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Voltube Corp. v. B. & C. Insulation Products Inc.

Decided: June 25, 1951.

VOLTUBE CORPORATION, A CORPORATION OF NEW JERSEY, PLAINTIFF,
v.
B. & C. INSULATION PRODUCTS, INC., A CORPORATION OF NEW YORK, AND LOUIS SPERLING, DEFENDANTS



Ewart, J.s.c.

Ewart

[20 NJSuper Page 252] Plaintiff brings suit against the defendants on a complaint divided into two counts, in the first of which plaintiff seeks an injunction restraining the defendants from continuing to make alleged false statements as to the quality of plaintiff's products, its ability to carry on business, its financial stability, and from circulating disparaging statements concerning plaintiff's business and its products, and the manner in which its business is conducted, and in the second count of which the allegations of the first count are repeated by reference; the defendants are charged with knowingly and maliciously circulating such false statements relating to the plaintiff and its business, and under

the second count plaintiff seeks both compensatory and punitive damages from the defendants.

It appears from the allegations of the complaint that the plaintiff corporation was organized in 1951; that it is engaged in the business of manufacturing and selling electrical insulation; that the controlling stockholders and officers of the plaintiff corporation were formerly associated in business with the defendant corporation and with the individual defendant; that the plaintiff and defendants are competitors in the business mentioned; and that the defendants, for the purpose of injuring the plaintiff and in order to take over the plaintiff's customers and the trade and business of the plaintiff, have fraudulently embarked upon a course of conduct designed to injure the plaintiff and its business by making false statements to the plaintiff's customers and to the trade generally to the effect that the plaintiff's manufactured products were defective; that plaintiff was financially unsound; that plaintiff's vice-president was a crook; that plaintiff was not capable of producing the goods it was manufacturing and offering for sale; that plaintiff's plant where its merchandise was manufactured would never be completed because it had insufficient funds with which to erect the building; that plaintiff would not be able to continue in business; that plaintiff was defendant in suits instituted by mechanics against it and that plaintiff was going out of business; and that no credit should be given to the plaintiff because of its unsound condition and generally that the plaintiff was entirely unreliable and not fit to do business with.

Before answering, defendants have moved:

(1) To strike the allegations set forth in paragraphs 2, 3 and 4 of the first and second counts of the complaint upon the ground that the same are immaterial and impertinent.

(2) Requiring the plaintiff to file a more definite statement of its complaint.

(3) To enter judgment in favor of the defendants on that portion of the complaint (first count) seeking a judgment

of injunction and restraint, upon the ground that there is a failure to state a claim upon which such relief can be granted.

(4) To transfer the complaint to the Law Division because it is essentially a suit at law.

I deal with the points raised by the foregoing motion in the order mentioned, as follows:

FIRST: Paragraphs 2, 3 and 4 of the first and second counts contain allegations showing the date of incorporation of the plaintiff; the names of its officers and controlling stockholders; the purpose for which it was organized and the business in which it is engaged; the former connection of the plaintiff's controlling stockholders and officers with the defendants; the fact of certain litigation in or about 1950 between Sanford Cytron, vice-president and one of the controlling stockholders of the plaintiff, and the individual defendant, concerning the ownership of stock and an accounting for profits of the corporate defendant; the outcome of such litigation in favor of Cytron and against Sperling, the individual defendant; the knowledge, experience and skill of the controlling stockholders and officers of the plaintiff corporation in the operation and conduct of the business in which the plaintiff corporation is now engaged; the setting up of business by the plaintiff corporation and the solicitation by the officers of the plaintiff corporation among the trade for business, etc. These facts and circumstances would ordinarily be immaterial and impertinent. However, plaintiff, in its complaint, charges the defendant was motivated by malice and the complaint seeks punitive as well as ...


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