Renwood Food Products v. Schaefer

• Decision Date: 20 September 1949
• Citation: 223 S.W.2d 144,240 Mo.App. 939
• Parties: Renwood Food Products, Inc., Respondent, v. Roy Schaefer, also known as LeRoy Peter Schaefer, Appellant
• Court: Missouri Court of Appeals

223 S.W.2d 144

240 Mo.App. 939

Renwood Food Products, Inc., Respondent, v. Roy Schaefer, also known as LeRoy Peter Schaefer, Appellant

Court of Appeals of Missouri, St. Louis District

September 20, 1949

Appeal from the Circuit Court of the City of St. Louis; Hon. William K. Koerner, Judge.

Affirmed.

Beckemeier & Beckemeier, Theodore E. Beckemeier and J. E Sigoloff for appellant.

(1) The right to injunctive relief appeals to the sound discretion of the Court and is to be used sparingly in clear cases only especially when it is sought to prevent a person from taking employment. Briscoe v. Williams, 192 S.W. (2) 643 646; Commission Row Club v. Lambert, 161 S.W. (2) 732; Steinberg v. O'Brien, 48 N. J. 370, 22 A. 348. (a) Sound public policy encourages employees to better their condition, to seek better jobs from other employers, or to go in business for themselves. Contracts which prevent their doing so are in restraint of trade and should be strictly construed and rigidly scanned. Haut v. Rossbach, 128 N.J.Eq. 77, 15 A. (2) 227; Athletic Tea Co. v. Cole, 16 S.W. (2) 735; Samuels Stores, Inc. v. Abrams, 94 Conn. 248, 108 A. 541; Schmidt v. Central Laundry & Supply Co., 13 N.Y.S. (2) 817. (b) Courts look with disfavor upon agreements containing restrictive covenants against engaging in similar business since such agreements tend to create monopolies and adversely affect the public. Mallinckrodt Chemical Works v. Nemnich, 83 Mo.App. 6, 16; Fries v. Parr, 139 N.Y.S. 220, 224; Skrainka v. Scharringhausen, 8 Mo.App. 522; 5 Williston, Contracts, Rev. Ed., Sec. 1643. (2) The contract herein is clearly in restraint of trade since it seeks to prevent competition. Attwood v. Lamont, (C. of A.) 90 L. J. Chancery 121, 3 K. B. (1920) 571; Super-Maid Cook-Ware Corp. v. Hamil, 50 Fed. (2) 830; Kansas City Laundry Service Co. v. Jeserich et al., 247 S.W. 447; Morris v. Sexelby (H. of L.) 85 L. J. Chancery 210, 1 A. C. (1916) 688; 16 C. J. S. Contracts 629, 633, Sec. 246, 250; Molina v. Barany, 56 N.Y.S. (2) 124. (3) Restrictive covenants in contracts will be enforced only when they are reasonable, when no public interests are involved, and the restriction is limited to the protection of contract rights, to which the covenant is incidental. Super-Maid Cook-Ware Corp. v. Hamil, 50 Fed. (2) 830; City Ice Delivery Co. v. Evans, 275 S.W. 87; Gordon v. Mansfield, 84 Mo.App. 367; Nordenfelt v. Maxim-Nordenfelt Guns & Ammunition Co., 78 L. J. Ch. 8, 1 Ch. (1909) 763; Clark Paper Co. v. Stenacher, 236 N.Y. 312, 140 N.E. 708, 29 A. L. R. 1325. (a) Plaintiff has failed to sustain the burden to plead and prove the existence of such conditions. Zeppenfield v. Morgan, 169 S.W. (2) (Mo. App.) 971; Super-Maid Cook-Ware Corp. v. Hamil, 50 Fed. (2) 830; Byers v. Trans-Pecos Abstract Co., 18 S.W. (2) (Tex.) 1096, 1098. (b) Plaintiff has failed to plead and prove facts showing irreparable damage. Mentner v. Brock, 147 Minn. 407, 180 N.W. 553, 20 A. L. R. 857; Clark Paper Co. v. Stenacher, 236 N.Y. 312, 140 N.E. 708, 29 A. L. R. 1325; Attwood v. Lamont (C. of A.) 90 L. J. Ch. 121, 3 K. B. (1920) 571. (4) The restrictive covenant was clearly unreasonable, unfair and oppressive since it seeks to prevent defendant from competing in a territory much larger than the one which constituted the field of his activities. Gordon Supply Co. v. Galuska, (N. J.) 166 A. 700; Wisconsin Ice & Coal Co. v. Leuth, (Wisc.) 250 N.W. 819; Whiting Milk Companies v. O'Connell, (Mass.) 179 N.E. 169; City Ice Delivery Co. v. Evans, (Tex.) 275 S.W. 87. (a) Where plaintiff has voluntarily sought to include a territory which is unreasonable, the Court has no authority to divide same and make a new contract for the parties. Restatement of Law of Contracts, 518 (b) Vol. 2, p. 1005; Mallinckrodt Chem. Wks. v. Nemnich, 83 Mo.App. 6, 16; Emler v. Fearne, (Ohio), 155 N.E. 496, 497; Samuels Stores Inc. v. Abrams, (Conn.) 94 Conn. 248, 108 A. 541; Attwood v. Lamont, (C. of A.) 90 L. J. Chancery, 121, 3 K. B. (1920) 571. (5) Since plaintiff had breached his contract with defendant by changing the territory, reducing the car allowance and increasing the days of work, it was guilty of a prior breach of the agreement and was, therefore, not entitled to an injunction. Camenisch v. Allen, 44 A. (2) 309 (Super. Ct. Pa.); Public Laundries v. Taylor, (Tex.) 26 S.W. (2) 1085; Fries v. Parr, 139 N.Y.S. 220; Foster v. White, 3 N.Y.S. (2) 456.

G. Carroll Stribling and Fordyce, White, Mayne, Williams & Hartman for respondent.

(1) The employee's agreement not to engage in a competing business after leaving the plaintiff's employment being reasonably limited as to time and space and supported by ample consideration, was valid and was properly enforced by the trial court's decree of injunction. City Ice & Fuel Co. v. Snell, (Mo. App.) 57 S.W. 2d 440; City Ice & Fuel Co. v. McKee, (Mo. App.) 57 S.W. 2d 443; Haysler v. Butterfield, (Mo. App.) 218 S.W. 2d 129; Holland Furnace Co. v. Connelly, 48 Fed. Suppl. 543; Kreger Glass Co. v. Kreger, (Mo. App.) 49 S.W. 2d 260; Fred A. H. Garlichs Agency Co. v. Anderson, (Mo. App.) 226 S.W. 978; Glover v. Shirley, 169 Mo.App. 637, 155 S.W. 878; Gill v. Ferris, 82 Mo. 156. (2) The restriction being limited to the City of St. Louis and three adjoining counties was partial and reasonable in its scope, and, therefore, valid and enforceable by injunction. Haysler v. Butterfield, supra; Holland Furnace Co. v. Connelly, supra; Kreger Glass Co. v. Kreger, supra; Angelica Jacket Co. v. Angelica, 121 Mo.App. 226, 98 S.W. 805; Harrison v. Glucose Sugar Refining Co., 116 F. 304, C. C. A. 7th; Knapp v. S. Jarvis Adams Co., 135 F. 1008, 1012, C. C. A. 6th; Mallinckrodt Chemical Works v. Nemnich, 83 Mo.App. 6, affirmed 169 Mo. 388; Hessell v. Hill, 38 S.W. 2d 490; Gordon v. Mansfield, 84 Mo.App. 367, 374; Wiggins Ferry Co. v. Railroad, 73 Mo. 389; Presbury v. Fisher, 18 Mo. 53; Billings v. Ames, 32 Mo. 265, 273; Peltz v. Eichele, 62 Mo. 171. (a) The restriction was reasonable because it was necessary for the protection of the business of the respondent, which extended throughout the area covered by the restriction. Mallinckrodt Chemical Works v. Nemnich, supra; Harrison v. Glucose Sugar Refining Co., supra; Knapp v. Jarvis Adams Co., supra. (b) The information obtained by defendant as to plaintiff's methods of doing business and the contacts made by defendant as a salesman for plaintiff could have been used by him to the detriment of the plaintiff in the balance of the area covered by the restrictive covenant, particularly in the case of chain stores and buying groups, member stores of which were situated in the appellant-defendant's territory and elsewhere throughout the territory covered by the restrictive covenant. Haysler v. Butterfield, supra. (c) The provision against engaging in any manner in the distribution of frozen foods within the limited area covered by the contract was valid and enforceable. Fred A. H. Garlichs Co. v. Anderson, supra; Haysler v. Butterfield, supra; Holland Furnace Co. v. Connelly, supra; Gill v. Ferris, 82 Mo. 156, 165; Marsden v. Travelers' Insurance Co., 52 F.2d 75, C. C. A. 8. (3) The trial court's findings of fact (a) that there was no agreement that plaintiff would have an exclusive territory, (b) that plaintiff acquiesced in the changes in method of figuring car allowance and other matters complained of, and (c) that plaintiff resigned to take competing employment are amply supported by the evidence and should be affirmed. Young v. Copeland, (Mo. App.) 204 S.W. 2d 455; Suhre v. Busch, 123 S.W. 2d 9, 343 Mo. 679; Beach v. Beach, (Mo. Sup.) 207 S.W. 2d 481; Holland v. Martin, 198 S.W. 2d 16, 355 Mo. 767; Botto v. James, 209 S.W. 2d 256. (a) In equity cases where the evidence on issues of fact is conflicting, the Appellate Court, having due regard for the trial chancellor's advantage in being able to observe the witnesses and determine their credibility, will not reverse the decision of the trial chancellor unless such decision is clearly contrary to the overwhelming weight of the evidence. Suhre v. Busch, supra; Young v. Copeland, supra; Holland v. Martin, supra; Botto v. James, supra; Niehaus v. Madden, 155 S.W. 2d 141, 145, 348 Mo. 770.

Anderson, J. Hughes and McCullen, JJ. concur.

OPINION

ANDERSON

This is an action to enforce by injunction the provisions of a restrictive covenant in a contract of employment. From a decree in favor of plaintiff, defendant has appealed.

Plaintiff, Renwood Food Products, Inc., is engaged in the business of selling frozen foods at wholesale. Defendant, Roy Schaefer, also known as LeRoy Peter Schaefer, entered plaintiff's employ in September, 1947, as a salesman. On September 11, 1947, the parties executed a written contract which contained the terms of defendant's employment. The material portions of said contract are as follows:

"1. Beginning on the 2nd day of September, 1947, the Company agrees to employ Employee as Salesman on a monthly basis at a salary of Two Hundred ($ 200.00) Dollars per month, plus commission. Employment of Employee shall be subject to termination either by the Company or by Employee on fifteen (15) days' notice in writing to the other party, with or without cause.

"2. In consideration of his employment by the Company Employee agrees that on termination of his employment for any cause whatsoever, he will not directly or indirectly engage in the business of distributing frozen foods or in any competitive business within the City of St. Louis, Missouri, St. Louis County, Missouri, Madison County, Illinois, and St. Clair County, Illinois, nor in any manner be connected with or employed by any person, firm or corporation engaged in the business of distributing frozen foods or any competitive business, for a

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