Vancil v. Anderson

• Decision Date: 25 January 1951
• Docket Number: No. 7618,7618
• Citation: 71 Idaho 95,227 P.2d 74
• Parties: VANCIL v. ANDERSON.
• Court: Idaho Supreme Court

Page 74

227 P.2d 74

71 Idaho 95

VANCIL v. ANDERSON.

No. 7618.

Supreme Court of Idaho.

Jan. 25, 1951.

W. H. Langroise, W. E. Sullivan, and W. B. Bowler, all of Boise, A. D. Foster, Emmett, for appellant.

Donart & Donart, Weiser, C. H. Higer, Emmett, for respondent.

THOMAS, Justice.

Prior to February 2, 1948 Clyde O. Anderson, the appellant, and Lee Owens were the owners and engaged in the operation of the 'Cherry Blossom' in Emmett, Idaho. On February 2, 1948 the appellant entered into a written contract of sale of his undivided one-half interest in the business, together with all furniture, fixtures, goods, wares and merchandise, for the sum of $17,500 to Alva H. Vancil, the respondent. The respondent also took an assignment of the leasehold rights of the appellant covering the buildings and lands used in connection with the business and entered into pssession of the property and business under the terms of the contract on or about February 2, 1948.

The contract of sale contained a non-competitive covenant in the following language: 'It is agreed and understood that the party of the first part shall not engage in any business like or similar to the business of the Cherry Blossom within the County of Gem, State of Idaho, for one year after the date of this contract, either as sole proprietor of such business or as copartner or firm name, or as corporate manager or as employee'.

The Cherry Blossom, at the time of the execution of the contract, was conducted as a restaurant, lunch counter, beer parlor, cigar and confectionery store and place in which slot machines were operated, card games were played, and chances on punch boards were sold.

During the months of March, April and May, 1948, respondent and Owens were engaged in remodeling the premises, which included putting in a new lunch counter twice the length of the original and adding an extra booth. They also enlarged their facilities by adding an additional room, 25' X 40', connected to the Cherry Blossom. The construction of the addition was commenced early in the month of May, 1948 and completed about the middle of June of the same year, and was thereafter used for card and pool games.

On or about May 20, 1948 the appellant, in some capacity not disclosed by the record, began the operation of a business across the street from the Cherry Bossom under the name of Anderson's Fine Foods, where whiskey, beer and meals were sold, and slot machines operated. No card games were played in Anderson's Fine Foods.

In the spring of 1949 respondent instituted an action against appellant to rescind the contract of purchase and, in the alternative, to recover damages in the sum of $5,000 for a violation of the non-competing covenant contained in the contract of sale. Prior to the trial respondent abandoned the theory of rescission and the issues were joined on the action for damages only.

At the close of respondent's case, appellant moved for nonsuit, which was denied; whereupon both parties rested without the appellant introducing any evidence.

Verdict was rendered for respondent for $4,000. The appeal is from the ensuing judgment for respondent.

A restrictive covenant, such as contained in the contract under consideration, being reasonable as to time and scope, must be given effect in accordance with the intention of the parties, and they should comply with both the letter and the spirit of the agreement. Under the fair and natural meaning of the language employed in the agreement both the spirit and intention thereof were breached by the appellant. Ryska v. Anderson, 70 Idaho 207, 214 P.2d 874.

In instances where a party sells his business, and, in connection with such sale, agrees that he will engage in the same or similar business in the same area for a particular and reasonable length of time, it is obviously the intention on the seller's part to sell the good will of the business, even though the contract, as in this instance, fails to expressly mention good will. 24 Am.Jur. 810, § 13; Mahlstedt v. Fugit, 79 Cal.App.2d 562, 180 P.2d 777; Herrington v. Hackler, 181 Okl. 396, 74 P.2d 388.

The evidence clearly establishes that the appellant breached the restrictive covenant with respect to the sale of meals and beer, operation of slot machines, and the impairment of good will.

The appellant's first assignment of error brings before the court the asserted error of the trial court in sustaining respondent's objection to appellant's cross-examination of respondent with respect to the kinds of card games played in respondent's place of business.

In order to prove a breach of the covenant not to engage in competition, it was not necessary that respondent establish the breach by adducing evidence that the appellant sold all the articles in Anderson's Fine Foods establishment that had been sold in the store which he sold to respondent, or engaged in every phase of such business. It was sufficient to show by competent evidence that a substantial and material portion of such articles were being sold by appellant during the period of time restricted by the covenant, in his new store located in the restricted area, to constitute a breach. 36 Am.Jur. § 72, p. 549, note 10. Although cards were played in the Cherry Blossom, no card games were played in Anderson's Find Foods. There was no competition with respect to card games, and no breach of the non-competing covenant in this respect.

Appellant asserts, in urging that he should have been allowed to cross-examine respondent with respect to the kinds of card games operated in the Cherry Blossom, that if it were revealed from such cross-examination that respondent was operating card games in violation of the gambling laws of this state, the court would refuse to determine the matter, and leave the respondent where it found him at the beginning of the litigation, on the ground of public policy which precludes a court from lending aid to one who has violated the law. In this respect it must be kept in mind that in order for respondent to prove breach of the non-competing covenant, it was not necessary that he show that the appellant engaged in the operation of card games. In order to prove his case it was not necessary for the respondent to, nor did he, depend upon any illegal acts to maintain his suit; he only sought to recover damages for breach of the non-competitive covenant with respect to the sale of meals and beer, the operation of slot machines and the impairment of good will; the contract on its face was a legal contract, and no contention is made that it contained any illegal features or that it is not supported by adequate and independent consideration; a contract will be enforced even if it is incidentally or indirectly connected with an illegal transaction provided it is supported by an independent consideration so that the plaintiff will not require the aid of the illegal transaction to make out his case. Hoffman v. McMullen, 9 Cir., 83 F. 372; Asher v. Johnson, 26 Cal.App.2d 403, 79 P.2d 457; McConnon v. Holden, 35 Idaho 75, 204 P. 656; 12 Am.Jur. 718, § 211. The appellant did not compete with respondent, plaintiff below, in card games in violation of the non-competing covenant. The respondent did not require the aid of any evidence with reference to card games played in either place of business to make out his case of breach of the non-competing covenant, hence no error was committed in sustaining the objection of respondent to the appellant's cross-examination of respondent with respect to the kinds of card games played in respondent's place of business.

The appellant further assigns as error the action of the trial court in overruling his objection to the respondent's opinion evidence with reference to the percentage that respondent's business would have, in his opinion, increased had respondent's customers not divided their business with that of the appellant. It is urged that it is error to permit the witness Vancil to express his opinion as to the percentage his business would have increased had his customers not divided their business beween appellant and himself.

The broad general rule is to the effect that a witness cannot state his conclusion as to the amount of monetary damage that has been sustained by himself or another by reason of the invasion of a legal right, without first testifying to the facts upon which his opinion is predicated. If, on the other hand, testimony is adduced, setting forth some facts upon which the estimate of damages was based, from which the jurors could determine the aggregate damages apart from the conclusions of the witness, such testimony is admissible. The following cases of this court support the general rule: Raide v. Dollar, 34 Idaho 682, 203 P. 469; Roseborough v. Whittington, 15 Idaho 100, 96 P. 437; see also 32 C.J.S., Evidence, Sec. 447(b), page 77.

McGuire v. Post Falls Lumber & Mfg. Co., 23 Idaho 608, 131 P. 654; Kirk v. Madareita, 32 Idaho 403, 184 P. 225, and Cox v. Crane Creek Sheep Co., 34 Idaho 327, 200 P. 678, cited by appellant, as well as McKissick v. Oregon Short Line Railway Co., 13 Idaho 195, 89 P. 629, are not in conflict with, but support this general rule.

Let us now examine the evidence of the respondent with reference to the presence or absence of any facts upon which his opinion evidence might be predicated. He testified that Anderson's Fine Fools commenced business on or about May 20, 1948; that the daily receipts of the Cherry Blossom as disclosed by its books declined abruptly after business was commenced by Anderson's Fine Foods, for the balance of the month of May, 1948, which was before he had completed the remodeling and enlargement of the Cherry Blossom; that the daily receipts for each and every day of the month of May, admitted in evidence from the records of the Cherry Blossom, disclosed that the daily receipts which had averaged in excess of $100 daily up through May 23, 1948, dropped to an average of about...