Love v. Stidham

Mr. Chief Justice Alvey delivered the opinion of the Court: . The specific ground upon which the ruling of the court below was founded is not stated in the bill of exception; but it seems to be conceded by both sides that the view upon which the court acted in withdrawing the case from the jury was, that the covenant sued on was not broken by the acts and conduct of Stidham alone; that as the covenant in terms was joint, and provided only against the joint acts of both Stidham and J ones, to entitle the plaintiffs to recover it was incumbent upon them to show that the breach complained of was committed by the joint act or acts of both Stidham and J ones; and without evidence to that effect no recovery could be had against Stidham for acts committed by him alone. [314] That is to say, the acts of one are not to be construed as the acts of both under the' covenant. Whether this is the proper construction of the covenant, is the first and principal question in the case. There can be no question but that the covenant sued on is, by its terms, a joint covenant, and not joint and several. .But does it follow that it requires the joint act of both defendants in order to constitute a breach of this covenant % A joint covenant does not necessarily mean a joint act to incur liability under it. The covenant is negative in form, that is to say, that the party of the first part “ shall not enter into the retail grocery business for the period of five years, within one mile,” etc. The covenant is not “ that the party ”' shall not as partners, and only as partners, enter into the retail grocery business, but they jointly obligate themselves that they will not enter into such business. They ceased to be partners from the time of selling out their business to the plaintiffs. To say that there could be no violation of the covenant except by the joint acts of the defendants as and in their character of partners, would seem at once to deprive the plaintiffs of all substantial benefit and protection of the covenant, by reason of the easy manner in which it could be evaded. If such be the' construction of the covenant, both Stidham and Jones, acting separately and individually, could each establish a place for carrying on the grocery business, within a block of the plaintiffs’ store, with entire impunity. Such could never have been the intention of the parties. The violation of the spirit and substantial meaning of the covenant by one of the defendants is a violation by both, and for which both are liable. The authorities seem to be clear to the effect, that any number of persons may bind themselves jointly for the performance of one entire duty, and so become sureties for one another for the performance of the thing contracted to be done. 1 Wms. Saund. 291b, note 4; 1 Add. on Contr. 38, 39. The substance of the covenant ought not to be sacrificed to a dry technicality without reason, as would certainly be the case, if one, or both of the defendants separately, could do what the defend [315] ant Stidham has done, without incurring liability under the covenant. .There are decided cases that fully support the contention of the plaintiffs. The case of Kramer v. Old, 119 N. C. 1, was where there was a sale of a mill by partners, and the joint stipulation on their part was “ that they would not continue business of milling in the vicinity of Elizabeth City after the first day of September, 1891, and the full completion of the agreement.” In that case it was held to be a violation of the contract for any one, or all of the vendors to take stock in, help to organize, or manage a corporation formed to compete with the purchaser of the mill in such business. It was also held to be a violation of the contract for the prohibited parties to furnish machinery or capital, or a portion of either, in lieu of stock, in a corporation organized with a view of competing with the person protected by his contract against such injury. The court in that case proceeded upon the ground that a reasonable and fair construction of the restrictive stipulation fully warranted the judgment against the defendants. In the case of Boutelle v. Smith, 116 Mass. 111, a firm of two bakers sold their business and good-will to another firm, with an obligation that they would not enter into the business within a limited area and time. One of the vendors engaged as a clerk with a third person having his store or place of business outside of the limited area, but such clerk drove a wagon over his former routes and sold and delivered bread to his former customers. This was held to constitute a breach of the contract and to render both vendors liable for the acts of the one. The court, speaking by Mr. Chief Justice Gray, said: “ The acts of one of the defendants offered to be proved at the trial, were a clear breach of their joint obligation;” citing case of Angier v. Webber, 14 Allen, 211. The case of Warehouse Co. v. Hobson, 96 Ky. 550, was a suit instituted against Hobson and others for damages, and to restrain Hobson from carrying on the tobacco business in Paducah or in that vicinity, in violation of a stipulation in [316] restraint of such business. The bill of sale of Hobson & Co., by which they disposed of their warehouse business, contained this provision: “And also all our good-will in said warehouse business as members of the firm of H. H. Hobson & Co., or as individuals; and we agree with said company not to engage in said business, directly or indirectly, for a period of ten years from this date.” This provision of the contract of sale was violated by the individual acts of Hobson alone. The Court of Appeals held that the plaintiff was entitled to redress for such violation of the contract of sale, and in their opinion stated the case as follows: “ It appears that appellees were owners of a tobacco warehouse in Paducah, and had built up quite a large trade in that vicinity. Some time prior to March 14, 1892, the appellant purchased the property and good-will of the appellees, and also, as alleged, contracted and agreed with them that they, the appellees, would not enter into said business directly or indirectly for ten years. Appellees executed deed of conveyance to appellant for said property, but afterwards appellee Hobson engaged in the same business, in the city of Paducah, and within less than five years from the sale.” Por this violation of the contract by the acts of Hohson alone, Ms co-contractors and obligors were held liable. See also the case of Stark v. Noble, 24 Iowa, 71, where the same principle is maintained. It is urged on behalf of the defendant Stidham, that the cases of Boutelle v. Smith, and Warehouse Co. v. Hobson, do not apply to this case, because they were cases where the contract was both joint and several. But whether that be the case or not is wholly immaterial in the application of those cases to the present. In those cases the court enforced the joint obligation of the parties, for the separate violation by one of them, treating all as equally and jointly bound for breaches committed by one or more of them, by virtue of the joint term in the contract. 2. The validity of the covenant sued on is not questioned, and could not be, upon the settled doctrine upon the subject as laid down by the Supreme Court, in the case of Gibbs v. [317] The Baltimore Gas Co., 130 U. S. 396, 409. That being so, the only remaining question is, whether the facts of the case as proved by the plaintiffs were sufficient to require the case to be submitted to the jury for their consideration,, to establish a breach of the covenant. Did the defendants or either of them enter into the retail grocery business, within the time and area prescribed? To answer this question in the affirmative it does not require that it be shown that the defendant had a regular store, or that he retailed all the articles that had been kept and retailed from the store sold to the plaintiffs. If a material and substantial part of such articles were retailed and sold by the defendant within the prescribed limits, that would constitute a breach of the-covenant, provided it comes within the definition of a retail grocery business. The defendant is responsible if he served customers within the prescribed limits, although he might have no residence, shop or place of business within such limits. Turner v. Evans, 2 El. & Bl. 512; Brampton v. Beddoes, 13 C. B. (N. S.) 538. He must, however, have entered into and carried on a retail grocery business. What constitutes a retail grocery business is, to a large extent, a matter of fact, and must be determined by a jury, under proper instructions from the court, as to the meaning and construction of the contract. We think the evidence in this case was of a nature proper to have been submitted to the jury upon the question as to whether a breach of the covenant had been committed, and if a breach had been found to have been committed, as to the quantum of damages. Hpon the whole, we think there was error in the ruling of the court below, in taking the case from the jury, and we must, therefore, reverse the judgment and remand the case for a new trial; and it is so ordered. Judgment reversed and cause remanded. A motion for a rehearing was overruled.