Case Name: R. N. ANDREWS AND OTHERS v. JAMES A. COSGRIFF
Court: Minnesota Supreme Court
Jurisdiction: Minnesota
Decision Date: 1928-10-26
Citations: 175 Minn. 431
Docket Number: No. 27,000
Parties: R. N. ANDREWS AND OTHERS v. JAMES A. COSGRIFF.
Judges: 
Reporter: Minnesota Reports
Volume: 175
Pages: 431–435

Head Matter:
R. N. ANDREWS AND OTHERS v. JAMES A. COSGRIFF.
October 26, 1928.
No. 27,000.
Jolin F. Regan and B. D. Grogan, for appellant.
Pfau & Pfau and Somsen, Dempsey & Flor, for respondents. ■
Reported in 221 N. W. 642.

Opinion:
Olsen, C.
Plaintiffs, members of the medical profession, are associated' together as partners and practice their profession at Mankota under the name of Mankato Clinic. Defendant is a licensed physician and surgeon and, prior to his employment by plaintiffs, was practicing his profession at Lamberton. In April, 1924, defendant entered into a written contract whereby he was employed by plaintiffs in their clinic to practice medicine and surgery on a stated salary for a term of one year from and after July 1, 1924. He entered upon and completed his term of service under this contract. The contract contained the provision that at the expiration or termination thereof defendant agreed not to practice medicine or surgery in the city of Mankato or within a radius of 25 miles therefrom for a period of five years.
Under date of October 1, 1925, defendant entered into a new contract with plaintiffs for an additional one-year term of employment from and after that date. This contract differs in some respects from the first in that it gives defendant the right to purchase what is designated as a half share interest in the partnership, Mankato Clinic, at the termination of the period of employment, provided he shall then have fully performed the contract on his part. The contract provides how the purchase price of the half share shall be determined. Defendant's salary is somewhat increased over what it was in the first contract. The second contract, like the first, provides that the defendant shall not practice medicine or surgery in the city of Mankato or within a radius of 25 miles therefrom for a period of five years from the expiration or termination thereof.
Defendant entered upon his employment under the second contract, but quit and terminated his employment on or about July 18, 1926, and went to Oklahoma to investigate some opening for practice there. He returned to Mankato in about two months and opened an office for the practice of medicine and surgery, and continued to practice there up to the time this action was tried. The action was brought to enjoin defendant from practicing in Mankato or within a radius of 25 miles therefrom for the period of five years from and after July 18, 1926. The court after trial made findings of fact and conclusions of law in plaintiffs' favor. Defendant moved for a new trial, and appeals from an order denying such motion.
The defenses presented were, first, that fraudulent representations were made by plaintiffs which induced defendant to enter into the contracts of employment; second, that without his knowledge plaintiffs made changes in the partnership articles of the Man-kato Clinic which imposed such conditions that he could not take advantage of his right to purchase a share in the partnership, and that such changes were made after he made his second contract of employment. He further pleads the fraud and alleged damages as a counterclaim.
The validity of the clause in the contracts of employment, whereby defendant agreed not to engage in the practice of medicine or surgery in the city of Mankato or within a radius of 25 miles therefrom for a period of five years, is not seriously questioned. Recent cases affirm the validity of such a provision. Granger v. Craven, 159 Minn. 296, 199 N. W. 10, 52 A. L. R. 1356; Peoples C. & D. Co. Inc. v. Share, 168 Minn. 474, 210 N. W. 397. Unless therefore the defendant has established one or more defenses to the second employment contract, or a counterclaim which entitles him to relief, the plaintiffs would seem entitled to the relief granted.
Defendant assigns as error the admission in evidence of exhibit A, the first employment contract. This contract is pleaded in the complaint. The making of the contract is admitted in the answer, and defendant alleges that it was obtained by fraudulent representations. There is a suggestion that defendant was not permitted to introduce evidence as to representations made to him prior to the execution of this contract, but there is no assignment of error as to any ruling in that regard. There was no error in admitting exhibit A in evidence.
The court found that no false or fraudulent representations were made by plaintiffs or any of them to induce defendant to execute or enter into either of the contracts of employment in question; that neither contract was obtained by any fraud. Our consideration of the record and evidence leads to the conclusion that these findings are sustained by sufficient evidence. A recital of the evidence on that issue is not deemed necessary.
It appears that on January 20, 1925, plaintiffs modified and amended their copartnership articles, under which they were doing business as the Mankato Clinic, by adding thereto an agreement to the effect that in case of the termination of the membership of any partner therein for any reason the member so retiring would not engage in the practice of medicine or surgery in the city of Mankato or within a radius of 25 miles therefrom for a period of eight years from and after the date of his admission to membership in the clinic. On October 28, 1925, an additional amendment was made to the copartnership articles, to the effect that no member should withdraw from the partnership without the approval of at least three-quarters in interest of the members, and that if any member should withdraw without such consent within ten years from that date, he should forfeit his interest in the clinic and all its assets.
Defendant claims that these changes in the partnership articles were made without his knowledge and were concealed from him; that these restrictions made it impracticable and impossible for him to buy a share and become a member of the partnership, and operated as a breach of his second employment contract, which gave him a right to buy a share in and become a member of the partnership; in other words, that the partnership contract as it existed on October 1, 1925, at the date of his second contract of employment, could not thereafter be changed by adding further restrictions thereto without his consent; that his right to buy into the partnership on the expiration of his employment contract, October 1, 1926, was breached by plaintiffs by making such change in the partnership articles, and that thereby he was released from the obligations in his employment contract.
The question of the effect of this change in the partnership articles, if it had been made after defendant executed his second contract of employment and without his knowledge or consent, we believe is not necessary to consider. The second employment contract, while dated October 1, 1925, does not appear to have been executed by defendant until about November 1, after the change in the partnership articles. The court so finds, and further finds that the second employment contract was entered into by defendant after extended negotiations as to the terms thereof and' after defendant was fully informed and advised of all the doings of the partnership and its business, and Avith full notice and knoAvledge' of each and all amendments and alterations made in the terms of the original partnership articles, including this particular change. While challenged as not sustained by the evidence, we find the evidence sufficient to sustain these findings, and no sufficient reason shown for disturbing them.
The evidence to show irreparable damage is sufficient. Other findings of fact are challenged as not sustained by the evidence and the conclusions of law as not justified.
We find the decisive and material findings of fact, as already noted, sufficiently sustained by the evidence and the conclusions of laAv Avell supported by the facts so found; and the order appealed from must therefore be affirmed.