Montgomery v. Getty

• Citation: 284 S.W.2d 313
• Decision Date: 03 November 1955
• Docket Number: No. 7371,7371
• Parties: Elbert MONTGOMERY and H. P. Montgomery, Respondents, v. O. K. GETTY, Appellant.
• Court: Court of Appeal of Missouri (US)

Page 313

284 S.W.2d 313

Elbert MONTGOMERY and H. P. Montgomery, Respondents, v. O. K. GETTY, Appellant.

No. 7371.

Springfield Court of Appeals, Missouri.

Nov. 3, 1955.

J. W. Grossenheider, Lebanon, Claude T. Wood, Richland, for appellant.

Fields & Low, John A. Honssinger, John F. Low, Lebanon, for respondent.

McDOWELL, Presiding Judge.

This appeal is from a judgment in favor of plaintiffs and against defendant in a declaratory judgment action rendered in the Circuit Court of Laclede County, Missouri.

The action is based upon a written contract of sale whereby defendant sold to plaintiffs his one-half interest in the Getty Amusement Company, a partnership business owned and operated by defendant and one, S. R. Sutter. The contract was dated September 15, 1952, and contained the following agreement:

'The seller agrees that he will not enter into the amusement device business, such as the one that he is now selling, that will compete with this said business for a period of three years from the date of this contract.'

It alleged that at the time the contract of sale was made, defendant and Sutter, a co-partnership, were engaged in the amusement device business in Laclede and adjoining counties, and that it was the intent of the parties, under the terms of the contract, that defendant would not, for a period of three years from the date thereof, compete in any way with the amusement device business sold to plaintiffs, in Laclede County, Missouri, and the adjoining counties thereto; that defendant violated the terms of this contract by reentering the business in said trade territory.

The amended prayer of the petition asked that the court declare valid the provisions of the contract restricting defendant from engaging in the amusement device business for a period of three years; that defendant violated the terms thereof and that he be enjoined from engaging in such business in Laclede and adjoining counties for three years from the date of the contract, and for such other orders as to the court may seem proper.

The answer is a general denial.

The facts briefly stated are: Prior to September 15, 1952, defendant and S. R. Sutter owned and operated the Getty Amusement Company, a co-partnership, engaged in installing music and pin bill machines with customers in various businesses, restaurants and cafes in Laclede and adjoining counties, on commissions.

Elbert Montgomery, plaintiff, testified that at the time plaintiffs purchased defendant's interest in the Getty Amusement Company it had machines in Laclede, Pulaski, Douglas, Dallas, Camden and Webster counties. When asked about Wright County he gave this answer: 'A. I don't believe we had any in Wright County'. He stated the bulk of the machines were in Lebanon.

Defendant, O. K. Getty, testified that at the time of the sale to plaintiffs, in 1952, the major part of the business of the Getty Amusement Company was in Laclede County, at least fifty per cent. He gave this testimony:

'Q. Would you tell me, as of that date, bearing that date in mind, what other counties did you do business in? A. Well, mostly in adjoining counties. I don't think we had anything in Wright County. In other words we had Pulaski, Dallas, Marshfield,--what county is that in?

'Q. Webster. A. Webster County.

'Q. Any in Camden? A. Yes, I believe there was in Camden County.

'Q. In other words, as of September, 1952 you and Mr. Sutter had been doing business in Laclede and in Pulaski, Webster and Camben Counties? A. That's right.'

Sylvester Sutter testified for plaintiffs that he was a partner in the Getty Amusement Company. He was asked where this business operated and gave this answer: 'A. It operated in Laclede and surrounding counties.

'Q. Where was the majority of the business? A. Laclede County.

'Q. What other counties did it operate in? A. Well, in Dallas and Webster, Camden and Pulaski.'

At the time the sales contract was made, September 15, 1952, there was another contract of sale between the parties wherein plaintiffs conveyed to defendant their interest in their tractor-trailer business located in Kansas City. The evidence shows that there were considerable conversations carried on between the parties as to the terms of these contracts prior to the execution thereof; that notes of the terms of the sales were transferred to an attorney who was instructed to prepare the sales contract; that during the preparation of the contract the parties agreed that the restriction clause, set out in the petition, be inserted in each of these sales contracts, i. e., that each of the parties agreed not to reenter the field of business conveyed for a period of three years.

It is in evidence that Sutter operated the business purchased by plaintiffs and that defendant knew this was the method by which the business was to be handled; that the business was so operated from September, 1952, to about the first of January, 1953, when a consolidation was had with competitors, Bell and Talbot, in the same business, and the name changed to 'United Amusement Company'; that plaintiffs invested more money in the new business than they had in the Getty Amusement Company, but obtained only a one-fourth share thereof. The evidence on the part of plaintiffs is that a writing was entered into but never signed; that they removed from the office and trucks the name 'Getty Amusement Company', but continued to operate both businesses, maintained a bank account and contracts with customers, kept the same telephone number and continued to do business in both names.

In defendant's opening statement he said: '* * * that Mr. Getty, who was then in Kansas City and disposing of the business which he had purchased from the Montgomerys, was contacted by a former employe of the company and that this employe requested that Mr. Getty come back down and help him organize a corporation to go 'in the amusement device business because a lot of his customers had been complaining that they were not getting the service that they were entitled to and that they felt there should be free competition here in this area, and that Mr. Getty consulted with his Kansas City attorney, then he came back down here and had a conference with Mr. Stickley, and that in fact, as Mr. Low has already stated, a corporation was formed. * * *'

In this statement he said that Mr. Stickley was President and defendant and his wife were stockholders; that defendant was vice-president and Mrs. Getty was secretary-treasurer; that the corporation entered into the amusement business and that Getty worked with the business as employee.

We think it is undisputed that the corporation had 6 shares of stock, 1 owned by Getty, 2 by Mrs. Getty and 3 by Stickley; that Getty solicited business, used his trucks in hauling the coin machines out to customers within the trade territory of the Getty Amusement Company and in competition therewith. It shows most of the business done by the corporation was in Laclede County. Defendant testified that from May, 1953, until now he had been actively soliciting business in Laclede and adjoining counties.

From the record testimony we are of the opinion that Getty was the controlling and moving power back of the corporation; that he and his wife operated the business from their home.

The contract of sale was offered in evidence containing the restriction clause as set out in plaintiff's petition.

The court's decree in part is as follows:

'* * * and the court finds that the provision in the contract mentioned in plaintiffs' petition and introduced in evidence providing as follows: 'The seller agrees that he will not enter into the amusement device business, such as the one that he is now selling, that will compete with this said business for a period of three years from the date of this contract.', is a legal, valid and binding provision and that defendant has violated said provision and is presently violating said provision and the court further finds that defendant should be prohibited, restricted and enjoined from engaging in the amusement device business, competing with plaintiffs' business, in Laclede County, Missouri, and counties adjoining thereto for a period of three years from and after September 15, 1952.

'It is therefore ordered, adjudged and decreed * * * that defendant has violated said provision and is presently violating said provision and the defendant is hereby prohibited, restricted and enjoined from engaging in the amusement device business, competing with plaintiffs' business, in Laclede County, Missouri, and counties adjoining thereto, for a period of three years from and after September 15, 1952, and all costs of the case are assessed against the defendant and execution shall issue therefor.'

Appellant's first...