NESSLE a. REESE

NESSLE a. REESE. Supreme Court, First District ; Special Term, June, 1865. Injunction.—Equitable Protection of Business Secrets. The courts will not, by injunction, restrain a party from the violation of a contract in which the parties have fixed and liquidated the damages for such violation. It does not alter the case that the parties defendant are insolvent. Trial by the court. This was an action brought by John P. Hessle and others against Henry Reese and wife and Edgar Hudlez\ It appeared that Reese was the inventor or discoverer of a pi'ocess for enamelling metals with porcelain, and that he with his wife assigned the right to use the process, which was theretofore a secret with them, to the plaintiffs’ assignor, covenanting not to use or disclose the same under a forfeiture of $5,000, fixed as liquidated damages for every breach of this stipulation. The present action was brought to obtain an injunction restraining them from disclosing or using this process, as it was alleged they were doing or were about, to do. John E. Burrill and H. H. Anderson, for the plaintiffs. Stallknecht & Hall, for the defendants. [MAJORITY — Miller, J.] Miller, J. I think that this' action cannot be maintained. The agreement for the sale of the secret for compounding and applying porcelain enamel, upon which the plaintiffs’ action is founded, contains a covenant that the defendants, Reese and wife, shall keep the secret, under a forfeiture of five thousand dollars, settled upon as liquidated damages, to be paid for every failure to do so. The principle upon which coui’ts of equity decree a specific peiformanee of contracts is, because damages at law may not. in a particular case, afford a complete remedy, and because of the difficulty of ascertaining the damages. ( Willard’s Eq. Jur., 274,278.) In the case at bar, the parties, by fixing the amount of damages in the agreement, have provided a complete and perfect remedy, and there is no difficulty in determining what the damages are. The damages being thus settled and liquidated, I think that the plaintiffs should be left to pursue their remedy by an action upon the agreement for damages, and are not entitled to an injunction restraining the defendants, and to equitable relief. (See Hoffman’s Provisional Remedies, 215; Barnes a. McAllister, 18 How. Pr., 534; Vincent a. King, 13 Ib., 234.) Nor does it, in my opinion, alter the case that the defendants, Reese and wife, have no property. That fact alone cannot disturb the general principle, that in case of a sum settled as liquidated damages, the parties are not usually entitled to an injunction, but must invoke their remedy at law for damages, where there is a violation of the contract. The purchaser here could have provided for such a contingency by requiring security, and it is his own fault that he has failed to do so. These views necessarily lead to the conclusion, that the complaint must be dismissed and that the defendants are entitled to judgment.