Bagwell v. H. B. Wellborn & Co.

• Decision Date: 14 October 1963
• Docket Number: No. 42737,42737
• Citation: 247 Miss. 564,156 So.2d 739
• Parties: Floyd D. BAGWELL v. H. B. WELLBORN & CO., Inc.
• Court: Mississippi Supreme Court

Page 739

156 So.2d 739

247 Miss. 564

Floyd D. BAGWELL v. H. B. WELLBORN & CO., Inc.

No. 42737.

Supreme Court of Mississippi.

Oct. 14, 1963.

H. C. Mike Watkins, Gerald Adams, Daniel P. Self, Jr., Meridian, for appellant.

Dunn & Singley, Meridian, William A. Bacon, Jackson, for appellee.

LEE, Presiding Justice.

H. B. Wellborn & Company, a Mississippi corporation, engaged in a general insurance adjustment business, with a branch office in the City of Meridian, Mississippi, sought to enjoin Floyd D. Bagwell against violating the terms of an employment contract between the parties of date of January 26, 1961. A copy of the employment agreement was attached to the bill. This instrument recited that the employee had never been engaged in the independent insurance adjustment business in the territory named except as complainant's employee; that such business is highly competitive, and depends to a large extent upon friendships, contacts and confidential information, formed and obtained in connection therewith; that the employer had spent many years in this character of work and had, thereby, obtained the benefit of confidential information; and that it was unwilling to employ Bagwell without execution of the agreement. By Par. 3 thereof, it was provided as follows: 'Employee hereby covenants and agrees that he will not, within a period of two years after the termination of said employment, engage in any manner in the independent insurance adjustment business in the City of Meridian or within a radius of 75 miles from the corporate limits thereof. This obligation not to so engage in any competing business is not limited to engaging therein in employee's own name or for his own account, but shall include any connection with the handling of any other types of independent insurance adjustment business either as employee, partner, stockholder, or other interest in any concern engaged in an independent insurance adjustment business. This agreement, however, shall not prevent the employee from performing services as a regular employee of an insurance company which does its own adjustment work, but shall prevent him from performing any services in said territory as an employee of any insurance adjustment company. Employee also agrees that he will not, during the period of said employment or within two years after termination thereof, either use himself or impart to anyone else any confidential information which he might have obtained by reason of said employment * * *'. (Emphasis supplied.)

The bill charged that the defendant's employment was terminated about June 2, 1962, and, since said time, the defendant had set up his own competing claim service, used information and client lists obtained from the complainant, and solicited business contrary to his contract of employment.

The answer of the defendant denied all of the material allegations of the bill and set up affirmative defenses, namely, a lack of consideration, no breach in the contract, it must be strictly construed against the complainant the contract was unreasonable, and its enforcement would cause undue hardship to him.

After hearing the evidence, the court delivered an elaborate written opinion in which the conflict in the evidence was resolved in behalf of the complainant. The hearing was, by agreement, treated as final. The decree was in accord with the findings and enjoined the defendant from engaging in the independent insurance adjustment business in the City of Meridian, Mississippi, or within a radius of seventy-five miles from the corporate limits thereof, as stated in the contract. From this action, the defendant appealed.

Without detailing the evidence, it is sufficient to say that it showed the right of the complainant to terminate the contract of employment, and the defendant's continuance thereafter in the independent insurance adjustment business in the City of Meridian, Mississippi, and adjacent territory thereto, in competition with the complainant, and in violation of the contract. There was a dispute in the evidence as to whether or not trade secrets, or secret information previously gained from the employer was of such nature as to be beneficial to the employee, as a competitor, or that the same was imparted to others.

In effect the court held, from all the evidence, that appellant understood the provisions of the contract when he...