Hulen v. Earel

• Decision Date: 10 September 1903
• Citation: 73 P. 927,1903 OK 76,13 Okla. 246
• Parties: F. P. HULEN v. J. W. EAREL.
• Court: Oklahoma Supreme Court

1903 OK 76

73 P. 927

13 Okla. 246

F. P. HULEN v. J. W. EAREL.

Supreme Court of Oklahoma

Decided: September 10, 1903

Syllabus

¶0 1.CONTRACT IN RESTRAINT OF TRADE--Invalid, When.H and E who were physicians, practicing their profession at Pond Creek, as co-partners, entered into a written contract for the dissolution of the co-partnership.H purchasing the property of the co-partnership, and E agreeing not to practice medicine in the vicinity of Pond Creek: Held, that such contract is invalid, and in violation of sections 819,820and821 of Wilson's Revised Statutes.

2. INJUNCTION--Remedy.Injunction is the proper remedy to prevent the breach of such a contract, when the same conforms to the provisions of sections 819,820and821 of Wilson's Revised Statutes.

3.PETITION--Does not State Cause of Action, When.A petition which sets forth such contract, together with all the inducements thereof, alleging that the plaintiff has fully executed the same on his part, and that the defendant is violating the terms of the contract by practicing his profession in the city of Pond Creek and vicinity thereof, does not state a cause of action.

This action was commenced in the district court of Grant county, by the plaintiff in error against the defendant in error, to enjoin the defendant from practicing his profession as a physician in the city of Pond Creek, and the vicinity thereof.The plaintiff and defendant had been engaged in business together, practicing their profession, with an office in the city of Pond Creek, and on April 28, 1902, the copartnership existing between them was dissolved, and at the same time a contract was entered into, by the terms of which the plaintiff purchased the defendant's interest in the property in which they had been doing business, together with the drugs, wares and merchandise owned by the parties, agreeing to pay therefor the sum of $ 1,450.00.Among other things, the contract contains the following:

"Said party of the second part, upon the payment of said sums of money, and the performance of the agreements herein, covenants and agrees not to engage in the practice of medicine in the vicinity of Pond Creek, Oklahoma."

A copy of the contract is attached to the petition as an exhibit.

The petition alleges:

"That plaintiff now is and was at all times herein referred to, a practicing physician and surgeon living in the city of Pond Creek, Oklahoma Territory, and carrying on the practice of his said profession in the city of Pond Creek and the vicinity of said city.

"That said defendant is by profession a physician and surgeon, and prior to the 28th day of April, A.D. 1902, the said plaintiff and defendant were engaged in business as co-partners, carrying on the practice of their profession together as a partnership, with their office in said city of Pond Creek and the vicinity thereof.

"That on the 28th day of April, A.D. 1902, the said plaintiff and defendant, by mutual agreement, dissolved said co-partnership and entered into a contract in writing for the dissolution of said partnership, and other purposes.A true and correct copy of which said contract in writing is hereto attached, marked exhibit 'A,' and incorporated into and made a part hereof.

"That by the terms of said contract the plaintiff purchased the interest of the defendant in the building theretofore occupied by said parties as an office, and in consideration of the dissolution of said partnership and the making of said contract, and the purchase, by plaintiff of defendant, of said building aforesaid, defendant agreed with the said plaintiff, that upon the payment of the sums of money specified in said contract and the performance of the agreements therein contained, that he, the said defendant, would not engage in the practice of medicine in the vicinity of Pond Creek, Oklahoma Territory, which said agreement is contained in and shown by the terms of said written contract, hereto attached and marked exhibit 'A.'

"Plaintiff alleges that he, on his part, has fully performed the terms and conditions of said contract and has paid the sums of money therein specified, and is entitled to have the defendant keep and perform, on his part, the terms and conditions of said contract, and refrain from the practice of medicine in the vicinity of Pond Creek, Oklahoma Territory.

"Plaintiff alleges that notwithstanding the performance by him of the terms of said contract, the said defendant in disregard of and in violation of the terms of said contract aforesaid, has engaged in the practice of medicine, and does now engage in 'the practice of medicine in the city of Pond Creek and vicinity thereof, in competition with the plaintiff, and in utter disregard of said contract, and will continue to practice medicine in the city of Pond Creek and vicinity thereof in violation of the terms and conditions of said contract, unless enjoined and restrained from so doing by the court.

"That, if said defendant continues to practice medicine as aforesaid, in the city of Pond Creek and vicinity thereof in violation of said contract, it will result in a great detriment and loss of money to this plaintiff, and it is impossible to estimate or compute the amount of the loss which will result to the said plaintiff, if the said defendant continues to violate his said agreement, as aforesaid.

"That it is wholly impossible for this plaintiff to detect all the violations by the defendant of his said agreement, and the plaintiff is and will be unable to detect all such violations, and unless the defendant is enjoined from such violations, the said plaintiff will be wholly without redress, and will be unable to realize any benefit from the covenant aforesaid, contained in said contract, between plaintiff and defendant, and for which the plaintiff paid a valuable consideration.

"That the said plaintiff has, in every respect, performed all the covenants and conditions in said contract required by him to be performed.

"Plaintiff alleges that he has no adequate remedy at law, and that this is a proper case for the intervention of a court of equity.

"Now therefore plaintiff demands judgment against the said defendant, restraining and enjoining the said defendant from engaging in the practice of medicine in the city of Pond Creek and vicinity thereof."

In the absence of the judge of the district court from the county, a temporary order of injunction was issued by the probate court.Thereafter a motion was made to dissolve the same, which was overruled.The defendant then filed his demurrer to the petition, on the ground that the petition did not state facts sufficient to constitute a cause of action in favor of the plaintiff and against the defendant.The cause coming on to be heard in the district court upon this demurrer, the same was sustained by the court, and the plaintiff refused to plead further, and electing to stand upon his petition, judgment was rendered against him for costs of the action, from which judgment the plaintiff appeals to this court.

June, 1903, Decided

Error from the District Court of Grant County; before James K. Beauchamp, Trial Judge.

Mackey & Simons, for plaintiff in error.

Denton, Dodson & Denton and W. H. C. Taylor, for defendant in error.

PANCOAST, J.:

¶1 The argument in this case has taken a wider scope than is deemed necessary to enable the court to pass upon the questions contained in the record.Judgment was rendered upon the demurrer.

¶2 The contract which is the basis of this action belongs to that class of contracts denominated in restraint of trade, and it is contended in this case that because of being in restraint of trade, it should not be upheld.Whatever may have been the origin of the common law rule, where there is no statutory provision controlling, it has been well settled that where a contract of this class contains three essential re- quisites, it will be upheld.Those are as follows: First, the contract must be partial, or restricted, in its operation, in respect of either time or place; second, it must be on some good consideration; third, it should afford only a fair protection to the interests of the party in whose favor it is made, and must not be so large in its operation as to interfere with the interest of the public.(Cook v. Johnson, 47 Conn. 175.)This contract is only partial.It is restricted in its operation as to place.The...