Butts v. Birdwell

• Decision Date: 23 February 1973
• Citation: 503 S.W.2d 930
• Parties: Ralph BUTTS, Complainant-Appellant, v. Odell BIRDWELL and Gallatin Oil Company, Inc., Defendants-Appellees.
• Court: Tennessee Court of Appeals

Page 930

503 S.W.2d 930

Ralph BUTTS, Complainant-Appellant, v. Odell BIRDWELL and Gallatin Oil Company, Inc., Defendants-Appellees.

Court of Appeals of Tennessee, Middle Section.

Feb. 23, 1973.

Rehearing Denied April 27, 1973.

Certiorari Denied by Supreme Court Sept. 17, 1973.

Charles W. Bone, Goodall & Bone, Gallatin, for complainant-appellant.

Thos. Boyers, IV, Gallatin, for defendants-appellees.

OPINION

SHRIVER, Judge.

This is an appeal from a decree of the Chancellor sustaining defendants' motion to dismiss at the conclusion of complainant's proof.

Ralph Butts filed his bill of complaint on June 19, 1972 in which he alleged that, on February 1, 1972, he entered into an agreement with defendant, Odell Birdwell, to purchase a 1970 International truck and tank trailer, together with accessories, etc., which was owned and operated by the defendant Birdwell in his business as a distributor of petroleum products for Shell Oil Company in Gallatin, Tennessee. A copy of the contract of sale is made an exhibit to the bill.

It is further alleged that, although the written contract of sale does not so specify, it was agreed and understood by the parties that the price paid by complainant included not only the value of the truck and accessories, but also included the good will of the established business of the defendant as distributor, and included his agreement not to compete with complainant in respect to said business.

It is further averred that, in spite of the foregoing agreement, approximately one month after entering into the agreement, the defendant, Odell Birdwell, joined the defendant, Gallatin Oil Company, Inc., as a distributor for said Oil Company and began to solicit his old accounts and to sell oil products to them and to service said accounts in violation of his agreement, and that this action was taken with the full knowledge and encouragement of the defendant, Gallatin Oil Company, Inc., in violation of T.C.A. 47--15--113, which provides for treble damages for the procurement of a breach of contract.

It is alleged that as a result of the foregoing violation of the agreement, complainant has been severely damaged.

It is further alleged that under complainant's contract with defendant Birdwell, he paid a cash consideration of $2,000.00 and agreed to make monthly payments of $500.00, and that, in view of defendant's activities, any amount in excess of $2,000.00 that had already been paid would be unreasonable; however, he tendered into Court $500.00 representing the payment due June 1, 1972 and asked for a temporary injunction restraining defendant Birdwell from attempting to repossess the truck and equipment, pending the outcome of this suit.

The prayers of the bill are:

(1) For process;

(2) That the agreement between the parties be construed by the Court as a promise of the defendant Birdwell not to compete with complainant as to the business purchased from him, and that the Court declare the agreement to be null and void by reason of defendant's breach thereof, and that complainant be awarded judgment for $1,500.00, plus interest, representing the sum paid by complainant over and above the market value of the truck;

(3) That complainant be released from any further obligations under the contract;

(4) That complainant have and recover from defendant, Odell Birdwell, $25,000.00, or such lesser sum as is found to be proper compensation for losses suffered by reason of defendant's breach of contract;

(5) That complainant have and recover from defendant, Gallatin Oil Company, Inc., $25,000.00, or such lesser sum as the Court should find to be proper compensation by reason of that defendant's actions, and that defendant be held liable in treble damages for its violation of T.C.A. 47--15--113.

(6) For temporary restraining order to prevent defendants from attempting to repossess the truck in question;

(7) For interest, costs and attorney's fees; and

(8) For general Relief.

Defendant, Odell Birdwell, filed his answer admitting the purchase of the truck with oil tank and equipment for $9,500.00 and the execution of the contract, Exhibit A to the bill, but denied that he sold complainant anything other than the truck with the tank and equipment, and denied any oral or written agreement by which he promised not to compete with complainant in the oil business. He admits joining the Gallatin Oil Company as a distributor, but denies that the Gallatin Oil Company had any knowledge of any alleged agreement on his part not to compete with complainant. Defendant Birdwell filed his answer as a cross-bill seeking to recover the balance of the purchase price of the truck and equipment.

The defendant, Gallatin Oil Company, Inc., for separate answer, denied any knowledge of the allegations contained in complainant's bill with respect to an agreement with Odell Birdwell whereby Birdwell promised not to compete with complainant in the oil business, and denied any action on its part to induce or persuade Birdwell to enter into any unfair business practice or violate any agreement.

Following a hearing on oral testimony and documentary evidence, the Chancellor entered the following decree:

'This cause came on to be heard on this the 24th day of October, 1972, before the Honorable Edward M. Turner, Chancellor, holding the Chancery Court for Sumner County, Tennessee at Gallatin, Tennessee.

The defendants, Odell Birdwell and Gallatin Oil Company, Inc., at the conclusion of all the proof introduced by the plaintiff, Ralph Butts, moved that the action be dismissed, which after due consideration given to all the proof and evidence in the cause, the Court was of the opinion that said motion was well taken.

It is, therefore, ORDERED, ADJUDGED and DECREED, that the original action brought by the plaintiff, Ralph Butts, against the defendants, Odell Birdwell and Gallatin Oil Company, Inc., be and the same is hereby dismissed with the costs being adjudged against the plaintiff, Ralph Butts, for which let execution issue if necessary.

It is further ORDERED, ADJUDGED and DECREED that the cross-complaint of Odell Birdwell be and the same is hereby dismissed against the cross-defendant, Ralph Butts.

It is further ORDERED, ADJUDGED and DECREED that all monies paid into Court in this cause shall be retained pending appeals, if any, and until further orders of the Court.

This the 24th day of October, 1972.

/s/ Edward M. Turner

CHANCELLOR

APPROVED FOR ENTRY:

GOODALL & BONE

By _ _

Attorneys for Plaintiff and Cross-Defendant

/s/ Thos. Boyers, IV.

Attorney for Defendants and Cross-Plaintiffs'

ASSIGNMENTS OF ERROR

There are four assignments, as follows:

'1. The learned Chancellor erred in sustaining the appellees' motion to dismiss without having first required appellees to rest their case.

2. The learned Chancellor, in sustaining the appellees' motion to dismiss, failed to look to all of the evidence; to take the strongest legitimate view of it in favor of the opponent of the motion; to allow all reasonable inferences from it in his favor; and to discard all counter-vailing evidence.

3. The learned Chancellor erred in finding that the proof was not sufficient to show a clear, unambiguous and valid covenant not to compete.

4. The learned Chancellor erred in finding that the proof was not sufficient to make out a case against the appellee Gallatin Oil Company, Inc.'

The record shows that on February 1, 1972, after a considerable period of negotiation, complainant, Ralph Butts, entered into an agreement with defendant, Odell Birdwell, to purchase the 1970 International two ton truck with a fifteen hundred gallon tank on it, together with other items that were attached thereto, which truck was being used by Mr. Birdwell in his business as a distributor of Shell Oil Company products on a route in Sumner, Macon and Trousdale Counties, Tennessee. The contract of sale, made exhibit to the bill, shows a consideration of $9,500.00 with a cash payment of $2,000.00, leaving a balance of $7,500.00, plus $750.00 finance charge, leaving a balance of $8,250.00 after payment of $2,000.00. It also provides for $500.00 monthly payments to liquidate said balance.

This written contract does not refer to the business which was being conducted by defendant Birdwell, and no mention is made therein of an agreement not to compete. However, complainant testified that, collateral to the written contract of purchase of the truck, there was a definite and well understood agreement that complainant was purchasing Birdwell's accounts with customers on his truck route in Sumner, Macon and Trousdale Counties, along with the good will established by him, and that as a part of the agreement it was definitely understood that Mr. Birdwell was not to compete with complainant in the sale of gas and oil products on the route and with customers with whom he had been doing business.

Complainant testified that this oral agreement, as a part of the transaction, was made in the presence of Mr. Richard Fenker of the Rail Oil Company, and Mr. Fenker testified as a witness confirming complainant's version of the transaction.

Among other things, the complainant testified that at the time he began negotiating with defendant Birdwell and at the time of the transaction in question, Birdwell was a distributor of Shell products for the Rail Oil Company and that he had a specific territory for this distributorship, which consisted of farm accounts, house trailers, and certain other individuals and businesses that used fuel oil, gasoline and other oil products.

In response to a question as to what he purchased from Birdwell, he answered:

'I was purchasing a 1970 International two ton truck with a 1500 gallon tank on it, the accounts that went with it, anything that was attached to the truck, and the good will.'

When asked if Birdwell indicated to him the value of the assets he was selling, he answered that Birdwell showed him several checks that he had received from...