Moskin Bros., Inc. v. Swartzberg

• Decision Date: 08 October 1930
• Docket Number: 405.
• Parties: MOSKIN BROS., Inc., v. SWARTZBERG et al.
• Court: North Carolina Supreme Court

155 S.E. 154

199 N.C. 539

MOSKIN BROS., Inc., v. SWARTZBERG et al.

No. 405.

Supreme Court of North Carolina

October 8, 1930

Appeal from Superior Court, Guilford County; Moore, Judge.

Action by Moskin Brothers, Incorporated, against Benjamin H Swartzberg and others. From a judgment of the superior court reversing a judgment of the municipal court of the city of High Point, which had issued a restraining order against named defendant, plaintiff appeals.

Reversed and remanded, with directions.

Under restrictive covenant against entering competing business after termination of employment for any cause, held, it was immaterial whether employee left voluntarily, as regards employer's right to injunction.

Store manager held properly restrained from violating covenant against entering competing business in restricted territory within two years.

This is an action to restrain and enjoin the violation by defendant Benjamin F. Swartzberg of a restrictive covenant contained in a contract in writing entered into by and between the plaintiff and the said defendant.

The action was begun in the municipal court of the city of High Point, N. C., on July 17, 1929.

Plaintiff is a corporation organized under the laws of the state of New York, and maintains and operates a store in the city of High Point, N. C., in which it sells, at retail, and on credit ready-to-wear clothing. It sells clothing on the "installment plan," as described in its complaint in this action.

On January 30, 1928, plaintiff entered into a contract, in writing, with the defendant Benjamin H. Swartzberg, a citizen of this state and a resident of the city of High Point. By said contract plaintiff employed said defendant as the manager of its store and business in the city of High Point. The said contract contains a paragraph which is in words as follows:

"Eleventh. The parties hereto recognize that the employer's business is based largely on credit information recorded on various customers' lists, statistical data, and other records of the employer, acquired, collected and classified as a result of substantial outlay in money and effort, and systematized by employer in establishing its business in various cities in the United States, and that irreparable damages would result to employer if such lists, records, or information are obtained or used by any other person, firm or corporation, or any competitor of employer, and said employment is obtained and based upon the trust and confidence reposed by employer in the employee with respect to the proper use of such lists, records and information solely for the employer's benefit and said employment affords employee opportunity of access to such confidential records and information concerning employer's business.

"The employee covenants that in the event of the termination of said employment for any reason whatsoever, he will not for a period of two years from the date of such termination (or if any shorter period be provided by law, then for that period) engage in or accept employment from or become affiliated with or connected with, directly or indirectly, or become interested, directly or indirectly, in any way in any business within the City of High Point, N. C., similar or of a like nature to the business carried on by employer, or in any other city or place wherein employer maintains a store or in which store employee shall have been during his said employment for an aggregate period of one month or more, or within 15 miles of the City of High Point, N. C., or within such distance from any of the places where employer's stores are located in which the employee shall have been as aforesaid.

"The parties hereto recognizing that irreparable injury will result to employer, its business and property in the event of a breach of the covenant herein made by the employee, and that said employment is based primarily upon the covenants and assurances herein made and evidenced, it is agreed that in such event employer shall be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation thereof by employee, his partners, agents, servants, employers, and employees, and all persons acting for or with him.

"The employee represents and admits that in the event of the termination of his employment for any cause whatsoever, his experiences and capabilities are such that he can obtain employment in business engaged in other lines and/or of a different nature, and that the enforcement of a remedy by way of injunction will not prevent him from earning a livelihood."

The defendant Benjamin H. Swartzberg remained in the employment of the plaintiff, as the manager of its store and business at High Point, N. C., performing his duties as prescribed in the contract of employment, from the date of said contract, to wit: January 30, 1928, until March 14, 1929, when said employment terminated. Since leaving the employment of plaintiff, the said defendant has entered into the employment of or has become associated in business with his codefendants. His codefendants are engaged in business in the city of High Point, similar to and of a like nature with the business of the plaintiff. They are competitors of the plaintiff, and operate a store in High Point similar in all essential respects to the store of the plaintiff, and located next door thereto.

The action was heard on July 23, 1929, on plaintiff's motion that a temporary restraining order theretofore issued therein be made permanent. From the judgment of said court, restraining and enjoining said defendant from entering into or continuing in the employment of any person, firm, or corporation, engaged in a business similar to or of a like nature with the business of the plaintiff, in the city of High Point, or from becoming associated in business with such person, firm, or corporation, until after March 14, 1931, defendant appealed to the superior court of Guilford county.

Upon the hearing of said appeal in the superior court, the Judge Presiding therein was of opinion that "the contract signed by the parties is unequal, and is not a contract for the employment of services involving peculiar skill and training, nor for services involving the exercise of high powers of mind peculiar to the defendant, and that the restraint imposed by the contract is not necessary for the protection of the covenantee, and is oppressive, and that the contract is an unreasonable restraint of trade and contrary to public policy."

In accordance with this opinion, defendant's assignments of error on said appeal were sustained, and the judgment of the municipal court of the city of High Point was reversed. It was ordered and adjudged that the temporary restraining order be and the same was dissolved.

From this judgment, plaintiff appealed to the Supreme Court.

Roberson, Haworth & Reese, of High Point, and Hays, St. John, Abramson & Schulman, of New York City, for appellant.

Gold, York & McAnally, of High Point, for appellees.

CONNOR J.

On his appeal from the judgment of the municipal court of the city of High Point to the superior court of Guilford county, the defendant assigned as error the failure of the judge of said municipal court to find and set out in his judgment the facts upon which he based his conclusions of law, in accordance with which his judgment was rendered. This assignment of error was apparently sustained by the judge of the superior court, although his judgment reversing the judgment of the municipal court is not founded on his ruling on this assignment of error. There are no findings of fact specifically set out in the judgment of the municipal court, but it is found, as stated therein, that after consideration of the pleadings filed and the affidavits and testimony introduced, the allegations of the complaint are sustained.

There is no controversy...