Bennett v. Carmichael Produce Co.

• Decision Date: 20 April 1917
• Docket Number: No. 9252.,9252.
• Citation: 115 N.E. 793,64 Ind.App. 341
• Parties: BENNETT et al. v. CARMICHAEL PRODUCE CO.
• Court: Indiana Appellate Court

64 Ind.App. 341

115 N.E. 793

BENNETT et al.

v.CARMICHAEL PRODUCE CO.

No. 9252.

Appellate Court of Indiana, Division No. 1.

April 20, 1917.

Appeal from Circuit Court, Bartholomew County; Frank S. Jones, Judge.

Action by the Carmichael Produce Company against Carrie Bennett and another. From judgment for plaintiff, defendants appeal. Affirmed.John W. Donaker and Ralph H. Spaugh, both of Columbus, for appellants. John Rynerson and Walter S. Rynerson, both of Columbus, for appellee.

HOTTEL, J.

On November 16, 1910, appellants, who are husband and wife, were engaged in the business of buying and selling poultry and produce in Bartholomew county, Ind. Frank S. McNeal and Ralph O. Boyer, as partners, were at the same time engaged in the same business in said county, and on said day entered into a written contract with appellants which, substituting “B. & B.” for the names of Bennett and Bennett and “parties of the first part,” and “M. & B.” for McNeal and Boyer, and “parties of the second part,” is as follows:

“This instrument made and executed in duplicate this 16th day of November, 1910, by and between B. & B. and M. & B., witnesseth: That in consideration of the covenants and agreements hereinafter contained, B. & B. hereby agree to lease to M. & B. for the sum of twenty-five dollars per month, payable in advance on the 22d day of each month, for the term of ten years beginning with the 22d day of November, 1910, with the privilege of five additional years, *** the *** premises known as the Driftwood Valley tollgate property. *** B. & B. also have bargained and sold and do hereby bargain and sell to M. & B. all the tangible personal property on *** said *** premises and used therein in connection with the poultry and produce business, such as horses, mules, wagons, fillers, egg case lumber, poultry crates and poultry crate lumber, office furniture and fixtures. ***

In consideration of the foregoing M. & B. are to pay *** B. & B. the sum of eight hundred dollars, in cash upon the delivery *** of said lease and the possession of the property described therein. The personal property before mentioned is to be invoiced and appraised at its actual cash market value by Stephen N. Davis and W. B. English on the 21st day of November, 1910, and when so invoiced and appraised M. & B. are to pay B. & B. as a further consideration for said transaction, the appraised cash value of *** said *** property. ***

As a further consideration for said lease, purchase and sale, B. & B. agree that during the term of said lease they or either of them will not engage either directly or indirectly in the poultry or produce business in the county of Bartholomew or any other county adjoining thereto except as employés of said M. & B., and in default thereof they will pay to M. & B. the sum of one thousand dollars as liquidated damages therefor.”

On February 2, 1912, M. & B. dissolved partnership, and “to fully carry out the terms of the contract” of dissolution, Boyer executed to McNeal the following written assignment of all his “right, title and interest” in the contract above set out:

“For value received and in order to fully carry out the terms of the contract of even date herewith, *** I hereby assign and transfer to said McNeal all my right, title and interest accrued or which may hereafter accrue, in the within contract between Carrie Bennett and George F. Bennett, her husband, and Frank S. McNeal and Ralph O. Boyer, dated the 16th day of November, 1910, including whatever rights I may now or might hereafter have to any part of the sum of one thousand dollars named in said contract as liquidated damages for breach heretofore or hereafter by the said Bennetts or either of them of their covenant named therein.”

On March 18, 1913, McNeal sold his business to the appellee, the Carmichael Produce Company, and “to fully carry out the terms of the contract” of sale executed to said purchaseran assignment of said original contract, which in part is as follows:

“This 18th day of March, 1913, for value received and in order to fully carry out the terms of the contract of even date herewith whereby I have sold to Carmichael Produce Company all my right and interest in and to the poultry and produce business and the stock and property thereof, now carried on by me at the premises known as the Driftwood Valley Tollgate property, I hereby assign and transfer to said Carmichael Produce Company. ***”

From this point on the assignment is in substantially, if not identically, the same language as that of the assignment quoted supra.

This appeal is from a judgment against appellants in favor of appellees in an action brought by the latter, as assignee of the contract first above set out, to recover the liquidated damages provided for therein. The complaint is in two paragraphs, each of which is predicated on said contract, which is made part of it and filed as an exhibit therewith. The respective assignments above set out are made part of the first paragraph as exhibits, while in the second paragraph they are set out.

[1] A demurrer to each of these paragraphs was overruled. Affirmative answers were filed, to which demurrers were sustained, but they were afterwards withdrawn, and the case was submitted for trial on the general denial. A motion for new trial, filed by appellants, was overruled, but they, in their points and authorities, present no error on this ruling, and hence such error, if any, is waived.

The only assigned errors, therefore, which we are required to consider, are those presented by the respective rulings on said demurrers. In our disposition of these errors, instead of indicating the several grounds of objection to each paragraph of complaint set out in the memorandum accompanying the respective demurrers thereto, we will consider those presented by appellants in their points and authorities as applicable to both, and to each paragraph respectively in the order there presented.

[2] It is first insisted by appellants that the contract sued on is in restraint of trade and in violation of that part of section 3866, Burns 1914, which provides:

“That every scheme, design, understanding, contract, combination in the form of a trust or otherwise, or conspiracy in restraint of trade or commerce, or to create or carry out restrictions in trade or commerce *** is hereby declared to be illegal.”

This contract is not one in general restraint of trade, but upon its face it indicates nothing more than an intent on appellants' part to sell, and on the part of appellee's assignors to buy the good will of appellant's business. The law of all jurisdictions regards the good will of a particular trade or business as a species of property possessing a market value, and subject to disposition and sale. Consumers' Oil Co. v. Nunnemaker, 142 Ind. 560, 564, 41 N. E. 1048, 51 Am. St. Rep. 193. And where it appears from the contract involved that the purpose and intent of the parties in its making was, on the part of the seller, merely to dispose of and sell the good will of his business, and, on the part of the buyer, merely to protect himself against the possibility of the seller's taking from him that which he bought and paid for, no scheme or design is shown which brings such contract within the class inhibited by the statute supra.

Contracts of this character have been frequently considered by the courts of this state and of other jurisdictions, and where their provisions have been such as to indicate nothing more than a sale and purchase of the good will of a business, with an agreement fixing liquidated damages for a breach of such provision, the courts have, to such extent, uniformly upheld them. Johnson et al. v. Gwinn et al., 100 Ind. 466.Duffy et al. v. Shockey, 11 Ind. 70, 75, 71 Am. Dec. 348;Merica v. Burget, 36 Ind. App. 455, 75 N. E. 1083;Diamond Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. 419, 60 Am. St. Rep. 464;Public Opinion, etc., Co. v. Ransom, 34 S. D. 381, 148 N. W. 383, Ann. Cas. 1917A, 1010;Johnston v. Blanchard, 16 Cal. App. 321, 116 Pac. 973;Webster v. Buss, 61 N. H. 40, 60 Am. Rep. 317;United States v. Addyston, etc., Co., 85 Fed. 271, 29 C. C. A. 141, 46 L. R. A. 122.

2. It is insisted that the interdicted territory in the contract sued upon includes not only Bartholomew county, but also the seven adjoining counties, and that there are no averments in the complaint showing that it was necessary to the protection of the good will of the business sold by appellants that such adjoining counties should have been included in the interdicted territory. In support of this contention, appellant relies on the case of Consumers' Oil Co. v. Nunnemaker, supra. Upon this question the court in that case said:

“The settled rule as enunciated by the American and English decisions of the highest courts seems to be that where, in the particular case before the court, the restraint in controversy, as to territory, appears to be broader or larger than is necessary to the protection of the party seeking to enforce the restrictive contract, it is of no benefit to either party, but in that event becomes oppressive upon the party against whom the enforcement is sought, and, being oppressive, the law regards the restriction as unreasonable and injurious to the interests of the public. *** It is a recognized principle that when a contract is or can be so separated in parts as to constitute two agreements, one illegal and the other legal, the latter may be enforced and the transaction pro tanto sustained. But it is otherwise where the contract in its nature is not divisible. *** The contract before us is not of this character, and does not come within the provisions of the rule stated, and it must either stand or fall as an entirety.”

[3] The language of the contract under consideration is easily distinguishable from that employed in the contract in the case just cited, and falls clearly within the line of cases in which the courts...