Becker Coll. of Bus. Admin. & Secretatial Sci. v. Gross

• Decision Date: 05 January 1933
• Citation: 183 N.E. 765,281 Mass. 355
• Parties: BECKER COLLEGE OF BUSINESS ADMINISTRATION AND SECRETARIAL SCIENCE v. GROSS.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

281 Mass. 355

183 N.E. 765

BECKER COLLEGE OF BUSINESS ADMINISTRATION AND SECRETARIAL SCIENCE

v.GROSS.

Supreme Judicial Court of Massachusetts, Worcester.

Jan. 5, 1933.

Appeal from Superior Court. Worcester County; Lummus, Judge.

Bill by the Becker College of Business Administration and Secretarial Science against Sumner H. Gross. From the decree, defendant appeals.

Affirmed.

P. H. Breen, of Worcester, for appellant.

L. E. Stockwell, of Worcester, for appellee.

WAIT, J.

The defendant, a man of full age, married and a father, contends that he is not bound by his agreement under seal not to ‘conduct, solicit pupils for, or in any capacity enter the employment of or act in any capacity for any private or semi-private school other than the * * * [plaintiff] providing instruction in Business, Shorthand, Typewriting, Accounting, Secretarial or Commercial subjects, or any of said subjects, and located in the County of Worcester in the Commonwealth of Massachusetts or in Providence County in the State of Rhode Island during the duration of this contract [for his employment] or for a period of five years thereafter, whether said contract shall terminate by reason of the expiration of its term or for any other reason whatsoever, without first obtaining the written consent of the Board of Directors of the * * * [plaintiff] thereto * * *. [He] further agrees that he will not solicit pupils from Worcester County or Providence County for any school of the kind above described wherever it may be situated during the period of five years before mentioned.’ He was not led to sign the above agreement by any fraudulent practice, nor was he subjected to any duress. He executed the contract after having in his possession for several days a draft which contained the foregoing, without objection to or suggestion with respect to it, although changes were made in the draft contract, which are not here material, before executing the agreement in final form. He read and fully understood the terms of the instrument. His employment terminated in October, 1931. He has broken the covenant by soliciting pupils in Worcester County for a private school in Worcester providing instruction in certain of the subjects enumerated in the covenant. He has secured between forty and fifty pupils for that school. He was engaged in such solicitation at the time of filing the report of the master herein. He has never obtained the written consent of the directors of the plaintiff to solicit pupils for any other school. He appeals from a final decree restraining him until October 19, 1936, substantially in the words of the covenant, from the acts against which he covenanted. It is his contention that the covenant is illegal and void as a restraint on competition; and, furthermore, that there has been such laches on the part of the plaintiff that it cannot maintain its bill.

The evidence was heard by a master who found, inter alia, the facts above recited. The defendant excepted to the report on the grounds that the finding that the plaintiff was not guilty of laches was inconsistent with the other findings reported and was not supported by the facts found; and that a finding that the plaintiff ‘has built up and acquired a substantial good will and favorable reputation in the territory served by it’ was too vague and indefinite. These exceptions were overruled after hearing. A motion to recommit was denied. An interlocutory decree entered confirming the report. No appeal was claimed.

[1] There is nothing in the contention with regard to laches, even if it be open to him after he has failed to appeal from the interlocutory decree which overruled the exceptions based upon it. The contract provided that any consent to his solicitation of pupils for other schools must be given in writing by the directors of the plaintiff. He relies upon knowledge of such activity on his part by a vice president of the plaintiff who did not know that the defendant had bound himself to this term of the contract; and failure of the plaintiff to take legal action until more than six months after such knowledge by the vice president. No other official connected with the plaintiff knew actually of the breach by the defendant until April, 1932. The bill was filed April 25, 1932. Such facts fall far short of proof of laches in bringing suit. They do not even prove knowledge by the corporation before April, 1932, that a breach had occurred.

Our law does not hold all contracts in restraint of trade or of competition to be invalid. See Gamewell Fire Alarm Telegraph Co. v. Crane, 160 Mass. 50, 35 N. E. 98, 22 L. R. A. 673, 39 Am. St. Rep. 458. In a long line of recent decisions contracts closely analogous to that here in question have been held to be valid and have been enforced. Sherman v. Pfefferkorn, 241 Mass. 468, 135 N....