Court Opinion

ID: 3889269
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:18:35.420566+00
Date Added: 2024-06-11T13:55:46.652637
License: Public Domain

If I understand the majority opinion correctly it is based upon the proposition that the contract between Lien and Blair Brothers is a lease of real property; that the restraining clause relates to the use of other real property belonging to Blair Brothers, and was incorporated in the lease for the protection of Lien under the lease; that the restraint is valid if reasonable for such protection.
As stated in the majority opinion, the contract gave Lien the exclusive right to remove from a quarter section of land, lime rock suitable for highway construction, and in addition provided that Blair Brothers would not permit the removal of similar products from any other "contiguous or adjacent acreage owned by them" during the three-year term of the agreement. This, in my opinion, constitutes a license, not a lease of real property. Schnuerle v. Gilbert, 43 S.D. 535, 180 N.W. 953.
It is undisputed that, with knowledge of the Lien contract, defendant, Northwestern Engineering Company, removed twenty-four thousand tons of lime rock from such "contiguous or adjacent acreage" under a contract with Blair Brothers. Lien claims that this constituted a breach of the restraining clause contained in his contract with Blair Brothers. Defendants claim that the clause in question is in restraint of lawful trade and business and that it is therefore void.
SDC 10.0706 provides: "Every contract restraining exercise of a lawful profession, trade, or business is void to *Page 98 
that extent, except: (1) One who sells the good will of a business may agree with the buyer to refrain from carrying on a similar business * * *."
It cannot be seriously questioned that the clause of the contract by which Blair Brothers agreed to sell or remove no lime rock from contiguous or adjacent land is in restraint of a lawful business, and that it is void unless it comes within the exception of Subdivision (1) of the above statute. This is clearly pointed out in the opinion of Hayes, J., filed in this case. To come within that exception the restraint must be a part of a contract for the sale of the good will of a business. Kidder Equity Exchange v. Norman, 42 S.D. 229, 173 N.W. 728, 5 A.L.R. 1180. "Good will exists as property merely as an incident to other property rights and is not susceptible of being owned and disposed of separately and apart from the property right to which it is incident." 38 C.J.S., Good Will, § 3.
This contract relates to the business of selling lime rock from the Blair Brothers' land. There is no evidence in this case to show that Blair Brothers ever engaged in the business of selling lime rock from their land, and without such a business Blair Brothers could have no good will to sell. Public Opinion Pub. Co. v. Ransom, 34 S.D. 381, 148 N.W. 838, Ann.Cas. 1917A, 1010.
Neither is the agreement between the parties one of purchase and sale. The contract was a standing offer by Blair Brothers to permit the removal of rock by Lien from the quarter section of land. This offer was subject to acceptance by Lien at any time during the three-year term of the contract. As Lien might have, at any time, removed rock from the land or obligated himself by the sale of rock to others he could have brought about an acceptance of the Blair offer to sell and in such case the contract of purchase and sale would be complete as to the extent of such acceptance. Lien never removed any rock from the quarter section of land, and never sold any rock for removal from the land. Consequently, the offer to sell by Blair Brothers was never accepted by Lien and no sale of rock ever took place. McCaul-Dinsmore Company v. Heyler, 44 S.D. 418, 184 N.W. 243; Hopkins v. Racine Maleable  Wrought Iron Co., *Page 99 137 Wis. 583, 119 N.W. 301; Wickham  Burton Coal Co. v. Farmers Lumber Co., 189 Iowa 1183, 179 N.W. 417 14 A.L.R. 1293, Anno. 1300.
It is, therefore, my opinion that the clause in question restrains the exercise of a lawful business under circumstances not permitted by the exception contained in SDC 10.0706, and that the clause is therefore void.