Spinks v. Riebold, 5239

• Decision Date: 19 February 1958
• Docket Number: No. 5239,5239
• Citation: 310 S.W.2d 668
• Court: Texas Court of Appeals
• Parties: Leroy SPINKS, d/b/a Spinks Tool & Supply Company, Appellant, v. J. A. RIEBOLD, Appellee.

Page 668

310 S.W.2d 668

Leroy SPINKS, d/b/a Spinks Tool & Supply Company, Appellant, v. J. A. RIEBOLD, Appellee.

No. 5239.

Court of Civil Appeals of Texas, El Paso.

Feb. 19, 1958.

Rehearing Denied March 12, 1958.

Thomas L. White, Monahans, for appellant.

John P. Dennison, Pecos, Alton C. Linne, Monahans. for appellee.

HAMILTON, Chief Justice.

Appellant, Leroy Spinks, doing business as Spinks Tool & Supply Company, sought an injunction to restrain appellee, J. A. Riebold, from engaging in the competitive business of that of appellant, on the ground that appellee had breached his employment contract. The case was tried to the court without a jury, and the relief sought by appellant was denied.

In September 1953, appellant and appellee entered into a contract of employment whereby appellant agreed to employ appellee as a salesman, selling merchandise equipment, and supplies handled by appellant in his business and, as a part of the consideration for said contract of employment, appellee agreed that he would not, after termination of his employment, directly or indirectly, engage in the same or similar business within the states of New Mexico, Texas, and Oklahoma, for a period of five years after such termination of his employment. On or about the 29th day of September 1956, appellee terminated his employment with appellant voluntarily, and immediately began to engage in a business similar to that of appellant, in the same territory in the states of Texas, New Mexico and Oklahoma in which appellee had worked for appellant.

The trial court, in its Findings of Fact and Conclusions of Law, found that the plaintiff was suffering damages as the result of the competitive business carried on by appellee, and that such damages were and would be very difficult to ascertain. The trial court further found that the appellant's business was principally confined to seismographing and core bit drilling portion of the petroleum industry, which was a highly specialized segment of said industry; that the potential customers in this segment of said industry were exceedingly limited, and that the continuity of appellant's business was dependent upon appellant's and his employees' personal contact with the customers and potential customers, and that the appellant had complied with the terms of the contract in every respect.

The trial court held that the restrictive covenant in the contract, which would prohibit appellee from entering a competitive business within the states of Texas, Oklahoma and New Mexico within five years from termination of employment by appellant, was unreasonable, both as to time and extent of territory covered, and could not be enforced because the contract was void.

Because of the opinion of our Supreme Court, in the case of Lewis v. Krueger, Hutchinson and Overton Clinic, 153 Tex. 363, 269 S.W.2d 798, 800, we cannot agree that the trial court was correct in the conclusion reached. It is our opinion that contracts of employment containing restrictive covenants, such as we have before us, will not be declared void because said covernants are unreasonable as to time, or as to the extent of territory covered, or unreasonable as to both time and territory. The Court specifically said, in that case, that it was not making a new and...