Campbell-Bruce Oil Co. v. Green

201 N.W.2d 362, 42 Mich. App. 161, 1972 Mich. App. LEXIS 904, 1972 Trade Cas. (CCH) 74,222

• Court: Michigan Court of Appeals
• Decided: July 25, 1972
• Docket: Docket 12265
• Status: Published

Opinions

R. B. Burns, P. J.

The issue in this case concerns the legality of defendant Leslie Green’s contractual promise to refrain from competing with plaintiff upon termination of his employment.

Prior to employment with plaintiff defendant was a tank wagon delivery driver for Standard Oil Company and in that capacity developed a customer route. While employed by plaintiff defendant agreed in writing to sell his customer route to plaintiff for $2,000 subject to the following condition:

"That should Leslie Green leave the employment of the Campbell-Bruce Oil Company he will not directly or indirectly engage in any business of the type or kind heretofore conducted by the Campbell-Bruce Oil Company for a period of five (5) years within a radius of fifty (50) miles from the City of Menominee, Menominee County, Michigan, nor shall he interfere in any way with the business of the Campbell-Bruce Oil Company.”

Approximately 2-1/3 years after execution of the restraint agreement defendant was either discharged from or quit plaintiff’s employ and began distribution of petroleum products within the proscribed area mentioned in the agreement. The briefs and records do not clarify whether defendant is now an independent distributor or employed by another company. In any event defendant claims, and the trial court agreed, that the contractual clause in question violates § l¹ of Michigan’s restraint of trade legislation:

"All agreements and contracts by which any person, copartnership or corporation promises or agrees not to engage in any avocation, employment, pursuit, trade, profession or business, whether reasonable or unreasonable, partial or general, limited or unlimited, are hereby declared to be against public policy and illegal and void.”

Section 6² of the restraint legislation provides that certain contracts in restraint of trade are excepted from the all-inclusive language of § 1 and according to plaintiff §6 validates the agreement in question:

"This act shall not apply to any contract mentioned in this act, nor in restraint of trade where the only object of restraint imposed by the contract is to protect the vendee, or transferee, of a trade pursuit, avocation, profession or business, or the good will thereof, sold and transferred for a valuable consideration in good faith, and without any intent to create, build up, establish or maintain a monopoly * * * .”

The plaintiff is unable to prevail in this case because:

Defendant formerly was an employee of the Standard Oil Company where he serviced customers of that company, and in rendering such service he compiled a list of the clientele which he purported to sell to plaintiff; these customers belonged to Standard Oil and not to defendant.

If there was any good will under these circumstances, it belonged to Standard Oil Company and not to defendant.

Defendant sold only his ability to obtain customers from the list that he submitted to plaintiff.

The sale of this list, or his ability to obtain customers is not within the exceptions of the statute.

Affirmed. Costs to defendants.

Holbrook, J., concurred.

1 MCLA 445.761; MSA 28.61.

2 MCLA 445.766; MSA 28.66.