Rosenstein v. Zentz

Pattison, J., delivered the opinion of the Court. The appellee, defendant, below, entered into a written agreement with the appellants, dated March 1'lth, 1912, by which he was 1o enter into the services of the appellants, who were engaged in the sale of pianos and other musical instruments, for the period of one year from the date of the agreement. His employment, as expressed in the contract, was to embrace the States of Maryland and Virginia and the District of Columbia, and his duties were those of salesman, collector and general utility man, and he was to devote the whole of his time to the performance of such duties. In the agreement is found the negative covenant that “He will not enter into any contract or employment or he in any way interested or connected with any one, other than the said merchants, in said territory, during said period of one year, ⁵⁶⁶ in similar employment,” etc. The- contract or agreement contained the further provision that “The sendees of said salesman are engaged during the working hours of the day and when necessary during the night.” His compensation named therein was fifteen dollars per week, payable weekly, from the commencement of his services, accounting from March 16th, 1912.

The bill of the appellants, filed March 13th, 1912, charges that the said defendant, subsequent to two o’clock on March 9th, 1912, the time when the contract between the plaintiffs and defendant is said by the plaintiffs to have been executed, entered into a written contract of employment with the Hub Piano Company, and at the time of entering into this contract and prior to the signing of it, the contract previously made with them by the defendant was exhibited to the members of the firm of the Huh Piano Company. And they further charge that at the time of the filing of their bill the defendant was in the employ of the Huh Piano Company, in breach of the covenants contained in their written contract with him and “in fraixd of their rights” thereunder. The bill further discloses that prior to the fifteenth day of February, 1912, the plaintiffs with Rachel Rosenstein and the members of the firm thereafter composing the firm of the Hub Piano Company were conducting department stores in the City of Baltimore under the firm name of L. Rosenstein & Sons, and that the plaintiffs with the members of the firm of the Hub Piano Co., as thereafter formed, also conducted a piano and musical instruments business in said city under the firm name of Rosenstein & Bros. That differences and disagreements as to the conduct of the business arose among the different members of the firms as they then existed.

These differences and disagreements were submitted to arbitration, and by the award it was provided that the piano business and piano accounts of the firm were to be sold and disposed of to the member or members of the firms who would pay the most therefor, and when sold, the purchaser or purchasers should be entitled to the good-will of said firms in so far as ⁵⁶⁷ the same related to the piano business, and the unsuccessful bidders and members of the old firm not among the purchasers were not to deal or attempt to deal with any of the existing customers of the said firms, either directly or indirectly, nor were they in any manner to seek to supplant with other musical instruments the instruments at that time held by the customers of the old firms. Under these provisions of the award the plaintiffs became the purchasers of the piano business and the piano accounts of said firm. The defendant was in the employ of the old firm at the time of its dissolution, and as allgod in the hill, “had the particular run of a (*lass of trade in the employ of the said two firms.” The prayer of the bill asks that the defendant he restrained from engaging, either directly or indirectly, at any time within one year from March 11th, 1912, within the territory heretofore mentioned, as salesman, collector and general utility man iu and about the piano or other musical instrument business. A preliminary injunction was issued as prayed and a demurrer to the hill was thereafter filed.

By an order of Court passed on the 8th day of April, 1912, the preliminary injunction was dissolved, the demurrer to the hill sustained and the hill dismissed. Tt is from this order that this appeal is taken. AYe have been referred to no case in Maryland nor have we been able to find one where the law applicable to the facts of this ease has been stated. The first (‘ase before this Court where an attempt was made to restrain an employee, under a contract for personal services, from rendering service to another in violation of such contract, was the case of Burton v. Marshall, 4 Gill, 487.

In that case Charles Burke made a contract for and on behalf of his wife that she should perform at the Holliday Street Theatre, Baltimore, Alaryland. of which the appellant was the manager, for the period of time and at the salary therein named. There was ím negative covenant in the contract that she should not, during that time, perform at any other theatre. As alleged in the bill of the appellants, in viola! ion of her contract the husband ⁵⁶⁸ refused to permit his wife to perform at said theatre, and engaged her services to a rival company, of which Burton was the manager. The bill also discloses that the complainant had brought an action at law to recover damages because of the breach of the contract.

The prayer of the bill asked, among other things, that Margaret Burke be restrained from performing as an actress in any other theatrical corps during the continuance of said contract, etc. This Court in that case held that the injunction should have been refused because oppressive when considered in connection with the suit at law then pending, saying, “Equity will not listen to a complainant who thus presents himself for relief, until he makes his election in which Court he desires to proceed in pursuit of his rights, and has dismissed, or agreed to dismiss, his proceedings in the other.” This Court in its opinion in that case referred to the cases of Kemble v. Kean, 6 Simons, 333, and Kimberley v. Jennings, 6 Simmons, 340. In those cases the contracts were for personal services and each contained an affirmative and a negative covenant. The Court was asked to restrain the employee from rendering services to one other than the plaintiff in violation of his contract with the plaintiff. The Court there held that it could not enforce the positive part of the contract, and therefore it would not restrain by injunction a breach of the negative part.

The Court in its reference to these cases did not approve or disapprove of the principle of law laid down in them, but simply said: “If these cases are to be regarded as of any authority, upon what principle could the complainant, under a contract affirmative in all its provisions, and the execution of which could not be specifically enforced, ask a Court of Equity, in effect, to engraft upon it a negative stipulation, the breach whereof was to be restrained by injunction, as if it had formed a part of the written agreement of the parties?” ⁵⁶⁹ The next ease we find in this Court involving the right-under a contract for personal services to restrain the violation of the covenants therein, is that of Hahn v. Concordia Society, 42 Md. 460 , which, unlike the case of Burton v. Marshall, contained an express negative stipulation that the defendant would not do that which the injunction prohibited him from doing. By the agreement in the case of Hahn v. Concordia, the appellees engaged the defendant, an actor, for the time therein mentioned, at a monthly salary, and he was not during the time for which he was employed to act in any other theatre without the express permission in writing from the appellees. The agreement also contained the stipulation to the effect that, if the defendant should break it, he should pay to the appellees a conventional fine of two hundred dollars, which sum was to be forfeited in any violation of the contract and required no legal proceedings for its execution. The Court, after briefly alluding to the decision in the case of Kemple v. Kean, referred to and quoted from the case of Lumley v. Wagner, 1 DeG., Mac. & G. 604, which expressly overrules the cases of Kemble v. Kean and Kimberley v. Jennings, and which was decided after the case of Burton v. Marshall.

This Court, in speaking of the case of Lumley v. Wagner, said: “By this decision we understand the law to be now settled in England that, though a Court of Equity can not enforce the specific performance of a contract for the rendition of mere personal services, yet it will not hesitate to interfere by injunction to prevent the violation of a negative stipulation, where the terms and nature of the contract are similar to those in that case. In this country, the authorities, and especially those in New York, of Hamblin v. Dinneford, 2 Edw. Ch. Rep. 529 , and Sanquirico v. Benedetti, 1 Barb. 315 , appear to have followed Kemble v. Kean and have denied the relief.

In fact, we have not been referred to, nor have we found, any American decision in which an injunction has in a like case been sustained.” The Court then proceeded to say: “But in our judgment the ⁵⁷⁰ present case does not require us to decide this important jurisdictional question.” The Court then, upon entirely different grounds from those it had been discussing, reversed the Court below and dismissed the bill. This is the last case in this Court that we have been able to find, or to which our attention has been called, involving the rights of an employer, under a contract for purely personal services, to restrain the employee from a breach of a ■ negative covenant in the contract of employment. In other jurisdictions, however, the rights of employers in such eases have since been frequently heard and determined, and the law governing such cases is also found in the works of the text writers covering this branch of the law. Page on Contracts, Vol. 3, section 1644, in summarizing the law applicable to cases of this character, says: “If the executory covenants are in part affirmative ones which can not be enforced by specific performance, and in part negative ones, the question whether Equity will grant relief against breach of the negative covenants by injunction is one on which there is conflict of authority.

The cases in which this question is presented are usually cases of contracts for personal services. The original rule in this country seems lo have been that equity would grant no relief, affirmative or negative, in contracts for personal services, even if there was an express neg’ative covenant. Modern Courts have, however, receded somewhat from this extreme and uncompromising position. In some cases it has been held that if the services contracted for are unique in character and if by reason of special knowledge, skill, ability