Gompers v. Rochester

• Decision Date: 07 January 1868
• Citation: 56 Pa. 194
• Parties: Gompers <I>et al. versus</I> Rochester.
• Court: Pennsylvania Supreme Court

56 Pa. 194

Gompers et al. versus Rochester.

Supreme Court of Pennsylvania.

November 6, 1867.

January 7, 1868.

November 6th 1867.

Before WOODWARD, C. J., THOMPSON, STRONG, READ and AGNEW, JJ.

Error to the Court of Common Pleas of Indiana county: No. 57, to October and November Term 1867.

COPYRIGHT MATERIAL OMITTED

H. W. Weir, for plaintiffs in error, cited 2 Greenl. Ev. § 259; Streeper v. Williams, 12 Wright 450; Shreve v. Brereton, 1 P. F. Smith 186; Gow on Partnership 77, n. 1; Gram v. Caldwell, 5 Law Rep. 489, Moor 64; Chitty on Cont. 675; Purdy v. Powers, 6 Barr 494; Noble v. McClintock, 2 W. & S. 152; Tanner v. Hall, 1 Barr 418; Evengham v. Ensworth, 7 Wend. 326; Anshutz v. Fitzsimmons, 9 Barr 181.

J. P. Blair (with whom were A. W. Taylor and Stewart & Clark), for defendant in error, cited 2 Greenl. on Ev. § 257; 2 Story's Eq. Jur. §§ 1314, 1316; Streeper v. Williams, 12 Wright 450; Slaman v. Walter, 1 Bro. Ch. R. 418; 2 Greenl. on Ev. § 258; Perkins v. Lyman, 11 Mass. 76; Merrill v. Merrill, 15 Id. 488; Hardy v. Martin, 1 Bro. C. C. 419; 2 Greenl. Ev. § 268, note; Davies v. Penton, 6 Br. P. C. 221; Bank of Columbia v. Patterson, 6 Cranch 303; Morgan v. Weir, 1 Casey 119; Brewster v. Sterret, 8 Id. 115; Abbott's Appeal, 14 Wright 234; Erwin's Appeal, 3 Id. 535; Foster v. Fox, 4 W. & S. 92; Roberts v. Halstead, 9 Barr 32; Bullitt v. Chartered Fund, 2 Casey 108; Baker's Appeal, 9 Harris 76; Deal v. Bogue, 8 Id. 228; Doner v. Stouffer, 1 Penna. R. 198; Riddle v. Etting, 8 Casey 412; Morse v. Bellas, 7 N. H. 549; Salmon v. Davies, 4 Binn. 375; 3 Kent's Com. 49.

The opinion of the court was delivered, January 7th 1868, by THOMPSON, C. J.

In the view we take of this case, the question whether the sum mentioned in the covenant, whereby the defendant Rochester bound himself not to engage in the business of merchandising in the town of Marion, or within a boundary of ten miles thereof, for a period of five years, is to be regarded as liquidated damages or as a penalty, is an abstraction, and not necessary to be determined in order to decide this case.

On the 18th of July 1863, the plaintiffs bought out the defendant's store of goods and the buildings and lot of ground whereon it was situated, in the town of Marion, Indiana county, and the latter entered into a covenant not to engage in business as stated above. The purchasers, and one Joseph Flude, continued the business of merchandising in the property, under the firm name of Kinter & Co., until the 17th of October 1864, when Gompers and Flude sold out all their interest in the store to F. M. Kinter, and Gompers also sold to him his interest in the real estate — Kinter becoming bound to pay all the debts due by the firm. A week later, viz., on the 24th of October, McQuaide sold his interest in the store and accounts due the firm, together with all his interest in the real estate, to Kinter.

No complaints by either of these parties up to that time were made, of a breach of the covenant by Rochester. He had been living and doing business in Bethlehem, Clarion county, after the sale by him in 1863. On the 11th of February 1865, Kinter resold the property and his store-goods to the defendant and his son. Nominally, at least, the son was the purchaser of the goods, and the defendant of the real estate. In that sale F. M. Kinter released the defendant from his covenant not to engage in the business of merchandising in Marion or within the specified boundary, "so far as he had power to do it," as the release says. After the completion of this purchase, the business was continued in the name of Rochester & Son, at the same place.

The plaintiffs contend that Kinter, although the sole owner of the goods and real estate, had not power on a resale to Rochester, to release him from his covenant, and that his engaging again in the business after his purchase was a breach of his covenant.

It would be very unjust if it were so. Agreements in restraint of trade generally, are void. They are not so when limited in time or partial in their operation, and when there is a sufficient consideration: Metcalf on Contracts 233. In the case in hand, the consideration manifestly was the sale of the store of goods, and the real property on which it stood. No other consideration is mentioned; and it is said that an agreement of this kind is the only exception to the rule, that a contract under seal imports a consideration which a party is not permitted to deny: Id. 233. In this class of cases there are numerous decisions in support of this doctrine, to the effect that a consideration must appear on the face of the agreement, and that a declaration on a bond that sets forth no actual consideration is bad on demurrer...