Pearson v. Duncan & Son

• Citation: 198 Ala. 25,73 So. 406
• Decision Date: 21 December 1916
• Docket Number: 5 Div. 643
• Court: Supreme Court of Alabama
• Parties: PEARSON v. DUNCAN & SON.

73 So. 406

198 Ala. 25

PEARSON v. DUNCAN & SON.

5 Div. 643

Supreme Court of Alabama

December 21, 1916

Appeal from Chancery Court, Tallapoosa County; W.W. Whiteside Chancellor.

Bill by Duncan & Sons, a partnership, against H.W. Pearson, to restrain him from violating a contract not to sell ice in the City of Alexander City. From an order granting an injunction respondent appeals. Reversed and rendered.

N.D Denson & Sons, of Opelika, for appellant.

Bulger & Rylance, of Dadeville, for appellee.

McCLELLAN J.

A contract in general restraint of trade is against public policy, is void, and unenforceable; but a contract in partial, reasonable restraint of trade will be sustained and enforced where its restraint is directed to the protection and effectuation of a sale of a business by him who has engaged to refrain from competition. Tuscaloosa Ice Mfg. Co. v. Williams, 127 Ala. 110, 28 So. 669, 50 L.R.A. 175, 85 Am.St.Rep. 125; Harris v. Theus, 149 Ala. 133, 43 So. 131, 10 L.R.A. (N.S.) 204, 123 Am.St.Rep. 17; Smith v. Webb, 176 Ala. 596, 58 So. 913, 40 L.R.A. (N.S.) 91.

The appellees would avail of the rights they assert against the appellant through a lease of an ice plant from the town of Alexander City, in connection with which they claim to have succeeded by assignment to them of the contract to be quoted. This contract, which was executed by the appellant and the town of Alexander City, is as follows:

"For and in consideration of $100.00 to me in hand paid by the town of Alexander City, I agree to discontinue my ice business in Alexander City and adjacent territory for a period of five years or so long as the present plant is operated by the town or an individual as home plant. I also agree not to associate myself in any way with another individual, firm or corporation for the purpose of handling ice in Alexander City or adjacent territory for the period as above stated or as long as the plant is operated as a home plant, either by the town or an individual.

"This contract is to be void should the town grant license to any other than parties operating the above mentioned plant.

"It is further agreed and understood that the signers of this contract and agreement are to abide by all the conditions herein set out.

"It is further agreed that H.W. Pearson is to have five days to dispose of what ice he has on hand and no other."

This bill prays the specific performance of that contract, and that alone, through the permanent injunction of appellant to engage in the ice business in Alexander City and adjacent territory for the time specified in the writing. It is clear that the quoted instrument's whole effect, so far as obligations assumed by appellant were or are concerned, was that appellant should discontinue his ice business in that territory and refrain from engaging therein, directly or indirectly, for the time stipulated in the instrument. In this writing there is no provision for or about the purchase or sale of appellant's ice business or of any stock or instrumentalities pertaining to his ice business. It necessarily results that the application of the principle stated to the obligation set forth in the instrument above requires the conclusion that the contract is void and unenforceable, because it is an effort to impose a general restraint to engage in a certain business in a certain territory. In paragraph 5 of the bill it is alleged:

"Your orators would further state, charge, and aver that after the town of Alexander City had leased the ice plant as above set out it did on, to wit, the 2d day of September, 1915, for and in consideration of $100 in cash paid to the respondent, H.W. Pearson, procure an agreement from the said H.W. Pearson whereby he agreed to discontinue his ice business in the town of Alexander City and adjacent territory for a period of five years, or so long as the ice plant located at Alexander City was operated by the town of Alexander City or an individual as a home plant, a copy of which said contract and agreement is hereto attached and marked 'Exhibit B' and made a part of this bill as if written herein with leave of reference thereto. Your orators would further show that, at the time this said contract was entered into between the town of Alexander City and the said H.W. Pearson, the town of Alexander City also bought from said Pearson all of his ice tools and things necessary for the handling of the ice business and paid him a valuable consideration for the same, and the said H.W. Pearson agreed in said business in the town of Alexander City for a period of five years, or so long as the ice plant at Alexander City was operated by the town or an individual as a home plant."

None or all of the allegations of this paragraph suffice to bring the contract here sought to be specifically enforced through injunctive process within the saving clause of the doctrine before reiterated. While it is averred that, at the time the contract sought now to be enforced, the town of Alexander City "also bought from said Pearson all of his ice tools and things necessary for the handling of the ice business and paid him a valuable consideration for the same," yet it is not made to appear that this purchase or articles was a part of the written contract of which the appellees now seek specific...