Kreger Glass Co. v. Kreger
| Decision Date | 04 April 1932 |
| Docket Number | 17422 |
| Citation | 49 S.W.2d 260 |
| Parties | Kreger Glass Company, Respondent, v. Ben Kreger and Julius Kreger, Appellants |
| Court | Kansas Court of Appeals |
Appeal from Jackson Circuit Court.
Affirmed.
All concur.
Boyer C.
Action for injunctive relief. For a number of years prior to February 1, 1929, the defendants had been engaged in the general business of buying and selling various kinds of glass both at retail and wholesale. Originally they were partners and later formed a corporation and continued their business under the name of Kreger Glass Company at Kansas City Missouri. The business had grown to considerable proportions and the goodwill and the name of the company were valuable assets. One Lyman and his associate, Klein, negotiated with defendants for a protracted period with a view of purchasing the business, assets, goodwill, and the name of the Kreger Glass Company, which culminated in the execution of a contract between the Kreger Glass Company, Ben Kreger and Julius Kreger as parties of the first part, and W. P. Lyman as party of the second part. This contract was executed February 1, 1929, and it recites that the company is located Kansas City, Missouri, engaged in the business of selling and installing plate and window glass and that Ben and Julius Kreger own all of the stock of the company; that the company has agreed to sell its goodwill, name, and all of its assets, with some exceptions, to said Lyman. The first paragraph provides that the company agrees to sell and transfer to Lyman or his nominee all of its physical assets, goodwill of the company and of the business, the name Kreger Glass Company and the right to use the same or any modification thereof. A method of determining the price to be paid for stock on hand and other assets was prescribed and it was agreed that in addition thereto the sum of $ 10,000 should be paid for the goodwill of the company. The lease of the premises occupied by the company was to be assigned to said Lyman or his nominee, and then the following paragraphs:
The total purchase price agreed upon was paid to defendants and it included $ 10,000 for goodwill, approximately $ 11,000 for merchandise and other physical assets, and several thousand dollars more for outstanding accounts. The purchasers desired to reorganize and reincorporate the business, and as an aid thereto, and in pursuance of the contract, the name of Kreger Glass Company was changed to that of Western Glass Company in order that the purchasers might reincorporate under the name of Kreger Glass Company, all of which was accomplished. The new corporation is the plaintiff. It received the assets and property of the old company by conveyance through Lyman and continued the operation of business as theretofore under the management of the new owners and with its main office and headquarters at Kansas City, Missouri.
Shortly after the sale, Ben Kreger left Kansas City and engaged in the glass business at Tulsa, Oklahoma. The business was a failure and he lost all his money. In July 1930, he returned to Kansas City and applied to the owners of plaintiff company for work; he was not engaged. In November 1930, the defendants, as partners and under the name of Missouri Glass Company, established a place of business and began operation in the glass business in Kansas City in competition with the plaintiff and others. They sold glass to the former customers of the Kreger Glass Company; they solicited and obtained patronage through personal efforts and the efforts of an employed solicitor, and called upon customers of the plaintiff, sold and attempted to sell to them or any other prospective purchaser, and sold glass both at retail and at wholesale in the Kansas City territory, and were so operating at the time of trial.
There is no denial that the defendants re-engaged in business in competition with the plaintiff, but they seek to justify their action, and rely upon the pleaded defense that when the agreement between the parties was reduced to writing the time limit was omitted by mistake, accident or error; that said period of time as agreed upon was to be for one year only, and that defendants did not re-enter business until long after the expiration of said period.
Over the objection of plaintiff the court heard the evidence on the issue as to whether or not there was in fact an agreement as to the limitation of time contended for by defendants. Both defendants testified that the agreement was as alleged in the answer. They were in effect contradicted by their own testimony given in depositions previous to the trial. Three witnesses, including Mr. Lyman, Mr. Klein, and their attorney, contradicted defendants and testified that the agreement, and the only agreement between the parties, was that embodied in the written agreement. Evidence on behalf of plaintiff further shows that before the contract was executed defendants were represented by an attorney who advised them about the restrictive clause in the contract and that both defendants stated they were not concerned about it and assured their attorney they did not care to waste time discussing it. The evidence further shows that the agreement on the part of defendants to cease business and not re-enter the general glass business in Kansas City was one of the principal factors which induced the purchase; that the subject had been discussed repeatedly before the contract was signed and well understood by all parties, and that defendants were anxious to sell and to cease business on account of domestic trouble of Ben Kreger; that he was preparing to leave Kansas City, and stated he was going to New York where his relatives lived. This inducement for the sale on the part of defendants is also shown by their own testimony. There is ample proof in the record that defendants did not at any time during the pendency of the negotiations mention the subject of a one-year period of restriction, but that they definitely agreed they would stay out of the business and not re-enter at any time in the future in competition with the plaintiff.
After hearing all the evidence the trial court entered its finding and judgment to the effect that by the mutual understanding and intention of all parties at the time the written agreement was entered into defendants Ben Kreger and Julius Kreger "did agree not to re-engage in the glass business directly or indirectly or in any way compete with the nominee of said W. P, Lyman, this plaintiff, or the owners thereof in the glass business within a radius of twenty-five (25) miles of Kansas City, Missouri, and so long as it remained in the glass business in said territory; **** that defendants in direct violation thereof and to the injury of plaintiff **** are openly engaged, in the glass business at Kansas City, Missouri, in direct and open competition with plaintiff and have been and are selling glass in Kansas City, Missouri, to the public including former customers of Kreger Glass Company." It was ordered and adjudged "that defendants Ben Kreger and Julius Kreger and each of them be and they are hereby permanently restrained and enjoined pursuant to the terms of Clause 4 of said contract, from engaging, being or continuing in the business of handling or selling, at retail or wholesale, glass in any form or for any use within a radius of twenty-five miles of Kansas City, Missouri, **** or in any way competing with plaintiff Kreger Glass Company in its glass business in said territory so long as plaintiff Kreger Glass Company remains in the glass business in said territory."
The defendants duly appealed from the judgment so entered. The alleged errors are numerous, but in substance limited to a few. Reference to the pleadings is necessary.
The petition states that the plaintiff is a duly organized corporation engaged in the general glass...
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