Insurance Center, Inc. v. Hamilton

• Citation: 218 Ga. 597,129 S.E.2d 801
• Decision Date: 07 February 1963
• Docket Number: No. 21875,21875
• Parties: The INSURANCE CENTER, INC. v. Warren L. HAMILTON.
• Court: Georgia Supreme Court

Page 801

129 S.E.2d 801

218 Ga. 597

The INSURANCE CENTER, INC. v. Warren L. HAMILTON.

No. 21875.

Supreme Court of Georgia.

Feb. 7, 1963.

Syllabus by the Court

1. (a) Allegations based on mere apprehension of injury and general conclusions, without alleging facts to show irreparable injury, are insufficient to state a cause of action for injunctive relief.

(b) The mere necessity of an accounting to ascertain the amount due on a contract is insufficient to give equity jurisdiction to order an accounting.

(c) The allegations that defendant is insolvent without more is insufficient to state a cause of action for the appointment of a receiver.

2. A covenant in a contract of employment which is ancillary to the sale of a business that the employee will not engage in the insurance business in the three contiguous counties of Richmond and Columbia, Georgia, and Aiken, South Carolina, for a period of 3 years from the date of the employment is not contract in general restraint of trade, is reasonable as to time and territory, and is enforceable.

3. Even though the contract provided liquidated damages in the event of its breach, the purchaser-employer could enforce the covenant not to enter the insurance business within 3 years within the 3 named counties.

4. The trial court erred in denying the temporary injunction enjoining Hamilton from violating paragraph 6 of his contract of employment.

The question of the validity of paragraphs 6 and 7 of an employment contract between Warren L. Hamilton and The Insurance Center, Inc., gives rise to this litigation. Those paragraphs are: '6. That Hamilton, in the event his employment with the Company is terminated for cause or otherwise, will not directly or indirectly engage in the business of selling or soliciting insurance, either general or life, in Richmond County, Georgia, Columbia County, Georgia, Aiken County, South Carolina, for a period of three years from the date hereof. Should Hamilton breach this covenant herein contained, the Company shall be entitled to damages in the amount of $25,000. 7. That Hamilton, if discharged for just and sufficient cause, will take no action for a period of ten years from the date hereof, either directly or indirectly, resulting on or influencing the cancellation of any policies then in effect and being handled or issued by the Company. Should Hamilton breach this covenant herein contained, the Company shall be entitled to damages in the amount of $10,000.'

The employment contract was executed on October 21, 1960, the same day as was a bill of sale by Hamilton to the Insurance Center, Inc., of his insurance business known as the Hamilton Insurance Agency and conducted at 1133 Druid Park Avenue, Augusta, Georgia.

Hamilton brought his petition against defendant Insurance Center, Inc., alleging that on June 8, 1962 he was notified that his employment with the company was terminated as of that date for reasons stated in the notice, all of which are false and groundless; that the company, which is insolvent, is indebted to him and terminated his services so as to convert his insurance business including renewals; that paragraphs 6 and 7 of the employment contract are void because unreasonable and oppressive. He prayed for an accounting, judgment of the amount shown due by the accounting, appointment of a receiver, and an injunction restraining defendant from attempting to enforce provisions 6 and 7 of his employment contract.

To the petition defendant filed general and special demurrers, and an answer and cross-bill in which it alleged that plaintiff is violating paragraphs 6 and 7 of his employment contract; that he has opened and is operating an insurance business in Augusta, is soliciting policyholders whose business it had bought from him, and is causing the company financial losses; that he is insolvent and if he is permitted to continue to operate an insurance business in violation of his agreement the company will suffer irreparable injury. Defendant prayed for a temporary and a permanent injunction enjoining him from violating his agreement, for damages suffered, and balance due on a promissory note.

Defendant excepts to an order overruling its general and special demurrers to plaintiff's petition, and to another order temporarily enjoining defendant from attempting to enforce paragraphs 6 and 7 of the employment contract and denying its prayers that plaintiff be temporarily enjoined from violating paragraph 6 of the employment contract and that the restraining order against it be dismissed.

Cumming, Nixon, Eve, Waller & Capers, Augusta, for plaintiff in error.

Fulcher, Fulcher, Hagler & Harper, Augusta, for defendant in error.

MOBLEY, Justice.

1. (a) The trial court erred in overruling defendant's general demurrer to plaintiff's petition. The petition does not state a cause of action for equitable relief as it contains no allegation of facts showing grave danger of impending injury to property rights of the plaintiff. A mere threat or bare fear of such injury is not sufficient. Thomas v. Mayor, etc., of Savannah, 209 Ga. 866(3), 76 S.E.2d 796.

It is well settled by numerous decisions of this court that a bare threat of injury to property, which, if followed up by an overt act would work irreparable injury, offers no basis for equitable relief by injunction or otherwise. West v. Chastain, 186 Ga. 667, 198 S.E. 736; City of Atlanta v. Universal Film Exchanges, 201 Ga. 463, 472(b), 39 S.E.2d 882; City of Brunswick v. Anderson, 204 Ga. 515(3), 50 S.E.2d 337; Mayor, etc., of Athens v. Co-op Cab Co., 207 Ga. 505(2), 62 S.E.2d 906; Nottingham v. Elliott, 209 Ga. 481(3), 74 S.E.2d 93. Allegations based on mere apprehension of injury and general conclusions, without alleging facts to show irreparable injury, are insufficient to authorize the grant of injunctive relief. A general demurrer to such a petition should be sustained. Carmichael v. Tucker, 214 Ga. 725, 727, 107 S.E.2d 829.

The basis of plaintiff's complaint is that paragraphs 6 and 7 of his employment contract are void and unenforceable, that defendant has notified him that his employment is terminated, and that if he violates the terms of paragraphs 6 and 7 the company will enforce the penalty provisions thereof. According to these allegations defendant has done nothing more than put plaintiff on notice that the penalty provisions will be enforced if he violates his agreement not to enter business within 3 years and for a period of 10 years not to take action causing policyholders of the company to cancel their policies. The only recourse defendant has is to enforce the contract in the courts, where plaintiff would have ample opportunity to defend the action and plead his defenses. Thus, he has an adequate remedy at law. If he has not already violated the contract and wishes a determination as to the validity of paragraphs 6 and 7 before he violates those provisions, such could be had by a declaratory judgment action at law. Code Ann. §§ 110-1101-110-1111.

(b) A cause of action for accounting is not stated. The petition does not show that the accounts are complicated. An accounting may be had at law. 'The mere necessity of accounting to ascertain the amount due on a contract is wholly insufficient to give equity jurisdiction to order an accounting.' Burress v. Montgomery, 148 Ga. 548(3), 97 S.E. 538.

(c) Nor is a cause of action for the appointment of a receiver stated. Code § 55-303. No clear and urgent need for a receiver is shown. Reeve v. Reeve, 163 Ga. 95, 135 S.E. 434. The allegation that defendant is insolvent without more is insufficient. Atlanta and Carolina Ry. Co. v. Carolina Portland Cement Co., 140 Ga. 650 79 S.E. 555.

2. The only question left for decision is whether or not the trial judge erred in denying the prayer of the defendant's cross bill that plaintiff be temporarily enjoined from violating paragraph 6 of the employment contract. A contract in general restraint of trade is void. Code § 20-504. A contract concerning a lawful and useful business in partial restraint of trade and reasonably limited as to time and territory is not void, Black v. Horowitz, 203 Ga. 294(1), 46 S.E.2d 346, provided it is not unreasonable in other respects. Orkin Exterminating Company of South Georgia v. Dewberry, 204 Ga. 794, 51 S.E.2d 669. See Kinney v. Scarbrough Co., 138 Ga. 77, 74 S.E. 772, 40 L.R.A., N.S., 473; Shirk v. Loftis Brothers & Co., 148 Ga. 500, 97 S.E. 66; National Linen Service Corp. v. Clower, 179 Ga. 136, 145, 175 S.E. 460. The question of...