43 So. 131 | Ala. | 1907
It may be conceded as being the general rule in all the states, as well as in England, that contracts -in general restraint of trade are void as. against public policy. — 24 Am. & Eng. Ency. Law (2d Ed.) 842; 3 Am. & Eng. Ency. Law (1st Ed.) p. 882; 9 Cyc. 525; 2 Pom. Eq. Juris. § 934; McCurry v. Gibson, 108 Ala. 451, 18 South 806, 54 Am. St. Rep. 177; Brewer v. Marshall, 19 N. J. Eq. 537, 97 Am. Dec. 679; Mitchell v. Reynolds, 1 P. Wims. 181; Trenton Potteries Co. v. Oliphant (N. J. Eq.) 43 Atl. 723, 46 L. R. A. 255, 78 Am. St. Rep. 612. “In-determining what is the public policy in this regard, Ave have to take into account certain contracts which restrain trade. It is of public interest that every one may freely acquire and sell and transfer property and property rights. A tradesman, for example, who has engaged in a manufacturing business, and has purchased land, installed a
Without indulging in comments on, or making a review of, the many cases in which contracts in partial restraint have been upheld and enforced, we will mention some of them, with a bare statement of the nature of the contract or covenant upheld: An agreement on the sale of a magazine not to publish a similar one (Ainsworth v. Bentley, 14 Wkly. Rep. 630); an agreement not to engage in the business of a gasfitter within 20 miles of a certain place (Wood v. Whitehead, 165 N. Y. 545, 59 N. E. 357) ; an agreement not to carry on the business of a soap manufacturer within 40 miles of Lockport, N. Y., for 10 years (Ross v. Sadgbeer, 21
The sum of these cases is that, though there can be no .general restraint of trade, yet to a certain extent it may be regulated, and by consequence to some extent re
It is made to appear by the averments of the bill that crude gum is an article that is purchased by those engaged in the naval stores business, and that one engaged in the business at or near Geneva may obtain, and
It appears, as has been observed, that the covenant is that the covenantor shall not enter into nor engage in the turpentine business at any point within 10 miles of the town of Geneva so long as the covenantee shall operate turpentine still at Geneva. The bill avers that, “soon after taking possession of the property purchased from Harris, complainant erected, at considerable expense, a turpentine distillery near Geneva; said town being the shipping point of complainant.” The contention of Harris (the covenantor) is that this averment does not show that complainant is operating a. still, “at” Geneva, that operating the still “near” Geneva does not show the operation of it “at” Geneva, and, therefore, that no breach of the covenant is shown by the bill. The proof shows that the complainant’s distillery is a miles from the courthouse that is located iu the town of Geneva, and is a half mile from the corporate limits; but in construing the bill on motion to dismiss, and on
It sufficiently appears that the covenant is based on a valuable consideration. The sale of the business is sufficient consideration for the covenant. — 24 Am. & Eng. Ency. Law, 853; McCurry v. Gibson, supra.
It is next insisted that, as the covenant stipulates'for a fixed sum as liquidated damages for breaches of the covenant, the covenantee has a complete remedy at law, which ousts the jurisdiction of the court of chancery. In the case of McCurry v. Gibson, supra, the covenant provided, in terms, for a forfeiture of $200 for a failure on the part of the co-venator to comply with its terms. This- court held that this ivas only a valid agreement for liquidated damages ,and said, in respect to the insistence there made, that the equitable jurisdiction was ousted'; that, while there are some cases decided by courts of last resort which hold to that view, they are opposed to the weight of authority; and that such a provision for liquidated damages does not oust the jurisdiction of the chancery court and is no bar to a decree for specific performance — citing Morris v. Lagerfelt, 103 Ala. 609, 15 South. 895. In studying the covenant in the case at bar we have found nothing to withdraw it from the influence of the ruling made in that case. — 3 Pom. Eq. Jur. § 1344. Jurisdiction of equity is generally exercised, in inspect to these contracts, for the purpose of indirectly compelling their specific performance by means of an injunction preventing their violation.
It is not indispensable that the covenantee should wait until the covenantor should begin to operate a distillery before invoking the aid of the chancery court. The bill shows that W. H. Harris, in violation of the agreement, ordered shipped to Geneva a turpentine distillery, which, in order to evade the binding force of the covenant, he had billed to his wife, Maggie Harris, his co-respondent; that W. H. Harris has erected said'distillery, procured gum for distilling, and is making all
It is insisted by demurrer that the bill shows that the business sought to be enjoined belongs to W. H. Harris, and on this account that Mrs. Harris is not a proper party to the bill; further, that, if the business belonged to Mrs. Harris, then'she is not a proper party. Equity abhors shams and subterfuges, and delights in looking through the mere surface and form of a transaction, and in scrutinizing closely the merits and substance. Assuming the truth of the foregoing allegations, a com
It follows, from the foregoing considerations, that the motion to dismiss the bill for want of equity made by W. H. Harris and the separate demurrers filed by the respondents were properly overruled.
This brings us to the consideration of the. cause on thmerits. Separate answers are filed by the respondents, in which the contract alleged in the bill as having been made between the complainant and W. H. Harris is admitted, and it is also admitted that a turpentine distillery has been erected in Geneva since the making of said contract, and that it was about- to be put in operation at the time the bill was filed; but it is expressly denied that TV., H. Harris was concerned in the erection of said distillery, or in the preparation of it for operation, either individually or as an agent for his wife. It is also denied that Mrs. Harris’s name is being used in connection with the operation of the distillery, or that she acquisced in the use of her name for the purpose of evading the covenant in the contract, and it is averred that the distillery is the property of Mrs. Harris, that it was purchased by her on her own responsibility and erected for her sole use, and that W. H. Harris is in.no respect interested in or responsible for its erection or operation. The allegations in regard to the combination between the respondents for the use of the wife’s name are also denied. So upon the admissions made in the answer, seems that the only questions or issues to be determined on the merits are whether or not the distillery is .an enterprise of W. H. Harris, whether it belongs to him and the purchase and operation of it in his wife’s name is a
But it is insisted that the proof fails to show a violation of the contfact, in that it-is not shown that the complainant’s distillery is located about a mile from the county courthouse in Geneva, and about a half mile outside of the corporate limits of the town; that Geneva is his shipping point for all the products of his enterprise. Construing the word’ “at” in the light of the circumstances shown by the evidence, and on the considerations heretofore adverted to in respect to this question and the authorities cited, Ave are of the opinion that this insistence is not Avell taken. We concur with the chancellor that the complainant has made a case entitling him to the relief prayed for, and the decree must be affirmed.
Affirmed.