryland'corporation located in Baltimore City, engaged in the manufacture and distribution of ice cream and other frozen commodities.

The defendant is a druggist engaged in that business at Dundalk, Baltimore County. The allegations of the bill, in substance, are: That the plaintiff, for the purpose of carrying on its business, owns and operates a large and expensive manufacturing plant, and operates fleets of trucks in distributing its goods in Baltimore City, Baltimore County, and elsewhere. That one of the features of its business is supplying drug stores and ¹⁹³ other retail business places with its manufactured product. That by reason of the merit of its goods, the efficient management of its business, and the extensive advertisement of its goods, done at great expense for twenty years past, it has acquired the leadership in the ice cream trade in Maryland, and an enviable and valuable reputation and good will in the trade.

That among its customers is or was the appellee. That on the 18th day of August, 1925, the appellant and the appellee executed an agreement, as follows: “This agreement, made this 18th day of August, 1925, between The Hendler Creamery Company, a corporation, duly incorporated under the laws of the State of Maryland, hereinafter called the company, and Dr. D. P. Lillich, Community Bldg., of Dundalk, Md., hereinafter called the customer; witnesseth: “(1) The company hereby leases to the customer for the term of three years from this date and agrees to install for the customer, at its own expense, except as hereinafter provided, its mechanically refrigerated equipment for preserving ice cream, and the customer in consideration thereof, agrees to buy and use exclusively, and to the extent of his requirements, during said term of three years, ice cream, sherbets and other frozen commodities made by the company, at its established wholesale prices as adopted by it from time to time. “(2) The customer further agrees to consideration of the premises to use said equipment carefully and keep the same in good order and condition; to supply the water and electric current required for the operation of the equipment at the customer’s own expense; to deal exclusively in the ice cream and other products of this company and not handle, advertise, nor permit any advertising matter, products and equipment of any other company or manufacturer, in, around or about the said premises during the term of this lease, and to use said equipment solely and exclusively for ice cream and other products manufactured and sold by the com ¹⁹⁴ pany; to waive and relinquish all claims against the company and to exonerate, indemnify and save harmless the company from all liability to all parties for damage or loss in any way arising out of or during the use of said equipment by the customer; and upon the termination of this agreement, by expiration of the term or upon breach by the pustomer of any of the conditions hereof, to return said equipment to the company in the same good order and condition as when installed, reasonable wear and tear excepted. The customer shall pay for any damage to the said equipment while the same is in the possession or on the premises of the customer which may be due otherwise than to the ordinary wear and tear incident to the use thereof. If a change in the location of said equipment shall become necessary the company shall effect such change upon the application and at the expense of the customer. “(3) Title to and ownership of said equipment is expressly retained by the company and in case of violation of any condition of this agreement, including failure on the part of the customer to pay any indebtedness of the customer to the company according to the company’s terms, or if the customer shall attempt to sell or encumber said equipment or remove same from the premises where installed by the company, or upon discontinuance by the customer of the purchase of ice cream from the company, or upon the issuing of any attachment, execution, distress for rent or like process against the customer, or the customer becoming bankrupt, the company shall have the right at its option, to enter into or upon the premises where said equipment may be and, without let or hindrance, to take possession of and remove said equipment, with or without process of law, and without the company or its agents being in any way liable for any claim for damage or injury in the removal of said equipment. “(4) In case the company exercises its right at any time before the expiration of the term of this lease to terminate the same by reason of violation of any con ¹⁹⁵ dition hereof by the customer or for any of the other causes above enumerated the customer agrees to pay to the company the sum of One Hundred Dollars ($100.00) as additional rental for said equipment covering the period from the time of installation thereof until the date of such termination, that amount representing the cost to the company of the installation of the equipment. “(5) After the expiration of the three-year term of this lease the same shall continue in force for a further term of one year and thereafter from year to year upon the same terms and conditions until terminated by either party upon thirty days’ notice in writing to the other prior to the termination of any current term. “(6) This contract shall extend to and be binding upon the successors of the company and shall also be binding upon the heirs, executors, administrators or 'successors and assigns of the customer, and the customer agrees to secure the acceptance of his successors or assigns, in the event of a sale or transfer of the business of the customer, by proper endorsement bereon. “The said equipment and this lease can not be assigned in any manner whatsoever without the written consent of the company first had and obtained. “In witness whereof the parties hereto have executed this agreement the day and year first hereinabove written. “The TIendier Creamery Company, “By J. D. Bawner, Compt. “D. P. Lillich, Customer. “Witness: J. W. Clemm. “Witness: W. U. Steek. “Ho. 171 0.” That in pursuance of the terms of said agreement the appellant did forthwith and at its own expense install its mechanical refrigerating apparatus or equipment, referred to in paragraph one thereof, for preserving ice cream and other frozen commodities, in the drug store occupied by the ¹⁹⁶ appellee at Dundalk.

That the appellee accepted the equipment; and thereafter, until July 1st, 1926, the relations of the appellant and appellee, as defined and expressed in the agreement, remained and were enjoyed and actively maintained unbroken and unimpaired. That the appellant has on its part well and faithfully done every matter, act or thing required of it to be done under the terms of said agreement, and has always been (and is now, and so tenders itself), able, ready and willing to sell and supply the appellee, to the extent of his requirements, ice cream, sherbets and other frozen commodities made by the appellant at its established wholesale prices as adopted by it from time to time. That the appellee, without just legal cause, has lately refused to buy the frozen commodities specified in the agreement at all from the appellant. That the refrigerating equipment, as installed, remains in the appellee’s drugstore.

That under the provisions of paragraph one of the agreement the appellee covenanted during the term of the agreement, which was for three years, to deal exclusively in the ice cream and other products of the appellant; and further agreed not to handle, advertise, or permit any advertising matter, products, or equipment of any other company or manufacturer, in, around, or about said premises, the appellee’s. drugstore. That notwithstanding said covenant the appellee, without legal justification, has done and is doing, and declares his intention of continuing to follow and do acts hereinafter specifically enumerated and which he covenanted not to do, and to refuse to perform the acts which he covenanted to do; that is to say, that contrary to said agreement, the appellee refuses to buy ice cream, sherbets or other frozen commodities made by the appellant; that he buys, sells, and deals in ice cream, in his said drugstore, made by the Horn Ice Oream Company or its parent concern, The Southern Dairies, Incorporated; that he has done, and now advertises and permits advertising matter, products, and equipment of the Horn Ice Cream Company or its parent concern, they being dealers and distributors of ¹⁹⁷ ice cream and, other frozen commodities, in, around, and about the premises occupied and used by the appellee for his drugstore at Dundalk. That the said continuing acts of the appellee in violation of the agreement, and his expressed intention to persist therein, do and will inevitably result in the loss of the sale, to the extent of the appellee’s future requirements in his drugstore, of ice cream or other frozen commodities such as the appellant makes, which said damage, as a result of the loss of said sale, in the future, cannot be ascertained and liquidated, the amount of the appellee’s future requirements, w'hile large, being uncertain, and will also result in substantial loss of good will and prestige built up through twenty years of effort, fair dealing and advertising. That the appellant’s loss, injury, and damage done it by reason of the appellee’s violation, in the present and future, of his covenant, both to do certain things and not to do certain other things, are continuing, perpetual and permanent, and work great injury to the appellant, its business, welfare and good will.

That the wrongs, damages and injuries, brought about as aforesaid by the appellee upon the -appellant, are not susceptible of adequate compensation in the ordinary course of law, but will cause irreparable damage to the appellant unless the said appellee is restrained therefrom. The prayers are, that the appellee, his agents, servants and employees, may be restrained and enjoined from handling for his requirements in the business of his drugstore at Dundalk, Baltimore County, Maryland, until after the 18th day of August, 1928, or so long as said agreement of August 18th, 1925, shall be in force or of legal effect, any ice cream or other frozen commodities such as the appellant makes, other than ice cream, sherbet, or frozen commodities furnished and sold by the appellant; that he be likewise enjoined from handling any of the products or equipment of any ice cream manufacturer, other' than such goods of the appellant, while such contract is in force and effect, and from advertising or permitting any advertising matter of ¹⁹⁸ any manufacturer other than the appellant, in, around, or about his drugstore at Dundalk; and for further relief. By the first paragraph of the agreement the appellant leased to the appellee for the term of three years from August 18th, 1925, and agreed to install at its expense, mechanical refrigerating equipment for preserving ice cream; and the appellee, in consideration of this being done, agreed to buy and use exclusively and to the extent of his requirements, during the said term of three years, ice cream, sherbets and other frozen commodities made by appellant at