Wis. Ice & Coal Co. v. Lueth

• Citation: 213 Wis. 42,250 N.W. 819
• Parties: WISCONSIN ICE & COAL CO. v. LUETH ET AL.
• Decision Date: 07 November 1933
• Court: United States State Supreme Court of Wisconsin

213 Wis. 42

250 N.W. 819

WISCONSIN ICE & COAL CO.

v.LUETH ET AL.

Supreme Court of Wisconsin.

Nov. 7, 1933.

Appeal from a judgment of the Circuit Court for Milwaukee County; Walter Schinz, Circuit Judge.

Suit by the Wisconsin Ice & Coal Company against Albert F. Lueth. From a judgment for plaintiff, defendant, and, on his death, Louise Lueth, special administratrix of his estate, appeals.--[By Editorial Staff.]

Reversed and remanded, with directions.

This was a suit in equity, commenced on January 8, 1931, by the Wisconsin Ice & Coal Company, as plaintiff, against Albert F. Lueth, as defendant, by which plaintiff sought to have defendant enjoined for a period of two years from delivering ice in the southern half of Milwaukee county, or from soliciting business in this territory. Subsequent to judgment defendant died, and Louise Lueth was thereafter appointed administratrix and admitted to prosecute this appeal. For convenience, Albert F. Lueth will hereafter be referred to as the defendant.

The controversy relates to the alleged breach of a restrictive covenant which was a part of a contract of hire, by the terms of which defendant became an employee of the plaintiff.

From a judgment entered April 18, 1932, granting an injunction, defendant appeals.Hayden & Hayden, of Milwaukee, for appellant.

Houghton, Neelen & Houghton, of Milwaukee, for respondent.

WICKHEM, Justice.

Prior to the execution of the contract involved herein, plaintiff company purchased the business and good will of the Kilbourn Road Ice Company, which did business in the territory included in the contract. Defendant was an employee of the Kilbourn Company, and was employed, after the purchase by the plaintiff company, under a written contract of hire, by the terms of which he agreed, in consideration of the employment, that he would not, for a period of two years after leaving the employ of the plaintiff, either on behalf of himself or any other person or company, deliver ice or solicit business in certain territory in the city of Milwaukee which was specifically and particularly set forth in the contract by its street boundaries.

Defendant left the employ of the plaintiff company in November, 1930, and there is a dispute as to the circumstances. Defendant claims that he was advised by plaintiff's agents that his services would not be needed until the following spring, and that this constituted a constructive discharge of the defendant. It is contended by the plaintiff that defendant asked for a two weeks' vacation in November, 1930, was granted another two weeks, and ultimately quit the employment voluntarily. The court found, and the evidence sustains the finding, that defendant voluntarily quit plaintiff's employ.

[1] The first contention of defendant is that the agreement upon which the injunction is based is without consideration, and consequently unenforceable, for the reason that plaintiff was not obligated to continue the employment for any definite period, but could terminate it at pleasure. In Louisiana such a contract has been condemned as lacking “serious consideration” because of the circumstance mentioned. Shreveport Laundries v. Teagle (La. App.) 139 So. 563;Blanchard v. Haber, 166 La. 1014, 118 So. 117. This doctrine can hardly be sustained in a common-law jurisdiction, nor is it consistent with the rule in Wisconsin. Eureka Laundry Co. v. Long, 146 Wis. 205, 131 N. W. 412, 35 L. R. A. (N. S.) 119;Milwaukee Linen Supply Co. v. Ring, 210 Wis. 467, 246 N. W. 567, 568.

Defendant's principal contention is that the agreement is void because the restraint imposed upon the defendant is unreasonable in territorial extent and not necessary for plaintiff's protection. This court has had occasion, in the Eureka Laundry Company Case and in the Milwaukee Linen Supply Company Case, to set forth the requisites for a valid restrictive covenant in contracts of employment. In the Milwaukee Linen Supply Company Case the court adopted the rule, as set forth in the Restatement of the Law of Contracts, §§ 513, 514, 515, to the effect that such a covenant “is illegal if the restraint is unreasonable,” and that such a contract “is unreasonable * * * if * * * it (a) is greater than is required for the protection of the person for whose benefit the restraint is imposed, or (b) imposes undue hardship upon the person restricted.”

[2] The principal question upon this appeal is whether the territory covered by the restrictive covenant was unreasonably large in view of the circumstances. As is pointed out in the Milwaukee Linen Supply Company Case, a contract in restraint of trade may be valid as applied to one set of circumstances and invalid as applied to another set. The propriety of a territorial restriction must be considered in connection with the...