Court Opinion

ID: 9625887
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:54:03.054414+00
Date Added: 2024-06-11T18:06:16.582565
License: Public Domain

WADE, Justice
(concurring in part — dissenting in part).
I agree that by the sale of the real estate and all the equipment used in carrying on the Mortuary business in Eureka, appellant sold his business to respondent. See Shafer v. Sloan, 3 Cal. App. 335, 85 P. 162. When a business is sold and there is an agreement by the seller not to engage in the same business in the same place and no mention is made of the good will, it is presumed that it was the intention of the parties to pass the good will along with the other assets. This is so because of the fact that good will cannot exist *227apart from the business with which it is connected. See 24 Am. Jur. page 810, Sec. 13; Shafer v. Sloan, supra; Mahlstedt v. Fugit, 79 Cal. App. 2d 562, 180 P. 2d 777; Wall v. Chapman, 84 Okl. 114, 202 P. 303; and Herrington v. Hackler, 181 Okl. 396, 74 P. 2d 388.
Respondent because of the implied sale of the business got whatever good will attached to appellant’s establishment in Eureka, which in its broadest sense means, according to Judge Storey's definition as stated in 24 Am. Jur. page 803,
“the advantage or benefit which is acquired by an establishment beyond the mere value of the capital stocks, funds, or property employed therein, in consequence of the general public patronage and encouragement which it receives from constant or habitual, customers on account of its local position, or common celebrity, or reputation for skill, or affluence, or punctuality, or from other accidental circumstances or necessities, or even from partialities or prejudices.”
Therefore, when appellant competed for the business in Eureka which would naturally and normally have gone to the establishment which was sold, he breached the agreement, and if such good will extended into Provo and south of Provo in Utah and Juab Counties because the business which he did there came as a result of the good will of his establishment in Eureka, he breached the contract by competing for business there. However, there is no evidence in the record before us that the good will of the establishment in Eureka extended to Provo and south of Provo, in Utah and Juab Counties and for that reason I would remit the case to the District Court so that evidence may be taken and a finding made as to that fact.
I do not agree that without a showing that such business was a part of the good will of the Eureka business, we can conclude from the language of the contract alone that appellant committed a breach thereof by picking up bodies of persons who were residents of the interdicted area or by holding funeral services within that area. As stated in the *228note on restrictive covenants in 87 A. L. R. page 329:
“Whether a covenant not to engage in business or practice professionally within a specified area is violated by dealing or attempts to deal with persons residing within such area from an establishment outside depends upon the construction of the covenant in light of the relation of the parties.”
In the instant case the sale of the business and the good will was by implication. There is nothing in the contract to indicate that respondent paid any special consideration for it. In fact, appellant offered to prove that the physical properties sold were worth at least as much as the entire consideration paid. Since what respondent got by his contract was the benefit which inured to appellant’s establishment the only reasonable interpretation of the restrictive clause is that when the parties to the contract agreed that appellant would not operate a mortuary or funeral business in the interdicted areas that they meant that he would not operate a funeral establishment within that area. That such was the meaning is borne out of the actions of both parties subsequent to the execution of the agreement when appellant sought permission to build a mortuary in Orem, Utah, which is a few miles north of Provo, Utah, and respondent granted such permission. In these negotiations they were considering only the place where such a business might be established not where incidental services might be rendered as a part of that business. In negotiating and making this change the parties clearly had in mind to allow appellant to establish a mortuary place of business in Orem rather than agreeing to allow him to pick up a body there. This shows that they had in mind a restriction on the place where he could establish a place of business not the place where he could incidentally go to perform some service pertaining to mortuary or funeral business. Respondent conceded that appellant could enter the interdicted areas to receive a body of a non-resident. This further shows that it was not intended to exclude appellant from all mortuary business there.
*229A further element which makes it clear that the parties had in mind only that no establishments should be opened or built by appellant in the interdicted areas when they spoke of mortuary or funeral business is that Sec. 79—7—16, U. C. A. 1943, provides that the “business of a funeral director must be conducted and engaged in at a fixed place or establishment; * * *.” (Emphasis ours.) . The only reasonable interpretation of the meaning of the words “mortuary or funeral business” as used in this contract in the light of this statute is that the parties must have had in mind that an undertaker could not legally do business except from a fixed place or establishment and when appellant contracted not to operate a funeral or mortuary business in the interdicted areas he agreed not to operate any establishments there in pursuance of his work as an undertaker.
In view of the fact that there was no express sale of the business of appellant but only a presumption that the business was sold because all of the physical properties pertaining to the business were sold and because of this presumption and the fact that the contract of sale contained a restraining clause, that the good will went with the sale of the business, it is apparent that no extra consideration was paid to appellant for such good will and it therefore does not violate one’s sense of good faith and fair dealing in allowing appellant to get what business he can from the interdicted areas as long as it is not business which is obtained because of his previous operation of the Eureka business.
I agree that the court erred in refusing a jury trial on the issues of fact necessary to decide whether there was a breach of contract and if so the amount of damages, if any, suffered therefrom. Not, however, because this kind of action would have been maintainable in a court of law when law and equity were administered by separate courts, but because Section 104 — 23—5, U. C. A. 1943 expressly so pro*230vides in the following language:
“In actions for the recovery of specific real or personal property, 'with or without damages, or for money claimed as due upon contract or as damages for breach of contract, or for injuries, an issue of fact may be tried by a jury, unless a jury trial is waived. * * (I have emphasized the words which deal directly with this question.)
This section fixes the right of a jury trial on all issues of fact involved in determining whether any of the kinds of relief therein specified should be granted and if so the amount and extent thereof. Under its provisions the right to such trial does not depend on whether the issues presented are legal or equitable, nor on whether that kind of action would have been maintainable in a law court under the dual court system. The test under this statute is whether the kind of relief specified therein is sought in the action. If such relief is sought, then a jury trial is granted on all issues of fact involving such relief but it does not require a jury trial on issues of fact involved in the granting of other kinds of relief which is sought in the same action. Prior to the 1945 amendment, this statute apparently was intended to give the right of a jury trial on all issues of fact involved in granting legal as distinguished from equitable relief. This is a departure from the practice under the dual law and equity court system where no jury could be had in the equity court although it often granted legal .relief. That seems to me to be the main purpose and effect of this statute prior to the amendment. In so doing, if followed, it. would greatly simplify the problem of determining when a jury trial should be granted.
When law and equity were administered in different courts, a jury trial was available only in a court of law. Under that system no problem was presented as to whether to grant a jury trial. The equity courts were instituted to temper harshness and injustices which developed under the •common law. At first, they usually intervened only after the issues of law and fact had been litigated in the law *231courts. They accepted the decision of the law court on the issues of fact and interposed equitable relief often to nullify the decision in the law court. At first the equity courts were reluctant in determining’ issues of fact often refusing to entertain a suit until the facts had been litigated in a court of law where a jury was available. Farrell v. City of Ontario, 39 Cal. App. 351, 178 P. 740. Under this practice, all issues of fact were determined by the jury. But courts of equity to prevent a multiplicity of actions and feeling in some cases they were better qualified to determine the facts than the jury developed the practice, first of determining the facts necessary to decide whether equitable relief should be granted, then of determining the necessary issues of fact in deciding whether to grant incidental or supplemental legal relief along with equitable relief and finally in some cases equity would try all issues of fact even though in the end it granted only legal relief. This resulted in the granting of much legal relief without the right of trial by jury. Kinsman v. Utah Gas & Coke Company, 53 Utah 10, 177 P. 418; Wasatch Oil Refining Co. v. Wade, 92 Utah 50, 63 P. 2d 1070; Ludlow v. Colorado Animal By-Products Co., 104 Utah 221, 137 P. 2d 347.
Under the Code and the New Rules of Procedure, with law and equity administered in one court, with a great increase in the number and kinds of matters which may be litigated in one action, it is impossible to always grant and deny a jury trial on each issue the same as under the former system. As we have seen under that system, equity courts grant almost all kinds of legal relief with or without granting equitable relief. And sometimes law courts came to grant relief which at first was granted only in courts of equity, and statutory actions were created which partook of the nature of both law and equity. Adding to all this confusion, courts have come to apply many different tests to the right to trial by jury. Often the test is stated to be whether legal or equitable principles are to be applied or the *232major issue is legal or equitable, or whether the action is one of which equity would take cognizance. Norback v. Board of Directors, 84 Utah 506, 37 P. 2d 339; Kinsman v. Utah Gas & Coke Co., supra; Wasatch Oil Refining Co. v. Wade, supra; Ludlow v. Colorado Animal By-Products Co., supra; Petty v. Clark, 102 Utah 186, 129 P. 2d 568, 572. In a concurring opinion in the Petty case, Mr. Justice WOLFE said, “I think the real test of whether the basis of an action is legal or equitable lies largely in whether the court has discretion to grant or withhold the so-called equitable remedy.” But he does not apply this test in the prevailing opinion. If this were the test, there would be few non-jury cases.
Though the application of these various tests would lead to varied results, often a number of them have been repeated in the same opinion without noticing that there is a difference. If the fact that the case requires the application of legal principles is sufficient to require a jury trial, then the fact that the case is one which would have been cognizable in a court of equity under the dual court system is not alone sufficient to require the denial of such a trial for as above pointed out equity courts often applied legal principles and granted legal relief, sometimes exclusively. A plausible argument can be advanced in almost every case where the question has been raised for both sides and the result usually depends on the approach to the question. There is absolutely no consistency in the many decisions made by this court on this question, and .1 think there can be none as long as we attempt to determine it on the basis of whether the case is one of law or equity. I therefore think it is unfortunate that the prevailing opinion discussed the question from that standpoint instead of relying solely on the statute as we did in the second case of Petty v. Clark, 102 Utah 186, 129 P. 2d 589, by unanimous consent.
The statute is clear and definite and if applied as herein *233suggested we will avoid uncertainty, litigation, and subtle distinctions as to when a jury trial may be required. If in any action any of the kinds of relief specified by the statute are sought, a jury trial is required to determine the issues of fact involved in granting such relief.
In this state, we have no constitutional provision like California and many other states which provided that “the right of trial by jury shall be secured to all, and remain inviolate forever.” Koppikus v. State Capitol Comm., 16 Cal. 248. Our constitution provides that in “capital cases the right of trial by jury shall remain inviolate,” that in criminal prosecutions the accused shall have the right to “trial by an impartial jury,” and in criminal prosecutions for libel that “the jury shall have the right to determine the law and the fact.” See Article 1, Sections 10, 12, and 15, Constitution of Utah. So, in civil cases, we are not required by any constitutional provision to grant the right of trial by jury as it existed at common law. Farrell v. City of Ontario, 39 Cal. App. 351, 178 P. 740. But even if we were, still this statute would not be contrary thereto because, at least before the amendment was added, it not only granted a jury trial in cases where one .was granted at common law but in many other cases which legal relief would have under that system been granted by an equity court.
Notwithstanding the California decisions and the prevailing opinion to the contrary, I think it is clear that under the dual court common law system no jury trial could have been had in this case except possibly in the very early times when the court of equity would refuse to determine the questions of fact but would first require the parties to litigate such matters in a law court. For under the common law system as it finally developed, courts of equity would grant in one suit both damages and injunctive relief growing out of the same trespass but a law court never granted injunctive relief. So in order to litigate both these *234questions in one action under the dual court system the matter would have to be brought in an equity court where it would be tried without a jury. I, therefore, think that the result which we reach can only be reached on the basis of this statute and is inconsistent with the practice at common law when law and equity were administered by different courts.
The courts of Oklahoma and Kansas have reached the conclusion herein contended for under a statute very similar to ours. See Jones v. Benson, 158 Okl. 25, 12 P. 2d 202; Holmes v. Halstid, 76 Okl. 31, 183 P. 969; Collins v. Industrial Sav. Soc., 78 Okl. 319, 190 P. 670; Clemenson v. Chandler, 4 Kan. 558; Fidelity Nat. Bank & Trust Co. v. Cloninger, 142 Kan. 558, 51 P. 2d 35; also see concurring opinion of Mr. Justice WOLFE in first Petty v. Clark case, supra, where these cases are cited and discussed.