Durham v. Lathrop

Mr. Justice Sears delivered the opinion of the court. We are of opinion that a decided preponderance of the evidence went to support the contention of the appellant that an oral contract was entered into, as part of the dissolution contract, to the effect that appellee would not interfere with the business of the former copartnership, to which the appellant succeeded. It is true that appellee denied the making of such a contract, but the denial is lame. He stated that what he said was, “I am not” (interfering) instead of “ I will not ” (interfere) with the accounts. But at the time of this admitted conversation there had been no purchase or sale. Durham had not bought and Lathrop had not sold. There was, then, no occasion or reason for disclaiming that Lathrop was at that time interfering with the business, for he was then a copartner and his right to interfere could be questioned by no one. Against this weak denial by Lathrop, three witnesses testify, in effect, that he did agree that he would not interfere with the business if his proposition to sell was accepted by Durham. We do not regard this oral transaction as merged in the writings. No one of the writings, nor all of them, purport to be a complete contract, embodying all the terms of the agreement. The oral agreement not to interfere with the . business to which his former partner was to succeed, and for which he, Lathrop, was to be paid, is in no way inconsistent with any of the terms of any of the writings, nor does it vary them. We think it was competent to show this oral agreement, and that it was not merged in the writings. 2 Jones on Evidence, Secs. 444, 5, 6; 2 Taylor on Evidence, Secs. 1135-1147; Pierce v. Woodward, 6 Pick. 206; Phœnix Pub. Co. v. Riverside Co., 54 Minn. 205; Batterman v. Pierce, 3 Hill, 171; Routledge v. Worthington Co., 119 N. Y. 592. Among other instances illustrative of the rule, the author in Jones on Evidence gives" a contemporaneous agreement by the vendor of property not to carry on a competing business.” In Pierce v. Woodward, supra, the Massachusetts court held that where the defendant sold the plaintiff a grocery, store for a sum of money stated' in the deed, and agreed verbally not to carry on the same kind of business within a certain distance, it was a sufficient consideration for the agreement that the plaintiff was thereby induced to purchase, and that such agreement was consistent with the deed and it did not relate to the conveyance and so might be proved by parol evidence. Irrespective of the evidence showing a distinct agreement by appellee, as part of the purchase consideration, not to interfere with appellant’s business, which he had just sold to appellant, it is a question of grave doubt if appellant might not, without such agreement, yet recoup for the damages claimed. This uncompleted contract was a firm asset. It constituted a valuable property right, and it belonged to the copartnership. Hence it was a firm asset. Scutt v. Robertson, 127 Ill. 135; Maywood v. Richards, 166 Ill. 466; Castle v. Marks, 63 N. Y. Supp. 1039; Little v. Caldwell, 101 Cal. 553; Ambler v. Bolton, 14 L. R. Eq. Cases, 427. The note sued upon was given by appellant to purchase this, among other assets of the firm. That appellee had destroyed or impaired the value of this asset would seem to be proper matter of recoupment in a suit brought upon the note. Batterman v. Pierce, supra. The contract between the firm of Durham & Lathrop and the Kemnitz Co. purports to give the former the ‘'control of such territory” as agreed upon. This can mean nothing less than an exclusive right to sell the goods manufactured by the Kemnitz Co. within the territory designated. The reservation in favor of the Kemnitz Co. that in case Durham & Lathrop failed to make satisfactory sales, the former might sell through others within the prescribed territory,does not affect the question as here presented, for the evidence discloses that the firm of Durham & Lathrop had succeeded in selling all that could be reasonably exacted by the Kemnitz Co. under the terms of the contract in the time during which the contract had run. The very reservation shows that the Kemnitz Co. regarded the right conveyed to Durham & Lathrop as an exclusive right, subject to the reservation. But it is enough for the determination of this appeal that a preponderance of the evidence establishes a specific contract not to interfere with appellant’s business. The fourth proposition of law, proffered by appellant and marked refused by the court, indicates that the learned trial court disregarded this evidence and declined to pass upon the question of preponderance. That proposition Kvas as follows: j “ The law is that if the court believes from the evidence 'that the defendant, Durham, purchased from the plaintiff, Lathrop, at the time of the dissolution of the partnership, the entire assets of the partnership business, and that this included the right to all the business which might be done with the Kemnitz Furniture Company in the territory embraced in the agreement with said Kemnitz Furniture Company during the year 1899, and that said plaintiff, Lathrop, in violation of said agreement, sold furniture for said Kemnitz Furniture Company during the year 1899 in the territory embraced in said agreement with said partnership, then the amount of the commissions so earned by said plaintiff, Lathrop, upon such sales, so far as the same are shown by the evidence, if equal to or greater than the amount due on the note sued on, are a proper matter of set-off or recoupment by the defendant in this case.” This proposition of law should have been held, and, guided by it, the court should, in our opinion, have found from the evidence that there was a valid and enforceable contract that appellee would not interfere with the business which he sold to appellant, and that for breach of that contract appellant was entitled to recoup and claim set-off under the notice filed with the general issue. There is no merit in the contention of counsel for appellee that the certificate to the bill of exceptions or to the record is insufficient. The bill of exceptions is certified as containing all of the evidence, and the certificate of the clerk to the record is sufficient. The judgment is reversed and the cause is remanded.