Thompson v. Turner

96 S.E.2d 263 (1957) 245 N.C. 478

Maxwell H. THOMPSON and James G. Llpe, T/D/A Thompson-Lipe Company
v.
D. Walter TURNER.

No. 311.

Supreme Court of North Carolina.

February 1, 1957.

Williams & Whisnant, Lenoir, for plaintiff-appellees.

L. H. Wall and Hal B. Adams, Lenoir, for defendant-appellant.

RODMAN, Justice.

Defendant's brief, after listing forty-one assignments of error composed of fortytwo exceptions, says: "All of the assignments of error heretofore listed and brought forward are insisted upon, but we especially invite the Court's attention to the following:" Eight assignments of error are then listed as meriting special attention.

We do not deem it necessary to deal separately with the designated assignments of error consisting of motions to nonsuit and exceptions to the charge. We understand them to present two legal questions.

The first question is: Have plaintiffs alleged and proved a consummated sale under the paper writing of 2 July 1947? Defendant in his brief insists that plaintiffs have only pleaded and proven an option to purchase and not a consummated sale. This position of defendant results from a misconstruction of the pleadings, the effect of the testimony, and the theory on which the case was tried. The complaint, in section 2, recites the execution of the written contract and the substance of its provisions and that defendant transferred and conveyed his business pursuant thereto. Section 3 reads: "That the plaintiffs have paid full consideration agreed upon and have duly performed each and all of the conditions of the written contract on their part to be performed." The corresponding section of the answer is: "It is admitted the plaintiffs have paid the amount of money as named; all other allegations of paragraph 3 are denied." Fairly interpreted, the complaint did not merely allege that plaintiffs had paid the $2,000 as a binder on the deal as recited in the paper writing of 2 July 1947, but that plaintiffs had paid the total purchase price ascertained after the inventory referred to in that paper had been taken; and plaintiffs had acquired the business pursuant to the terms of the written contract. The case was tried on that theory. All the evidence shows that on 1 August 1947 plaintiffs paid a substantial sum to defendant at which time the business was turned over to plaintiffs by defendant. The testimony of the witness Wise, who worked for defendant until 1 August, is to that effect. Plaintiff Lipe was asked what amount he paid under the contract for the business of D. Walter Turner. He replied: "Well, $2,000 was paid as a binder, and then the balance was paid. Q. How much was paid? A. Approximately $25,000.00." Speaking with reference to the payment of the consideration, he said: "It was paid in cash, and we took over the business August 1, 1947." Defendant himself nowhere controverts the fact that the sale was consummated as provided by the paper of 2 July 1947. He says: "Yes, I wrote the contract, the paper writing, and I signed it. I don't recall how much they paid me for the business; I don't recall what the amount was. Yes, they paid me a substantial amount. No, I don't know it was as much as $20,000; I don't know that. I have already told you I didn't know. Yes, they paid as much as $5,000; they paid as much as $10,000 * * *" He further testified: "* * * when I sold out, I did not go to Mr. Wise and Mr. Ross and ask them to stay on and work the counties that they had been working." Again he testified: "Prior to the time I sold it, I could have sold it to two people * * *" to show that the sale had been consummated it was not necessary to show the minute details necessary to determine the exact price paid under the terms of the contract. If, as the testimony establishes, the sale was consummated, it was immaterial whether the amount paid and received was approximately $25,000, as testified by plaintiffs, or merely more than $10,000, as testified by defendant.

It was not necessary when the sale was consummated pursuant to the contract of 2 July 1947 to have any paper writing to evidence that fact. The property passed by delivery when the terms of the contract as written by defendant himself had been complied with. There is testimony in the record coming from the defendant to the effect that he delivered the merchandise to plaintiffs.

This brings us to the second question, namely: Is the territory in which defendant contracted not to engage in business void for failure of description?

Defendant does not assert that the contract is void as being in restraint of trade and hence contrary to public policy. Contracts for the sale of a business containing as an incident to the sale a covenant not to engage in business in competition with the vendee in the area served by the business are recognized as valid when reasonable. The test of a covenant is its reasonableness in protecting the purchaser from competition from his vendor without detriment to the public. Maola Ice Cream Co. of North Carolina, Inc., v. Maola Milk & Ice Cream Co., 238 N.C. 317, 77 S.E.2d 910; Sonotone Corporation v. Baldwin, 227 N.C. 387, 42 S.E.2d 352; Noskin Bros. v. Swartzberg, 199 N.C. 539, 155 S.E. 154; Faust v. Rohr, 166 N.C. 187, 81 S.E. 1096; Wooten v. Harris, 153 N.C. 43, 68 S.E. 898; Shute v. Heath, 131 N.C. 281, 42 S.E. 704; King v. Fountain, 126 N.C. 196, 35 S.E. 427; Kramer v. Old, 119 N.C. 1, 24 S.E. 813, 34 L.R.A. 389, 36 Am.Jur. 537.

Defendant's position is that the contract does not describe the area in which defendant is prohibited from competing with sufficient accuracy to identify and locate it. The defendant cites, in support of his position, Hauser v. Harding, 126 N.C. 295, 35 S.E. 586, 588. There the area was described as "the territory surrounding Yadkinville." The Court said: "The territory surrounding Yadkinville—the language of the contract—is so uncertain as to be incapable of being marked out or being identified. Such language does not in law define a prescribed territory. We know of no rule by which the territory could be laid off."

In Shute v. Heath, supra, the territory was described as "any territory now occupied by them, or from which they secure their patronage." The Court held the description was not susceptible of location. Manifestly that is so because where the purchaser might secure patronage in the future is not something that could be determined when the contract was entered into. That case expressly recognizes the doctrine that if a description suffices to meet the test necessary for a valid conveyance of real estate, it is sufficiently accurate to meet the test of area which limits the vendor's right to compete with the purchaser.

The evidence for the plaintiffs identifies the territory in which defendant operated at the time of the sale as composed of the ten counties named in the issue. Plaintiffs testified that these were the counties which comprised the territory served by defendant in July 1947. In addition to the testimony of plaintiffs, former employees of defendant testified as to the territory in which defendant operated at the time of the sale. Defendant, a witness in his own behalf, did not specifically deny that the counties enumerated in the issue were the counties covered by him in July 1947. He testified: "I was not to sell any merchandise of any kind within the territory where I sold to the plaintiffs, within their territory. I don't know just what the territory was, all of the counties it included, but I know most of the counties, in the territory * * *" It did not, as defendant suggest, contradict the terms of the written contract to show by parol what counties the defendant was operating in at the time of the sale in 1947. This was a fact susceptible of accurate determination and when shown by parol fixed the bounds of the area in which defendant had contracted not to compete with plaintiffs. This sufficed to meet the test. Skipper v. Yow, 238 N.C. 659, 78 S.E.2d 600; Linder v. Horne, 237 N.C. 129, 74 S.E.2d 227; Stewart v. Cary, 220 N.C. 214, 17 S.E.2d 29, 144 A.L.R. 1287; North Carolina Self Help Corporation v. Brinkley, 215 N.C. 615, 2 S.E.2d 889; Lee v. Barefoot, 196 N.C. 107, 144 S.E. 547; Norwood v. Totten, 166 N.C. 648, 82 S.E. 951.

The crucial question in this case was not what was the area in which competition was prohibited, but had defendant under the guise of a manufacturer of coffee in fact sought, as a wholesale merchant, to wean from plaintiffs, retail merchants, former customers of defendant. The jury has found that fact in accordance with the contentions of plaintiffs.

We have given consideration to all the other exceptions and assignments of error but discover nothing which would justify a new trial. There is

No error.

JOHNSON, J., not sitting.