Palmer v. Toms

• Decision Date: 21 May 1897
• Citation: 71 N.W. 654,96 Wis. 367
• Parties: PALMER ET AL. v. TOMS ET AL.
• Court: Wisconsin Supreme Court

96 Wis. 367

71 N.W. 654

PALMER ET AL.

v.TOMS ET AL.

Supreme Court of Wisconsin.

May 21, 1897.

Appeal from circuit court, La Crosse county; O. B. Wyman, Judge.

Action by J. V. Palmer and another, partners as Palmer Bros., against Frank P. Toms and another, partners as Toms & Powell. There was judgment on a verdict directed for plaintiffs. A new trial was denied, and defendants appeal. Affirmed.

Plaintiffs owned an old established livery and funeral business, so called, in the city of La Crosse, Wis. They sold such business to the defendants, with the good will thereof and all personal property used therewith, for the sum of $13,000, and leased to defendants, for use in such business, the barn and premises where the same had been theretofore carried on. As an inducement to defendants to make the purchase at said sum of $13,000, plaintiffs agreed in writing that neither of them would engage in the same kind of business in the city of La Crosse for the term of five years, and that, in case of a breach of such agreement on the part of either of them, they would, for each day such breach continued, pay to the defendants the sum of $10. Some time after the transaction referred to, defendants, with others, formed a corporation, called the “City Livery Company,” to conduct the business purchased by defendants as aforesaid, and to such company said business and the property purchased therewith were transferred, but without the contract in restraint of plaintiffs' engaging in the business being specially mentioned. Subsequently, John V. Palmer, in violation of the aforesaid contract, again entered into a livery and funeral business in the city of La Crosse, and thereafter, upon default being made by defendants and their grantee (the said livery company) in the payment of the rent due on the barn leased as aforesaid, brought suit therefor against defendants, and they counterclaimed for damages for the aforesaid breach of contract. On the trial no question was raised as to the amount of rent due upon the lease. Proof was made on the part of defendants of the allegations of the counterclaim, in accordance with the aforesaid statement. The trial court held that defendants were not entitled to recover on such counterclaim, and directed judgment for plaintiffs for the rent due. Judgment was thereupon entered in plaintiffs' favor, from which this appeal was taken.C. L. Hood, for appellants.

Higbee & Bunge, for respondents.

MARSHALL, J. (after stating the facts).

The general rule that contracts in restraint of trade are void has its exceptions, one of which is that, for the protection of the good will of an established business, the owner of the same may make a sale thereof with such business, and, as an inducement to the purchaser to buy, part with his liberty to engage in the same business for such limited time and within such limited territory as may be reasonably necessary to protect the purchaser in the enjoyment of such business. With the limitations indicated, the public is not necessarily deprived of the vendor's industry. Such vendor is not prevented from pursuing his occupation but partially. He receives a valuable consideration for the restraint upon his own liberty; and the vendor becomes possessed of substantial benefits by the transaction, without material injury, if any, to the public. Hence the objections are obviated which generally render contracts in restraint of trade void, and they are sustained by universal authority. Laubenheimer v. Mann, 17 Wis. 542;Fairbank v. Leary, 40 Wis. 637;Machine Works v. Perry, 71 Wis. 495, 38 N. W. 82;Washburn v. Dosch, 68 Wis. 436, 32 N. W. 551;Richards v. Seating Co., 87 Wis. 503, 58 N. W. 787;Williams v. Farrand, 88 Mich. 473, 50 N. W. 446;Navigation Co. v. Winsor, 20 Wall. 64;Johnson v. Gwinn, 100 Ind. 466; 3 Am. & Eng Enc. Law, p. 882, and notes. The essential element of reasonableness requires that the vendor shall not part with his liberty of action to any greater extent than is reasonable, having regard to the circumstances of the given case. The question in that regard, when the validity of the contract is judicially called in question, is one of law for the court. Richards v. Seating Co., supra. In Washburn v. Dosch, supra, the property sold consisted of the goods and good will of a mercantile business. The vendor agreed not to engage in the same business, in the particular village in which such business was located, for five years. This court sustained the contract. In Johnson v. Gwinn, supra, the property...