Summary
In More v. Bonnet, 40 Cal. 251 [6 Am. Rep. 621], upon which appellants principally rely, a contract not to engage in a particular business "in the City and County of San Francisco, or State of California" was held void.
Summary of this case from General Paint Corp. v. SeymourOpinion
Appeal from the District Court of the Fifteenth District, City and County of San Francisco.
The plaintiff appealed.
COUNSEL:
We find in this covenant the mention at least of two separate and distinct limits wherein restraint is to be exercised. The breach of covenant is alleged to have accrued within the limits of the first mentioned area, and the complaint in this regard is silent as to the other. If the memorandum of contract had contained a covenant of restriction limited only to the City and County of San Francisco, such a covenant would undoubtedly have been valid. (Wright v. Ryder, 36 Cal. 357-8; Chappell v. Brockway, 21 Wend. 162; Holbrook v. Waters, 9 How. Pr. 338; Bunn v. Gay, 4 East, 190.) But it is insisted, that because the memorandum of contract contains the further words " or State of California," the effect is to destroy the force of the covenant as regards the area limited to the City and County of San Francisco, or the contract is to be so construed as to merge this reasonable and restricted limit to the said City and County, into a general and totallimit extending over the whole State. In other words, that, by this addition to the contract, the intention of the parties was to wipe away any effect created by their former words, and to create but a single covenant of restraint, limited to the whole State. Such a method of construction is hostile both to the ordinary and usual meaning of the words used, and to all legal precedent and authority. If the additional words had been " or State of New York" no question whatever would have arisen, but that the disjunctive " or" had been used in the ordinary sense of a disjunction signifying a separation, and not a combination. But, apart from this reasoning on phraseology, we maintain that the law construes this covenant as an agreement to refrain from exercising a trade within the limits of two separate and distinct areas, and though the restraint as to the latter limit be bad, yet the law will still afford relief for a violation of the covenant as regards the former valid limit. (Story on Contracts, Sec. 640, and notes 2 and 4; Archibald v. Thomas, 3 Cow. 290; Smith v. Parkhurst, 3 Atk. * p. 136; Jackson v. Showl, 29 Cal. 272; Saunders v. Clark, 29 Cal. 305; People v. Rickett, 8 Cow. 226.)
Pringle & Pringle, for Appellant.
Jarboe & Harrison, for Respondent.
The contract being illegal confers no right upon the plaintiff. It is in restraint of trade, and void as against public policy. (Wright v. Ryder, 36 Cal. 356, and the various cases therein enumerated.)
This proposition is not controverted, but it is insisted that the covenant is valid, inasmuch as the " City and County of San Francisco" may be taken by itself and is a " reasonable restricted limit." To this we reply: The contract is an entire one and cannot be separated. An entire contract that is void in part is entirely void, and cannot be enforced. (Roby v. West, 4 N.H. 290; Crawford v. Morrell, 8 Johns. 253; Mechelen v. Wallace, 7 Ad. A. E. 49; Thomas v. Williams, 10 B. & C. 671.)
We do not understand the case of People v. Rickett, cited by appellant, as deciding that a lease, void by the Statute of Frauds, is valid so as to confer any affirmative rights upon the tenant. It merely holds that, for the purpose of determining such tenancy, the entry by the tenant shall be held lawful so as to entitle him to a proper notice to quit, carrying out the doctrine previously held, that for suchpurposes a tenancy at will shall be deemed a tenancy from year to year. The three cases last cited by us above are in point, that a contract void in part by reason of the Statute of Frauds cannot be made the basis of a cause of action.
This is not a case where the rules applicable to construction of ambiguous words or phrases may be invoked. There is nothing ambiguous in the contract; no word or phrase that is capable of two interpretations. The only question is whether the contract is entire or several. That it is entire, we think, is apparent upon its examination.
There is only one consideration for the entire agreement of Bonnet, viz: two thousand dollars. There is no sum affixed for the sale of the merchandise, none for the good will, none for the covenant not to engage in the business in San Francisco, none for the covenant not to engage in the business in California. Had there been a different valuation affixed to each of these items, the appellant might, with some degree of propriety, have argued that the contracts were several, but in the absence thereof, such argument is inapplicable.
JUDGES: Rhodes, C. J., delivered the opinion of the Court.
OPINION
RHODES, Judge
M. Bonnet & Co., in consideration of $ 750 to them paid by the plaintiff, and his promissory note for $ 1,250, payable to them in five equal monthly installments, sold to the plaintiff, all the tools and utensils used by them in their business of asphaltum roofing and pavement-laying, a certain lot of gravel, and a good will of that business in all its branches; and they further promised and agreed with the plaintiff, that in case he should pay the several installments of the note, as they should become due, they " shall not hereafter at any time engage, either directly or indirectly in the said business of asphaltum roofing or pavement-laying in the City and County of San Francisco, or State of California." It is alleged in the complaint, that the defendant was carrying on that business under the name of Bonnet & Co. The plaintiff sues to recover damages for an alleged breach of that contract, and to enjoin the defendant from carrying on that business in the City and County of San Francisco, or the State of California. The demurrer to the complaint was sustained on the point, that the contract is in total restraint of trade, and therefore void, as against public policy.
It is not doubted that the contract, so far as it relates to the whole State is void (Wright v. Ryder, 36 Cal., 367); but it is contended that the contract restrains the exercise of the business within two distinct areas; that the contract is severable--the one part restraining the exercise of the business within the City and County of San Francisco, and the other part restraining its exercise within the State, and that, while the latter is void, the former is valid, because the limits are not unreasonable. But we are of the opinion that the contract is, in that respect, entire. No precise rule can be laid down for the solution of the question, whether a contract is entire or separable; but it must be solved by considering both the language and the subject matter of the contract. There were not two distinct areas, for the one included the other. The defendant's business was not carried on in the two distinct areas, as two separate occupations, but the complaint avers that the defendant was carrying on the business in the State, and that he sold such business to the plaintiff. Then the price is expressly apportioned by the contract, or the apportionment may be implied by law, to each item to be performed, the contract will generally be held to be severable; but no such apportionment can be made of this contract. When the contract provides for the restraint of the business within the State, if the mention of any subdivision of the State will make the contract severable, then it would be easy to defeat the rule prohibiting contracts in total restraint of trade by mentioning in the contract each subdivision of the State; and when it is objected that the limits are unreasonable it will be answered that the plaintiff seeks to enjoin the defendant from pursuing the business, in only one of the cities or towns mentioned in the contract.
Judgment affirmed.