Rapalee v. Malmquist

• Decision Date: 12 February 1914
• Citation: 165 Iowa 249,145 N.W. 279
• Court: Iowa Supreme Court
• Parties: RAPALEE ET AL. v. JOHN MALMQUIST & SON ET AL.

165 Iowa 249

145 N.W. 279

RAPALEE ET AL.

v.JOHN MALMQUIST & SON ET AL.

Supreme Court of Iowa.

Feb. 12, 1914.

Appeal from District Court, Woodbury County; David Mould, Judge.

Action to restrain a copartnership firm, and the individual members thereof, from engaging in the marble and monument business in Sioux City and vicinity, and for damages for alleged violation of contract not to engage in said business entered into by the said copartnership firm and the appellants. There was a trial, at the conclusion of which the petition of plaintiffs was dismissed, and they appeal. Affirmed.Farnsworth, Naglestad & Salinger, of Sioux City, for appellants.

Henderson & Fribourg, of Sioux City, for appellees.

PRESTON, J.

At and prior to the time of the making of the contract in question, about January, 1905, there were three separate concerns engaged in the marble business in Sioux City. They were D. W. Rapalee,M. C. Carlstrom & Co., and John Malmquist & Son. The two first named, and who are plaintiffs herein, claimed that the other was doing a dishonorable business, because it was cutting prices, and they concluded to purchase the business of defendants. This they did, paying for the business about $2,200, each of the two concerns so purchasing paying one-half; and after the purchase they divided the property.

The contract was signed by John Malmquist & Son, a partnership, the members of which were John Malmquist and John Malmquist, Jr. The purpose was to lessen competition. The evidence of plaintiffs is that there was such competition with the three that there was no money to be made, and “we were buying out Malmquist & Son to lessen that competition. It was to stop this competition.”

The provisions of the contract are, in substance: “That John Malmquist & Son sells to D. W. Rapalee and M. C. Carlstrom & Company, jointly, their stock of marble and granite goods and the good will for $2,259, and that as a part of the consideration for the purchase price that said John Malmquist & Son will not directly or indirectly engage in the marble and granite business in Sioux City in the future.” And the firm name was signed, “John Malmquist & Son.”

Authorities are cited by appellants on the general proposition that contracts of this nature are enforceable. Appellees contend that the contract does not purport to bind the individual members of the firm, and that they are not bound. Such contracts in restraint, or partial restraint, of trade are not favored, and will be strictly construed. Haldeman v. Simonton, 55 Iowa, 144, 7 N. W. 493;Streichen v. Fehleisen, 112 Iowa, 612, 84 N. W. 715, 51 L. R. A. 412.

We think this case is ruled by the Streichen Case, supra. The firm or partnership did not engage...