Hedge, Elliott & Co. v. Lowe, 47 Iowa 137

Hedge, Elliott & Co. v. Lowe

47 Iowa 137 | Iowa | 1877

Day, Ch. J.

Upon the application for a temporary injunction evidence was introduced establishing the following facts: Prior to the purchase from Lowe, Hedge and Torse were negotiating for the formation of a partnership in the agricultural implement business in Winterset. It does not very clearly appear whether or not the partnership was fully consummated between Hedge and Torse before the purchase from Lowe, but Hedge was aware of the teirms of the negotiation which was conducted by Torse. On the first day of February, 1875, an inventory of the stock was taken, the notes and checks were drawn and the money paid for-the goods, and the written contract set out in the petition was executed. When Torse commenced business with the stock purchased, Hedge engaged in business with him as a partner. Torse and Hedge con*140timied. in business as partners until September 14, 1876, when Yorse sold his undivided half of the business to Elliott & Sibley. The sale to Elliott & Sibley included Yorse’s interest in the written agreement aforesaid. After Yorse went out of business Lowe resumed business. Some time after the sale to Elliott & Sibley, and after the latter part of November, 1876, Yorse assigned one-half interest in the contract to Hedge, ■and one-half interest therein to Elliott & Sibley.

I. The evidence tends to show that some time in January, 1876, a written agreement between Lowe and Yorse was executed, respecting the purchase of the stock of implements, which contained no stipulation that Lowe should remain out of business. It is claimed by appellant that at this time the agreement was fully consummated, and that the subsequent agreement of Lowe to remain out of business is without consideration. We think, however, that the evidence shows that the contract was consummated February first, when the .inventory was made and the stock was paid for. The agreement is .supported by a sufficient consideration. . •

l. contract: trade. II. It is claimed by appellant that the agreement is unreasonable and cannot be enforced. Contracts in general restraint'of trade are void. But those which are in restraint ot it as to particular persons or places, or for a limited time, if founded upon a good and valuable consideration, are valid. 1 Story’s Equity Jurisprudence, Sec. 292; 1 Addison on Contracts, Sec. 272, and cases cited; Id., Sec, 503; Mitchell v. Reynolds 1 P. Williams, 181. In Hubbard v. Miller, 27 Michigan, 15 (19), it is said: “If, considered with reference to the situation, business and objects of the parties, and in the light of all the surrounding circumstances with reference to which the contract was made, the restraint contracted for appears to have been for a just and honest purpose, for the protection of the legitimate interests of the party in whose . favor it is imposed, reasonable as between them, and not specially injurious to the public, the restraint will be held valid. See, also, Guevand v. Dandelet, 32 Md., 562; Beal v. Chase, 31 Michigan, 490; Ewing v. Johnson, 34 Howard Pr. R., 202; Pierce v. Woodward, 6 Pick., 206. These authorities fully *141sustain the validity and the reasonableness of the agreement sued on.

2____ assignment. III. It is urged by appellant that the contract is a personal one and that it cannot be assigned. If the agreement not to engage in the agricultural implement business was 0f sufficient value to constitute in part an inducement to Vorse to purchase, it must be admitted that it might be equally valuable to a vendee of Yorse. If Yorse, because of this agreement, was induced to purchase, no good reason can be given why Yorse should not be able to avail himself of this agreement as a means of effecting a sale. The question here is not whether this agreement may be the subject of transfer in the abstract, but whether it maybe transferred with the business to which it originally pertained.' The following cases sustain the assignability of such agreements. California Steam Navigation Co. v. Wright, 6 Cal., 258; S. C., 8 Cal., 585; Guevand v. Dandelet, 32 Md., 562 (569). In Pemberton v. Vaughan, 59 English Common Law Rep., it is said: “There is no case which decides that an agreement in restraint of trade is illegal because it is for life. It does not follow that the plaintiff will not require the protection of the agreement because he may not himself continue the business; he may sell the business, and sell it on better terms on account of the protection secured to it by such agreement.” It is claimed, however, that the assignment was not made until long after Yorse sold his interest in the business. The written, assignment, it is true, was not made until after the sale; but there can be no doubt from the evidence that Hedge acquired an interest in this agreement when he became a partner of Yorse; and it further appears that Yorse in fact sold his remaining interest in the agreement when he sold 'to Elliott and Sibley. There was no error in granting the temporary injunction.

Affirmed.