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SURCO PRODUCTS v. KIESZEK (05/23/51)

May 23, 1951

SURCO PRODUCTS, INC.
v.
KIESZEK, APPELLANT



Appeals, Nos. 104 to 108, inclusive, March T., 1951, from judgment of Court of Common Pleas of Allegheny County, April T., 1951, No. 1696, in case of Surco Products, Inc., v. Leonard J. Kieszek et al., individually; Associated Products, Inc. and Associated Manufacturing Corporation. Judgment reversed.

COUNSEL

John A. Metz, Jr., with him Metz & Metz and Howard S. Auld, for appellants.

James H. Brennan, with him Maurice Chaitkin and Brennan & Brennan, for appellee.

Before Stern, Stearne, Jones, Bell, Ladner and Chidsey, JJ.

Author: Bell

[ 367 Pa. Page 516]

OPINION BY MR. JUSTICE BELL

A Bill in Equity was filed on February 9, 1951, alleging a conspiracy and notifying defendants that an application for a temporary injunction would be presented to the court on February 15, 1951. The hearing

[ 367 Pa. Page 517]

    was continued until February 16th and on that date the court, after hearing some testimony, granted a preliminary injunction restraining the defendants from doing any business until February 21, 1951, at which time another hearing was to be held to determine a further order of the court. The preliminary injunction was ordered without requiring any bond or other security to indemnify defendants for damages which might be sustained by reason of such injunction. Defendants appealed from this order on February 21, 1951.

Plaintiff's Bill alleged that prior to November 1, 1950 defendants, Kieszek and Simons, were shareholders of Surco Products, Inc., and defendant, Schneider, was general manager of Associated Manufacturing Corporation, which had made dies for plaintiff, which were used for its chemical device or diffuser, known as "Air-Scent". On November 1, 1950 Kieszek and Simons sold their stock in Surco Products, Inc. to the plaintiff in exchange for one-third of all of plaintiff's assets (including a one-third interest in the dies which were to remain in the possession of Associated Manufacturing Corporation until other-wise authorized), and also a license to manufacture and sell the identical diffuser or device made by plaintiff under the same trade name of "Air-Scent" within one-third of the territory of the plaintiff's distributors, and in any open territory not covered by any distributor contract of plaintiff. The Bill then alleged a conspiracy of all the defendants to unlawfully compete with plaintiff, and to cheat and defraud plaintiff; and prayed for injunctive relief, an accounting, and punitive damages. No injunction affidavits were attached to plaintiff's Bill or filed in court; plaintiff elected instead to request a preliminary injunction after hearing by the Court.

[ 367 Pa. Page 518]

This brief summary of the plaintiff's Bill of Complaint will suffice, since the contents of the Bill and the factual merits of the case are of little or no moment on this appeal.

Most of the record in the hearing or trial on February 16, 1951 consisted of a colloquy between the counsel for plaintiff and for defendants and the court, although some evidence was produced by plaintiff, which we shall briefly summarize. Defendant Schneider was President and Manager of Associated Manufacturing Corporation, one of the defendants, and Secretary-Treasurer of Associated Products, Inc., another defendant. Schneider failed to bring with him under subpoena the minute book and charter of Associated Products, Inc. The two corporate defendants had on hand approximately 800 units of the mechanical devices involved. Dies owned two-thirds by the plaintiff and one-third by the defendants Kieszek and Simons under the written contract attached to the Bill ...


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