Court Opinion

ID: 7812042
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:13:55.794698+00
Date Added: 2024-06-11T16:30:30.021719
License: Public Domain

Hart, J., (after stating the facts). This court has sustained as valid agreements by the vendor of a business, with or without limitations as to time, not to carry on the business within the limits of a certain city. Bloom v. Home Insurance Agency, 91 Ark. 367; Hampton v. Caldwell, 95 Ark. 387; Kimbro v. Wells, 112 Ark. 126; and Kimbro v. Wells, 121 Ark. 45. Under this rule Crabtree might make a valid agreement with the purchaser of his stock not to engage in the same business again in the same city as the corporation which purchased his stock. Assuming (without deciding the question) that a contract in partial and reasonable restraint of trade, such as a covenant not to engage in a particular business within a designated territory, is assignable, still we do not think that the contract in question is valid under the particular facts and circumstances in this ease as shown by the record. According to the testimony of Crabtree, which is corroborated by that of Moore, he made and executed the contract for the sale of his stock to the corporation which issued it before he -made or assigned the contract not to engage again in the transfer business in the city of Fort Smith. His sale of the stock was completed on the evening of June 23, 1914. This is shown by the minutes of the board of directors of the corporation held on that evening, and nothing is shown by any agreement on Crabtree’s part not to again engage in the same business. It is true that the stock was not delivered to the corporation or the notes of the corporation delivered to Crabtree until the next morning. This occurred, however, because the stock of Crabtree had .been deposited in bank as collateral security. The stock was delivered to the corporation by Crabtree, and the notes of the corporation were delivered to Crabtree for the stock before anything was said to Crabtree about making an agreement not to engage again in the business. Crabtree at first declined to sign the agreement, but, upon the representative of the corporation insisting on it, he did sign it, but received no consideration for so doing. His testimony in this respect is corroborated by that of O. C. Moore. Hence the chancellor was warranted in finding that the contract for the sale of the stock by Crabtree to the corporation and the contract by him with the corporation not to engage again in the transfer business in the city of Fort Smith were separate and distinct contracts, with no consideration for the latter. It was competent to show by parol evidence that the two instruments were wholly independent and separate agreements, and that there was no consideration between the parties to support the agreement of Crabtree not to again engage in the transfer business in the city of Fort Smith. Kimbro v. Wells, 112 Ark. 126, and Kimbro v. Wells, 121 Ark. 45. The chancellor found the issues in this respect in favor of the defendant, Crabtree, and it cannot be said that his finding of fact is against the preponderance of the evidence. It follows that the decree will be affirmed.