Mandan-Bismarck Livestock Auction v. Kist

84 N.W.2d 297, 1957 N.D. LEXIS 130
CourtNorth Dakota Supreme Court
DecidedJuly 26, 1957
Docket7651
StatusPublished
Cited by10 cases

This text of 84 N.W.2d 297 (Mandan-Bismarck Livestock Auction v. Kist) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mandan-Bismarck Livestock Auction v. Kist, 84 N.W.2d 297, 1957 N.D. LEXIS 130 (N.D. 1957).

Opinion

SATHRE, Judge.

Plaintiff brings this action for specific performance of a contract of sale dated August 24, 19SS by the terms of which the defendants F. C. Kist, Laura Kist and Joseph P. Schaaf, individually and as co-partners doing business under the name of Mandan Livestock Sales agreed to sell to R. S. John and Gerald Boren, their assets, name and good will for a consideration of one dollar and other valuable considerations, in hand paid by the plaintiff. The contract of sale, among other things provides:

“The sellers, as a part of the consideration on this contract, do hereby agree and covenant not to engage in the business requiring a livestock sales license from the State of North Dakota under, existing law, for a period of ten (10) years within the counties of Morton and Burleigh, in the State of North Dakota.”

The contract is in evidence as plaintiff’s exhibit “A”.

On August 25, 1955 R. S. John and Gerald Boren by endorsement on said contract, plaintiff’s exhibit “A” assigned and transferred said contract to the plaintiff, Mandan-Bismarck Livestock Auction, a corporation in return for plaintiff’s agreement to assume and carry out all obligations of the assignors of said contract.

The complaint of the plaintiff alleges the foregoing facts, and further alleges that on or about August 24, 1955 the defendants, F. C. Kist, Laura Kist and Joseph P. Schaaf, copartners as Mandan Livestock Sales and the defendant Bismarck-Mandan Stockyards, Inc., represented to the plaintiff and its assignors that the business of the said copartners had been sold to R. S. John and Gerald Boren by a written contract, plaintiff’s exhibit “A” herein, and that the defendant Mandan-Bismarck Stockyards, Inc. approved, ratified and confirmed said purchase by the said copartnership and made entries thereof in its records.

The complaint then alleges that because of the representations made by the defendants and each of them the plaintiff, by the assignment to it on August 25, 1955, acquired all of the right, title and interest in and to said business and property of the copartnership, Mandan Livestock Sales, and at all times since has been the owner thereof; that the officers and directors of Man-dan Stockyards, Inc. were advised by the buyers of Mandan Livestock Sales that they formed a corporation which is the plaintiff, Mandan Livestock Auction, which offered to lease the facilities of the defendant Mandan-Bismarck Stockyards, Inc. under the terms of rental and mutual rights and obligations described and agreed to at a meeting of the directors on August 25, 1955, which offer was then accepted unanimously by the board of directors of the Mandan-Bismarck Stockyards, Inc.

The complaint further alleges that the plaintiff and its assignors have performed all the terms and conditions of the contract, exhibit “A”, and at all times since October 15, 1955, have been ready, able, and willing to take over and operate the Mandan Livestock Sales pursuant to the terms of the *299 said agreement of sale. It is then alleged that the defendants F. C. Kist, Laura Kist and Joseph P. Schaaf as copartners, and the defendant Mandan-Bismarck Stockyards, Inc., in complete disregard of said contract, and the ratification and adoption thereof, refused and continue to refuse to carry out the terms of said contract, plaintiff’s exhibit “A”; that if the defendants do not comply with the terms of the contract of sale herein, that plaintiff will suffer great and irremediable loss, for which a judgment in damages will be no adequate compensation, nor would it do complete justice between the parties.

Judgment is demanded for specific performance by the defendants of said contract, plaintiff’s exhibit “A”, and that the defendants be required to transfer to the plaintiff the entire assets and business of Mandan Livestock Sales, pursuant to the terms and conditions of the said contract of sale.

Each of the defendants answered separately, denying generally the allegations in plaintiff’s complaint, but in the main, the answers are practically identical. Both answers admit that the defendants have refused and continue to refuse to carry out the terms of the contract, plaintiff’s exhibit “A”. The answers also allege that the sum of $1 paid to the defendant R. S. John and Gerald Boren was the only thing of value which they received under said agreement for sale of the said business and that said consideration was unfair, unjust, unreasonable and unconscionable, and that the same has been refunded to the plaintiff. Both answers allege that the following provision in the contract of sale, plaintiff’s exhibit “A”, is illegal and void and violative of subdivision 1, Section 9-0806, NDRC 1943: “The sellers as a part of the consideration of this contract, do hereby agree and covenant not to engage in the business requiring a livestock sales license from the State of North Dakota under existing law, for a period of ten years within the counties of Morton and Burleigh in the State of North Dakota.”

Notice of rescission of said contract dated September 6, 19SS was served upon the assignors R. S. John and Gerald Boren on September 7, 1955.

After issue joined between the parties, and after petition and notice to plaintiff a pretrial conference was held before the Honorable Harvey J. Miller, one of the judges of the sixth judicial district, Morton County, North Dakota on February 14,1956. At the pretrial conference the defendants moved for judgment on the pleadings. The motion was based on the following grounds:

1. That the clause in the contract for sale prohibiting the seller from engaging in the livestock business in Morton and Burleigh Counties for ten years was void and nullified the whole contract.
2. That the consideration of one dollar for the contract was inadequate as a matter of law.
3. That the Mandan-Bismarck Stockyards, Inc., is not a party to such agreement, received no consideration therefor, and is not bound thereby.
4. That the plaintiff has an adequate remedy at law.

Thereafter and on the 10th day of March 1956 the Honorable Harvey J. Miller, made and filed his memorandum decision wherein he held that the provision in the contract, plaintiff’s exhibit “A”, which provided that the sellers as a part of the consideration of the contract agreed not to engage in the business requiring livestock sales license from the State of North Dakota under the existing laws of the State for a period of .10 years within the counties of Mortem and Burleigh was illegal and void under subdivision 1 of Section 9-0806, NDRC 1943 which provides:

“One who sells the good will of abusiness may agree with the buyer to *300 refrain from carrying on a similar business within a specified county, city or village, or a part of either, so long as the buyer or any person deriving title to the good will from him carries on a like business therein.”

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Bluebook (online)
84 N.W.2d 297, 1957 N.D. LEXIS 130, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mandan-bismarck-livestock-auction-v-kist-nd-1957.