National Linen Service Corp. v. Clower

175 S.E. 460, 179 Ga. 136, 1934 Ga. LEXIS 235
Supreme Court of Georgia·Decided July 11, 1934·No. No. 9992·Published·Cited by 41 cases

Opinion

Bell, J.

Clower agreed with Atlanta Linen Supply Company that for the period of one year next following the termination of his employment with that company he would not, for himself or in behalf of any other person, engage in the same kind of business within the limits of Fulton County, and stipulated that the provisions of the contract “shall extend to the successors and assigns” of the employing corporation. It is the restrictive covenant which the National Linen Service Corporation as an alleged assignee is seeking to enforce. Under previous decisions by this court such a covenant is assignable; and the more especially is this true of the contract here under consideration, in view of the agreement by the employee that its provisions should extend to “ successors and assigns.” In the instant case we are not concerned with any effort to assign the employee’s agreement to work for the employing corporation. It is only the restrictive covenant whereby the employee agreed not to engage in the same line of business, and not to work [143] for any other person engaged in snch business for the period of one year within a stipulated territory, that calls for any adjudication in the present case. This agreement, if valid, was assignable. Swanson v. Kirby, 98 Ga. 586 (2) (26 S. E. 71); Legg v. Hood, 154 Ga. 28 (3) (113 S. E. 642).

On September 1, 1928, Atlanta Linen Supply Company made a contract with National Linen Service Corporation, whereby it undertook to convey all of its personal property including “choses in action of every description,” its “good will,” and “every other form of asset owned or controlled” by it in connection with the business which it conducted in thé name of Atlanta Linen Supply Company. The contract between it and Clower was delivered to National Linen Service Corporation upon the closing of this transaction. The petition shows that Clower was still working for Atlanta Linen Supply Company under his contract with that company, and that he continued in the service of the plaintiff “under the terms of said contract” until June 6, 1933. He thus recognized the plaintiff as his employer, and adopted the purported assignment to it by the Atlanta Linen Supply Company. For nearly five years he received from the plaintiff the compensation and benefits which were to fiow from the Atlanta Linen Supply Company) its “successors and assigns,” during all of which time the plaintiff was in possession of the contract and was dealing with the employee in place of Atlanta Linen Supply Company. We need not consider technical definitions of the phrase “chose in action” or of other terms employed in the purported assignment. The most important rule to be applied in the construction of a contract is to ascertain the intention of the parties; and to this end the language used must be examined in the light of all the attendant circumstances. A word may have one meaning in a dictionary, even a law dictionary, and an entirely different meaning in a contract. Whether or not the restrictive covenant as made by Clower should be called a “chose in action” or should be considered as a part of “the assets” or of the “good will” of the Atlanta Linen Supply Company, it is clear that this company intended to assign and convey to National Linen Service Corporation every right connected with the business which it sold to the corporation last named, and as a part of the transaction it made a physical delivery of the contract under consideration. In view of these circumstances, and of the reciprocal [144] conduct of the employee and National Linen Service Corporation, as hereinbefore stated, by which the validity of the assignment was fully recognized, we do not hesitate to hold that the service corporation became at least an equitable assignee of the restrictive covenant, and therefore was entitled to enforce the covenant in equity, in the absence of other obstacle. Jones v. Glover, 93 Ga. 484 (21 S. E. 50); Southern Mutual Life Insurance Association v. Durdin, 132 Ga. 495 (64 S. E. 261, 131 Am. St. R. 210); United Engineers &c. Inc. v. Fiat Metal Mfg. Co., 175 Ga. 509 (165 S. E. 609); Public Opinion Printing Co. v. Ransom, 34 S. D. 381 (148 N. W. 838, Ann. Cas. 1917A, 1010).

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National Linen Service Corp. v. Clower, 175 S.E. 460, 179 Ga. 136, 1934 Ga. LEXIS 235 (Ga. 1934).

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