Henderson v. Jacobs

239 P.2d 1082, 73 Ariz. 195, 1952 Ariz. LEXIS 231
CourtArizona Supreme Court
DecidedJanuary 21, 1952
Docket5449
StatusPublished
Cited by23 cases

This text of 239 P.2d 1082 (Henderson v. Jacobs) is published on Counsel Stack Legal Research, covering Arizona Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Henderson v. Jacobs, 239 P.2d 1082, 73 Ariz. 195, 1952 Ariz. LEXIS 231 (Ark. 1952).

Opinion

DE CONCENT, Justice.

On November 10, 1948, T. S. Henderson, hereinafter referred to as appellant, entered into an option agreement with A. E. Jacobs, hereinafter referred to as appellee, whereby the latter was given an option to purchase appellant’s “plumbing contracting and supply business” for $6,000. One thousand dollars was paid for the option, and $1,000 was to be paid November 24, 1948, and $100 per month thereafter. Appellee did not pay the November 24th payment but took possession of the business, trucks, and inventory. On January 5, 1949 appellee borrowed $1,000 at the bank, with appellant’s endorsement, and paid same to appellant on the option agreement to purchase. Subsequently appellee repaid the bank at no cost to the appellant.

On January 27, 1949, the parties entered into another agreement as follows:

“This Agreement, addendum to Agreement dated November 10th, 1948, by and between Taylor S. Henderson and Aubrey E. Jacobs, as named herein,
“Witnesseth: That said Jacobs shall without delay return to said Henderson the motor vehicles * * * and that the materials included in the inventory shall be returned to said Henderson (so far as such inventory shall have been passed to said Jacobs) ; and further said Aubrey E. Jacobs agrees to supply to said Henderson sufficient materials and supplies to equal 87% (eighty:seven per cent) of One Thousand ($1,000) Dollars computed at cost price.
*198 “And upon the transfer of the said properties as above stipulated, said Jacobs shall be relieved now and forever from the payment of any further payments under the said contract of November 10th, 1948, and said agreement shall be considered executed in full by said Jacobs in each and every particular.
“Dated this 27th day of January, 1949.
“Henderson shall not work in said business for a period of 5 years within the 'Wickenburg area except with approval of Jacobs and except for such contracts let by C. L. Maguire which Jacobs is unable to contract”

Appellee returned to appellant the trucks, and the inventory that had passed into his hands, and in addition $870 worth of his own supplies. This made a total of $2,870 of value transferred by appellee to appellant in connection with both the option agreement and the “addendum” agreement.

After this- agreement had been signed, appellant worked on several different occasions as a plumber for day wages in the Wickenburg area. Appellee instituted proceedings to obtain an injunction against appellant so working as a plumber or as a plumbing contractor in that area for a period of five years from the date of the January agreement. The case was presented before the trial court (sitting without a jury) as a court of equity. The trial court enjoined appellant from “ * * * working as a plumber for hire, or in the plumbing business, in the Wickenburg area, for a period of five years commencing January 27, 1949, except for such contracts as are held by C. L. Maguire, which Aubrey E. Jacobs is unable to contract”. This judgment and injunction was modified after appellant had objected to its form. Insofar as important now, that modification dealt with what comprised the “Wickenburg area” ; “ * * * That the court finds and adjudges that the words ‘Wickenburg Area’ as used in the supplementary agreement made and entered into by and between Plaintiff and Defendant on January 27, 1949, includes the central area surrounding the Town of Wickenburg, Arizona, and the Town of Aguila, Arizona, and the Town of Morristown, Arizona, and the Town of Congress Junction, Arizona, also- known as Congress, Arizona.” A motion for a new trial was made and denied and appellant then appealed to this court.

Appellant makes six assignments of error. Assignments 1 and 2 will be treated together, since they both deal with the same issue. Appellant asserts in his first assignment that the “Appellee did not bear the burden of proof to show the necessity for an injunction”, meaning that appellee failed to show that he suffered any damages.

Appellee introduced into evidence the agreement of January 27, 1949, which set out the restrictive covenant. Witnesses then testified that appellant had worked as a plumber in the town of Wickenburg and the area immediately outside that town *199 after the date of the agreement not to do so. (The question of a possible distinction between “plumber for hire” and “plumbing contractor” will be treated later.) Appellant urges on us the Utah rule with regard to the necessity of showing irreparable injury before an injunction will issue. Melrose v. Low, 80 Utah 356, 15 P.2d 319, and followed in De Soto v. De Jaquez, 44 N.M. 564, 106 P.2d 301. This court has held that a restrictive covenant is enforceable even though no damages have been shown. In Continental Oil Co. v. Fennemore, 38 Ariz. 277, 299 P. 132, 133, speaking of a restrictive covenant with regard to land, we said “In this case it is not shown that appellees would suffer any substantial injury as a result of the erection of the proposed service station. But in cases of this character it is not necessary to prove special, damages in order to secure injunctive relief. (Citing cases.)” While the facts are dissimilar yet the same proposition of law is applicable.

The majority rule governing restrictive covenants as applied to sale of businesses is found in 43 C.J.S., Injunctions, § 84b at page 566: “Where an established business has been sold with its good will and there is a valid covenant not to compete, a breach is regarded as the controlling factor and injunctive relief follows almost as a matter of course. In such cases the damage is presumed to be irreparable, and the remedy at law is considered inadequate. It is not- necessary that the buyer first prove special pecuniary damages or show an actual loss of customers who might in any event have discontinued their patronage. Injunctive relief may be given, even though only nominal damages are shown or although no actual damage is shown. * * * ” In light of the foregoing, we hold that there is no merit to appellant’s first and second assignments of error in that the appellee need not allege nor prove special damages.

Appellant’s third assignment of error is that “The Court erred in rendering and entering judgment for a permanent injunction against Appellant for the reason that the agreements upon which Appellee relied are so vague and ambiguous that they are void as a matter of law.” The phrases that appellant urge as being ambiguous are the following: “plumbing contracting and supply business; said business; Wickenburg area; such contracts let by C. L. Maguire which Jacobs is unable to contract

12 Am.Jur., Contracts, sec. 64, page 556, reads in part as follows: “The determination that an agreement is sufficiently definite is favored. The courts will, if possible, so construe the agreement as to carry into effect the reasonable intention of the parties if that can be ascertained.” And section 65, page 557 follows with: “The.

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Bluebook (online)
239 P.2d 1082, 73 Ariz. 195, 1952 Ariz. LEXIS 231, Counsel Stack Legal Research, https://law.counselstack.com/opinion/henderson-v-jacobs-ariz-1952.