Christman v. Starr ( 1972 )

Greenblott, J.

This is an appeal from a judgment of the Supreme Court in favor of plaintiff, entered in Albany County, upon a decision of the court at Trial Term, without a jury.

In 1961 the parties entered into a partnership whose business was the operation of a retail lawn and garden supply center engaged in the sale of equipment, plants, lawn and garden supplies under the name of "The Quality Bulb and Garden Center In 1967 the parties and a third person, one Putt, formed a corporation named Lansco, Inc., for the purpose of engaging in the landscape service business.

Late in 1967 the partnership was dissolved and respondent’s interest was purchased by appellant for $46,000. The agreement provided for the payment of the balance of the purchase price, $25,000, pursuant to a bond secured by a mortgage requiring five annual $5,000 installments. It was further provided that the respondent would not engage in the business of 1 ‘ selling and distributing garden supplies, garden tools and equipment, buying and selling landscape items, or to engage generally in the business of a garden supply house or any other business of similar nature related thereto, within a radius of fifty (50) miles of the present business office ’ ’.

Subsequent to the dissolution of the partnership and until February of 1969, respondent continued to be engaged in the landscape business as an employee of Lansco, Inc. When problems arose between the parties, respondent commenced his own landscape contracting business which he named Don Christman, Inc. This corporation provided such services to its customers as the installation, maintenance and care of lawns.

Appellant made the first required payment on the balance due on the agreement on January 15, 1969, but refused to make further payments, alleging that the restrictive covenant had been breached by the respondent. Respondent then commenced this action to recover the unpaid balance of $20,000. The trial court determined that respondent was entitled to recover on the bond, holding that respondent’s activities were not in violation of the restrictive covenant.

This decision is supported by the record and should be affirmed. The partnership had never engaged in the landscaping business and, in our opinion, the parties never contemplated that the restrictive covenant was intended to cover the landscape service business. That business was the function of Lansco, Inc. which was not made a party to the dissolution agreement or mentioned in that instrument. Furthermore, the restrictive covenant does not contain language restricting respondent from engaging in the landscape service business.

The record also discloses that at the time the dissolution agreement was entered into, The Quality Bulb and Garden Center was not engaged in landscape contracting but left that business to Lansco, Inc. We must also take into consideration the fact that respondent continued his stock ownership in Lansco, Inc. following the sale of his interest in the retail business. Moreover, we note that after respondent ceased his active interest in Lansco, Inc. and formed his own corporation, appellant continued to refer landscaping business to respondent’s new corporation. For these reasons we conclude that the parties never intended to include the landscape servicing business in the restrictive covenant. Hence respondent is not in violation of the restrictive covenant.

The judgment should be affirmed.