Smith v. Webb

• Decision Date: 30 May 1912
• Citation: 176 Ala. 596,58 So. 913
• Parties: SMITH v. WEBB.
• Court: Alabama Supreme Court

58 So. 913

176 Ala. 596

SMITH v. WEBB.

Supreme Court of Alabama

May 30, 1912

Appeal from St. Clair Chancery Court; W. W. Whiteside, Chancellor.

Action by T. J. Smith against E. W. Webb. From a judgment for defendant, plaintiff appeals. Reversed and rendered.

M. M. &amp Victor Smith, of Pell City, for appellant.

N. B Spears, of Pell City, and James A. Embry, of Ashville, for appellee.

McCLELLAN J.

The purpose of the bill, exhibited by appellant against appellee is to enforce the specific performance of the contract set out below, by means of the restraining effect of injunctive process. The contract made was in writing and is as follows: "Pell City, Alabama, October 19, 1910. This is to certify for a consideration of $1,500.00 I have sold and delivered to T. J. Smith my livery outfit that consists of 8 horses, all buggies, surreys, hacks, wagons, harness of every description, in fact all that belongs to the stable, including one billy goat, wheelbarrow and tools of every kind and description except three shoats in the barn lot. I also agree to turn over to T. J. Smith both stables now in my possession belonging to Sumter Cogswell. I further agree to turn over my contract with the Standard Oil Company on November 1, 1910, and I further agree to have transferred to the said T. J. Smith my insurance on said livery business. I further agree for the above consideration not to engage in the livery business in opposition to said T. J. Smith in Pell City. [ Signed] E. W. Webb." (Italics supplied.)

It is contended that the vendor (Webb) had breached, before the bill was filed, and was then breaching, the contract in that feature (italicized above), whereby he obliged himself to refrain from engaging in the livery business, etc.

The contract is not void as in restraint of trade. 2 Beach on Contr. § 1575; Tuscaloosa Ice Mfg. Co. v. Williams, 127 Ala. 110, 28 So. 669, 50 L. R. A. 175, 85 Am. St. Rep. 125; McCurry v. Gibson, 108 Ala. 451, 18 So. 806, 54 Am. St. Rep. 177; Moore v. Towers Hdw. Co., 87 Ala. 206, 6 So. 41, 13 Am. St. Rep. 23; Robbins v. Webb, 68 Ala. 393; Arnold & Co. v. Jones Cotton Co., 152 Ala. 501, 44 So. 662, 12 L. R. A. (N. S.) 150; Harris v. Theus, 149 Ala. 133, 43 So. 131, 10 L. R. A. (N. S.) 204, 123 Am. St. Rep. 17. The omission from such contracts of a limit as to time of duration does not affect them if they are otherwise valid. Harris v. Theus, supra; McCurry v. Gibson, supra; 92 Am. Dec. pp. 754, 755, note.

As appears from the instrument itself, the vendor was, when the sale was made, engaged in the livery business at Pell City. While there is in the instrument no express provision for the sale of the livery business as such, the stipulations therein with respect to the contract with the Oil Company evidently to endure beyond November 1, 1910, with respect to the transfer of the "insurance on said livery business," and with respect to the turning over of the Cogswell stables, in connection with the engagement italicized, leave no room for doubt, we think, that the parties contemplated, and so contracted, the sale of the business along with the chattels and effects specified in the paper. In other words, these evidences from the face of the instrument exclude the idea that the parties contemplated, solely, the sale of the chattels and effects enumerated. There is in the instrument no express reference to the sale of the good will of the business. It may well be, though it is not necessary to affirm it at this time, that such an engagement as that expressed in the italicized provision would import, necessarily, the sale of the good will of the business as effectually as if that term had been incorporated in the writing. Again, since the good will of a business is an incident thereto, it may be the sale of the business as such would carry by implication that property element or attribute of the business. Much has been written by the courts and text-writers on the subject. 20 Cyc. pp. 1275-1283. Practically all of the many decisions consulted on this investigation treat of contracts where the parties referred to good will in terms. Probably, in such dealings, it is best to remove all doubts in the premises--to make particular reference to good will.

In the construction of contracts the judicial duty is to ascertain the intent of the parties, where, of course, that intent is not so clearly expressed as to exclude the necessity for construction. In order, where construction is necessary, to ascertain the intent of the parties, the circumstances surrounding them and the object proposed by their engagement should be considered. Parol evidence is often the only means whereby the conditions and circumstances surrounding the parties, at the time of contracting, may be shown. Lewman v. Ogden, 143 Ala. 351, 42 So. 102, 5 Ann. Cas. 265; McDonnell v. Jordan, 142 Ala. 279, 38 So. 122.

The particular feature of the contract to be construed is this: "I further agree for the above consideration not to engage in the livery business in opposition to said T. J. Smith in Pell City." Whether the breach charged by the vendee may be sustained depends, primarily, upon the character and measure of restraint this provision imposed upon the vendor; and, secondarily, upon the resolution of the issue of fact as to the vendor's conduct in respect of the livery business, in Pell City, with which he was later connected.

Whether the intent of the parties was that the vendee should not engage in the livery business in his own name at that place, or whether he should not contribute by his services, presence, and prestige to the conduct of such a business owned by another, are questions arising from the terms employed in the provision, and make the true meaning equivocal, and hence present a case calling for the full discovery of the surrounding circumstances existing when the contract was made. Corwin v. Hawkins, 42 A.D. 571, 59 N.Y.S. 603.

It may be assumed that, since the law does not look with favor upon restrictions against competition, tending to monopoly, though upholding such contracts when not in general in restraint of trade, contracts restrictive of the right to engage in business of a particular kind and in a particular place will be strictly construed. Eastern Express Co. v. Meserve, 60 N.H. 198.

When the contract was made, the vendor had been engaged for three years or more in the livery business at Pell City. While there is some conflict in the evidence upon the point, it is fair to say that its clear preponderance is to the effect that, at the time of the sale, the trade of that character at Pell City was not sufficient for the profitable conduct of two distinct livery businesses. At that time the vendor had no rival. It may be he had controlled this condition by renting another livery barn, which it does not appear was the site of the business the vendor then conducted. The vendee decided to open a...