McElreath v. Riquelmy

• Decision Date: 10 September 1969
• Docket Number: No. 270,270
• Parties: Ross McELREATH, Appellant, v. Henry C. RIQUELMY et al., Appellee. . Houston (14th Dist.)
• Court: Texas Court of Appeals

Page 853

444 S.W.2d 853

Ross McELREATH, Appellant, v. Henry C. RIQUELMY et al., Appellee.

No. 270.

Court of Civil Appeals of Texas.

Houston (14th Dist.).

Sept. 10, 1969.

Hugh E. McGee, Jr., houston, for appellant.

William G. Wilson, Thad T. Hutcheson, Hutcheson, Taliaferro & Grundy, Houston, for appellee.

TUNKS, Chief Justice.

On July 1, 1960, Henry C. Riquelmy, Ross McElreath, Ray W. Lacour and Robert H. Isaacs entered into a partnership agreement to engage in the accounting profession under the firm name of Mattison and Riquelmy. After provisions as to the partners' ownership in the assets of the firm and participation in its income the contract provided as follows:

'6. This agreement may be cancelled by any party hereto upon 30 days written notice to the other parties, in which event the earnings of Mattison and Riquelmy will be determined on the accrual basis as of the end of the month in which the notice is given in order to determine the earnings subject to this agreement. This amount due the withdrawing partner plus his capital account will be paid by Mattison and Riquelmy or Henry C. Riquelmy at a rate to be determined but in not less than 3 years.

'7. Any partner withdrawing from the partnership of Mattison and Riquelmy agrees not to enter into competition for a period of 3 years with Mattison and Riquelmy and agrees not to solicit any of its clients or accept work from any of its clients without first notifying Henry C. Riquelmy. And any such withdrawing partner who accepts work over the objection of Henry C. Riquelmy shall forfeit any amount due him under paragraph 6, above.'

On November 17, 1964, Ross McElreath gave the other members of the partnership the following written notice:

'Gentlemen:

'In accordance with the terms of our partnership agreement I hereby give the required thirty day notice of my intention to withdraw from or cancel said agreement.'

On December 9, 1964, McElreath wrote to Henry C. Riquelmy as follows:

'Dear Mr. Riquelmy:

'In accordance with the terms of our partnership agreement effective July 1, 1960 and terminating December 16, 1964; I, the withdrawing partner, hereby give you notice as required in paragraph 7 of said agreement of my intention to practice public accountancy in competition with Mattison and Riquelmy and accept work from any of its clients who so request. Solicitation is a violation of the Code of professional ethics; I will not solicit.'

On January 12, 1965, Riquelmy wrote the following letter to McElreath:

'Dear Mr. McElreath:

'In accordance with the partnership agreement of Mattison and Riquelmy dated July 1, 1960, you are hereby informed that the writer objects your soliciting work from clients of Mattison and Riquelmy, and also objects to your accepting work from clients of Mattison and Riquelmy, and you are hereby notified to decline said work in writing with copy to this firm. If you comply with this objection then the earnings accrued as of November 30, 1964, and your partnership capital account will be paid to you on December 16, 1967 . Should you fail to comply with the objection mentioned above by February 15, 1965, then you are hereby notified that you will forfeit the earnings to which you may be entitled on the accrual basis as well as your capital account.'

Despite the fact that Riquelmy objected to his doing so, McElreath accepted work from clients of the partnership whose accounts he had handled while he was a member of the firm. Those clients were located at Houston, Harris County, Texas, and the work from them was accepted within 90 days from the time of his withdrawal from the partnership. For such reason the remaining partners refused to account to him for the amount to which he would otherwise be entitled under the terms of paragraph 6 of the contract. McElreath filed suit against the remaining partners for such accounting and for judgment for the amount to be found due him under such accounting. The defendants filed motion for summary judgment supported by affidavits establishing the above recited facts. The trial court granted the defendants' motion for summary judgment and the plaintiff, McElreath, has appealed.

Appellant's first point of error is to the effect that the trial court erred in granting the motion for summary judgment because there was a question of fact as to the reasonableness of the restrictive covenant contained in paragraph 7 of the contract. That point is overruled. The question as to such reasonableness was properly determined by the court as a question of law. Chenault v. Otis Engineering Corp., 423 S.W.2d 377, ref., n.r.e.

By his second point of error the appellant contends that the provisions of paragraph 7 restricting his competition with the partnership are 'illegal and void.' That point is overruled. Even though the language of paragraph 7 of the contract be construed as an agreement restricting competition without limitation as to area it was, nevertheless, not illegal or void. Weatherford Oil Tool Co. v. Campbell, 161 Tex. 310, 340 S.W.2d 950.

By his third point of error the appellant suggests that the non-competition agreement contained in paragraph 7 of the contract is ambiguous because it does not clearly state whether the three year period during which competition is prohibited begins at the date of the execution of the contract or at the date of the withdrawal of a partner. That point, too, is overruled. A construction to the effect that the three year period began at the date of the execution of the contract would be wholly unreasonable. The correspondence between the parties, set...