*1 SANDSTROM, JJ., not (UCC and 7- NEUMANN 41-07-16 their sale. Section case of the Court when this members 210), N.D.C.C., a warehouseman authorizes heard, participate did not was by sell- lien to enforce its warehouseman’s decision. person with ing goods stored if no the nec- goods pays amount interest satisfy the lien.
essary to storage agreement valid had a
Jobbers had lien on
covering Lang’s goods and charges. When storage for its goods notice, not, pay the amount
Lang did lien, legiti- satisfy
necessary to Jobbers goods WERLINGER, right to sell the Larry Plaintiff mately exercised its stor- Appellee, apply proceeds unpaid to the and and that the trial age charges. We conclude claim Lang’s properly dismissed court CASUALTY INSUR- MUTUAL SERVICE against Jobbers. COMPANY, Mutual Service ANCE Company, and Modern Ser- Insurance Berg public auction at conducted Company, Defendants vice Insurance 18, 1991, request May on and sold Jobbers’ Appellants. had stor Lang’s goods that Jobbers been Lang “Berg the obli Civ. No. 920128. ing. contends: Lang’s rely gation, position, in his of North Dakota. Supreme Court very representation Lang’s personal were possessions not ‘abandoned’ and Feb. title.”
not of a merchantable already have concluded that Jobbers Lang’s goods, lien on and that Job-
had a lien was entitled enforce its
bers auctioning Lang's
selling Lang's goods. In agent
goods, Berg acting Jobbers’ as enforcing Lang has drawn its lien. not authority show-
our attention to fact or
ing protection Berg is entitled to less selling goods on Job-
than Jobbers Therefore, we conclude that
bers’ behalf. Lang’s properly
the trial court dismissed against Berg.
claim
Affirmed. LEVINE, JJ.,
MESCHKE ERICKSTAD, Surrogate Judge.
RALPH J.
Surrogate Judge RALPH J. was Chief at the time
ERICKSTAD Justice served
this case was heard and pursuant
surrogate judge for this case
Section J.,
JOHNSON, who a member of heard, when this case was did
Court
participate in this decision. *2 provided
of the contract for cessation of compensation: termination liability “All companies of the for termi- compensation provided para- nation for in graph 12 subparagraphs and its shall in any cease the event one or more of the following shall occur: “(1) directly either indirectly, by You or yourself agent and for or as an Fraase, Wegner, Nordeng, Johnson & another, through or others as their Ramstad, Fargo, appellee; agent, engage in an or be licensed as argued by Jeffrey A. Bredahl. solicitor, agent, representative, or bro- in any way ker or be connected Jeffries, Flom, Moorhead, MN, Olson & health, property, casualty, or life appellants; argued by for defendants and business, year insurance within one Gullickson, Moorhead, Sara B. MN. following termination within a 25 mile your radius of location at LEVINE, business that Justice. time; ...” Casualty Mutual Insurance Com- Service Immediately resigning an as MSI pany, Mutual Life Insurance Com- Service Werlinger agent, began serving as an pany, and Modern Service Insurance Com- agent company for another insurance with- (MSI) pany appeal judgment award- in 25 miles of his former address. business ing Larry Werlinger termination com- Werlinger’s employ- Because of immediate pensation parties’ him due under agent ment as insurance within 25 miles agent’s contract. conclude that a non- business, pay of his former MSI refused to competition clause in the contract is an compensation2 Werlinger. termination trade, unlawful restraint of void under 9-08-06, N.D.C.C.,1 and we affirm the Werlinger sued MSI to recover the termi- judgment. compensation allegedly nation due him. parties summary filed motions for Both Werlinger agent was an MSI insurance judgment. trial ruled that Para- court Fargo resigned from 1977 until he 12(D) graph void 12(A) Paragraph 1991. under unenforceable provided agent, that with at least granted Werlinger’s N.D.C.C. The court policies years and at least 5 of service summary judgment and denied motion for would, termination, upon paid termi- Judgment was entered favor MSI’s. compensation percentage nation of “a interest, $26,048.45, Werlinger plus paid you by compa- the service fees each appealed. costs and disbursements. MSI ny for the full 12 calendar last months immediately preceding such termination.” Relying wholly decision in on this court’s 12(A) Paragraph also contained a schedule v. Northern percentages (N.D.1967), payable of service fees that MSI contends termination, upon 12(D) Paragraph agent’s which varied accor- of its contract years dance with the number of of service is not a restraint of trade. 12(D) case, agent Paragraph Agency Insurance with MSI. Northern goodwill In restraint a like business "9-08-06. business void— from him carries on therein. Exceptions. Every anyone which Partners, upon anticipation or in of a "2. exercising profes- is restrained from a lawful agree partnership, may dissolution of the sion, kind business is to that carry on a all or number of them will not void, except: extent city the same where similar business within goodwill "1. One who sells the of a busi- transacted, partnership business has been may agree buyer ness with the to refrain from specified part or within a thereof.” carrying speci- on a similar business within a either, county, city, part long fied or a parties stipulated so 2. that the amount in dis- $26,048.45. buyer any person deriving pute title to the nothing in the There is company. ance on re- stopped paying Geiss commissions plaintiff and the terminated his contract between premiums when Geiss newal prevents sell- or restrains began which Northern defendant employment with *3 employment company. taking plaintiff another from ing insurance for the employ- company. in the The a clause insurance Northern relied on other contract, renewal com- on providing that of commissions payment ment provision ter- paid upon Geiss after the be to terminated missions would renewals he did “provided employment, employment acceptance mination of of plaintiffs com- another insurance go company to work for does not insurance with another equal to one month pany period from plaintiff the any way prevent in months that trade, the first six month after profession, each in his engaging had been contract with any oth- selling [Northern] insurance [Geiss’s] business of to recov- at 689. Geiss sued in force.” Id. question in company. The er commissions, contending that er renewal profes- of his is not in restraint therefore clause, providing for forfeiture the in sion, trade, is not or business and employ- if he took of renewal commissions 9-08-06, North Dako- violation of Section company, was insurance ment with another Century Code.” ta trade, in violation an unlawful restraint supra, 153 v. Northern Geiss 9-08-06, affirming a In at 690-691. N.W.2d Northern, this court held judgment for the either must overrule Geiss in the noncompetition clause Geiss, In in this case. trial court’s decision not a restraint of employment contract was re- right to commissions on plaintiff’s “the trade: unaccrued and premiums an newal [was] question not vio- “The contract in does not become contingent right, which [did] provisions of Section late premiums right until ... renewal absolute Code, for it does Century Dakota Geiss, supra, by the insured.” paid [were] plaintiff any way not in restrain Werlinger’s termi- at 690. 153 N.W.2d profession, or busi- following his hand, other compensation, on the nation that, provide should he ness. It does fees of the service percentage was to abe give up with the de- decide to his work Werlinger has already paid. been he had employment with an- fendant and take distinguish suggested that we Geiss company during a cer- insurance other that, this case on the basis “[b]ecause period following the termination of tain nature of the contingent the unaccrued defendant, he employment his Geiss], there exist- commissions renewal [in commissions would not be entitled in commissions right such ed no vested paid after he takes such on renewals actually paid by premiums until the were company, another on employment with insured”, Werlinger’s while “termi- had sold for the defen- policies which he from renewal compensation nation differs perfectly lawful condi- This is a dant. compensation ... in that the commissions right to con- plaintiff had the tion. amount, expec- not an represents a known and circum- as to the conditions right tancy, absolute he was to receive stances under which upon compensation termination to such premiums, on renewal commissions employment.” in agreement was not restraint such (Cita- Werlinger’s proffered distinc- profession, or business. We deem his omitted.) a difference. tions tion to be one without involved important feature of the contracts right “The has no vested was not the basis in this case and Geiss payments which were to be the renewal company’s terminated upon which either policies which he made the future paid, the restraint on agent was to be but right to such commissions had sold. His companies imposed competition that only in the event the renewal became due forfeiture of upon agents their to avoid the during the time be- premiums paid, paid. be money they would otherwise employment by another insur- fore L.J.). provi declare contract view, recognize that a Courts failed to our Geiss public policy they if against sions as be absolute to void of trade need not fair distinguish are “inconsistent with and honorable Rather than unlawful. dealing, contrary policy and offen suggested, pre- sound Werlinger has we wrongly good morals.” v. Peterbilt sive Johnson recognize fer to that Geiss (N.D. Inc., Fargo, it. decided and overrule of 1989). of the oldest and one of “[0]ne common law has al- policy “The applications public pol most continuous” competition.” free ways been favor of sphere its icy “in the of contract law is al., Page Prosser and Keeton Keeton et application to in restraint of (5th ed. Torts at 1012 on the Law *4 Holdsworth, supra, at 56. trade.” VIII 1984). Ages and until the In the Middle law as to contracts restraint of “[T]he 1600s, in restraint of trade all contracts has, any trade more than other class of wholly illegal. VIII W. regarded contracts, by changing ideas been moulded Holdsworth, English Law 56- History A public policy.” Id. 1973). (2nd 1937, Impression ed. 2nd 59 Bacheler, public policy restraining Eng.Rep. 1097 This state’s v. 78 Colgate 9-08-06, N.D.C.C., (1602), by fixed typical of the time. It involved trade is excep- provides, with two narrow by and a which the defendant which a debt bond here, “[e]very that con- “use the tions not relevant that if his son should covenanted county by anyone which is restrained within the trade of an haberdasher profession, Kent, Canterbury exercising a lawful or Roch- cities to that extent void.” ester”, plaintiff twenty any business of kind is pay he would 1, Swendiman, supra. v. to be fn. Olson pounds. The court held See (1932), 870 a dentist 62 N.D. N.W. unlawful: five-year employed another dentist for a law, against pro- to condition is “[T]his providing that if the under a contract term any to use a lawful trade hibit or restrain the term ex- employed dentist left before time, any any place; or at for as well at practice dentistry pired, he could not may him for one time or one he restrain Forks, Dakota, or East Grand Grand longer him place, he restrain Minnesota, Forks, period of two against places, times and more which is liqui- provided The contract years. commonwealth; for the benefit of the $2,000 upon violation. damages dated freemen, being it is free for them to pur- held that a This court any place.” exercise their trade compete not save chasing right to did argument Id. An that the restraint was the restraint of trade: absolute, it could eliminated because be that, the con- under “Appellant claims by payment twenty pounds, was unavail- tract, liberty practice at to ing, “ought the tradesman not to because City Forks profession in the of Grand his living.” abridged of his trade and Id. of his contract the termination exceptions, limited in time and Reasonable $2,000 the defendant. upon payment of to space, began recognized in to arise and be practice Surely not freedom to this was 1600s, such as the case of the sale Forks, since he profession in Grand business, that a mas- or limited restraints the freedom with purchase have to would impose upon apprentice to might ter $2,000, is no merit to this and there guard against apprentice a former tention.” trade to use all his former master’s able Accord, Colgate v. Ba at 870. compete against him. VIII N.W. secrets to cheler, Holdsworth, supra, supra. at 58-59. Care, Inc. v. St. contracting par Spectrum Emergency interests of the “[T]he Center, 479 Joseph’s Hospital & Health necessarily
ties are not the same as the (N.D.1992), involved interests of the commonwealth.” Maxim Nordenfelt Nordenfelt, Guns and Ammunition Co. [1893] I Ch. (Bowen, v. between emergency Spectrum, a room physicians to company supplying hospitals, 9-08-06, N.D.C.C., Olson employed supply physicians and the it to- Section Swendiman, Emergen Spectrum’s contract with the supra; Spectrum hospital. physicians provided: Care, Joseph’s Hospital & cy Inc. v. St. Therefore, agrees Center, Physician that supra;
“... Health deci California rela- during the term of contractual Family sions, such as Buskuhl v. tionship Corporation peri- and for a with Co., supra, construing the Field same Code thereafter, (1) Physician year one od of N.D.C.C., 9-08-06, we con provision as § (c) Corporation compete will not ... 12(D) Paragraph that clude Hospital enter into contractual at contract constitutes an unlawful arrangements provision of emer- for the under of trade and is void coverage gency department physician The contract restrains hospital Physician where has competing by requiring with MSI by Corporation.” been scheduled (Olson v. Swen “purchase he the freedom” provi- at 850. said of that diman, supra, 870) compete 244 N.W. at sion: “There can be no doubt section forfeiting money with MSI that MSI 9-08-06, N.D.C.C., provi- makes void the pay to him. The contract would otherwise attempts prohibit physi- sion which *5 competing from restrains being employed by Hospital cians by “imposing penalty if he does so” MSI period.” at the end of the contract 479 (Buskuhl Co., supra, Family v. Ins. Life at N.W.2d 607) Cal.Rptr. 76 at in the form of a forfei opening What is now codified as the money him if he ture of otherwise due 9-08-06, N.D.C.C., clause of was drawn § v. compete should elect to with MSI. Code, originally proposed from the Field supra, Northern Ins. is inconsis York, adoption in New and was enacted tent with this court’s earlier decision Territory 833 of the Dakota Code Civil § Swendiman, supra, v. Olson this court’s of 1865 and later codified as 959 of the § Spectrum, supra,3 later decision in and the Territory Dakota Civil Code of 1877. construing the California decisions same provision same Field Code was enacted statute. California in 1872 and codified as Field Code as our Con Cal.Civ. (now 1673 Code codified as Cal.Bus. & sequently, hereby it. we overrule 16600). Prof.Code “Because of this com judgment is affirmed. derivation, mon California court decisions sections, construing Code not Field while binding, respectful are entitled to consider MESCHKE, J., and RALPH J. ation, ‘persuasive and should ERICKSTAD, Surrogate Judge, concur. ” Glatt v. Bank Kirk ignored.' not be Surrogate Judge RALPH J. ERICK- Plaza, wood 473, 477 n. 4 at the STAD was Chief Justice time this (N.D.1986) (citation omitted). California surrogate case was heard and served as courts, construing pro the same Field Code judge pursuant for this case to Section 27- derived,
vision from which our statute was 17-03, N.D.C.C. provisions held that it “invalidates em ployment prohibiting employ JOHNSON, PHILIP Justice J. who was a working competitor ee from member of the Court when this case was completion employment of his imposing heard, participate did not in this decision. penalty if he does so.” Buskuhl v. Fam Co., ily 514, Cal.App.2d 271 76 Justice NUEMANN and Justice SAND- 602, (1969). Cal.Rptr. 607 STROM, members of the Court heard, partici- when this case was light history of the did not common-law noncompetition pate clauses in restraint in this decision.
3. We note that
this court in Geiss did not discuss
Spectrum
Care,
man Emergency
Inc. v. St.
Swendiman,
the earlier case of Olson v.
62 N.D.
Center,
Joseph's Hospital & Health
N.W.2d
479
(1932).
ring specially. employee involve an
This case does not his or
soliciting her own customers working for another
business while [See
Biever, Coutts, Nordell Drees & (N.D.1981); Spectrum Emer- Joseph’s, 479 N.W.2d
gency Care v. St. J., (N.D.1992) [VandeWalle, Therefore,
curring agree specially]]. I opinion and majority
with the most therein.
rationale contained agreements
I continue to believe
prohibiting employee soliciting
employee’s during the term of the clients valid, notwithstanding
employment sec are See, e.g.,
tion NDCC. 34-02- §§
07; 34-02-14, I do not construe NDCC. opinion Spectrum Emergency nor
Care, supra, contrary to to hold that be
lief. *6 B.S., the Interest of Child. SHIREY, Appellee,
Rick Petitioner
B.S., child, B.S., and R.S. and parents, Respondents Appellants.
Civ. No. 920160.
Supreme Court of Dakota. 23, 1993.
Feb.