Wright v. Scotton

121 A. 69, 13 Del. Ch. 402, 31 A.L.R. 1162, 1923 Del. Ch. LEXIS 33
CourtSupreme Court of Delaware
DecidedJanuary 16, 1923
StatusPublished
Cited by77 cases

This text of 121 A. 69 (Wright v. Scotton) is published on Counsel Stack Legal Research, covering Supreme Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wright v. Scotton, 121 A. 69, 13 Del. Ch. 402, 31 A.L.R. 1162, 1923 Del. Ch. LEXIS 33 (Del. 1923).

Opinion

Pennewill, C. J.,

delivering the opinion of the Court.

The first, second and third assignments of error go to the question of parties. It is contended by the appellants, that the covenant sued on, having been made with George P. Scotton, one of the complainants, individually, and no assignment of the covenant having been shown, the other complainants who became part[407]*407ners with George P. Scotton in the garage business, are not entitled to any relief for the breach of said covenant, and cannot, therefore maintain this action.

Whether George C. Scotton and Lyman J. Scotton,1 two of the complainants, are proper parties to the suit, and entitled to relief therein, depends, of course, upon their relation to the restrictive covenant in question. Did that covenant, made by Wright and Son with George P. Scotton, inure only to the benefit of George P. Scotton and other persons to whom it might be formally assigned, or to George P. Scotton and other persons who might be associated with him in the business he purchased from Wright and Son, even though there was no formal assignment? It is admitted by the appellants, that after the sale of their garage business to George P. Scotton, he (the said George P. Scotton) immediately engaged in the garage business with James- L. Scotton, George C. Scotton, and Lyman J. Scotton. There was formed between them an association or partnership, and the business which one of the partners had bought from Wright and Son became the business of all the partners.

When George P. Scotton purchased from Wright and Son their garage business, he purchased also the good will, and secured from Wright and Son an agreement that they would not engage in any competitive business. This agreement or covenant was necessarily and inseparably connected with the business that George P. Scotton bought from the Wrights, and passed to the firm or association that was immediately formed, of which George P. Scotton was a member, and which took over his garage business,

No formal assignment of the agreement was required, any more than a formal sale or transfer of the personal property which constituted a part of the garage business was required to vest it in all the partners. The covenant not to engage in any competitive business followed the business bought by the covenantee, and inured to his benefit as well as the benefit of any person associated with him as a partner in the same business. When the covenanteeentered into a partnership with others, to carry on the business he had bought, he by that very act transferred to Ifis partners everything that constituted a part of the business, which he could [408]*408transfer without writing. Such transfer included the restrictive covenant for the breach of which this suit was brought.

There is no doubt that the benefit of the covenant may be assigned with the business, and the assignee’s rights will be protected. 4 Pom. Eq. Juris., § 1715. This is not denied.

Such being the case, we think that any act of the covenantee which transfers the business and property, also transfers or assigns the covenant. Knowles v. Jones, 182 Ala. 187, 62 South. 514; Haugen v. Sundseth, 106 Minn. 129, 118 N. W. 666, 16 Ann. Cas. 259, and note.

The appellees admit their inability to find any case that supports their contention respecting the parties complainant, and we think none can be found. Perhaps there is no case that is exactly in point, but we are satisfied that sound reason, well settled principles of equity, and the following cases, which are somewhat, analogous in principle to the present one, support our conclusion, that the complainants were the proper parties to sue for a breach of said covenant: Palmer v. Toms, 96 Wis. 367, 71 N. W. 654; Knowles v. Jones, 182 Ala. 187, 62 South 514; Public Opinion Pub. Co. v. Ransom, 34 S. D. 381, 148 N. W. 838, Ann. Cas. 1917A, 1010; Satterthwait v. Marshall, 4 Del. Ch. 337, 356, 357; Mangan v. Schuykill County, 273 Pa. 310, 116 Atl. 920.

The right of the complainants to sue was not affected by the fact that James L. Scotton, one of the partners, retired or withdrew from the firm before the suit was brought. It is admitted by the appellants that James L. Scotton withdrew from the business about September 1, 1920, and that thereafter the complainants, trading as George P. Scotton and Sons, and also trading as Smyrna Nash Motors Company, conducted the garage business purchased from Wright and Son. Having retired from the partnership and the business before the suit was brought, he was not a necessary party to the suit, and presumably had no interest at the time in the business, or in anything connected therewith, including the covenant in question.

The record shows that no objection or exception was taken in the court below on account of parties, and it is too late now, we think, tp insist that some one else should have been included as complainant. And, besides, it is well settled that a suit in [409]*409equity is for the determination and adjustment of the rights and liabilities of all concerned in the subject-matter. It is the purpose of a court of equity to do complete justice by deciding upon and satisfying the rights of all the persons interested in the subject of the suit, so as to make the performance of the order of the court perfectly safe to those who are compelled to obey it and to prevent future litigation. 1 Daniell, Chan. Pl. & Pr. (6th Anno. Ed.) 190.

A court of equity may adapt its relief to the particular rights and liabilities of each party and determine the interests of all so far as they are legitimately connected with the subject-matter and properly within the sqope of the adjudication. 1 Pom. Eq. Juris., (4th Ed.) §§ 114, 115, 116.

The record shows that the Chancellor had knowledge of James L. Scotton’s former relation to complainant’s business, and this court will assume that his decree was made with that knowledge, in determining the interests and rights of all parties concerned in the determination of the suit.

Counsel for the appellants have stated in their brief, and announced to the court at the argument, that the fourth assignment of error would “not be considered.” It is not necessary, therefore, for the court to consider in this connection one of the questions discussed at some length by the Chancellor, viz., whether the garage erected by the defendants outside the town limits of Smyrna was “adjacent” to said town, within the meaning of the restrictive agreement.

The fifth and sixth assignments of error raise the question of loches.

It is contended by the appellants that the complainants were guilty of such loches as defeated their right, if any they had, to an injunction or to recover damages.

It is true, as the appellants contend, that, equity will generally refuse its aid to stale demands. Laches, or inexcusable delay, have always been discountenanced. The rule is well established, independent of any statute of limitations, that if a party is guilty of loches or unreasonable delay in applying for an injunction, he thereby forfeits his claim to that special form of remedy. There is, however, no hard and fast rule as to what con[410]*410stitutes loches, which has been .defined as an “inexcusable delay” in asserting a right.

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Cite This Page — Counsel Stack

Bluebook (online)
121 A. 69, 13 Del. Ch. 402, 31 A.L.R. 1162, 1923 Del. Ch. LEXIS 33, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wright-v-scotton-del-1923.