Beit v. Beit

15 Conn. Supp. 191
CourtConnecticut Superior Court
DecidedNovember 4, 1947
DocketFile No. 17282
StatusPublished

This text of 15 Conn. Supp. 191 (Beit v. Beit) is published on Counsel Stack Legal Research, covering Connecticut Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beit v. Beit, 15 Conn. Supp. 191 (Colo. Ct. App. 1947).

Opinion

INGLIS, J.

This is an an action for a declaratory judgment determining whether or not a restrictive covenant as to engaging in business is legal and enforceable.

Prior to July 31, 1945, the plaintiffs, who are husband and wife, each owned an undivided one-sixth interest in a partnership doing business under the name of Beit Brothers. The other partners in the business were two brothers of Mr. Beit and their respective wives. As of July 31, 1945, by bills of sale dated October 23, 1945, each of the plaintiffs sold to the defendant, who was the son of one of the other couples who made up the partnership, his or her interest in all of the assets of the business of the partnership. In each of the bills of sale was the following provision: ‘T further expressly covenant and agree with [193]*193this vendee, his heirs and assigns not to engage in the meat market or grocery business within the limits of New London County, Connecticut, for a period of thirty years from this date.” It is the purpose of this action to determine the validity of that covenant.

At the time of the’sale, the partnership was engaged in the business of selling groceries, vegetables, meats and dairy products at retail, and at wholesale in the sense that they sold to restaurants and hotels at reduced prices. They conducted three stores: one on North Thames Street, Norwich; one on Franklin Square, Norwich; and one on Main Street in New London. In addition they operated a small abattoir in Preston and had a warehouse in Norwich. The business was an old established concern, having been operated in one or more of the stores for about thirty years and having been known as Beit Brothers since 1923 in Norwich and since 1926 in New London. The North Thames Street store was small and carried meats mainly. The other two stores were large and were operated as self-service and almost exclusively “cash and carry” stores. What charge accounts there were, were with a very few very old customers and with a few hotels and restaurants. They maintained no delivery service.

. There is no credible evidence that, except for a few hotels and restaurants and for a few transients, the Norwich stores had any customers outside of Norwich and the immediately contiguous towns, or that the New London store had any customers from outside New London, towns contiguous thereto, and Mystic. Although in a sense Norwich is the trading center for the northern part of New London County, and New London is the trading center for the southern part, that does not apply to the retail provision business. The purchase of meats, groceries and vegetables by residents of the outlying towns is done nearer home. A retail provisions store located in Old Lyme, Lyme, Salem, Colchester, Lebanon, Griswold, Voluntown, North Stonington or Stonington is in competition with such a store in Norwich or New London only to a negligible degree, if at all. That would be particularly true with reference to cash and carry stores located in Norwich or New London.

At the time of the sale, the named plaintifF was forty-five years of age. Accordingly, the restriction against his entering business for thirty years was for him a lifetime restriction, and [194]*194that term was fixed with exactly that in mind. He had been in. the meat and grocery business since boyhood and knew no other business. There were no secret processes or trade secrets in the business theretofore conducted by the partnership which it would be harmful to the partnership to have disclosed.

The question of the validity of the restrictive covenant turns on the question whether it was reasonable under the circum' stances. Such a restriction is unreasonable and therefore invalid if it is greater than is required for the reasonable protection of the purchaser or if it imposes an undue hardship upon the covenantor or if it affects the public as a whole injuriously. Re-statement, 2 Contracts, §515; 5 Williston, Contracts, (Rev. Ed.) § 1636; 17 C. J. S., § 247; Cook v. Johnson, 47 Conn. 175, 176; Styles v. Lyon, 87 Conn. 23, 27; Milaneseo v. Calvanese, 92 Conn. 641; Samuel Stores, Inc. v. Abrams, 94 Conn. 248, 252; Torrington Creamery, Inc. v. Davenport, 126 Conn. 515, 519. There is some dictum to the effect that restrictions in contracts of sale are treated more liberally than those in con' tracts between employer and employee (cf. Samuel Stores, Inc. v. Abrams, supra 253), but the ultimate test in the case of any such restriction is whether it is reasonable. And the test is whether it is reasonable in the light of conditions as they aré at the time of the contract and not in the light of what they may become in the future. Cook v. Johnson, supra.

Applying- the test of reasonableness to' the restriction in question, it was of course reasonable that the defendant should have protection -¿gainst the possibility of either of the plaintiffs set' ting up a business which would be in ■ competition with that which was to be continued by the partnership. The fact that if either of the plaintiffs inaugurated a new business it would probably-be under the name of Beit and thereby possibly cause confusion with the partnership name might-well justify a restriction somewhat moré éxtended as to space and time than would otherwise bé justified. On the other hand, taking- all things into consideration, it is inconceivable that, the business of the part' nership being a retail business and particularly a “cash and carry” business for the most part, a new business, even of the same nature,' located outside the locality from which the part' nership customers came would offer any real competition to the partnership.. There is a vast area of New London County out' side that locality. In the same way, thirty years is a long period of time. No other similar case, that is the sale of a retail busi' [195]*195ness, has been found in which a restriction for that length of time has been held valid. Certainly in the present case a restriction for thiry years was more than was necessary to prevent competition as to the good will of the business as it existed on July 31, 1945. Accordingly, it is apparent that the restriction in question was much greater both as to space and as to time than was reasonably necessary to protect the legitimate interests of the defendant.

Moreover, the restriction,' by keeping the plaintiff Max Beit out of the business he knew best for the remainder of his life, works an undue hardship on him.

It is concluded that the restriction is unreasonable and therefore invalid.

The defendant makes the contention that, if the restriction is invalid as against public policy, the plaintiffs, under well established principles of the law, can seek no relief because they are in pari delicto. The answer to that is that the plaintiffs are not seeking to enforce the illegal contract or to recover any thing done or paid under it. They are seeking to avoid it. And, in particular, they are not now seeking any affirmative relief. All they ask is a declaratory judgment as to the rights of the parties under the restrictive covenant.

Judgment may enter finding that the restrictive covenants referred to in the complaint are unreasonable and declaring that they are invalid and unenforceable. No costs will be taxed in favor of either party.

SUPPLEMENTAL MEMORANDUM OF DECISION

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37 F.2d 451 (Fifth Circuit, 1930)
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Milaneseo v. Calvanese
103 A. 841 (Supreme Court of Connecticut, 1918)
Styles v. Lyon
86 A. 564 (Supreme Court of Connecticut, 1913)
Torrington Creamery, Inc. v. Davenport
12 A.2d 780 (Supreme Court of Connecticut, 1940)
Samuel Stores, Inc. v. Abrams
108 A. 541 (Supreme Court of Connecticut, 1919)
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Cook v. Johnson
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Bluebook (online)
15 Conn. Supp. 191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beit-v-beit-connsuperct-1947.