Lyle v. Haskins

• Decision Date: 05 April 1946
• Docket Number: 29779.
• Citation: 24 Wn.2d 883,168 P.2d 797
• Parties: LYLE et al. v. HASKINS et al.
• Court: Washington Supreme Court

168 P.2d 797

24 Wn.2d 883

LYLE et al. v. HASKINS et al.

No. 29779.

Supreme Court of Washington

April 5, 1946

Department 2

Action by Donald W. Lyle and Karl Nelson, copartners, against Harold L. Haskins, personally, and Harold L. Haskins and E. Roberta Haskins, his wife, as a community, and Henry O. Johnson personally, and Henry O. Johnson and Irline Johnson, his wife, as a community, to enjoin alleged violation of a restrictve covenant in a conditional sales contract whereby the defendants, Harold L. Haskins and his wife, sold a sawmill and lumber manufacturing business to plaintiffs. From a decree for plaintiffs, the defendants, Henry O. Johnson and his wife alone, appeal.

Decree modified, and as so modified, affirmed.

Appeal from Superior Court, Lewis County; J. M. Phillips, judge.

Bertil E. Johnson and Ralph M. Rogers, both of Tacoma, for appellants.

C. D Cunningham, of Centralia, for respondents.

JEFFERS Justice.

On October 6, 1944, Donald W. Lyle and Karl Nelson, copartners instituted an action in the superior court for Lewis county against Harold L. Haskins, personally, and Harold L. Haskins and E. Roberta Haskins, his wife, as a community, and Henry O. Johnson, personally, and Henry O. Johnson and Jane Doe Johnson, his wife as a community.

It is alleged in the complaint that on or about May 18, 1943, defendants Harold L. Haskins and wife, who had theretofore been operating a sawmill and lumber manufacturing business in Morton, Lewis county, Washington, sold and delivered to Karl Nelson, one of the plaintiffs above named, for the use and benefit of Donald W. Lyle and Karl Nelson, the good will of such business and certain real estate described in the complaint together with the lumber yard, mill, dry kilns and other buildings situated thereon, and all machinery and equipment in the sawmill and dry kiln, upon a conditional sales contract, for the total purchase price of $52,500.

It is further alleged that on the same date a supplemental agreement in writing was entered into between Harold L. Haskins and wife and Karl Nelson, for the use and benefit of Karl Nelson and Donald W. Lyle, wherein it was agreed: 'That the sellers agree that upon the completion of the sale as contemplated in the principal agreement, whereby the buyer purchases the retail lumber yard, sawmill and equipment of the sellers, located in the town of Morton, Lewis county, Washington, that in consideration of the moneys paid and to be paid, as therein stated, the sellers agree to refrain from entering into or engaging directly or indirectly in lumber manufacturing or selling in competition with the buyer within the county of Lewis, state of Washington, for a period of ten (10) years.' (Italics ours.)

It is further alleged that thereafter plaintiffs complied with each and every of the terms of the contract and supplemental contract, and paid defendants Harold L. Haskins and wife the full purchase price as called for in the contract, and that proper forms of conveyance were made by Harold L. Haskins and wife to Karl Nelson, whereby the title to all the real estate and personal property was conveyed to Karl Nelson, for the use and benefit of Karl Nelson and Donald W. Lyle.

It if further alleged that the defendants Harold L. Haskins and wife conspired with their codefendants, Henry O. Johnson and wife, to violate the restrictive clause of the agreement above quoted, the latter having at all times full knowledge of the agreements and their contents; that the defendants have been and are now carrying out their unlawful conspiracy to breach and avade the terms and conditions of the agreement, and are operating and engaging in the buying, selling and manufacture of timber and lumber products, both directly and indirectly, are competing with the business carried on by plaintiffs in Lewis county, have been and are soliciting orders for the sale of their products in such county and elsewhere in competition with plaintiffs, and have acquired real and personal property in furtherance of their purpose.

It is further alleged that defendants have acquired real property near plaintiffs' lands, have commenced to and are erecting a mill upon such lands, and have purchased equipment to be used in the operation thereof; that in furtherance of this unlawful purpose defendants have employed dummies to appear as owners and purchasers of some of the equipment and property to be used in furtherance of their unlawful acts.

Plaintiffs pray that a temporary restraining order issue, restraining and enjoining defendants and each of them and all persons conspiring with, aiding or assisting them in doing the unlawful acts set forth in the complaint, and that upon hearing, the order be made final and all persons conspiring with, aiding or assisting them be permanently enjoined for a period of ten years from and after May 18, 1943, from carrying on any lumbering or sawmill operations or the buying and selling of timber and lumber products or erecting or constructing any mill in Lewis county for the purpose of the manufacture and sale of lumber.

Defendants by their answer denied the material allegations of the complaint, and especially denied that Harold L. Haskins and wife or the other defendants have violated any of the terms or conditions of the contracts herein first above mentioned.

It is also denied that defendants Harold L. Haskins and wife have any interest in the manufacturing plant which defendants claim is now being operated by Henry O. Johnson and Robert E. Haskins, son of Harold L. and E. Roberta Haskins.

The reply denied the affirmative matter set forth in defendants' answer.

The cause came on for hearing on January 17, 1945, and after some testimony was taken, was continued to April 19, 1945. Thereafter, on September 8, 1945, the court entered its judgment in favor of plaintiffs. We shall later refer to those parts of the judgment to which particular exception is taken.

Henry O. Johnson and wife have appealed from the judgment entered. No appeal was taken by Harold L. Haskins and wife.

Appellants assign as error the denial of their motion for nonsuit made at the close of respondents' case; the entering of any injunction against appellants; the enjoining of the operations of the business of appellant Henry O. Johnson and Robert E. Haskins; and the enjoining of the use of lands owned by appellants and Robert E. Haskins for the use of a lumbering business, for ten years.

In order to avoid confusion, we state again that Harold L. Haskins is the father of Robert E. Haskins, and it was Harold L. Haskins and wife who made and entered into the contracts with Karl Nelson.

We may state further at this time that no question is raised as to the compliance by Nelson with all the terms of the agreements.

The main contention of all the defendants at the trial, and by appellants herein, is that there has been no violation of any of the terms of the agreements by Harold L. Haskins and wife, or either of them, or by these appellants, or either of them.

The facts which the trial court was entitled to consider are not greatly in dispute, but the question is in regard to the interpretation to be given to such facts.

Harold L. Haskins and wife resided in Morton, Lewis county, Washington, where they owned and operated a sawmill and lumber manufacturing business. They purchased side cuts from various tie mills in the vicinity of Morton, which side cuts are called cants. These cants were cut into two-by-four's and then sold. There was and is only a limited supply of these cants in that vicinity, and it is not practicable to ship in cants from other districts. Harold L. Haskins had had considerable experience in the mill business. On May 18, 1943, Harold L. Haskins and wife entered into the contracts hereinBefore referred to and as set out in the complaint, whereby they agreed to sell to Karl Nelson their sawmill and lumber manufacturing business, including good will, for the price of $52,500, of which $15,000 was to be paid in cash and the balance in monthly installments. It is admitted that the entire purchase price has been paid and proper conveyance delivered by Harold L. Haskins and wife.

The supplemental agreement contained the provision relative to Harold L. Haskins and wife engaging in a competing business in Lewis county for a period of ten years. This particular provision we have hereinBefore set out, and we only again call attention to the fact that the provision prohibited the seller from 'entering into or engaging directly or indirectly in lumber manufacturing or selling in competition with the buyer within the county of Lewis, state of Washington, for a period of ten years.'

For some years during the time Harold L. Haskins and wife were operating the mill and business, and at the time they sold to Nelson, they had in their employ one C. B. Perkins, who was an accountant, his duties pertaining mostly to the office work. After the sale to Nelson in May, 1943, Perkins continued to work for the new owner in the same capacity until November, 1943.

Perkins quit the employ of respondents in November, 1943, and started in subiness for himself, buying cants from local tie mills. He seems to have had some trouble in buying these cants, or at least in getting them cut, so he decided he would build a mill himself to manufacture the cants into lumber. Apparently realizing that he did not have sufficient funds to erect and equip a mill, Perkins first contemplated just a shed equipped with a planer and an edger. He discussed his problems with Harold Haskins and asked his advice in regard to the project.

During this discussion, Harold Haskins made the suggestion that, to carry out this purpose, Perkins form a partnership with Robert E. Haskins,...