Title: Mandan-Bismarck Livestock Auction v. Kist
Citation: 84 N.W.2d 297
Docket Number: 7651
State: north-dakota
Issuer: north-dakota Supreme Court
Date: July 26, 1957

84 N.W.2d 297 (1957) MANDAN-BISMARCK LIVESTOCK AUCTION, a corporation, Plaintiff and Appellant, v. F. C. KIST, Laura Kist, Joseph P. Schaaf, Individually and as co-partners, doing business under the firm name and style of Mandan Livestock Sales; Mandan-Bismarck Stockyards, Inc., a corporation, Defendants and Respondents. No. 7651. Supreme Court of North Dakota. July 26, 1957. *298 Strutz, Jansonius &amp; Fleck, Bismarck, for appellant. Kelsch &amp; Scanlon, Mandan, for respondents. SATHRE, Judge. Plaintiff brings this action for specific performance of a contract of sale dated August 24, 1955 by the terms of which the defendants F. C. Kist, Laura Kist and Joseph P. Schaaf, individually and as copartners 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 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 Mandan 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, 1955 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: 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 Morton and Burleigh was illegal and void under subdivision 1 of Section 9-0806, NDRC 1943 which provides: The court further held that the consideration for the entire contract applies in part to the clause prohibiting the seller from engaging in business in Morton and Burleigh Counties; that the contract does not provide a formula for apportioning the consideration; that the terms of the contract were vague and indefinite and that therefore the whole contract is unenforceable by specific performance. The motion of the defendants for judgment on the pleadings was granted. An order was made accordingly and judgment for dismissal of the action with prejudice was entered thereon. The plaintiff appealed from the judgment and assigned numerous specifications of error, but only two questions are argued on this appeal: The provision in the contract involved herein by which the sellers agreed not to engage in the livestock business for a period of ten years in Morton and Burleigh Counties has been quoted elsewhere in this opinion. Section 9-0806, NDRC 1943 provides: There is no ambiguity in the language of the quoted section. The area within which a party to a contract of sale of his business may legally agree not to engage in a similar business is limited to a "specified county, city or village, or a part of either." The language employed can not be construed to permit a seller to bind himself to refrain from engaging in such business in a larger area than one county or one city, or one village, or a part of either county, city or village. In the case of Strobeck v. McWilliams, 42 N.D. 30, 171 N.W. 865, this court in construing Sections 5928-5929, R.C.1913 (now Sec. 9-0806, NDRC 1943) held that: To the same effect is the case of Olson v. Swendiman, 62 N.D. 649, 244 N.W. 870, where the same statute was under consideration. We quote from paragraph 2 of the syllabus: We hold therefore that the provision in the contract, plaintiff's exhibit "A", by which the seller agreed not to engage in the livestock business in Morton and Burleigh Counties is void and in violation of Section 9-0806, NDRC 1943. The next question for consideration is whether the remaining provisions of the said contract are valid and enforceable by specific performance. Section 9-0403, NDRC 1943 provides: In 14 Am.Jur. pages 739, 740, Contracts, Sec. 221, it is stated: The consideration as stated in the contract involved here is: "One ($1.00) Dollar, and other valuable considerations". There is no direction in the contract, however, by which the kind or character of the "other valuable considerations" can be ascertained or identified, or what part of the consideration has application to the illegal part of the contract and what part, if any, applies to the remaining part of the contract. In the case of Guardian Agency, Inc., v. Guardian Mut. Sav. Bank, 227 Wis. 550, 279 N.W. 79, 115 A.L.R. 1356, the Supreme Court of Wisconsin held, under a statute prohibiting certain contracts, that "Where any part of the consideration * * * for an unseverable promise, one of which is illegal, the promise, whether written or oral, is wholly void." In 81 C.J.S. Specific Performance § 34, pages 490, 491 it is stated: Paragraph 9 of the sales contract involved here provides: The paragraph quoted is vague and indefinite and does not specify the facilities available to the Mandan-Bismarck Stockyards, Inc. nor are there any directions therein for ascertaining the terms of the oral agreements of Mandan Livestock Sales with Mandan-Bismarck Stockyards, Inc. with which the buyers agreed to comply. In order to entitle a litigant to specific performance of a contract the terms thereof must be complete and capable of being performed without additions or amendments. We quote the following statement from 81 C.J.S. Specific Performance § 35, pages 494, 495 and 496. Further negotiations after the contract has been completed do not prevent specific performance of the contract. It is no defense that the agreement must be gathered from more than one instrument where they may fairly be construed as constituting one writing." The trial court held that the contract of sale, plaintiff's exhibit "A", was not sufficiently clear, specific and definite in its terms to entitle plaintiff to specific performance thereof. We conclude that under the established rules of law applicable in such cases and the judicial decisions cited herein, the trial court correctly granted the motion of the defendants for judgment on the pleadings. The judgment is affirmed. GRIMSON, C. J., and JOHNSON, BURKE and MORRIS, JJ., concur.