Bonner v. Bailey , 152 Ga. 629 ( 1922 )

Hill, J.

(After stating the foregoing facts.) The plaintiffs and the defendant entered into the following written contract: “ Georgia, Newton County. This agreement entered into this 22nd day of August, 1919, between J. H. Bonner of the first part,- and W. A. Turner, W. B. Bailey, and J. J. Hunt of the second part, witnesseth: That the said first party has this day sold to the said second parties and the said second parties have bought the entire stock of goods invoiced at $6755.03, fixtures invoiced at $1800.00, and accounts invoiced at $1024.30, and a bonus of $1500.00, making total of $12,079.33 which is the full, purchase-price of said sale and purchase by the parties hereto. The said second parties agree to pay the outstanding accounts payable to creditors of the said Bonner, in the total sum of $5361.69, a list of which is hereto attached and made a part of this agreement; and the said second parties further agree to pay any other account that may be due by the said Bonner, provided he agrees to same, and the said second parties have a balance of the purchase-price sufficient to make said payment. The said second parties have this day paid to the said first party the sum of $3000.00, the receipt of which is hereby acknowledged; and deducting this said payment and the sum of $5361.69 to be paid to his said creditors by the second parties hereto, leaving a balance of $3717.64, which the said'parties of the second part agree to pay to the said Bonner within thirty days from this date, any account not listed and directed to be paid by the said Bonner to be deducted from this sum.

"The title to said stock of goods retained by the said Bonner until the full purchase-price is paid, and the said second parties hereby bind themselves, severally and jointly by these presents, to pay the full amount of the said purchase-price at all events, even should the said stock be burned, lost, or destroyed in any way.

.“Any and all palpable errors in the invoice of the items listed above is subject to be corrected by the parties hereto on or before the 1st day of September, 1919, and the said parties will abide and pay or deduct any deficiency or increase in the said invoices.

“All rights of homestead and exemption are hereby waived, and the tenor of this instrument as against the said parties shall be treated as a promise to pay by the said second parties.

“The said first party is not to go into business in competition with the said second parties for a period of three years, unless agreed in writing by the said second parties.

“Signed, sealed, and delivered in duplicate this 22nd day of August, 1919.” The names of the parties and of a witness to the contract are affixed thereto.

Shortly after the execution of the contract the plaintiffs brought the present action against the defendant, alleging that he has gone into business in competition with plaintiffs, in violation of his contract, and is now actively engaged in selling general groceries at and around Porterdale, Georgia, in competition with plaintiffs, and that there has been no agreement in writing on the part of the plaintiffs authorizing him to do so, and that the defendant announces his intention to continue to thus engage in business in competition with plaintiffs and in violation of his agreement. The suit has for its purpose the enjoining of the defendant from engaging in such business, and also to recover damages from him for breaching his contract. The court overruled the demurrer to the petition; and this ruling is assigned as error. The question arises from the petition and demurrer whether the contract is one in general in restraint of trade. Our Civil Code (1910), § 4253, declares that a contract which is in general in restraint of trade can not be enforced. Is the contract in the present case, which it is alleged has been breached, such a contract ? Whatever the rule may be in other jurisdictions, it is settled in this State that a contract in general restraint of trade without territorial limitation is contrary to public policy and unenforceable. Seay v. Spratling, 133 Ga. 27 (65 S. E. 137); Kinney v. Scarborough 138 Ga. 77 (74 S. E. 772, 40 L. R. A. (N. S.) 473; Floding 7, Floding, 137 Ga. 531 (73 S. E. 729). It will be observed from reading the foregoing contract that there is no limitation as to space or territory not to carry on the business which the defendant was engaged in at the time he sold his stock of goods to the plaintiffs. The pleadings must be construed more strongly against the pleader, and as against the allegations and the contract itself we must construe the pleadings in the light of the contract. There is no effort to reform the contract on account of fraud, accident, or mistake; nor is it alleged that the contract does not contain the entire agreement between the parties thereto. So far as the contract is concerned, the defendant could not enter business in competition with the plaintiffs for a period of three years, unless agreed to in writing by the plaintiffs. There is absolutely no limitation as to space or territory not to carry on this particular business; and therefore, in accordance with the former rulings of this court, the contract is unenforceable. The fact that there is a limitation as ‘to time alone (three years) will not suffice. Goodman v. Henderson, 58 Ga. 567, and authorities cited on page 569. In the Goodman case, it is true, the contract was held to be enforceable, but on the ground that there was a limitation as to space, the agreement reciting that the party selling was “'to retire from the business of purchasing, in the Savannah market.”

Having reached the conclusion that there is no limitation as to space or territory in the contract which is the- foundation of the present suit, we are of the opinion that no cause of action is set out in the petition, and that the court below erred in overruling the demurrer. As this ruling is controlling, all that transpired subsequently to the overruling of the demurrer on the trial of the case was nugatory, and need not be' considered

Judgment reversed.

All the Justices concur.