Edgecomb v. Edmonston

• Citation: 153 N.E. 99,257 Mass. 12
• Parties: EDGECOMB v. EDMONSTON.
• Decision Date: 02 August 1926
• Court: United States State Supreme Judicial Court of Massachusetts

257 Mass. 12

153 N.E. 99

EDGECOMB

v.EDMONSTON.

Supreme Judicial Court of Massachusetts, Suffolk.

Aug. 2, 1926.

Report from Superior Court, Suffolk County; A. R. Weed, Judge.

Action in equity by Horace A. Edgecomb against S. Kemp Edmonston to enjoin defendant from engaging in business similar to plaintiff's for five years from termination of an agreement of employment. Finding an order for final decree for plaintiff, and case reported. Decree for plaintiff.

Hale & Dorr, of Boston, for plaintiff.

Mayberry & Mansfield, L. A. Mayberry, and P. Mansfield, all of Boston, for defendant.

PIERCE, J.

This is a suit in equity seeking to enjoin the defendant from engaging in any line of business similar to the plaintiff's within the commonwealth of Massachusetts, for a period of five years after September 1, 1924. The case was heard by a judge of the superior court, who reports it to this court upon his ‘finding and order for final decree filed October 2, 1925.’

The facts found by the court, somewhat more succinctly stated, are as follows: When the contract sued on was made and for some years prior thereto, the plaintiff conducted a general law reporting office. His business still is, and was, to furnish shorthand reporters to lawyers, and others desiring their service to attend hearings before commissions, legislative committees and other public bodies, and trials in courts, or before masters and auditors not employing official stenographers, and to prepare and furnish to his customers transcripts in typewriting of such proceedings. The plaintiff's customers are of Boston for the most part, but he has customers in other of the large cities of the commonwealth. The defendant is and has been since 1915 a shorthand reporter. Prior to his employment by the plaintiff under the contract in suit, the defendant lived in Washington, reporting trials in the courts of the district and of Virginia, hearings before congressional committees, and conventions.

In 1921, at the plaintiff's suggestion the defendant came to Boston, entered the plaintiff's employ, and after a time made with the plaintiff the contract in suit, which is dated November 21, 1921, and is under seal. The material parts of the contract are:

‘1. The said Edmonston agrees, from and after November 21, 1921, to give his entire time and services as shorthand reporter to the said Edgecomb during the usual hours, in the said Edgecomb's business of stenographic reporting, for a period of four years, and this agreement shall continue in full force and effect thereafter until one of the parties hereto shall, on or before the first day of July in any year give to the other party written notice of his intention to terminate his agreement on the first day of the following September, in which case the term hereby created shall terminate in accordance with such notice.

‘2. The said Edmonston guarantees that he is a qualified court stenographer, competent and experienced, and that his services in such capacity shall be satisfactory to the said Edgecomb.

‘3. The said Edmonston further agrees that upon the termination of this agreement he will not, without the consent of the said Edgecomb, in writing thereto first obtained, engage in any line of business similar to the said Edgecomb's within the commonwealth of Massachusetts, for a period of five years thereafter.’

Thereafter, and until the events hereinafter related, the defendant give his entire time and services as a shorthand reporter to the plaintiff's said business.

Late in March, 1922, the plaintiff became dissatisfied with the defendant's work, but an understanding ‘was reached that their relations should not terminate but that the defendant was to go on and make another trial and do his best.’ In March, 1923, further dissatisfaction arose with the defendant's work, in consequence of a request by a judge of the Suffolk probate court to the plaintiff that the defendant be not sent again to report hearings before that judge. On April 16, 1923, the plaintiff gave the defendant the notice, printed in the finding of the judge, to the effect that his employment under the contract was terminated, ‘effective not later than May 15, 1923, and as much earlier as is convenient to you.’ The further report of the judge is as follows:

‘Upon all of the evidence I find that the defendant is and was in April, 1923, a qualified court stenographer, competent and experienced but that his services in that capacity under said contract were not satisfactory to the plaintiff, that the plaintiff acted in good faith and was actually and honestly dissatisfied; that the plaintiff performed all the obligations imposed upon him by said contract; that the employment of the defendant was terminated by the plaintiff for good cause; and that the defendant has meantime engaged and is now engaged within the commonwealth in a line of business similar to the plaintiff's without the plaintiff's consent. No evidence was offered of any substantial damage suffered by the plaintiff because of the defendant's breach of his covenant not to engage in Massachusetts in a line of business similar to the plaintiff's after the termination of said contract. Upon the facts so found I rule as matter of law that the contract was broken by the defendant, that his employmentthereunder was terminated on April 16, 1923, and that this was a ‘termination of this agreement’ within the meaning of the third paragraph of the contract. I find that the covenant contained in said third paragraph is valid as to consideration and is not lacking in mutuality and is reasonable in its limitation as to time, and is not too vague in its scope to be enforced.'

The contention of the defendant that the covenant ‘that upon the termination of this agreement * * * [the defendant] will not, without the consent of the said Edgecomb, in writing thereto first obtained, engage in any line of business similar to the said Edgecomb's within the commonwealth of Massachusetts, for a period of five years thereafter,’ is limited by reasonable construction to cover a period of five years which has its beginning with the time fixed for the end of the employment, and that it cannot reasonably be construed as operative when the contract shall be terminated for causes other than lapse of time. The defendant further contends that the provision of the contract in respect to the satisfaction of the plaintiff with the services of the defendant was misconstrued by the court in that it found that the plaintiff ‘acted in good faith and was actually and honestly dissatisfied’; whereas, to justify the plaintiff's action, it was necessary to find that the plaintiff ‘justly and honestly entertained’ the judgment that the services of the defendant were not satisfactory; citing Tobin v. Kells, 207 Mass. 304, 93 N. E. 596, and Chandler,Gardner & Williams, Inc., v. Reynolds, 250 Mass. 309, 314, 145 N. E. 476.

We are of opinion that the contention as to the time when the covenant became operative is too narrow, and that the fair construction of the agreement is that a lawful termination of the contract by the plaintiff is a termination of the agreement which made operative the covenant of the defendant. We are also of opinion that the finding of the judge that the plaintiff was actually and honestly dissatisfied warranted his finding ‘that the employment of the defendant was terminated * * * for good cause,’ without a further finding that the plaintiff's judgment of dissatisfaction was ‘justly and honestly entertained.’ If the judgment of the plaintiff was not ‘justly and honestly entertained.’ the court would not have found that he was ‘actually and honestly’ dissatisfied.

A suit in equity to enforce a negative covenant is actually one for specific performance while not so in form. Taylor Iron & Steel Co. v. Nichols, 70 N. J. Eq. 541,61 A. 736.

‘The practice of enforcing negative covenants * * * is well...