Wakenight v. Spear & Rogers
| Decision Date | 07 February 1921 |
| Docket Number | 157 |
| Citation | 227 S.W. 419,147 Ark. 342 |
| Parties | WAKENIGHT v. SPEAR & ROGERS |
| Court | Arkansas Supreme Court |
Appeal from White Chancery Court; J. E. Martineau, Chancellor affirmed.
Judgment affirmed.
Brundidge & Neelly, for appellant.
Appellees have enjoyed all of the benefits under their contract of purchase which they were entitled to. Appellant remained out of business for more than three years, and then only re-entered business as a day laborer when the public demanded his services, and he in no way interfered with the business of appellees. The public interest demands a reversal of this cause under the testimony which is undisputed. Contracts in partial restraint of trade are objectionable and of doubtful propriety and ought not to prevail where it is shown that the public will be the sufferer by the enforcement thereof private interests ought always to yield to a reasonable demand for the public good. The court erred in granting the injunction. 6 R. C. L., § 196; 49 N.E. 1030.
Miller & Yingling, for appellees.
1. The contract was not intended to lessen competition or fix the price of commodities. The agreement was simply a sale of the good will of each of the parties to the other. It is true the public will suffer some inconvenience, but the agreement was not void as against public policy. The test as to whether a contract in restraint of trade is valid is whether the restraint is reasonably necessary to protect the party in whose favor it is made, with the exception stated in 13 C J., § 420, p. 477, that the contract or covenant by which the restraint is imposed must be incidental to and in support of a sale by which the covenantee acquires some interest in the business needing protection. The rule applies to the case at bar. 74 Am. St. 241.
2. Contracts in partial restraint of trade only are generally upheld when the agreements are by the seller of property or business not to compete with the buyer in such a way as to derogate from the value or business sold. 13 C. J., § 411, p. 468.
A stipulation in a bill of sale of a business that the seller will not engage in a competing business within a limited territory for a limited period of time is not contary to public policy, but will be enforced. 1913 A, Ann. Cas., p. 281. Contracts in partial restraint of trade, if reasonable and founded upon legal consideration, will be enforced. 62 Ark. 101; 91 Id. 373. The rule in 62 Ark. 101 has been uniformly followed in this State. 94 Ark. 475; 95 Id. 387, 449; 112 Id. 129.
3. The contract was merely a sale of the good will of the business and not in restraint of trade. 3 A. L. R., p. 254, and note. On the question of consideration of public policy, the rule is stated in 6 R. C. L., § 197, p. 793; Ib. 803, § 204. The cases in 127 Ark. 593 and 49 N.E. 1030, are not applicable. Under the law and the facts the decree is right.
In October, 1916, appellant Wakenight, a licensed plumber, owned and operated a plumbing shop in the city of Searcy, and carried a line of plumbing supplies. Appellees are also licensed plumbers, and operate a plumbing shop in that city, and in connection with that business were also engaged in selling certain automobile accessories.
The appellant sold all of his plumbing supplies and fixtures to the appellees, in consideration of their sale to him of all their automobile accessories and their agreement to pay him the difference between the value of the plumbing supplies sold to them and the automobile accessories and supplies sold by the appellees to the appellant. And in said contract of sale appellant bound himself not to again enter into the plumbing business in any capacity, or to be interested therein, either directly or indirectly, as long thereafter as the appellees might be engaged in said business in said city; and the appellees, on their part, agreed not to sell or be interested in the sale of automobile accessories or in the repairing of automobiles in said city. After said contract was entered into and the sale was made by the parties, the appellant went into the business of operating a garage for the repair of automobiles and the sale of automobile accessories in Searcy; and the appellees continued to operate their plumbing business and discontinued the sale of automobile repairs and accessories.
The parties to the contract mutually observed its terms until February, 1920, when appellant resumed work as a plumber in the city of Searcy as an employee of his brother, who owned and operated a plumbing business in that city. This suit was brought to enjoin appellant from engaging in that business and the appeal is from a...
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