The History of the Standard Oil Company/Volume 2/Appendix/Number 42
NUMBER 42 (See page 69)
STANDARD OIL COMPANY'S PETITION FOR RELIEF AND INJUNCTION
[In the case of the Standard Oil Company vs. William C. Scofield et al., in the Court of Common Pleas, Cuyahoga County, Ohio, 1880.]
The said plaintiff, the Standard Oil Company, now comes and says that on the twentieth day of July, A.D. 1876, it was and still is a corporation organised and existing under and by virtue of the laws of the state of Ohio, and that at the same time the said defendants, William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle, were and still are partners doing business in the firm name of Scofield, Shurmer and Teagle, and the said plaintiff complains of the said defendants, and says: That on the said twentieth day of July, A.D. 1876, the said plaintiff and the said defendants as such partners were each separately engaged in the business of refining and dealing in crude petroleum and its products, said plaintiff having a number of refining establishments at Cleveland, Ohio, and the said defendants owning and operating one refinery only, also located at Cleveland, Ohio, on the line of the Atlantic and Great Western Railroad, and while so engaged and on the said twentieth day of July, A.D. 1876, the said plaintiff and the said defendants as such partners entered into a joint arrangement in writing in and by which it was, amongst other things, agreed between the said plaintiff and the said defendants individually and as such partners that the said defendants would continue their then business in the firm name of Scofield, Shurmer and Teagle of buying, refining and selling crude petroleum and its products as theretofore carried on by them, for a period of ten years from July 20, A.D. 1876, and furnish for the conducting of said business their refinery aforesaid with all tanks, fixtures, buildings, erections, tools, and all mechanical appliances then or theretofore used by them in their said business, together with the land on which the same are situated, and also within five days from the date of said agreement furnish for the use of said joint business adventure the sum of ten thousand dollars in cash to be used continuously in said business until July 20, A.D. 1886. That the said William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle, in and by said agreement for conducting said joint adventure, further covenanted and agreed with the plaintiff to devote all their time and personal attention necessary to conduct the said business for the period aforesaid, and that during the existence of said adventure they would not nor would either of them as a firm or as individuals directly or indirectly engage or be concerned in any business connected with petroleum or any of its products in Cuyahoga County or elsewhere, except in connection with the parties of the first part under this agreement, nor would they or either of them enter into any new business which would interfere with the time necessary to be devoted to the full and faithful conduct of the business of said adventure.
That the said William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle, in and by said agreement for conducting said joint adventure, further covenanted and agreed with said plaintiff that the amount of crude petroleum to be distilled by them in the business of said adventure should not exceed annually eighty-five thousand barrels of forty-two gallons each in any year, but the same should be distributed as nearly as practicable in equal quantities of 42,500 barrels of forty-two gallons each, each and every six months from the twentieth day of July, A.D. 1876, but the said 42,500 barrels might be run in a less period than six months.
That in and by said agreement for conducting the business of said joint adventure it was stipulated and agreed by both parties, amongst other things, that from the net profits of the business of said joint adventure the said defendants should first be entitled to retain and be paid the sum of $35,000 per annum while the said agreement was in force and operation, and in the case the net profits should not amount to $35,000 for any year that said agreement for conducting said joint adventure was in force and operation, then at the expiration of any such year the plaintiff should on demand pay to the said defendants a sum of money sufficient to make that amount, viz., $35,000 for any year that said agreement should be in force and operation. That all net profits over the amount of $35,000 so stipulated to belong to said defendants annually should belong and be paid to said plaintiff until the plaintiff should receive therefrom as much as said defendants had received from the net profits under the provisions of said agreement, and all net profits in excess of $70,000 annually should be divided equally between the parties thereto.
That in consideration thereof and in and by said agreement for conducting said joint adventure, the said plaintiff stipulated and agreed with the said defendants, amongst other things, that on or before the twenty-fifth day of July, A.D. 1876, it would furnish to the said defendants for them to use in the business of said joint adventure the sum of $10,000 in cash, which sum was so paid in as agreed and still remains in the business.
That the said plaintiff would receive, dock, and sell in the city of New York all oil and the products of petroleum consigned to it for sale at New York by said firm of Scofield, Shurmer and Teagle at actual cost of brokerage and handling without commissions.
That the said plaintiff would and did in said agreement guarantee to the said defendants that their share of the net profits arising from the business of said joint adventure should for ten years from July 20, A.D. 1876, to July 20, A.D. 1886, amount to the sum of $35,000 annually, during the operation of this contract, as hereinbefore stated. The plaintiff further says that between July 20, 1876, and the present time, the said defendants have repeatedly violated their said agreement in this, to wit: that every year since the making of said agreement the said defendants have distilled over 85,000 barrels of crude petroleum; that during the year from July 20, 1876, to July 20, 1877, they distilled 89,983.34-42 barrels; that during the year from July 20, 1877, to July 20, 1878, they distilled 87,754.4-42 barrels; that during the year from July 20, 1878, to July 20, 1879, they distilled 100,246.25-42 barrels, and from July 20, 1879, to July 20, 1880, they distilled 90,082.34-42 barrels.
That up to the present time the defendants have distilled more than by the terms of their said agreement they have a right to distil up to January 20, 1881, and have purchased large quantities of crude petroleum and are distilling portions thereof, and threaten to distil the balance without regarding their said contract. That the crude petroleum so as aforesaid distilled by the defendants has not by them been distributed as nearly as practicable in equal quantities of 42,500 barrels of forty-two gallons each, each and every six months as they agreed to do, but in violation of their said agreement they distilled from July 20, 1876, to January, 1, 1877, 43,509.36-42 barrels; from January 1, 1877, to July 20, 1877, 46,473.40-42 barrels; from July 20, 1877, to January 1, 1878, 50,416.12-42 barrels; from January 1, 1878, to July 20, 1878, 37,337.34-42 barrels; from July 20, 1878, to January 1, 1879, 56,974.15-42 barrels; from January 1, 1879, to July 20, 1879, 43,272.10-42 barrels; from July 20, 1879, to January 1, 1880, 57,499.35-42 barrels; that on or about the twentieth day of July, 1879, the plaintiff having discovered that the said defendants had in violation of said agreement distilled about 22,984 barrels of oil more than they were entitled to by the terms of said agreement, the plaintiff objected and complained to the defendants in regard thereto, and thereupon the defendants admitted the violation of the contract in that respect, and it was agreed between the parties that the defendants would and should during the then coming year diminish their manufacture sufficiently to bring the entire amount of manufacture under said contract within the terms of said agreement.
That during the then coming year from July 20, 1879, to July 20, 1880, the said defendants did not diminish their distillation below the 85,000 barrels as they had agreed to do, but from July 20, 1879, to January 1, 1880, they distilled 57,499.35-42 barrels, and from January 1, 1880, to July 20, 1880, they distilled 32,582.41-42 barrels, making a total of 90,082.34-42 barrels for the year, thus increasing their distillation over the 85,000 barrels 5,082 barrels, instead of diminishing it as they had agreed to do.
That the defendants threaten to and have informed the plaintiff that they will hereafter wholly disregard said contract and continue to distil crude petroleum without regard to quantity.
The plaintiff further says that since the making of said agreement and within the past year the said Daniel Shurmer and John Teagle have in violation of their said contract engaged and been connected in constructing a refinery at Buffalo, New York, for the purpose of distilling crude petroleum with others than the plaintiff under said agreement and are now so engaged.
That within the past year the said Daniel Shurmer and John Teagle and each of them have invested money to the amount of $10,000, and are now engaged and connected in constructing refineries for the purpose of distilling crude petroleum and its products with others in no way connected with the plaintiff or under said agreement, but intending thereby to establish and prosecute with others the same business as that contemplated and conducted under said agreement, and thereby establishing and conducting a rival business to the business of said adventure and tending to involve the plaintiff in loss by reason of its guarantee that the profits of said adventure should amount to the sum of $35,000 annually to defendants, and have during the past year been at said Buffalo and other places giving the said business their time and personal attention, and have done so at times when their time and personal attention was needed and was requisite to properly conduct the business of said adventure under said agreement at Cleveland.
The plaintiff further says that because of the said failures and refusals of the defendants to carry out their said agreement it has already sustained great damage and will sustain further damage if the said defendants are permitted to continue their said violation of said agreement. That the said plaintiff has no adequate remedy therefor at law for the reason that the damages arising therefrom are so remote and difficult of ascertainment, and constantly recurring would necessitate a multiplicity of suits and would involve the plaintiff in the increased hazards of losses arising from such increased manufacture and deprive it of all the benefits of said contract.
The plaintiff therefore prays that the said William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle may by proper process be made defendants herein and compelled to answer this petition; that a preliminary injunction and restraining order be granted restraining the said William C. Scofield, Charles W. Scofield, Daniel Shurmer and John Teagle, and each of them individually and as partners in the name of Scofield, Shurmer and Teagle, until the further order of the court, from distilling at their said works at Cleveland, Ohio, more than 85,000 barrels of crude petroleum of forty-two gallons each in every year, and also from distilling more than 42,500 barrels of crude petroleum of forty-two gallons each, each and every six months, and also from distilling any more crude petroleum until the expiration of six months from and after July 20, 1880, and also from directly or indirectly engaging in or being concerned in any business connected with petroleum or any of its products, except in connection with the plaintiff under their said agreement, and that on the final hearing of this case the said defendants may in like manner be restrained and enjoined from doing any of said acts until the expiration of said agreement, and for such other and further relief in the premises as equity can give.
- M. R. Keith,
- R. P. Ranney,
- Attorneys for Plaintiff.