covenant on its right to terminate ; illegally restrict its use of the equipment; perpetually enjoin it against use of its equipment; require it to pay license fees on its use of the equipment; and impose a restraint contrary to public policy. Defendant-respondent's contentions rest basically on the faulty assumption that the agreement imposes no clear-cut restriction on the right of use of the Muzak equipment and accordingly it can terminate with impunity. But the contract, speaking for itself, is the best witness to the concomitant obligation of defendantrespondent to pay $100 per month so long as it continues to use the Muzak equipment. Furthermore, the right to terminate provision of the 1937 contract, so heavily relied on by defendantrespondent, ceased to have any significance after 1940 since it was inconsistent with the modification agreement whereby title to the Muzak equipment was transferred. Thus, when defendantrespondent argues that plaintiff-appellant is endeavoring to have the court impose a restrictive covenant upon its right to end the agreement and cites cases where litigants were endeavoring to have the court impose a restriction which was not in the parties' contract, defendant-respondent is not arguing the instant case. Nor does plaintiff-appellant seek a perpetual injunction against defendant-respondent's use of the equipment. Plaintiff-appellant seeks merely to enforce the agreement as written, to require defendant-respondent to pay the agreed license fee so long as defendant-respondent continues to derive the benefit for which this fee was fixed. Actually, defendant-respondent is asking the Court to disregard the specific provision both in the 1937 agreement and the 1940 modification, obligating it to pay $100 per month for the use of the Muzak equipment. And in asking the Court to absolve it of this duty, defendantrespondent does not even offer to forego any of the rights obtained by it under the contract. To persuade the Court to thus rewrite the parties' agreement, defendant-respondent stigmatizes this one provision of the contract as “a penalty”, an “illegal restriction”, “a restrictive covenant”, a “restraint contrary to public policy”. By thus indulging in name-calling, defendant-respondent attempts to gloss over the basic fact that this license obligation is an integral part of the contract as written, that it was thoroughly considered by the parties and inserted as a fair measure of the consideration to go to plaintiff-appellant. It is certainly not a penalty provision. Nor is there any real question of public policy since royalties and license fees are often provided as payments for the use of equipment leased or sold. Publishers who own literary works may be required to pay royalties to authors, as In re Elsner's Will, 210 App. Div. 575, 206 N. Y. S. 765 (1924); owners of Western Electric and United Shoe Machinery equipment may be required to pay license fees or royalties to the manufacturers of the equipment purchased from hem; and G. Schirmer, Inc. may be required to pay royalties to April Productions, Inc. so long as it publishes music under license from that company. It is respectfully submitted that the contention of defendant-respondent cannot be countenanced. A basic obligation imposed on one party to a contract cannot be labeled “illegal” or “restrictive” or “contrary to public policy” and thus tossed aside, while the remainder of the contract with all its benefits to that party is permitted to stand intact. Yet this is precisely what defendant-respondent asks this Court to do when it seeks to terminate an agreement partially executory and partially executed; the executory part containing an important part of the obligation imposed upon defendant-respondent which has already obtained from the executed part of the contract all it ever hoped to obtain. Defendant-respondent seeks here “something for nothing” or unjust enrichment. It is of no significance in the case at bar that legal title to the Muzak equipment after May 14, 1940 was not in plaintiff-appellant but in defendant-respondent because the parties agreed that, notwithstanding the passage of legal title from plaintiff-appellant to defendant-respondent as a result of the May 14, 1940 modification agreement, license fees thereafter would continue to be paid. In the cases of April Productions Inc. v. G. Schirmer, Inc., supra, and in re Elsner's Will, supra, payments were likewise directed to be made to one who then did not have legal title. CONCLUSION The judgment of the Appellate Term of the Supreme Court, First Judicial Department, should be reversed and the judgment of the Municipal Court of the City of New York should be reinstated, with costs in all courts to plaintiff-appellant. Respectfully submitted DAVIS & GILBERT, Attorneys for Plaintiff-Appellant. IRVING P. SCHLESINGER, Of Counsel. |