Boggs v. Friend
| Decision Date | 01 February 1916 |
| Docket Number | 2809. |
| Citation | 87 S.E. 873,77 W.Va. 531 |
| Parties | BOGGS v. FRIEND. |
| Court | West Virginia Supreme Court |
Submitted January 18, 1916.
Syllabus by the Court.
A contract between the seller and purchaser of an established shop or business, which binds the seller, as incident to the sale and purchase of his property, not to set up and engage in a rival business within the neighborhood thereof or in such close proximity thereto as to detract from the natural patronage of such shop or business, is not void on grounds of public policy, as constituting an unreasonable restraint of trade.
In such cases the test in determining the validity or invalidity of the contract is the reasonableness of the restraint imposed and it will be enforced as to time and space only to the extent necessary to protect the rights of the parties and the interest of the public therein, if any.
There is a distinction between those cases where by the terms of the contract the purchaser is put entirely out of business and those in which the restraint is imposed as a mere incident to the sale and transfer of one's business to another, and to protect the purchaser therein. The former class are generally condemned by the courts, the latter held reasonable, valid and enforceable.
Though such a contract be not in terms limited in time or space, it will be construed as intending only such sufficient time and reasonable space as may be necessary to protect the purchaser in the thing or business purchased.
Where as in this case, such contract does not eo nomine include the good will, but covers not only a sale of the business but the place of business also, as a shop or lot on which the business is carried on, it will ordinarily be construed as including the good will of the business, by reasonable intendment or implication.
Appeal from Circuit Court, Braxton County.
Suit by James A. Boggs against Silas M. Friend. From decree for defendant, plaintiff appeals. Reversed and remanded.
Hall Bros., of Sutton, for appellant.
Hines & Kelly, of Sutton, for appellee.
The bill alleges that on and prior to July 21, 1910, defendant had been engaged in the business of a blacksmith at the forks of Little Otter Creek, in Braxton County, and was the owner of the well equipped shop and the lot on which the same was located, and where he had built up a good business, with a desirable patronage; that on that day, by verbal agreement, plaintiff purchased from defendant said lot of land, together with the blacksmith shop thereon, and all tools, implements and equipments therein, and the business aforesaid, and the good will thereof, for the price of three hundred and seventy five dollars, of which he had paid down in cash one hundred and fifty dollars, and for the residue had executed to defendant his four notes for fifty six dollars and twenty five cents each, payable in five, ten, fifteen and twenty months from the date thereof; that a part of said contract of purchase was that defendant would not engage in the blacksmith business in the vicinity or neighborhood where said blacksmith shop was located, or at any other place so near thereto as to constitute a rival business, or detract from the patronage which would naturally or likely go to the shop and business so purchased by plaintiff from him.
It is further alleged that defendant well knew plaintiff had purchased said property and business for the purpose of engaging in the business of blacksmithing on said lot, and with a view of obtaining the patronage and good will of the business built up by him as aforesaid; that on taking possession of said property plaintiff at once engaged in said business, that he had paid some of said notes and was ready and willing to pay the other note, and had in all respects performed the contract on his part, and was entitled to specific performance of the contract on the part of defendant and to a deed from him for said lot with general warranty.
The bill further alleges that notwithstanding his aforesaid agreement defendant, within a month or two thereafter and after plaintiff had taken possession of said property and was engaged in carrying on said business, had set up a rival shop or business at a point within a quarter of a mile of plaintiff's shop, and had been and was still engaged in carrying on such rival business in violation of his contract, and that unless restrained he would continue to do so, to the continued great damage of plaintiff.
The bill furthermore charges some defect in the title of defendant to said lot, and his probable inability to make good title thereto; but the answer putting in issue all other material allegations of the bill denies this one also, and professes defendant's ability and readiness as always on payment of the balance of purchase money to make good deed to plaintiff in accordance with his contract, and denies also that defendant had ever declined to do so.
The prayer of the bill was and is that defendant be enjoined from conducting such rival blacksmith shop, and that he also be required to specifically perform his contract with plaintiff, by executing to him a good and proper deed for said property, and that plaintiff be also given a decree against him on account of the damages sustained by breach of his contract, not to set up and carry on a competing shop as aforesaid.
On the demurrer thereto we think the bill is not multifarious, and presents a good cause for the injunctive and other relief prayed for. The demurrer does not appear to have been disposed of by the court below, except by the general decree denying plaintiff all relief and dismissing his bill on the merits, and fro m which decree he obtained the present appeal.
The propositions relied on to support the decree, affirmed by defendant, and challenged by plaintiff and appellant, are: First, that the contract alleged, respecting the good will of the business purchased, and defendant's agreement not to set up and conduct a rival business, were not proven; second, if proven, the contract was void, as being an unlawful restraint of trade; and, third, not being definitely limited in time or place, it was for this reason also void and unenforceable.
The first proposition, want of proof to support the contract alleged, we think should be denied. The contract, a verbal one, was substantially proven by plaintiff's evidence though controverted by that of defendant, the only witnesses to the immediate transactions between them; and the evidence of the witnesses as to the subsequent declarations or admissions of these parties is more or less conflicting. But when we look to the situation of the parties, to all the facts and circumstances surrounding them at the time of the contract, and to their previous negotiations leading up to the contract, as to which there is little if any conflict in the evidence, to the declared purposes of the defendant in wanting to sell, and of the plaintiff in wanting to buy an established business, and the fact admitted by defendant, that the subject of his getting down and out of the business was discussed, not only between himself and plaintiff, prior to the contract, but also between himself and other prospective purchasers, and the evidence of disinterested witnesses as to his subsequent declarations, that he had sold out to plaintiff, and had agreed not to set up or engage in any rival business, all satisfies us beyond doubt, that the contract was in fact substantially as...
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