Blackard v. Monarch's Mfrs. & Distributors, Inc.

• Decision Date: 01 November 1960
• Docket Number: No. 19252,No. 1,19252,1
• Citation: Blackard v. Monarch's Mfrs. & Distributors, Inc., 169 N.E.2d 735, 131 Ind.App. 514, 97 A.L.R.2d 1255 (Ind. App. 1960)
• Parties: , 97 A.L.R.2d 1255 John C. BLACKARD, General Fabricators, Inc., Appellants, v. MONARCH'S MANUFACTURERS AND DISTRIBUTORS, INC., Appellee
• Court: Indiana Appellate Court

Page 735

169 N.E.2d 735

131 Ind.App. 514, 97 A.L.R.2d 1255

John C. BLACKARD, General Fabricators, Inc., Appellants, v.MONARCH'S MANUFACTURERS AND DISTRIBUTORS, INC., Appellee.

No. 19252.

Appellate Court of Indiana, Division No. 1.

Nov. 1, 1960.

Rehearing Denied Jan. 11, 1961.

Earl N. Davis, Indianapolis, Tyler, Sharp & Davis, indianapolis, of counsel, for appellants.

Daniel E. Johnson, Charles L. Whistler, Indianapolis, Baker & Daniels, Indianapolis, of counsel, for appellee.

RYAN, Judge.

Ernest R. Mills and John C. Blackard had been partners in a formica fabrication business under the name of Monarch's Manufacturers and Distributors.This partnership was terminated by an agreement between Blackard and Mills on April 5, 1957.The terms of this agreement provided that Blackard would sell all of his interest to Mills, and in return Blackard was to receive One Thousand ($1,000.00) Dollars in cash and Forty-nine Thousand ($49,000.00) Dollars within thirty days.Mills also was to execute a note for Fourteen Thousand Five Hundred ($14,500.00) Dollars to be paid within sixty (60) days.The agreement further provided that a corporation should be formed under the name of Monarch's Manufacturers and Distributors, Inc. and that the Fourteen Thousand Five Hundred ($14,500.00) Dollar note would be redeemed by the issuance to Blackard of two hundred (200) shares of the stock of the new corporation.Provision was also made for the possible future purchase of Blackard's stock by the corporation or by Mills.

The agreement further contained the following provision:

'The Seller hereby covenants and agrees that he will not manufacture or sell any of the products currently handled by Monarch's Manufacturers and Distributors in the State of Indiana, or the adjacent states, for a period of four years from the date of the execution of this agreement.

'The Buyer hereby covenants and agrees that he will not enter into a competitive business with said Monarch's Manufacturers and Distributors, Incorporated, hereafter to be formed, or authorize or direct any other person, persons, or firm to enter into a competitive business in his name or for his benefit, in the State of Indiana or adjacent states, for a period of four (4) years from the date of the execution of this agreement.'

In addition to this agreement Blackard and Mills entered into another agreement on the same date whereby it was agreed that Blackard would be employed by the corporation as its Vice President for a period of three years at an annual compensation of three (3%) per cent of the gross sales.

On April 17, 1957, the corporation was formed and Mills transferred to the corporation by bill of sale, and deed, the assets of the partnership.Concurrently the corporation assumed all of the business liabilities of Mills including the liability to pay Blackard's Fifty Thousand ($50,000.00) Dollars.Within the thirty days provided for by the contract, the corporation paid Fifty Thousand ($50,000.00) Dollars to Blackard.

On the same date, April 17, 1957, the first meeting of the board of directors of the corporation was held, at which time the agreement, whereby Blackard was to be employed and paid three (3%) per cent of the gross sales, was accepted.He was paid his three (3%) per cent commission.

On November 25, 1957, the following in struments were executed:

'RELEASE

'The undersigned, MONARCH'S MANUFACTURERS AND DISTRIBUTORS, INC. of Indianapolis, Indiana, by Ernest R. Mills, as President, and Donald L. Walker, as Secretary and Treasurer, and John C. Blackard, of 2893 Greenbrier Street, Sarasota, Florida, hereby covenant and agree that in consideration of the payment of Fourteen Thousand Dollars ($14,000) by said MONARCH'S MANUFACTURERS AND DISTRIBUTORS, INC., by certified check made payable to John C. Blackard, and other valuable consideration, the said John C. Blackard does hereby release any and all rights and interest that he may have arising out of that certain contract of employment executed on the 5th day of April, 1957, whereby the said John C. Blackard was employed as Vice-President in charge of sales for said MONARCH'S MANUFACTURERS AND DISTRIBUTORS, INC. and the said MONARCH'S MANUFACTURERS AND DISTRIBUTORS, INC. by Ernest R. Mills as President, and Donald L. Walker, as Secretary-Treasurer, do hereby release the said John C. Blackard from any and all duties and liabilities arising under said contract of employment.

'WITNESS OUR HANDS AND SEALS this 25th day of November, 1957
                "s/ John C. Blackard  MONARCH'S MANUFACTURERS
                --------------------
                    John C. Blackard  AND DISTRIBUTORS, INC
                "(CORPORATE SEAL)     By: s/ Ernest R. Mills
                                      -----------------------
                                      Ernest R. Mills
                                         President
                "s/ James M. Robison  s/ Donald L. Walker
                --------------------  -----------------------
                    Witness           Donald L. Walker,
                                         Sec.-Treas."
                

'AGREEMENT

'We the undersigned, Ernest R. Mills and John C. Blackard, hereby covenant and agree that in consideration of the mutual release of a certain contract of employment entered into by and between Ernest R. Mills and John C. Blackard on the 5th day of April, 1957, which said contract was adopted by Monarch's Manufacturers and Distributors, Inc., and which said contract was mutually released on the 25th day of November, 1957, by the parties thereto; that in consideration of said mutual release the certain contract entered into by and between the said Ernest R. Mills and John C. Blackard on the 5th day of April, 1957, which said contract provided for, among other things, the repurchase by the said Ernest R. Mills from the said John C. Blackard of two hundred (200) shares of the common capital stock of Monarch's Manufacturers and Distributors, Inc., is hereby mutually released and discharged.This certain contract, consisting of two (2) pages, and being that certain contract entered into by the parties hereto at the time of the sale by the said John C. Blackard to the said Ernest R. Mills, of all of his interest in Monarch's Manufacturers and Distributors, of Indianapolis, Indiana, and all of the provisions thereof, are hereby mutually released and discharged by the parties hereto and none of the provisions thereof shall have any further force and effect from the date of this mutual release thereof.

'We, Ernest R. Mills and John C. Blackard, further covenant and agree that the two hundred shares of the common capital stock of Monarch's Manufacturers and Distributors, Inc. now owned by John C. Blackard will be resold to said Corporation, or to Ernest R. Mills individually at his written request, by the said John C. Blackard, his heirs or assigns, as follows: Fifty (50) shares on the 17th day of April, 1958, fifty (50) shares on the 17th day of April, 1959, and the...