Wesley v. Chandler

• Decision Date: 21 July 1931
• Docket Number: 19771.
• Citation: 3 P.2d 720,152 Okla. 22,1931 OK 477
• Parties: WESLEY et al. v. CHANDLER.
• Court: Oklahoma Supreme Court

3 P.2d 720

152 Okla. 22, 1931 OK 477

WESLEY et al. v. CHANDLER.

No. 19771.

Supreme Court of Oklahoma

July 21, 1931

Rehearing Denied Oct. 13, 1931.

Syllabus by the Court.

Since the Code of Civil Procedure abolished distinctions between forms of civil actions, and reduced all civil actions to one form, a petition in a civil action is not demurrable if it alleges facts entitling the pleader to any relief, and that is so notwithstanding an erroneous prayer for relief, the prayer being no part of the statement of the cause of action.

In Oklahoma restraints of trade are permitted in connection with the sale of a business, trade, or professional practice, the permissible limits being fixed by statutes which declare such agreements void only as to an excess of time or space, and the statutes only invalidate the excess, even though there is only one agreement and it has not been expressly divided by the parties.

If any part of a single consideration for one or more objects, or of several considerations for a single object, is unlawful, the entire contract is void. Section 5022, C. O. S. 1921. The foregoing section is declaratory of the common law.

If an indivisible promise is given for several objects, one or more legal and one or more illegal, if the legal objects would be enforceable, notwithstanding the illegality, if the agreement were divisible, then, although the agreement is void while it is executory, upon full performance of the indivisible promise the party performing it may enforce the legal promise or promises of the other.

If an agreement is such that, if it were divisible, part would be enforceable, the reason why, if indivisible, it is wholly void while executory, is not because the illegal part of the agreement illegalizes the entire agreement, but because there has been no definite offer and acceptance with reference to that alone which is legal.

Syllabus by the Court.

It is not decided whether a conveyance of a business, trade, or professional practice, where the agreement was partly in illegal restraint of trade, can ever be rescinded, but at least, after rescission has become impracticable, each party is bound, and, if the unenforceable part of the agreement does not go to its root, they are both bound on their promises, notwithstanding that one is indivisible, in such case the indivisible promise being enforced in the proportion that the legal and enforceable part of the agreement bears to the whole agreement. In the present case the unenforceable part did not go to the root of the agreement, and the sellers can recover to that extent upon the buyer's promise.

If the unenforceable part of such agreement ever goes to the root of the agreement, any recovery allowed the seller may be only quasi ex contractu for benefits conferred upon the buyer.

Appeal from District Court, Muskogee County; W. J. Crump, Judge.

Action by Carter W. Wesley and another against Charles A. Chandler. From an order sustaining a demurrer to their amended petition and dismissing the action, plaintiffs appeal.

Reversed with instructions.

J. J Bruce, of Muskogee, for plaintiffs in error.

Twine & Twine and Chandler & Turnage, all of Muskogee, for defendant in error.

SWINDALL J.

This action was brought upon a conveyance and agreement dated March 2, 1926, conveying a law practice of the plaintiffs who were then located at Muskogee, Okl., and also conveying the property used in connection with the practice; the instrument of conveyance also expressly conveyed the good will, and recited an agreement on the part of the sellers not to engage in the practice of law in the state of Oklahoma, "during the period of this agreement, except as necessary to complete and dispose of cases, contracts, and matters in effect at the time of this agreement." The exception referred to a part of pending business which had been expressly reserved from the conveyance, but it is impossible to understand what was meant by "during the period of this agreement," unless we refer it, as we must, to the period during which the agreement was intended to remain in any respect executory, which would be the date of maturity of the last installment payment.

The purchaser agreed to pay a purchase price of $5,000, which agreement was divisible, not, however, as apportioned to the various things done and promised by the sellers, but only as to times and amounts of installment payments, $1,000 of which was to be paid on the execution of the agreement, $2,000 on or before March 1, 1927, and $2,000 on or before March 1, 1928.

The defendant paid only the initial installment of $1,000, and after the maturity of the last installment the plaintiffs sued to recover the balance of the agreed purchase price, alleging full performance of the agreement on their part. A demurrer, was sustained to the original petition, and the same ruling was made as to a demurrer presented to an amended petition which set forth the facts as outlined above. The plaintiffs stood on the amended petition, and appeal from the order sustaining the demurrer to it.

The only question involving the merits of the controversy is whether the amended petition stated a cause of action in spite of an illegal agreement in restraint of trade.

1. The plaintiffs apparently considered themselves entitled to enforce the express promises of the defendant. Under the common-law procedure, such recovery would be in the form of action which was known as special assumpsit, a form of case, and, should the plaintiffs be held not entitled to recover on the express promises of the defendant, they would fail in the action, regardless of whether or not the facts alleged showed them entitled to other relief. That condition is strikingly described by Pollock and Maitland in their History of English Law, vol. 2, p. 559, in the following language: "The metaphor which likens the Chancery to a shop is trite; we will liken it to an armory. It contains every weapon of medieval warfare from the two-handed sword to the poniard. The man who has a quarrel with his neighbor comes thither to choose his weapon. The choice is large; but he must remember that he will not be able to change weapons in the middle of the combat and also that every weapon has its proper use and may be put to none other. If he selects a sword, he must observe the rules of sword play; he must not try to use his cross-bow as a mace. To drop metaphor, our plaintiff is not merely choosing a writ; he is choosing an action, and every action has its own rules."

Whether certain facts constitute a cause of action is determined by the substantive law, which was not altered or modified by the Code of Civil Procedure. The Code did, however, expressly abolish distinctions between forms of actions and reduce all civil actions to one form, in which a plaintiff is only required to allege facts constituting some cause of action. If a plaintiff does that, his petition is not demurrable, and that is so, although his prayer for relief may disclose that he is in error as to the theory of recovery. A., T. & S. F. Ry. Co. v. Rice, 36 Kan. 593, 14 P. 229; Turben v. Douglass, 76 Okl. 78, 183 P. 881; Fraley v. Wilkinson, 79 Okl. 21, 191 P. 156.

The petition is good if the facts alleged entitle the plaintiffs to any relief.

2. At first agreements in restraint of trade were those made by craftsmen and tradesmen having only a localized trade or business, and at a time when a craftsman was required to follow only his trade, and at that time the law permitted no restraint. Y. B. 2 Hen. V, pl. 26; Colgate v. Bacheler, 2 Cro. Eliz. 872 (43 and 44 Eliz.); Williston on Contracts, vol. 3, § 1634, and cases cited.

But it is now generally held in jurisdictions where the courts are not bound by the arbitrary terms of a statute reflecting medieval economic ideals that on the sale of a business, trade, or professional practice restraint is permitted to the extent that it is reasonably necessary in time and space to protect the business, trade, or practice sold. Mitchel v. Reynolds, 1 Pere Wms. 181 (1711); Williston on Contracts, vol. 3, §§ 1634 and 1641, and cases cited. But this permissible scope is subject to the condition that the agreement does not tend to create a monopoly, and to the possible qualification that, even though the business sold is unlimited in extent geographically, the restrictive promise must not be. Williston on Contracts, vol. 3, § 1641. For the citation of numerous cases tracing the development of the law with respect to agreements in restraint of trade, see Hall Mfg. Co. v. Western Steel & I. Works (C. C. A.) 227 F. 588, L. R. A. 1916C, 620.

But in Oklahoma the permissible limits have been fixed by statute, rigidly, and without regard to the breadth and scope territorially necessary to protect that which is conveyed. The statutes are sections 5071, 5072, and 5073, C. O. S. 1921, which read as follows:

(5071) "Every contract by which any one is restrained from exercising a lawful profession, trade or business of any kind, otherwise than as provided by the next two sections, is to that extent void."

(5072) "One who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business within a specified county, city or part thereof, so long as the buyer, or any person deriving title to the good-will from him carries on a like business therein."

(5073) "Partners may, upon or in anticipation of a dissolution of the partnership, agree that none of them will carry on a similar business within the same city or town where the partnership business has been transacted, or within a specified part thereof."

Among the grounds on which agreements in unreasonable restraint of trade are held illegal are the injury to the seller and...