Strobeck v. McWilliams

• Decision Date: 19 March 1919
• Citation: Strobeck v. McWilliams, 42 N.D. 30, 171 N.W. 865 (N.D. 1919)
• Parties: STROBECK et al. v. McWILLIAMS et al.
• Court: North Dakota Supreme Court

42 N.D. 30

171 N.W. 865

STROBECK et al.

v.McWILLIAMS et al.

Supreme Court of North Dakota.

March 19, 1919.

Syllabus by the Court.

This action presents an appeal from an order restraining defendant from selling lands to persons residing within the territory naturally tributary, for business purposes, to the village of Cogswell. Held that, under the statute, in selling the good will of a business, it is only competent for the party to agree with the buyer to refrain from carrying on a similar business within a specified county or city, and also that the remedy by injunction is summary, peculiar and extraordinary and lies only to prevent general and irreparable mischief, and that the power to grant an injunction should be exercised with the greatest caution and only in very clear cases, and when there are circumstances to bring the cause under some recognized head of equity jurisdiction.

Appeal from District Court, Richland County; Frank P. Allen, Judge.

Action by G. L. Strobeck and another against G. W. McWilliams and another. From an order restraining defendants from selling land to persons within certain territory for business purposes, they appeal. Reversed, and action dismissed.

Birdzell and Grace, JJ., dissenting.Engerud, Divet, Holt & Frame, of Fargo, for appellants.

A. Leslie, of Forman, and W. S. Lauder, of Wahpeton, for respondents.

ROBINSON, J.

In September, 1913, the defendants and one Mott owned the Cogswell State Bank. The defendants owned nearly all the bank stock, consisting of 150 shares. In connection with the bank business, and as a part of the business, there was done a real estate, farm loan, and insurance business. Pursuant to a written agreement defendants sold to the plaintiff the entire stock of the bank at $260 a share and agreed to this covenant:

“In selling the stock of the bank it is understood, and the sellers agree, that the good will is included, and that they will not engage in the banking business here, nor in territory tributary where the bank draws business from, or in the insurance business, or real estate business, or farm loans.”

The complaint avers that, in violation of the contract, the defendants did a real estate business at Cogswell and in territory tributary to it, thereby competing with the plaintiffs in the real estate business, and greatly injuring and damaging them, and that they threaten to continue such business.

The trial court found that, subsequent to the making of the contract, and upon the trial of this action, the defendants threatened to engage generally in the business of selling lands not located in Sargent county to persons residing within said territory, and have claimed a legal right to engage in the business of selling lands to people residing in said territory, provided only that the said lands should not be located in said territory. The court also found that the evidence did not show that up to the time of the commencement of the action the defendants had done any act that was a breach of the contract, or that the plaintiffs had suffered any damage. On such findings the court directed that the defendants be perpetually enjoined from carrying on the business of selling land to persons residing in the territory naturally tributary, for business purposes, to the village of Cogswell, and this without regard to where the lands are located, excepting that they are not enjoined from selling their own lands. As the court finds that at the time of the commencement of the action the defendants have not done anything that was a breach of the contract, it is manifest that the findings do not sustain the judgment, and the findings are in accordance with the testimony. The threats on which the judgment is based were called out by an improper cross-examination of one defendant; but a party cannot in that way and at the same time make and try a cause of action.

Preventative relief may be given by injunction: (1) When pecuniary compensation is not an adequate remedy; (2) when it would be extremely difficult to...