Hanson v. Wirtz

Birdzell, J. This is an appeal from a-judgment awarding to the plaintiff an injunction restraining the defendant from carrying on a certain implement business within ten years after January 15, 1918 at Kay, North Dakota, or in the territory which had been served by him while engaged in the implement business at Ray prior to January 15, 1918. The case is here for trial de novo. The defendant W. W. Wirte, for some years prior to November, 1917, had been engaged in the implement and machinery business at Kay. The business was transacted under the name of AVirtz 1 bothers, but it was under the direct management of the defendant, lie testified, however, that two brothers had an equal interest in the business with him. In November, 1917, AY. AY. AYirtz, the defendant, entered into a contract as the party of the first part with W. J. Hanson, the plaintiff, as the party of the second part. Under the terms of this contract, the latter, for a stated consideration of $14,-500.00, purchased certain real property upon which the. business in question was located, together with the stock and the good will of the •btisiness. The real estate stood in the name of the defendant. The con *606 tract contains tbe following stipulation: “It is mutually understood and agreed between the parties hereto that the sale of real property and merchandise as aforesaid by party of the first part carries with it the good will of the implement business as carried on by the firm of Wirtz Brothers, a partnership, at Nay, North Dakota, and the said party of the first part covenants and agrees with the party of the second part that neither the said party of the first part nor any member of the firm of Wirtz Brothers will engage in the implement business at Bay, North Dakota, nor in the territory that has been served by said implement business at Kay, North Dakota, for a period of ten years from the date of the final settlement as aforesaid.” This contract was signed by W. W. Wirtz, the defendant. Within the period of ten years he became interested as an owner in a similar business in Ray. The appellant raises but a single question on the appeal. It is said that under § G404-, Comp. Laws, 1913 a partner has no authority to dispose of the good will of a business, and it is argued that the contract in question is void as having been entered into by one having no authority. The case of Kelly v. Pierce, 16 N. D. 234, 12 L.R.A.(N.S.) 180, 112 N. W. 995, is cited as decisive of the question. In that case it was said (page 238), that one partner had no power to dispose of the good will of the business and, hence, that a contract to that effect would be void if made. The context clearly shows that this is a holding, merely, that such a contract would be void insofar as the other members of the partnership are concerned. It was stated'in the same connection that it was not even contended that Kelly, the other partner, had agreed to retire from the business, but, on the contrary, it appeared that he at all times desired to continue. It will be noted that by the contract in question the defendant agreed not to re-engage in the business and that he, and not the other members of the firm, if there be other members, is the person restrained. So far as he is concerned, therefore, it is immaterial whether the contract is binding on the other members of the firm or not. Having assumed to convey the good will of the business and having undertaken to protect it by agreeing not to re-engage in the business, he is precluded from asserting his own lack of authority as either an excuse or a legal justification for violating his contract. It was suggested on argument that the judgment would amply protect tire plaintiff if it restrained the defendant from carrying on the *607 business in Nay and in tbe tributary country witliin tlic county of Williams. The plaintiff’s attorney expressed assent to this modification. The judgment, therefore, will be so modified as to limits, and as so modified, affirmed. CuRtstiaNSON, Ch. J., and Noessle, BuR.ee, and -JojiNson, JJ., concur.