Dyar Sales & Machinery Co. v. Roy Bleiler

• Decision Date: 02 October 1934
• Citation: 175 A. 27,106 Vt. 425
• Parties: DYAR SALES & MACHINERY CO. v. ROY BLEILER
• Court: Vermont Supreme Court

175 A. 27

106 Vt. 425

DYAR SALES & MACHINERY CO. v. ROY BLEILER

Supreme Court of Vermont

October 2, 1934

May Term, 1934.

Insufficiency of Bill of Exceptions To Present for Review Exceptions to Chancellor's Failure To Find---Chancery Rule 39---Reference to Transcript---Injunction---Exceptions To Failure To Find as to Immaterial Matters---Harmless Error---Evidence of Indebtedness To Show Financial Irresponsibility and Consequent Inadequacy of Remedy of Law---Sufficiency of Evidence To Sustain Findings---Necessity of Caution in Proceedings To Enforce Contract in Restraint of Employee Taking Other Employment after Termination of Employment under Contract---Question Not Raised Below---Exceptions To Exclusion of Evidence as Unavailable Because Not Appearing in Bill of Exceptions---Classes of Contracts in Restraint of Right of Employee To Accept Employment with Other Than Employer---Factors in Determining Whether Equitable Relief Available To Enforce Contract Limiting Employee's Right to Reemployment after Termination of Employment under Contract---Sufficiency of Findings To Support Decree---Facts Preventing Enforcement of Contract in Restraint of Reemployment---Burden of Proof---Extent of Territorial Restriction as to Employee's Reemployment after Termination of Employment Which May Be Contracted---Jurisdiction of Equity To Enforce Contract in Restraint of Employee's Reemployment at Termination of Contract.

1. Where bill of exceptions signed by chancellor, which presents only questions for review, did not specify grounds of exceptions as required by chancery rule 39, and evidence was not made part of record for purpose of showing that defendant was entitled to findings requested, exceptions to chancellor's failure to find as requested are not for consideration in Supreme Court on appeal.

2. Where transcript of evidence was referred to in bill of exceptions and made part thereof, but was not referred to or made controlling for any particular purpose such reference is too general to avail defendant on exception to chancellor's failure to find as requested.

3. In suit by road machinery company to enjoin employee from violating provision of contract of employment not to engage in sale within State of equipment similar to that sold by employer for period of one year after termination of employment thereunder, where there was no claim that defendant's services were unique or extraordinary or that he had acquired trade secrets which he might divulge exceptions to chancellor's failure to find respecting such matters were without merit, since such findings were not material.

4. In such suit, finding that defendant was "heavily indebted" to plaintiff on his drawing account at time employment was terminated by plaintiff's exercise of right contained in contract that either party could terminate employment upon seven days' notice in writing, held harmless, where findings showed amount of such indebtedness and, under contract plaintiff had right to terminate contract upon notice as therein specified.

5. In such suit, finding that defendant was "heavily indebted" to plaintiff at time employment was terminated, showing amount of such indebtedness, held proper as tending to show defendant's financial irresponsibility and consequently inadequacy of plaintiff's remedy at law.

6. In such suit, evidence held to support finding that defendant, subsequent to termination of his employment by plaintiff, had solicited orders in plaintiff's territory for road machinery dealt in by competitors of plaintiff and received orders from different parties for such machinery.

7. In such suit, evidence held to support finding that plaintiff had been to substantial expense in instructing and training defendant as salesman of its goods and that he had thereby become acquainted with its road equipment and consequently valuable to plaintiff.

8. Courts of equity should always proceed with caution in giving effect to contracts in restraint of right of employee to engage in similar work after termination of employment.

9. Claim that chancellor erred in declining to hear defendant's demurrer, held not for consideration on appeal, because record failed to show that question was saved below for review.

10. Exceptions to exclusion of evidence which do not appear in bill of exceptions signed by chancellor, held unavailable on appeal.

11. Law recognizes two classes of contracts in restraint of right of employee to accept employment with others than his employer, one covering term of employment and the other being applicable after employment is terminated.

12. Right of employer to equitable relief to enforce contract of employee not to engage in similar business within employer's territory for specified time after termination of employment depends on whether employee, by reason of character of employment or service rendered by him, has acquired such close and intimate relations with the employer's customers or patrons, or obtained such knowledge of employer's business, that use of acquaintanceship or knowledge thus obtained in competing business, in breach of agreement, would result in irreparable injury to employer for which he has no adequate remedy at law.

13. In suit by road machinery company to enjoin employee from violating provision of contract of employment not to engage in sale within State of equipment similar to that sold by plaintiff for period of one year after termination of employment thereunder, findings held to support decree for plaintiff.

14. Provisions in contract of employment restricting employee from engaging in similar work within employer's territory for specified period after termination of employment will be enforced in equity, unless found contrary to public policy, unnecessary for employer's protection, or unnecessarily restrictive of rights of employee, due regard being had to subject-matter of contract and circumstances and conditions under which it is to be performed.

15. In suit by road machinery company to enjoin employee from violating provision of contract of employment not to engage in sale within State of equipment similar to that sold by plaintiff for specified period, burden is on defendant to prove that contract should not be enforced because contrary to public policy, unnecessary for employer's protection, or unnecessarily restrictive of rights of employee.

16. In contract of employment, restriction therein as to employee accepting similar employment for specified time after termination of employment under contract, so far as territory is concerned, may be extended to limits where employer's trade may be likely to go.

17. Suit by road machinery company to enjoin employee from violating provision of contract of employment not to engage in similar work within State for specified period after termination of employment, held properly brought in equity, law affording no adequate remedy under circumstances.

APPEAL IN CHANCERY. Suit to enjoin employee from violating provision of contract of employment not to engage in sale within state of equipment similar to that sold by plaintiff employer for one year after termination of employment thereunder. Heard on bill, answer, and findings of fact by chancellor, after the March Term, 1933, Washington County, Bicknell, Chancellor. Decree for plaintiff. The defendant excepted. The opinion states the case.

Decree affirmed, and cause remanded.

George R. McKee for the defendant.

Present: POWERS, C. J., SLACK, MOULTON, THOMPSON, and SHERBURNE, JJ.

OPINION

SLACK

The plaintiff assembles and sells road machinery. The defendant had been in its employ as traveling salesman two years prior to January 2, 1932. On that day they entered into a contract in writing, by the terms of which defendant was to cover the State of Vermont as salesman for plaintiff and not engage directly or indirectly in the sale of any other road machinery than that sold by it. The contract provided that either party could terminate it upon seven days' notice in writing. It also provided that: "Should this contract be terminated by either party for any reason whatsoever, the said Roy Bleiler agrees on his part that for the period of one year from the termination of this contract, he will not engage either directly or indirectly in the sale, in the above mentioned territory, of equipment similar to that sold by the Dyar Sales and Machinery Company."

On March 27, 1933, plaintiff gave defendant notice in writing that the contract would terminate seven days from that date. This suit, which was commenced April 15, 1933, is to restrain defendant from violating the quoted provision of the contract. The defendant filed an answer; the case was heard on the merits; the facts were found; and a decree was entered for plaintiff. The case is here on defendant's exceptions and appeal.

Defendant requested the chancellor to make the following supplemental findings: (1) The terms of the contract are harsh, oppressive, and unreasonable and ought not to be enforced in equity; (2) the contract is more restrictive than necessary to protect plaintiff; (3) the services of defendant were not unique, unusual or extraordinary; (4) plaintiff could readily find an equally capable man to take defendant's place, and (5) defendant, while serving plaintiff did not acquire any trade or business secrets which he might divulge to plaintiff's harm. This the chancellor declined to do and defendant excepted.

These exceptions do not require consideration. The bill signed by the chancellor, which presents the only questions for review Stevens v. Flanders et al., 103 Vt. 434, 154 A. 673, does not specify the...