129 Wis. 597 | Wis. | 1906
There is no assignment of error that the findings of fact or any of them are contrary to or not supported by the evidence. Some branches of the appellant’s argument refer to that subject, but as there is no assignment •of error, specially, in respect thereto we shall not examine any question in that regard, except where it is deemed to be necessarily called for by some assignment of error as to rulings on motions.
I.
The first four assignments of error relate to the subject of whether the complaint states a cause of action. The various propositions suggested for consideration, so far as they seem material, will be treated in their order.
1. There is no allegation in the complaint that the re•straint sought to be imposed on the defendant is necessary to the protection of plaintiff’s business.
The complaint contains this allegation:
“Notwithstanding said agreement, and contrary to the ■terms thereof, the said defendant has nevertheless again en*605 gaged in tbe laundry business in tbe city of Milwaukee by associating himself with tbe Badger Laundry, . . . and that tbe inevitable result of said connection, if tbe same be permitted to continue, . . . will be a large diminution in the value-of tbe good will of said business.”
That seems to sufficiently negative tbe proposition. Moreover, when a person sells out bis interest in an established business and agrees not to enter into tbe same kind of business or be concerned in it in competition with that so sold, by necessary implication such agreement is material to tbe protection of such business.
2. There is nothing in tbe complaint showing that defendant before tbe commencement of tbe action breached tbe agreement by doing anything injurious to tbe plaintiff.
What has been said is a sufficient answer to that proposition. It was not essential that actual injury should have been caused before tbe commencement of tbe action in order to enable respondent to maintain tbe same. It was sufficient that there was an actual breach of tbe agreement mentioned,, which, unless restrained, would cause injury to plaintiff of a nature not remediable adequately in an action at law.
3. Tbe contract is one in restraint of labor and is invalid on that ground.
We are not favored with any authority to tbe effect that one may not in selling out bis interest in a business surrender, for a reasonable length of time and within reasonable limits as to territory; bis liberty to engage in a competing business, either as proprietor or employee. It would seem that tbe same rule which permits a person in selling out his-interest in a business, as a part of tbe transaction to restrict bis liberty to impair tbe value of tbe thing sold by engaging in tbe £ame kind of trade in one capacity, would justify restraining such liberty as to engaging in such business in any other capacity. That contracts of tbe former character, reasonable as to time and space, are valid is not questioned,.
The reason of the rule aforesaid, in terms or effect, is stated in the cases cited this wise: Inasmuch as public policy requires that a man should be free to sell in the most advantageous way what he has obtained by his skill or other means, the same policy should permit him to enter into restrictive agreements in aid of the thing sold, provided the restrictions, in the judgment of the court, are not unreasonable, having regard to the subject matter of the contract.
If the scope of the contract here were so broad as counsel for appellant contends, there might be some question as to its validity in its entirety. It is argued that the language “in any manner, either by conducting a laundry establishment on his own behalf or in conjunction or jointly with any other persons, or by entering the employ of any person, firm, or corporation engaged in such business, in the capacity of an officer, manager", solicitor, or any other capacity whatsoever,” if enforced, would deprive appellant of liberty to pursue any manner of labor for any person or concern engaged in the
In Barr v. Craven, 89 L. T. Rep. 674, tbe facts were .that an agent of an insurance company employed to serve in a particular district contracted “that be would not interfere directly or indirectly with tbe business” after resigning or being dismissed from bis agency. Tbe contract was construed to mean tbe business of tbe society in tbe district in which tbe agent contracted to aid it, and as so construed it was held valid.
Sternberg v. O’Brien, 48 N. J. Eq. 370, 22 Atl. 348, seems to touch this case in respondent’s favor at all points. Tbe defendant entered tbe employ of tbe plaintiff, who was engaged in tbe instalment clothing business, in tbe capacity of collector, agreeing in consideration of tbe employment that for one year after its termination “be would not engage in or be 'Concerned or interested in tbe instalment clothing business, in tbe city of Newark or Jersey City, on bis own account, or as tbe agent or employee of any other person or persons, in any capacity.” Tbe court construed the contract as if it read will not engage in or be concerned or interested in tbe instalment clothing business in tbe city of Newark or Jersey City in any capacity, saying:
“It thus appears that tbe defendant’s promise is that be will not take employment in a particular business in any capacity. When, therefore, tbe whole of tbe restrictive clause is read, it is made entirely plain that tbe restraint which tbe defendant put upon himself is not general, but partial, and that tbe only thing which be has prevented himself from doing, after be ceases to be an employee of tbe complainant, is*608 engaging in or being concerned or interested in tbe instalment clothing business. He cannot serve or assist a rival business, in any capacity, in either of the two cities named, but the interdiction is confined to that particular business. As to any other business or employment he is unbound and free. Anything outside of the instalment clothing business he is just as much at liberty to do for a rival of the complainant as though he had not made the contract in question.”
The position taken that the agreement was a restriction upon the right to labor was condemned and the contract held valid. We have quoted at considerable length from the opinion, as it meets with our approval and covers fully the point raised by appellant’s counsel.
There are many cases in the books in harmony with the foregoing. In Hitchcock v. Anthony, 83 Fed. 119, 28 C. C. A. 80, an agreement was sustained of a person, who purchased from another some land adjacent to that used by such other in conducting a coal and fish business, not to engage in the coal or fish business for a specified term of years, “or to do> anything that will conflict with the said coal or fish business of the grantor.”
In Lange v. Werk, 2 Ohio St. 519, an agreement not to “establish or be connected either directly or indirectly with any person (without the consent of the other party to the agreement) in the tar candle business,” was condemned solely because it was not reasonably limited as to territory.
In Alger v. Thacher, 19 Pick. 51, an agreement not to “at any time hereafter in his own name, or in the name of another, conduct, carry on, use, or employ the art, trade, or occupation of an iron founder or caster, or be concerned, interested, employed or engaged, directly or indirectly, in any manner whatsoever, or under any pretense whatsoever, in the-business of founding or casting iron,” was held void only because of its being unlimited as to time and space.
In Guerand v. Dandelet, 32 Md. 561, an agreement, limited as to time and space, not to “directly or indirectly com
In Cowan v. Fairbrother, 118 N. C 406, 24 N. E. 212, an agreement by the vendee of a printing business, limited as to time and space, not to “edit, print, or conduct a newspaper or magazine, nor be in any wise connected with one printed anywhere” within the territory mentioned, was sustained.
The foregoing precedents seem to sufficiently answer the claim of appellant’s counsel that the contract in question is void as a general restraint upon the right to labor, and the claim that the agreement is contrary to public policy. The appellant is free to engage in the city of Milwaukee in any kind of business except the laundry business. He is free to accept employment of a rival in such business in such city outside of the competing business. He is free to engage in the laundry business outside of Milwaukee at any time, and therein after the five-year period. The restraint is limited to the kind of business sold and as to time and space in a manner commonly sustained, as we have seen. Such restrictions satisfy every essential of the doctrine lately announced in Cottington v. Swan, 128 Wis. 321: “The restraint imposed is reasonable, under the circumstances, with reference to the situation, business, and object of the parties.” It was “contracted for . . . the protection of the legitimate interests of the party in whose favor it is imposed.” It “is reasonable as between them [the parties] and not specially injurious to the public.” Reasonableness between the parties has reference to time, space, purpose, and scope. If all the tests in that regard are satisfied the public interests are satisfied. The time and space must not be so great as to have the effect of a general restraint. The purpose must have reference to the protection of the business sold, or in which the party restrained is in some capacity engaged, and which is reasonably ’ benefited by the restraint. The scope of the restraint must be germane to such purpose.
4. Neither plaintiff nor its successors paid anything for the good will claimed.
The written evidence of what defendant sold and what was acquired by plaintiff shows that it was an entire going business, including the good will thereof and all property in use in connection therewith, and that $3,500 was paid therefor. It seems to follow, necessarily, that the thing sought to be protected by the restraint imposed on the liberty of the defendant was the subject of the sale and that such restraint entered into and became part of the equivalent for the $3,500.
5; The next proposition is that there is no evidence supporting the findings and judgment for an injunction.
As stated at the outset, there is no assignment of error that the findings are not supported by the evidence. That would warrant us in not examining the record as to this proposition. However, we have examined the same sufficiently to
6. Tbe court erred in awarding plaintiff damages.
Tbat is predicated on tbe theory, in part, tbat tbe complaint contains no claim for -damages, which seems contrary to tbe fact; and again upon tbe theory tbat no damages were recoverable except such as were suffered before tbe action was commenced. In an action of this sort it. is sufficient to allege an actual breach of tbe agreement and tbat damages have accrued, or will accrue, unless tbe court interferes to prevent a continuance of tbe breach, which will otherwise occur, and allegations otherwise bringing tbe case under a recognized bead of equity jurisdiction. In case of tbe primary right involved being established in favor of tbe plaintiff, tbe •court having jurisdiction of tbe parties and subject matter may properly, in order to do complete justice in tbe matter, rendering it unnecessary to sue at law for damages happening during tbe litigation, as ancillary to tbe principal matter of relief, award plaintiff compensation for such damages. The rule on tbat subject is quite ancient.
In Nelson v. Bridges, 2 Beav. 239, tbe facts were tbat during tbe pendency of a suit for specific performance of an agreement tbe subject of such agreement was in part taken away by tbe defendant, but tbe matter was not brought to tbe attention of tbe court before judgment in plaintiff’s favor as to tbe primary right. Upon an application for relief in tbe .-action Lord LaNgdale said:
“If tbat circumstance bad been known at tbe first bearing, I cannot have tbe least doubt but that tbe court would, in tbe ■exercise of its jurisdiction, have put in a due course of investigation tbe question of tbe amount of compensation which ■ought to be made to tbe plaintiff.”
It being suggested tbat relief could be obtained or might have been obtained at law be said:
“I am of tbe opinion tbat it is not necessary for this court ■when it has once entertained jurisdiction in a case to resort*612 to that circuitous mode of giving relief; I think, moreover, that if this matter had been before the court at the first hearing, it would have been put in a proper train of investigation.”
II.
The fifth and sixth assignments of error cover matters indicated in the propositions following.
1. The court improperly excluded evidence offered by the defendant showing that the clause of the agreement claimed to have been violated, restraining the defendant from being concerned in a rival laundry business as an employee, was included in such agreement by fraud.
Appellant testified at length that he did not read the writing before signing; that in the oral agreement nothing was said as to his not working in a laundry; that he read a few lines of the writing and then signed it relying upon Mr. Com-stock’s assurance — acting for the adverse party — that it was according to the oral agreement; that he read very little English, but took papers at home. He‘was not permitted to testify as to what kind of papers he took or what language was used in his family, or whether if he had read the contract he could have understood it; or whether he would have signed it had he known of its containing the objectionable clause; or whether he intended to forego his right to be employed in a laundry. We are unable to see any harmful error in the exclusion of such evidence in view of the evidence which was permitted. When the defendant testified that he did not read the paper; that he read very little English; that the original agreement did not contain anything as regards his not taking employment in a rival business, and that he signed the paper relying upon Comstock’s assurance that it was drawn according to the oral understanding, he covered everything that was material from his standpoint, especially in view of the. court’s findings of fact.
The court did not hold, as it seems, that if appellant did
2. The court improperly excluded evidence as to appellant’s purpose in going to work for the Badger Laundry Company.
We are unable to see any materiality to such evidence. If what he did constituted a violation of his agreement, whether he had such a purpose in view or not could not affect the matter. He was permitted to testify fully as to the capacity in which he was employed by the .Badger Laundry Company, which was that of bookkeeper and general office work, and clearly within the prohibition of the contract.
3_ The court improperly excluded evidence tending to show the unreasonable nature of the contract.
The evidence excluded was directed to the subject of whether appellant was dependent for a livelihood on work in or about a laundry. We are unable to see that such circumstance, had it been established, could have affected the result. As we have seen, whether such a contract is reasonable or unreasonable is a matter of law to be determined from the writing, having regard to the limitations as to time and place and the purpose and scope of the restraint. They being reasonable, all essentials of a valid contract are present, because even if the party restrained of his. liberty is deprived, partially, from participating in a particular vocation for a limited period, there is left ample opportunity for him to do so outside of the territory covered by his agreement.
The next assignment of error is that the court erred in denying defendant judgment on his counterclaim.
That is based on the theory that there was no reply. There are two answers to that. First. Though no reply is found in the record, the court in the decree recited that there was one in fact. Second. The trial proceeded from the beginning to the end upon the theory on both sides that the allegations of the counterclaim were in issue. That was a waiver of any formal reply. Killman v. Gregory, 91 Wis. 478, 65 N. W. 53; Bowman v. Van Kuren, 29 Wis. 209.
IY.
The next two assignments of error refer generally to this proposition: The contempt proceedings must fail, for such proceedings cannot be maintained independently of the action.
That proposition seems to be grounded on the theory that neither the facts alleged nor those proved show any ground for the action, and that the findings of fact are contrary to the evidence. Those matters are all sufficiently answered in other parts of the opinion. Certainly the contempt proceeding was in the action, not independent of it. The complaint stated a cause of action and the^ facts found both in the main action and the contempt proceedings show a violation of the temporary injunction. There is no assignment of error, as' we have seen, that such findings are contrary to the evidence, and, if it were otherwise, our examination of the record leads us to the conclusion that counsel’s contention would have to be overruled.
Y.
Error is further assigned upon the exclusion of evidence offered by the defendant upon the issue of contempt.
Under this head we are referred to several pages of the printed case where it is shown that the evidence of witnesses
VI.
Complaint is made because tbe court denied tbe motion to vacate tbe reference to Mr. Scheiber on tbe ground that he was prejudiced.
Appellant’s motion in that regard was beard on affidavits and denied, as it appears, because tbe proofs were not sufficient to sustain bis claim. We are unable to see wherein tbe court clearly committed error at that point, but in any event it was not harmful, since Mr. Scheiber resigned, tbe orders appointing him were in form vacated, and Hon. W. 3". Mc-Elroy was appointed refereepn bis place./
VII.
Further error is claimed because tbe court vacated tbe order of reference to Mr. Scheiber.
Tbe idea of counsel at this point is that tbe rule that a judgment cannot be vacated by tbe trial court after tbe term
In Forrest v. Forrest, supra, the court vacated the order of reference after a lapse of some three years, because the referee did not proceed expeditiously to close up the matter referred to him. In disposing of the subject this language was .used by Woodburr, J.:
“The court would not of course compel a referee to act, against his inclination . . . when there are, no doubt, many*617 who are not only willing but desirous of rendering such services. . . . That the court can vacate the order of reference and direct a reference to some person whose engagements are such that the reference will be proceeded in with reasonable •dispatch is not doubtful.”
VIII.
The next claim is that the court erred in refusing to set .aside the report of the referee.
The motion was based on want of evidence to support the findings. Some complaint is now made because the referee heard the two matters referred to him together, but no exception seems to have been made to the report on that ground, .and if there were we should be constrained to hold that there was no harm done appellant by the procedure. Moreover, it ■does not appear that there was any objection at the hearing before the referee to the trial of both of the referred matters together.
On this branch of the case it is insisted that there was no proof produced before the referee of damages caused by the breach of appellant’s agreement as set forth in the complaint, though the referee found that there were such damages to the amount of $169 and the court confirmed the finding as to $74. True, all the evidence offered on that matter was directed to loss caused after the commencement of the action. So it was inaccurate to characterize the damages found as was done. However, that is not material. The more serious question is whether such damages were established. They were composed of $66, increase in expense of filling the place of engineer, because of an employee in such place going over to the Sanitary Laundry Company, and an increase of $8 in the cost of filling the place of another employee from the same cause.
There was ample evidence that the two employees left the service of respondent and were hired by the Sanitary Laundry Company, with which appellant was connected, and that
On the subject of increased expense there was ample evidence, but there seems to be this serious infirmity in the proof: It does not appear that either of the employees broke-any contract with respondent in leaving its employ, or how long they would have remained with respondent after the time they left its service but for the conduct of appellant. That was left by the proof to mere conjecture, since the employees were under no obligation to so remain. On the whole, we cannot see any sound basis for charging the increased cost of filling their places to appellant. The learned referee, seemingly, concluded that such cost was so chargeable as a necessary result of the finding that the Sanitary Laundry Company hired the employees after they left the service of respondent. We do not think such result would necessarily follow. Unless such employees would have remained with respondent for some length of time, ascertainable with reasonable certainty, had the opportunity not been offered them of taking service with the Sanitary Laundry Company, there would be no definite basis for charging the increased wages paid to fill their places to appellant. It appears that they were working for respondent by the week. It was their right at the end of any week to terminate the service.
Tbe further point is made that there was no proper basis shown for charging appellant in the contempt proceedings with the costs and expenses incurred by respondent therein, because no actual loss was shown. That matter is governed by the'statute (sec. 3490, Stats. 1898), which provides that:
“If an actual loss or injury has been produced to any party by the misconduct alleged the court shall order a sufficient sum to be paid by the defendant to such party to indemnify him and to satisfy his costs and expenses, instead of imposing a fine upon such defendant. . . . Where no such actual loss or injury has been produced the fine shall not exceed two hundred and fifty dollars over and above the costs and expenses of the proceedings.”
It will be seen from the wording of the statute that indemnity refers to actual loss, but that the imposition of costs and expenses does not depend upon there being such loss. Without that element, under the rule in Emerson v. Huss, 127 Wis. 215, 106 N. W. 518, a fine should be imposed to go into the school fund when paid, but costs and expenses follow the conviction just the same as if there was actual loss. It is considered that the purpose of the statute is that such costs and expenses shall go to the party incurring them. That subject was not involved in Emerson v. Huss, supra. In a civil contempt proceeding there is no reason, it seems, why the costs and expenses should-not go to the complainant upon a conviction of the alleged wrongdoer the same in one case as in another. The party making the expenditures in either is the complainant. Therefore, if they are to be paid at all by the wrongdoer it would require some unmistakable language in the statute to warrant holding that they constitute a part of and follow the fine proper. True, the words of the statute “the fine shall not exceed two hundred and fifty dollars over and above the costs and expenses of the proceedings” rather suggest that the fine,, in the whole, includes the costs and expenses, but the ascertainment of those elements is
The supreme court of Michigan in considering its statute corresponding to our sec. 3490, Stats. 1898, exclusive of the last sentence, in Holland v. Weed, 87 Mich. 584, 49 N. W. 877, held a finding of actual loss to be indispensable to the imposition on'the wrongdoer, for the complainant’s benefit, of the latter’s costs and expenses in the proceedings. It seems, however, that such conclusion was arrived at without reference to a companion statute, which is substantially identical with the last sentence of such sec. 3490. We are constrained not to follow the Michigan decision. It seems that had the court there construed the two sections together a different conclusion would have been reached.
The language of the court’s findings and judgment is “that as punishment for his said misconduct, the said August W. Schmeling do . . . pay over to the attorney for plaintiff the said sum of four hundred and forty-nine and 9-100 dollars ($449.09), to indemnify the plaintiff for its actual loss and injury . . . and to satisfy its costs and expenses arising out of such misconduct on the part of said defendant.” The actual loss, spoken of in the statute is such as an action will lie for. In re Pierce, 44 Wis. 411; State ex rel. Lanning v. Lonsdale, 48 Wis. 348, 4 N. W. 390. That of course does not include costs and expenses of > prosecuting the contempt proceedings. The items found by the referee and included in the final result are wholly of that character. So no sum should have been awarded to the respondent as for indemnity. The wording of the final order and judgment in that regard is irregulai’, but appellant was not harmed, because he was not made to pay a sum as a fine in addition to costs and expenses.
The foregoing covers all matters that seem to require special mention in this opinion.
By the Oourt. — The judgment in the action so far as it awards $74 damages to the respondent is modified by striking out such award, and as so modified it is affirmed. The final order and judgment in the contempt proceedings is affirmed, as are all orders specially appealed from. Costs are allowed to the appellant to the extent of clerk’s fees only.
