Marvel v. Jonah

• Decision Date: 17 June 1914
• Citation: 90 A. 1004,83 N.J.Eq. 295
• Parties: MARVEL v. JONAH.
• Court: New Jersey Supreme Court

90 A. 1004

83 N.J.Eq. 295

MARVEL

v. JONAH.

Court of Errors and Appeals of New Jersey.

June 17, 1914.

Garrison, Bergen, and White, JJ., dissenting.

Appeal from Court of Chancery.

Suit by Philip I. Marvel against William E. Jonah. From a decree of the Court of Chancery (81 N. J. Eq. 369, 86 Atl. 968) denying relief, complainant appeals. Reversed.

Bourgeois & Coulomb, of Atlantic City, for appellant. Allan B. Endicott, of Atlantic City, and Robert H. McCarter, of Newark, for respondent.

GUMMERE, C. J. The complainant and defendant are practicing their profession in the city of Atlantic City, together with one Dr. Durand, as partners. The bill filed by the complainant prays an accounting from the defendant, the dissolution of the partnership relationship between them, because of continued violations by the defendant of certain provisions contained in the partnership agreement, and the enforcement against the defendant of a restrictive covenant contained in that agreement, by the terms of which the defendant bound himself, in case the partnership was terminated because of violations of the contract by him, to refrain from practicing his profession in Atlantic City for a period of three years next thereafter. The learned Vice Chancellor before whom the case was heard in the court below held that the complainant was entitled to an accounting, and to have the partnership dissolved because of breaches of the partnership agreement by the defendant, but refused to enforce against the latter the restrictive covenant, because he considered that to do so "would be unjust and unnecessarily oppressive." From so much of the decree as refuses an injunction against the defendant restraining him from practicing in Atlantic City during the stipulated period, the complainant appeals.

Dr. Marvel began the practice of medicine in Atlantic City about 1884. His practice gradually grew to such an extent that in 1905 it became necessary for him to employ an assistant. Dr. Jonah, who had graduated from a medical college five years before that time, was selected by him for that position. In 1906 Dr. Marvel found it desirable to employ a second assistant, and took in Dr. Durand. In 1908 the complainant and defendant entered into a parol partnership agreement which, in 1910, was superseded by that which is involved in the present controversy. It is apparent from the proofs that the present development and value of the practice of the firm is, in large measure, due to the efforts and reputation of Dr. Marvel; and that his purpose in having the restrictive covenant put in the partnership agreement was to prevent the younger members of the firm, after having been brought into association with his patients, as his representatives, from setting up an independent practice in Atlantic City, and taking with them such patients, or any of them.

The conclusion of the learned Vice Chancellor that it would be unjust and unnecessarily oppressive to enforce the restrictive covenant against Dr. Jonah seems to be based upon the idea that, although the independent practice of his profession in Atlantic City by Dr. Jonah will result in the loss of patients by Dr. Marvel, yet, even after such loss, the latter's practice will still be so large as to be beyond his ability to cope with it without the assistance of others, and, consequently, that the restraint sought by him against Dr. Jonah would be of little value to him if granted. The premises do not justify such a conclusion. If Dr. Marvel has built up a practice so large that he is unable to take care of it without the aid of qualified assistants, he is entitled to the emoluments thereof, and to be protected against the loss of those emoluments through illegal competition. It will hardly do to say that a man who has built up a business so extensive that he cannot handle it...