Akey v. Murphy

• Citation: 238 So.2d 94
• Decision Date: 13 July 1970
• Docket Number: No. 39419,39419
• Parties: 1970 Trade Cases P 73,277 Robert M. AKEY et al., known as Watson Clinic, a medical partnership, Petitioners, v. Frank P. MURPHY, Respondent.
• Court: Florida Supreme Court

Page 94

238 So.2d 94

1970 Trade Cases P 73,277

Robert M. AKEY et al., known as Watson Clinic, a medical partnership, Petitioners, v. Frank P. MURPHY, Respondent.

No. 39419.

Supreme Court of Florida.

July 13, 1970.

William O. E. Henry, of Holland & Knight, Bartow, for petitioners.

Robert L. Trohn, of Langston & Massey, Lakeland, for respondent.

ROBERTS, Justice.

This cause is before the court on direct conflict certiorari to review the decision of the District Court of Appeal, Second District, in Akey v. Murphy, Fla.App.1970, 229 So.2d 276. Because of a conflict on the same point of law with the decision of the District Court of Appeal, Fourth District, in White v. Allen, Fla.App.1970, 232 So.2d 766, we issued the writ.

The controversial point has to do with the interpretation of Subsection (3) of Section 542.12, Fla.Stat.1969, F.S.A. This statute was enacted in 1953, as Chapter 28048, Laws of Florida, Acts of 1953, to provide generally that contracts restraining the exercise of 'a lawful profession, trade or business of any kind' are invalid; however, the statute contains the following exceptions: Subsection (2) authorizes such a contract in connection with the sale of the good will of a business or between an employer and an employee when reasonably limited as to time and area; and Subsection (3) provides that partners may agree that, upon the dissolution of the partnership, 'all or some of them will not carry on a similar business within a reasonably limited time and area.'

The case Sub judice is concerned with a contract between partners engaged together in the practice of medicine under the name 'Watson Clinic.' The partnership contract provided that, upon the withdrawal of a partner, he would not practice medicine within thirty miles of Lakeland (the location of the clinic) for a period of two years. The withdrawing partner, the respondent here, declined to abide by the agreement, and this suit by the remaining partners, the petitioners here, followed. The chancellor found that the restrictions were reasonable as to time and area, were no greater than necessary to protect the petitioners' legitimate interests, were not unduly harsh and oppressive on the respondent, nor injurious to the public interest.

On appeal, the appellate court, with one judge dissenting, reversed. The basis of the majority decision was that the exceptions contained in Subsections (2) and (3) applied only to a 'business' and did not include a 'profession.' The court relied upon Bergh v. Stephens, Fla.App.1965, 175 So.2d 787, in which the First District Court of Appeal had so construed Subsection (2) in a case involving an employer-employee relationship in the practice of medicine. In his dissenting opinion in the case Sub judice, Judge Mann pointed out that a strong argument made here had not been made in the Bergh case, namely, that our statute is borrowed from other jurisdictions in which the validity of contracts such as that here reviewed had been upheld prior to 1953, the date of the enactment of our statute. As noted above, in White v. Allen, supra, 232 So.2d 766, the Fourth District Court of Appeal agreed with Judge Mann and held that the term 'business' as used in Subsection (3) of Section 542.12, supra, also includes a profession or trade. We agree.

It has long been the rule in this state that the adoption of a statute of another state adopts also the construction thereof by the courts of that state. As set forth in Duval v. Hunt, 34 Fla. 85, 15 So. 876 (1894),

'Besides our adoption of the terms of the statute itself, according to the well-settled rule, we also adopt, as forming an integral part of the same, any known and settled construction that had been placed thereon by the courts of the state from which it has been adopted, in so far as that construction is not inharmonious with the spirit and policy of our own general legislation on the same subject.'

This rule has been many times followed by this court. See Gray v. Standard Dredging Co., 109 Fla. 87, 149 So. 733 (1933); State ex rel. Porter v. Atkinson, 108 Fla. 325, 146 So. 581 (1933); and, most recently, Blank v. Yoo Hoo of Florida Corp., Fla.1969, 222 So.2d 420. It seems that the statutes of California and Oklahoma prohibiting contracts restraining a person from engaging in any 'lawful profession, trade, or business of any kind' each contain an exception almost identical to Subsection (3) of Section 512.42, supra, applicable in terms to agreements not to carry on 'a similar business' upon the dissolution of a 'partnership'. The courts of California and Oklahoma construed this provision of the statute as applying to partnerships for the purpose of engaging in a profession as well as other business relationships. See Crutchett v. Lawton, 1934, 139 Cal.App. 411, 33 P.2d 839; Ragsdale v. Nagle, 1895, 106 Cal. 332, 39 P. 628; Herrington v. Hackler, 1937, 181 Okl. 396, 74 P.2d 388; Wesley v. Chandler, 1931, 152 Okl. 22, 3 P.2d 720; Wall v. Chapman, Okla.1921, 84 Okl. 114, 202 P. 303; Threlkeld v. Steward, 1909, 24 Okl. 403, 103 P. 630; Moore v. Snodgress, 1950, 203 Okl. 572, 223 P.2d 1080. See also Brown v. Stough, Okl.1956, 292 P.2d 176 (decided after Florida adopted a similar statute in 1953) pointing out that the sale of a withdrawing partner's interest in the business to partners who continue the business, includes the retiring partner's interest in the good will of the firm, even though no mention is made thereof in the contract restricting the retiring partner from engaging in the profession for a reasonable time and area.

An agreement among partners that a withdrawing partner will refrain from engaging in the partnership business within a reasonable area for a reasonable time is not contrary to public policy in general, see 5 Williston on Contracts, Sec. 1644, nor to the public policy of this state, see Massari v. Saliciccia, 102 Fla. 847, 136 So. 522 (1931). Thus, the exception contained in Subsection (3) of Section 542.12, supra, is merely a declaration of the existing public policy of this state. No real distinction between business partners associated together for the practicing of a trade or profession and those engaged in a 'business' such as the sale of groceries (as in the Massari case, supra) is immediately apparent, insofar as the public policy in question is concerned. Cf. DeVaney v. Rumsch, Fla.1969, 228 So.2d 904, holding that the 'professional-business' distinction made in connection with the imposition of ethical and moral obligations on professional persons had no validity and was not applicable insofar as the constructive-service statute, Section 48.181, Fla.Stat.1969, F.S.A.--providing for service upon the secretary of state as the agent of nonresidents engaging in business in this state--was concerned.

It is contended on behalf of respondent that the statute must have been intended to apply only where there is a 'reasonable interest', such as the sale of the good will of a business, to be protected by the restrictive covenant in question. However, as pointed out by the chancellor in his final decree, the purpose of the restraining covenant here was to 'assist in assuring the continuity and growth of the medical group in the achievement of its public goals and objectives.' The covenant was a part of the partnership agreement entered into by each partner in the clinic as a condition precedent to his becoming a part of the clinic partnership. It would appear, therefore, that there was a 'reasonable interest' to be...