Opinion
No. 50/514.
07-29-1922
COLLABELLA et al. v. NAIDECH et ux.
William H. J. Ely, of Rutherford, for complainants. Weinberger & Weinberger, of Passaic, for defendants.
Bill by Arthur Collabella and another against Hyman Naidech and wife. Decree for complainant.
William H. J. Ely, of Rutherford, for complainants.
Weinberger & Weinberger, of Passaic, for defendants.
FOSTER, V. C. This bill seeks to restrain defendants from engaging in competing lines of business with the complainant the Riverside Coal & Supply Company. In February, 1921, Naidech agreed to sell to the complainant Collabella for $16,000 his interest in the Coal & Supply Company. In April, 1921, when the balance of the purchase price was paid and the sale consummated, Naidech agreed with Collabella and the Coal & Supply Company that he would "not at any time within ten yrs. enter into any business or partnership whose business would compete or in any wise hinder or annoy the said business of said corporation, this with—in a radius of 10 miles of the present plant of the said corporation."
The business of the company was and is the sale of coal, grain, and mason's materials. Shortly after this sale, Naidech transferred the proceeds of the sale and his bank balance of over $6,000 to his wife, and also transferred and conveyed to her his real estate and other property, and about July, 1921, the business of the New Jersey Grain & Supply Company was started, and has since been conducted in Nnidech's home on Center street, Nutley, within the area prohibited by the agreement.
Defendants contended the property and business belong to Mrs. Naidech; that Naideeh's properties were conveyed to her to enable her to pay notes and other indebtedness they had contracted some years previously in another business; and they further claim that, because of Naidech's illness, he is unable to conduct business for himself, and only incidentally assists his wife in the management of the business of the New Jersey Grain & Supply Company, which admittedly is engaged in business competing with the Riverside Coal & Supply Company, in which the complainant Collabella is a stockholder. Defendants further contend that the contract must be construed strictly in their favor; that Naidech's agreement not to "enter" into any competing business or partnership cannot be so enlarged as to prevent him from assisting his wife in her business, as the word "enter," in the agreement, means Naidech must not enter any competing business as a principal.
The proofs show that Naidech has actively participated in the business of the New Jersey Grain & Supply Company; that he has solicited orders for mason materials and has attended to the delivery of such materials; that he has quoted prices therefor and collected money for the same, and has given receipts for such money; that he has also shown customers over his property, and pointed out a railroad siding which he stated had cost him $3,500; and, while the proofs also show that Mrs. Naidech participates in the conduct of the business, I am convinced that in doing so she is merely assisting her husband in carrying on his business.
The facts and circumstances established by the proofs further satisfy me that the use of the name of Mrs. Naidech, or of the New Jersey Grain & Supply Company, In the business, Is a mere subterfuge, resorted to by Naidech to evade the agreement entered into by him with complainants, and while the agreement in question is not binding upon Mrs. Naidech, and she is of course at liberty to engage in a competing business with complainant, I do not find that to be the situation here, for the proofs show this to be the business of her husband, and under the rule stated in Fleckensfein v. Fleckenstein, 66 N. J. Eq. 252, 57 Atl. 1025, and other cases in this state, the decree prayed for will be advised.