Bagwell v. H. B. Wellborn & Co.Bagwell v. H. B. Wellborn & Co.
H. B. Wellborn & Company, a Mississippi corporation, engaged in a general insurance adjustment business, with a branch office in the City of Meridian, Mississippi, sought to enjoin Floyd D. Bagwell against violating the terms of an employment contract between the parties of date of January 26, 1961. A copy of the employment agreement was attached to the bill. This instrument recited that the employee had never been engaged in the independent insurance adjustment business in the territory named except as complainant’s employee; that such business.is highly competitive, and depends to a large extent upon friendships, contracts and confidential information, formed and obtained in connection therewith; that the employer had spent many years in this character of work and had, thereby, obtained the benefit of confidential information; and that it was unwilling to employ Bagwell without execution of the agreement. By Par. 3 thereof, it was provided as follows: “Employee hereby covenants and agrees that
he will
not,
within a period of two years after the termination of
The bill charged that the defendant’s employment was terminated about June 2, 1962, and, since said time, the defendant had set up his own competing claim service, used information and client lists obtained from the complainant, and solicited business contrary to his contract of employment.
The answer of the defendant denied all of the material allegations of the bill and set up affirmative defenses, namely, a lack of consideration, no breach in the contract, it must be strictly construed against the complainant, the contract was unreasonable, and its enforcement would cause undue hardship to him.
After hearing the evidence, the court delivered an elaborate written opinion in which the conflict in the evidence was resolved in behalf of the complainant. The
Without detailing the evidence, it is sufficient to say that it showed the right of the complainant to terminate the contract of employment, and the defendant’s continuance thereafter in the independent insurance adjustment business in the City of Meridian, Mississippi, and adjacent territory thereto, in competition with the complainant," and in violation of the contract. There was a dispute in the evidence as to whether or not trade secrets, or secret information previously gained from the emplyer was of" such nature as to be beneficial to the employee, as a competitor, or that the same was imparted to others.
In effect the court held, from all the evidence, that appellant understood the provisions of the contract when he signed it; that its terms were complied with by the appellee; that it was not unreasonable; that, by reason of the relation, appellant acquired knowledge of and acquaintance with the employer’s clients; and that the enforcement of the contract would not result in monopoly or undue hardship. In other words, the contract here involved was reasonable as to time, territory, and the nature of the employment or trade protected.
The conclusions of the learned chancellor, in regard to the basic question, áre borne out by a consideration of Wilson v. Gamble,
In the course of the testimony of H. B. Wellborn, President of the company, he referred to the use and value of a book which he had been compiling over a period of fourteen years, and which, in his opinion, constituted valuable and confidential information about the business. He said that he gave the appellant a copy for use in the business at Meridian as the branch manager. But he did not offer a copy in evidence. When counsel for appellant demanded its admission, counsel for appellee objected because it was contended that this was confidential information, prepared by the witness; that, if required to introduce it, the same would become open to the public; and that, under such circumstances, the book was privileged. The court refused to admit the same. Appellant denied that he had any knowledge of the contents of the book except for casually glancing over some of it two or three times.
Appellant says that it was reversible error for the court to refuse the admission of this evidence. Neither party has cited authority on the competency and admissibility of this evidence. But in Du Bois v. Thomas,
For like reason, the so-called “bible” should have been introduced, and it was error to refuse its admission.
However, this error was not of such gravity as to require a reversal of the case. As a matter of fact, its value, if any, was with reference to imparting information — only one phase of the case. It is obvious that an agent for the adjusting firm, who went to the office in the City of Meridian, and, for approximately seventeen months, met the proper people, solicited business for his employer, and adjusted claims for his employer’s patrons,' must have gained very valuable information and knowledge which would greatly assist him in opening and operating a like business in his own or firm name. Consequently, since by his contract he agreed that, if the same should be terminated, he would not engage in such capacity for a term of two years, he should not be permitted to do so.
Affirmed.