Appeal from the Circuit Court of the United States for the Western District of Missouri. This is an appeal from an order granting a temporary injunction against the breach by the appellants of an agreement made on May 4, 1908, between the Woodward & Burgess Amusement Company, the complainant below, and the defendants and appellants, Lee Shubert and Jacob J. Shubert, relative to the operation of two theaters at Kansas City owned by them respectively. By that contract the amusement company agreed that it had a lease of its theater for 10 years, that it would pay the rent under that lease, and that its theater should be operated as a place of amusement at prices of admission which should not be higher than $2 nor lower than 254. The Shuberts agreed that they had a lease for 10 years of their theater, that they would pay the rent under that lease, that they would cause their theater to be carried on as a place of amusement at prices of admission not higher than $1 nor lower than 254, that they would fill at least 30 weeks each season at their theater, and would pay into the general fund $1,000 for each week less than 30 booked and played therein. The amusement company drew the contract, and submitted it to the Shuberts for signature. The Shuberts wrote into the fourth and eighteenth paragraphs of it the words underlined below, and then the contract was signed. The fourth, seventh, eighth, and eighteenth paragraphs read in this way: "Fourth. The party of the first part hereby appoints and designates O. D. Woodward as its representative at the salary of $50 per week and the second parties hereby appoint and designate O. D. Woodward as their representative at a salary of $50 per week to be the General Manager of the enterprises herein referred to. But said representative to be subject to direction and orders from the 2nd party hereto." "Seventh. The party of the first part agrees to take general supervision and control of both of said theaters and the business in connection therewith and to make no charges for its services in so doing. "Eighth. It is further agreed that the parties of the second part shall name and appoint a treasurer for the Sam S. Shubert Theater in Kansas City, Missouri, said treasurer to be under the supervision of the party of the first part but who shall have no power to discharge said treasurer." "Eighteenth. The Shubert Theater is to be booked in the offices of Lee & J. J. Shubert in New York City, all contracts to go to O. D. Woodward for approval and signature; the house program to carry the announcement 'Under the Management of the Woodward & Burgess Amusement Company and Lee and J. J. Shubert.' All funds of the Shubert Theater shall be deposited by the treasurer thereof to the credit of the Shubert account and surplus distributed at end of season as herein provided." The parties further agreed by this contract that there should be charged into the general expenses of each of the theaters $20,000 per year as rental therefor; that each of the theaters should keep true books of account of all moneys received and paid out, should send daily statements of its receipts and weekly statements, which should show its profits and losses to each of the parties; that each of the theaters should be operated as an independent enterprise; that on June 30th of each year the profits or losses of each theater should be ascertained; that the net profits of both theaters should be paid into a general fund, and should be divided equally between the parties to the contract, and that the losses of both theaters should be divided in the same way; and that the term of the agreement should be five years, and the amusement company should have the option to continue the term for five years longer. O. D. Woodward was and is the president of the amusement company, and in May, 1908, the Shuberts placed the amusement company and Woodward in possession of their theater, and they proceeded to prepare it for the season commencing in September, 1908. Before the 3d day of September, 1908, numerous controversies arose between the parties respecting the authority of the Shuberts to order and direct the course of management of their theater under the contract. Woodward and the amusement company disobeyed Shuberts' orders in relation to the price of admission, the matinee days, the employés, and the expenditure of the fund deposited to the credit of the Shubert account. Thereupon the Shuberts discharged Woodward, and on September 3, 1908, the amusement company, and Woodward exhibited their bill in one of the courts of the state of Missouri, in which they set forth the contract, alleged that the Shuberts were about to break it and to take possession of their theater, that this action would result in irreparable injury to the complainants, and prayed that the Shuberts and C. A. Bird, their agent, might be enjoined from violating the contract and from interfering with the possession, control, and management of the Shubert Theater. The court restrained the defendants from taking possession of their theater, and ordered them to show cause why an injunction should not issue as prayed. The suit was then transferred to the United States Circuit. Court below, where on September 10, 1908, the order to show cause came on for hearing pursuant to due notice. On that hearing the defendants, in answer to the order to show cause and in opposition to the order for the injunction, filed and presented to the court below 10 affidavits and more than 20 letters between the parties, but the court declined to read them or to hear them. The complainants, probably for that reason, presented no affidavits in response, and the court on September 14 and September 23, 1908, granted and continued an injunction against the violation of the contract by the defendants. On October 2, 1908, the fact that the parties were unable to agree what the contract meant and what acts were in violation of it was made to appear to the court, and it thereupon appointed Woodward general manager of the defendants' theater, and authorized and directed him to manage it according to the terms of the contract, and authorized the defendants to appoint a treasurer for this theater, and it appointed a master to determine what disputed expenses incurred by Woodward should be paid by the treasurer. The defendants appealed from the orders of September 14th and 23d and October 2d. The order granting the injunction was made on September 14, 1908, and was amended on September 23, 1908. At the time these orders were made, the rights of the parties relative to the order for injunction were measured by the proofs presented by the complainants' bill filed on September 14, 1908, under an order of repleader and the letters and affidavits presented by the defendants in answer to the order to show cause. In that bill the complainants set forth the contract, alleged that under it they were entitled to the possession and management of the Shubert Theater for five years, with an option of an extension of the term for five years more; that they entered into the possession and control of the theater in June, 1908; that they hired the employés, advertised the theater, and expended a great deal of time and labor about the details necessary to perform the contract; that they were about to open the theater on September 6, 1908; that the defendants were seeking to disregard the contract with the amusement company, and to deprive Woodward of his rights under the contract, and were threatening and attempting to take exclusive possession of the theater, to discharge the employés hired by the complainants, and to prevent them from proceeding under the contract. They alleged that they had spent a great deal of time and money in carrying out the contract, and that if the defendants were permitted to disregard it the complainants would suffer great financial loss, permanent damage, and irreparable injury; that the profits by the operation of the contract during the time named therein would probably be very large, exceeding perhaps $250,000, but that from the fact that they were all prospective there was no way by which the damage to the complainants could be ascertained if the acts of the defendants were permitted to continue. And they prayed for an injunction against the defendants enjoining them from disregarding the contract and from interfering with the possession, control, and management of the Shubert Theater under the contract, and from interfering with the rights of the complainants thereunder. The opposing affidavits proved that before the original bill was filed the complainants had disobeyed the order of the Shuberts, which prescribed the scale of prices for admission to the Shubert Theater within the limits fixed by the contract, and that they had prescribed other prices which would in many instances cause a difference in the gross receipts of the theater of as much as $1,000 for a week's engagement, and might easily convert what ought to have been a profit into a loss; that the complainants had shifted the midweek matinee of the Shubert Theater from Wednesday to Thursday in violation of the direction of the Shuberts, and that this change would greatly diminish the earnings of the theater; and that Woodward had refused to recognize the right of Miller, the treasurer of the Shubert Theater, appointed by the Shuberts pursuant to the contract, to determine the validity of claims against the funds deposited to the credit of the Shuberts' account under the nineteenth paragraph of the contract, and his right to sign the checks thereon, and had insisted that Woodward had the right to sign checks and handle the house along the same lines as he handled every other house with which he was connected; that thereupon the Shuberts had discharged Woodward and had taken possession of the Shubert Theater. James C. Jones and J. C. Rosenberger (Jones, Jones, Hocker & Davis and Kersey Coates Reed, on the brief), for appellants. John H. Lucas (Thompson, Stanley & Price and Johnson & Lucas, on the brief), for appellees. Before SANBORN and ADAMS, Circuit Judges, and RINER, District Judge. SANBORN, Circuit Judge (after stating the facts as above). The complainants pray in their bill, and the orders challenged grant, a temporary injunction against the violation by the defendants of the contract of May 4, 1908. The act of Congress which confers jurisdiction of appeals from orders granting or continuing injunctions provides that an appeal may be taken where "upon a hearing in equity" such an order is made (Act April 14, 1906, с. 1627, 34 Stat. 116 [U. S. Comp. St. Supp. 1907, p. 208]), and counsel insist that these orders are not appealable, (1) because they grant an injunction until the further order of the court, but an injunction until the further order of the court is equally appealable with one until a time certain, and (2) because when the defendants presented their affidavits and letters in answer to the order to show cause why the injunction should not issue against them, the court declined to hear these affidavits and letters or to hear counter affidavits which were not prepared and hence do not appear in the record, and granted the injunction without regard to these proofs for the purpose of maintaining the existing state of affairs until the validity and construction of the contract could be judicially determined at the final hearing of the suit. But the affidavits and letters presented by the defendants constituted admissible evidence in their behalf in opposition to the order for the injunction. Either party may read pertinent affidavits and admissions at such a hearing. Equity Rule 55; Bates on Federal Equity Procedure, § 534; 3 Daniell, 275, 297. These affidavits and letters were introduced in response to the order to show cause at the proper time in the presence of the court and counsel, and at the hearing upon which the court decided to grant the injunction. A hearing by a federal court in equity at which the admissible evidence of a litigant is disregarded and an order or decree is rendered against him is no less a hearing in equity than one in which his evidence is considered, and the orders granting the injunction were appealable. Moreover, whether the court below considered the affidavits and letters or not, the appellate court may not lawfully disregard them, because upon an appeal in equity the question always is in a national appellate court whether or not the order or decree challenged is sustained by the competent and relevant evidence presented by the record before it. Blease v. Garlington, 92 U. S. 1, 8, 23 L. Ed. 521; First National Bank v. Abbott (C. C. A., filed November 24, 1908) 165 Fed. 852; Missouri American Electric Co. v. Hamilton Brown Shoe Co. (C. C. A., filed November 16, 1908) 165 Fed. 283; Dreutzer v. Frankfort Land Company, 65 Fed. 642, 644, 13 С. С. А. 73. The injunctional orders in this case are unique. They enjoin the defendants from interfering with such management and control of the Shubert Theater by the complainants "as is granted unto complainants in and by the written instrument set out in plaintiffs' petition," and they enjoin the complainants from interfering with the management of the theater, "except under the exact terms specified in the contract made between the parties," declare that it is the express object of the orders "to compel a strict observance of the rights granted by and the obligations incurred by the terms employed in the contract until its validity or invalidity may be determined on full proofs by final decree," and that in case dispute should arise between the parties, application may be made to the court for temporary construction of the contract and for further orders. When these orders were made on September 14th and September 23d respectively, the record was replete with proof that an irreconcilable conflict had arisen between the parties over the construction of the contract before the suit was commenced; and on October 2, 1908, upon further application, the court ordered that Woodward should exercise the powers of general manager of the theater and of its business, "subject, however, to the provisions of the contract in all respects"; that the defendants' treasurer should exercise the powers of a treasurer; that disputes about claims for expenses should be determined by a special master who was appointed by the order; and that the purpose of the order was "to preserve the status of the property and require the operation and conduct of the business of the Shubert Theater in strict accordance with the contract between the parties." It is clear from a review of these orders that their legal effect was to enjoin the defendants from committing any breach of the terms of the agreement of May 4, 1908. An injunction against the breach of a contract is a negative decree of specific performance of the agreement, and the general rule is that the power and the duty of a court of equity to grant the former is measured by the same rules, principles, and practice as its power and duty to grant the latter relief. 4 Pomeroy's Equity Jurisprudence (3d Ed.) § 1341; General Electric Co. v. Westinghouse Elec. & Mfg. Co. (C. C.) 144 Fed. 458, 463; Welty v. Jacobs, 171 III. 624, 631, 49 N. E. 723, 40 L. R. A. 98; Chicago Municipal Gas Light Co. v. Town of Lake, 130 I11. 42, 60, 22 N. E. 616. This, like most general rules, is not without its exceptions, under which injunctions may be lawfully issued to restrain the performance of specific acts in violation of agreements whose specific performance the courts would not completely enforce, as where certain acts violative of an agreement constituted an infringement of complainant's patents (General Electric Co. v. Westinghouse Electric Co. [C. C.] 151 Fed. 664, 675), or a breach of a partnership agreement (Leavitt v. Windsor Land & Investment Co., 54 Fed. 439, 443, 4 C. C. A. 425), although a court of equity will not enjoin all breaches of a partnership agreement and in that way enforce specific performance of it (Marble Co. v. Ripley, 10 Wall. 339, 350, 19 L. Ed. 955), or the violation of a negative covenant, express or implied, where the prohibition will have the effect or tendency, as in the case of a singer's or of a ball-player's contract, to compel performance of the agreement (Lumley v. Wagner, 1 De Gex, M. & G. 604; Philadelphia Ball Club v. Lajoie, 202 Pa. 210, 51 Atl. 973, 974, 58 L. R. A. 227, 90 Am. St. Rep. 627; Singer SewingMachine Co. v. Union Button Hole & Embroidery Co., 1 Holmes, 253, 22 Fed. Cas. No. 12,904; Chicago & A. R. R. Co. v. N. Y., L. E. & W. R. R. Co. [C. C.] 24 Fed. 516, 520; McCaull v. Braham [C. C.] 16 Fed. 37; Goddard v. Wilde [C. C.] 17 Fed. 845); but a prohibition of the complainants from managing other theaters would have no tendency to compel them to manage the Shubert Theater according to the agreement, and in the absence of such a tendency this contract lacks mutuality, or where the validity of the contract conditions the right to the possession and a court forbids a forcible taking until the soundness of the agreement can be determined (Western Union Co. v. St. J. & W. Ry. Co. [C. C.] 3 Fed. 430), but the validity of this contract is not determinative of the right of possession of the Shubert Theater. The case at bar does not fall under any of these exсерtions, and it is governed by the general rule. The bill is not leveled at any specific violation or any specified series of breaches of the agreement. It charges that the defendants are seeking to disregard their contract, and it prays for a single relief, and nothing more, that the defendants may be enjoined "from disregarding said contract, and from interfering, or attempting to interfere, with the possession, control, and management of said Shubert Theater under said contract, or in any way interfering with the rights of these complainants thereunder." It is a bill for the complete specific performance of the contract by injunction, and the orders for the temporary injunction are as broad as the bill. Neither the bill nor the orders for the injunction can be successfully maintained unless it was the duty of the court below upon the record before it to compel temporarily the specific performance of the contract. The specific performance of a contract by a court of equity is not a matter of right. It rests in the discretion of the court, not in its arbitrary whimsical will, but in its sound judicial discretion informed and directed by the established principles, rules, and practice of equity jurisprudence. Hennessey v. Woolworth, 128 U. S. 438, 442, 9 Sup. Ct. 109, 32 L. Ed. 500. Nor are these principles and rules and this practice hard, fast, or without exception. They are rather advisory than mandatory, and the application of the rules and of their exceptions to each particular case as it arises is still intrusted to the conscience of the chancellor. Yet these principles and rules and this practice serve to inform the intellect and to enlighten the conscience, |