257 Mass. 12 | Mass. | 1926
This is a suit in equity seeking to enjoin the defendant from engaging in any line of business similar to the plaintiff’s within the Commonwealth of Massachusetts,1 for a period of five years after September 1, 1924. The case was heard by a judge of the Superior Court, who reports it'
The facts found by the judge, somewhat more succinctly stated, are as follows: When the contract sued on was made and for some years prior thereto, the plaintiff conducted a general law reporting office. His business still is, and was, to furnish shorthand reporters to lawyers, and others desiring their service to attend hearings before commissions, legislative committees and other public bodies, and trials in courts, or before masters and auditors not employing official stenographers, and to prepare and furnish to his customers transcripts in typewriting of such proceedings. The plaintiff’s customers are of Boston for the most part, but he has customers in other of the large cities of the Commonwealth. The defendant is and has been since 1915 a shorthand reporter. Prior to his employment by the plaintiff under the contract in suit, the defendant lived in Washington, reporting trials in the courts of the District of Columbia and of Virginia and Maryland, hearings before congressional committees, and conventions.
In 1921, at the plaintiff’s suggestion the defendant came to Boston, entered the plaintiff’s employ, and after a time made with the plaintiff the contract in suit, which is dated November 21, 1921, and is under seal. The material parts of the contract are:
“1. The said Edmonston agrees, from and after November 21, 1921, to give his entire time and services as shorthand reporter to the said Edgecomb during the usual hours, in the said Edgecomb’s business of stenographic reporting, for a period of four years, and this agreement shall continue in full force and effect thereafter until one of the parties hereto shall, on or before the first day of July in any year give to the other party written notice of his intention to terminate his agreement on the first day of the following September, in which case the term hereby created shall terminate in accordance with such notice.
"2. The said Edmonston guarantees that he is a qualified Court Stenographer, competent and experienced, and that his services in such capacity shall be satisfactory to the said Edgecomb.
Thereafter, and until the events’ hereinafter related, the defendant gave his entire time and services as a shorthand reporter to the plaintiff’s said business.
Late in March, 1922, the plaintiff became dissatisfied with the defendant’s work, but an understanding “was reached that their relations should not terminate but that the defendant was to go on and make another trial and do his best.” In March, 1923, further dissatisfaction arose with the defendant’s work, in consequence of a request by a judge of the Suffolk Probate Court to the plaintiff that the defendant be not sent again to report hearings before that judge. On April 16, 1923, the plaintiff gave the defendant the notice, printed in the finding of the judge, to the effect that his employment under the contract was terminated, “effective not later than May 15, 1923, and as much earlier as is convenient to you.” The further report of the judge is as follows:
“Upon all of the evidence I find that the defendant is and was in April, 1923, a qualified court stenographer, competent and experienced but that his services in that capacity under said contract were not satisfactory to the plaintiff, that the plaintiff acted in good faith and was actually and honestly dissatisfied; that the plaintiff performed all the obligations imposed upon him by said contract; that the employment of the defendant was terminated by the plaintiff for good cause; and that the defendant has meantime engaged and is now engaged within the Commonwealth in a line of business similar to the plaintiff’s without the plaintiff’s consent. No evidence was offered of any substantial damage suffered by the plaintiff because of the defendant’s breach of his covenant not to engage in Massachusetts in a line of- business similar to the plaintiff’s after the termination of said contract. Upon the facts so found I rule as matter of law that the contract was broken by the defendant, that his employ
The contention of the defendant is that the covenant, “that upon the termination of this Agreement . . . [the defendant] will not, without the consent of the said Edge-comb, in writing thereto first obtained, engage in any line of business similar to the said Edgecomb’s within the Commonwealth of Massachusetts, for a period of five years thereafter,” is limited by reasonable construction to cover a period of five years which has its beginning with the time fixed for the end of the employment, and that it cannot reasonably be construed as operative when the contract shall be terminated for causes other than lapse of time. The defendant further contends that the provision of the contract in respect to the satisfaction of the plaintiff with the services of the defendant was misconstrued by the court, in that it found that the plaintiff “acted in good faith and was actually and honestly dissatisfied”; whereas, to justify the plaintiff’s action, it was necessary to find that the plaintiff “justly and honestly entertained” the judgment that the services of the defendant were not satisfactory; citing, Tobin v. Kells, 207 Mass. 304, and Chandler, Gardner & Williams, Inc. v. Reynolds, 250 Mass. 309, 314.
We are of opinion that the contention as to the time when the covenant became operative is too narrow, and that the fair construction of the agreement is that a lawful termination of the contract by the plaintiff is a termination of the agreement which made operative the covenant of the defendant. We are also of opinion that the finding of the judge that the plaintiff was actually and honestly dissatisfied warranted his finding “that the employment of the defendant was terminated ... for good cause,” without a further finding that the plaintiff’s judgment of dissatisfaction was “justly and honestly entertained.” If the judgment of the
A suit in equity to enforce a negative covenant is actually one for specific performance while not so in form. Taylor Iron & Steel Co. v. Nichols, 4 Rob. (N. J.) 541. “The practice of enforcing negative covenants ... is well established, and is a part of the growth of equity jurisprudence to meet and keep up with the growth and development of business methods. The policy of the law is that business men should keep their contracts, and not turn the contractee over to the uncertain remedy of an action at law for damages for nonperformance.” Pitney, Vice-Chancellor, .in Feigenspan v. Nizolek, 1 Buch. 382, 394. It long has been settled that equity will not interfere to decree specific performance, except in cases where it would be strictly equitable to make such a decree; and “that contracts restraining freedom of employment can be enforced only when they are reasonable and not wider than is necessary for the protection to which the employer is entitled and when not injurious to the public interest.” Sherman v. Pfefferkorn, 241 Mass. 468, 474. Blake v. Flatley, 17 Stew. 228, 231. The cases usually arise where an established business has been sold; the seller’s agreement to remain out of the trade for a time being required as a part of the consideration and as a means of protecting the good will with which he has expressly or impliedly agreed that he will not interfere. Angier v. Webber, 14 Allen, 211. Ruggiero v. Salomone, 248 Mass. 237. The basis of the equitable relief is that the damages suffered or to be suffered are irreparable, or that an action at law would not afford adequate damage. Angier v. Webber, supra. Morse Twist Drill & Machine Co. v. Morse, 103 Mass. 73. Dwight v. Hamilton, 113 Mass. 175. Ropes v. Upton, 125 Mass. 258. Anchor Electric Co. v. Hawkes, 171 Mass. 101. Myott v. Greer, 204 Mass. 389. Ruggiero v. Salomone, supra. Chandler, Gardner & Williams, Inc. v. Reynolds, supra. Farrell v. Chandler, Gardner & Williams, Inc. 252 Mass. 341. Boston & Suburban Laundry Co. Inc, v. O’Reilly, 253 Mass, 94,
The defendant next contends that the finding of the judge that the “limitation of the covenant as to territory went beyond what reasonably was required in order to protect the plaintiff’s right of injunctive relief for a limited period against the defendant’s competition,” made impossible in law his further finding, “that so far as said covenant restrained the defendant from engaging in any line of business similar to the plaintiff’s within the city of Boston and from soliciting the plaintiff’s customers within the Commonwealth, the limitation was reasonable,” for the reason, as argued, that the restrictive covenant is not severable. Upon this point Judge North in Baines v. Geary, 35 Ch. D. 154, said: “It is quite clear that a covenant-in restraint of trade is good, if it does not go further than is necessary to give reasonable protection to the person who imposes it. There is nothing illegal in such a covenant, but it is considered unreasonable if it imposes a larger restraint than is necessary for the protection of the covenantee. The Courts have, however, seen their way to treat such a covenant as divisible, and to enforce it to the extent to which it is reasonable, while
Having regard to the terms of the contract in the suit at bar and to the attendant circumstances of its making and breach, a majority of the' court are of opinion that the theory of the divisibility of space as applied to this contract is con
Decree accordingly.