RAYMOND v. YARRINGTON.

[96 Tex. 443, 72 S. W. 580, 73 S. W. 800.]

CONTRACTS not to Engage in Business-When Construed to be Joint and Several.-A contract by two parties signed in their individual names, agreeing not to enter into or conduct a milling business within a designated territory without the permission of J. H. or his assigns, binds each of such parties not to engage in such business, and is violated when one of them so engages, and both thereupon become liable for the resulting damages. (pp. 917, 921.)

CONTRACT-Liability of Third Person for Causing Breach of. Where one knowingly induces another to break his contract with a third person, such third person has a right of action against the one so causing such breach for the damages resulting therefrom. 920.)

(p.

DAMAGES for Violating a Contract-Vagueness of Evidence -When does not Preclude a Recovery.-Where a contract not to engage in a specified business has been violated, he who is damaged thereby is not precluded from recovering by the fact that his evidence does not show to what extent his business was diminished by the violation of the contract not to compete with him. To require accuracy in such a case would be to deny a remedy for the wrong. (p. 922.)

James W. McClendon and Fiset & Miller, for the plaintiff in

error.

D. W. & D. H. Doom and West & Cochran, for the defendants in error.

446 GAINES, C. J. This suit was brought by plaintiff in error against defendants in error. General and special demurrers to the petition were interposed by all the defendants; and all were sustained, except those of defendant Harwood. His exceptions were overruled, but upon the trial a verdict was instructed in his favor. A judgment was accordingly entered for all the defendants; and it was affirmed on appeal to the court of civil appeals.

We will set out in substance and as briefly as practicable the facts alleged in the petition. In the first paragraph, Yarrington, Harwood, McDowell, Kaufman and the E. O. Stanard Milling Company, a corporation, are made defendants in the suit, and their respective residences are stated.

In the second paragraph it is alleged that Yarrington and Harwood were partners engaged in a brokerage or agency business and had built up a profitable trade selling flour, meal, bran and other milling products for the defendant corporation and others engaged in a like business; that the firm had con

tracts with such corporations and others which gave them an exclusive right to sell the products of their employers in a certain designated territory, of which the city of Austin was a part; but that the contracts were for no definite period of time and were terminable at the pleasure of either party upon notice to the other. It was further alleged that for the consideration of one thousand dollars the defendants Yarrington and Harwood sold to the plaintiff and to his brother, one Frank Raymond, as partners, such agency business in such territory and bound themselves not to conduct at any time thereafter, either individually or as partners, a milling agency business therein; and that the defendant milling company knew of said contract and agreed that the plaintiff and his brother should take the place of Yarrington and Harwood as their agents in the designated territory and should there represent them exclusively in the sale of their products. It was also averred in such paragraph that in the agreement it was stipulated in behalf of the defendant milling company that the plaintiff and his brother should retain defendant Yarrington to assist them in their business for the period of ninety days, and that thereby the defendant milling company impliedly agreed to retain the plaintiff and his brother as their agents in the designated territory for a reasonable time, provided they should prove to be satisfactory agents; and that but for the conduct of the defendants as thereinafter alleged the agency would have continued for a period of five years.

447

In the third paragraph it is further averred that, in order to deprive the plaintiff and his brother of the advantages to accrue to them under their contract with Yarrington and Har-. wood, the defendants conspired to break up the agency business of plaintiff and his brother in the following manner; that to obtain the one thousand dollars paid for the business, Harwood entered into the contract with the intention of not carrying out his obligation and with the purpose of again entering upon the business of an agency for the sale of mill products in the territory named in the agreement; that "in pursuance of said conspiracy" he began in August, 1898, to sell the products of other mills in such territory, and that about December of that year the defendant milling company limited the territory of Raymond and brother, as their agents, to the city of Austin. That prior to February 1, 1899, defendants McDowell and Kaufman, acting in their own behalf and as agents of the defendant milling company, took part in the

original illegal purpose of Harwood to violate said contract, and with full knowledge of the rights of the Raymonds, conspired and agreed with him that McDowell and Harwood should take the place of the Raymonds as the agents of the defendant milling company in the territory designated in the original contract between the Raymonds on the one part and Yarrington and Harwood on the other; and that thereupon the defendant milling company did employ McDowell and Ilarwood as their agents for such territory and did discontinuethe employment of the Raymonds. It is also alleged in this paragraph, that about December 1, 1898, the defendant milling company limited the agency of the plaintiff and his brother to the city of Austin, and that they continued to act as agents for such restricted territory until February 1, 1899. Then follow allegations of a loss of profits from the conduct of defendants in the sum of ten thousand dollars and that their acts were done knowingly and over the protests of the Raymonds, with a claim for exemplary damages.

In the fourth paragraph are found similar allegations as to the destruction of the business of the plaintiff and his brother and the damages, which resulted therefrom, all of which are alleged to have accrued from a conspiracy on part of defendants McDowell, Kaufman, the milling company and Harwood to cause Harwood to break his contract with the Raymonds.

The fifth paragraph repeats the allegations as to the damages. The sixth alleges an assignment for value by Frank Raymond of his interest in the cause of action to the plaintiff.

Were the demurrers of the defendants other than Harwood properly sustained? A copy of the written contract between the plaintiff and Yarrington and Harwood is made an exhibit to the amended petition and contains this provision: “We specially agree and bind ourselves not to enter into or conduct a milling agency business in the city of Austin or the territory above designated without the written permission of J. H. Raymond, Jr., or his assigns." It appears from the averments in the petition that Harwood only engaged in a milling agency business in the prohibited territory after the contract was executed; therefore, unless the contract properly construed bound each of them not to conduct such business, no cause of action is shown against either of the defendants. Do Yarrington and Harwood, by the contract, bind themselves 448 that neither of them shall sell mil products in the prohibited territory, or merely that both shall not? This question we referred back to the counsel for written arguments and the arguments have been

filed. From the cases there cited we feel constrained to hold that it was a breach of the contract for either Yarrington or Harwood to again engage in the business in question in the -designated territory. In the case of Welsh v. Morris, 81 Tex. 159, 16 S. W. 744, a partnership known as Welsh Brothers sold out a business as undertakers to the plaintiff Morris and bound themselves "not to start the undertaking business in Denison City, Texas, so long as said S. B. Morris is in the business." Subsequent to the execution of the contract one of the partners only engaged in the prohibited business, and it was contended that this was no breach of the stipulation. It was held, however, that the action of the one was a breach of the contract. The contract was signed "Welsh Brothers"; and counsel for defendants in error frankly concede that unless this case can be distinguished by the fact, that the contract of Yarrington and Harwood is signed by each of them in their individual names only, it is conclusive of the question against them. We do not think the cases can be distinguished. The contract of Yarrington and Harwood, though signed by them individually, is as anuch a contract as partners as if it had been signed in the partnership name. The decision in Welsh v. Morris, 81 Tex. 159, 16 S. W. 744, is in accordance, as we think, with the weight of authority. See opinion of Alvey, chief justice, in Love v. Stidham, 18 App. D. C. 306, 53 L. R. A. 397, and cases there cited. Contra: Streichen v. Fehleisen, 112 Iowa, 612, 84 N. W. 715.

The case then made by the petition is that the defendants, other than Harwood, conspired to induce and did induce the latter to break his contract to the damage of the plaintiff. The important question is, Does this show a cause of action? The point has never been decided in this court, and the authorities upon it elsewhere are in conflict. We think, however, the great weight of authority is in favor of an affirmative answer to the question.

We will first review briefly the cases in the English courts in which the point has come up for consideration.

The first is the leading case of Lumley v. Gye, 2 El. & B. 216, which was decided in 1853. In that case the plaintiff, the lessee of a theater, sued the defendant, alleging that a -certain singer had been engaged by the plaintiff to sing at his theater and none other, and that while she was under such contract the defendant maliciously induced and enticed her not to perform for him as she had agreed to do. Upon demurrer to the declaration it was held, by three of the judges, that it

showed a good cause of action. Justice Coleridge, one of the four judges who sat in the case, dissented. Practically the same question came before the court in the case of Bowen v. Hall, L. R. 6 Q. B. Div. 333. It was again held that an action would lie for inducing one under a contract of service to another to leave the service. Lord Coleridge, then the chief justice of the common pleas, dissented from the opinion of the majority.

449 Again, in 1893, the case of Temperton v. Russell (1893), L. R. 1 Q. B. Div. 715, came up for decision. There the plaintiff was a contractor and builder and had made contracts with third persons to supply him with material to be used in his business. The defendants were a committee of certain trades unions; and for the reason that plaintiff would not comply with certain rules laid down by the unions, they induced those who had contracted to deliver him material to break their contracts, and also conspired to prevent others from entering into contracts with him. It was held that they were liable both for inducing a breach of the existing contracts and also for conspiring to prevent others from entering into contracts with the plaintiff.

A similar case came before the house of lords in 1897: Allen v. Flood [1898]. L. R. App. Cas. 1. In that case the plaintiffs were employed by the job at work upon a ship, but were subject to be discharged at the will of their employer. Allen, the defendant, representing a boilermakers' society, called upon the agents of their employer, and stated to them, that, unless the plaintiffs were discharged, the members of the boiler-makers society, about forty in number, then at work on the ship, would be "called out" or "knock off" work on that day. Thereupon their employer discharged the plaintiffs; and they brought suit against the defendant, alleging in effect that he had unlawfully and maliciously caused their discharge. It was held by the court-four of the nine law-lords dissenting-that, since the employer had a right to discharge the plaintiffs and since the discharge was lawful, the defendant was not liable for having procured it, although as found by the jury he acted from a malicious motive. In the numerous opinions which were given in the case, the previous cases of Lumley v. Gye, 2 El. & B. 216, and Bowen v. Hall, L. R. 6 Q. B. Div. 333, were discussed. After that decision it became a question, whether their authority had not been shaken, if not overturned thereby. But in 1901 the important case of Quinn v. Leathem, [1901] App. Cas. 495, arose, and it was there held that