Opinion
22884, 22892.
ARGUED MARCH 8, 1965.
DECIDED APRIL 8, 1965.
Injunction. Richmond Superior Court. Before Judge Kennedy.
William C. Calhoun, for plaintiffs in error.
Cohen, Cohen Slaton, James E. Slaton, contra.
1. A contract for a valuable consideration wherein the seller of a business agrees not to compete with the purchaser, if reasonable as to territory, need not be limited as to time, in order to be a valid and binding contract.
2. The admissions of the defendants in their verified answers and the testimony upon the trial supported the verdict for the plaintiff; and the charge excepted to was authorized by the evidence.
3. Where lands are held by the United States Government for forts and arsenals, the public buildings erected thereon, together with the roads, streets, or other essential appurtenances, are free from such jurisdiction of the State as might impair effective use for the purposes intended.
ARGUED MARCH 8, 1965 — DECIDED APRIL 8, 1965.
On December 3, 1963, Charlie Reid filed his petition for equitable relief against Lillie Mae Brittain, doing business as Service Cab Company, and her husband, James E. Brittain. In substance the petition alleged: On December 6, 1961, James E. Brittain sold and conveyed to the plaintiff his taxicab businesses, known as Harlem and Packard Cab Companies, together with all equipment, permits, licenses, and good will. Paragraph 3 of the sales contract provided: "Seller agrees that he will not go into the taxicab business either as a partner, owner, or operator of such a business, or that he will own or have any interest in or connection with any taxicab business within a radius of fifty (50) miles of the City of Augusta, Georgia, within the next twenty-five (25) year period." James E. Brittain has obtained a license to operate taxicabs for hire on the reservation of Fort Gordon, Georgia, and is now operating a cab there under the name of Service Cab Company. James E. Brittain is the true owner and operator of Service Cab Company. He has placed the registration of the business in his wife's name as a subterfuge to circumvent the provisions of his contract with the plaintiff. As a result of Brittain violating his contract, the plaintiff will be irreparably damaged, and he is now suffering daily financial loss. The plaintiff has no adequate remedy at law, and unless the defendants are enjoined from operating a taxicab business, the plaintiff will suffer complete financial ruin. The prayers were: for process; that the defendants be temporarily and permanently enjoined from operating or entering into the taxicab business within the radius and time provided by the contract; for damages; and for other relief.
The defendants filed separate answers. James E. Brittain admitted the sale to the plaintiff and the execution of the contract sued upon, but denied all other material allegations. He alleged: The defendant abided by his agreement with the plaintiff until April, 1963, when the plaintiff sold the defendant a taxicab, and the defendant, with the plaintiff's permission, reentered the taxicab business and operated a taxicab for hire in conjunction with the Harlem Cab Company, and operated the taxicab for the plaintiff until September, 1963. The actions on the part of the plaintiff constituted a lawful breach of the agreement and the defendant is no longer bound thereby. The period of 25 years set forth in the agreement is unreasonable "within the meaning of the law and that portion should be set aside."
Lillie Mae Brittain admitted the execution of the contract. She denied the allegation that her husband had procured a license to operate cabs at Fort Gordon. She admitted that her husband was driving a cab under the name of Service Cab Company. She alleged that: She is the sole owner of Service Cab Company and operates solely on the military post under a license granted by authorities of Fort Gordon "with the exception of trips initiating from said Post." The plaintiff does not hold a license to operate at Fort Gordon, but operates in the City of Augusta. The defendant's business is not competitive with the business of the plaintiff, and she has caused him no damage.
On the interlocutory hearing an order was entered enjoining both the defendants as prayed. On the trial before a jury on the prayers for a permanent injunction a verdict was returned enjoining both defendants from operating, or being associated with, the taxicab business as provided in the sales agreement between Brittain and Reid. Judgment was entered enjoining the defendants as provided by the agreement, but it was further provided in the judgment: "It appearing to the court that it is necessary to have a license or permit from the Commanding General of Fort Gordon, to enable a taxicab operator to do business at said post; it further appearing without dispute that on December 6, 1961, and at all times prior to and subsequent thereto, the plaintiff, Charlie Reid, did not have such a license or permit, and that the defendant does have such a permit, and therefore the operation of a taxi business solely on the post at Fort Gordon by the defendants would in no wise be competitive to Charlie Reid, the plaintiff, and would not be a violation of the contract between the plaintiff and the defendant and the prohibition of such operation is excluded from this permanent injunction. Such operation must be solely on the post to come within the terms of this exclusion and any operation on the public highways off the post within the 50-mile radius above referred to, even though the passenger may originate on the post would not be excluded from the terms of this permanent injunction."
The defendants except to the judgments overruling their motion for judgment notwithstanding the verdict and their motion for new trial. By cross bill of exceptions the plaintiff excepts to so much of the judgment as excludes from the injunction granted the operation of a taxicab business by the defendants within the confines of Fort Gordon.
1. Where the owner of a business conveys it and the good will of the business by written contract for a valuable consideration and agrees not to compete with the purchaser, and the agreement is reasonably limited as to territory, it need not be limited as to time. In Goodman v. Henderson, 58 Ga. 567, 569, this court said: "The principle seems to be, that the restraint of trade must be limited in territory, limitation in time not affecting the validity of the contract. It may be forever, and still good." The rule stated in the Goodman case has always been the rule in Georgia. Holmes v. Martin, 10 Ga. 503; Seay v. Spratling, 133 Ga. 27, 29 ( 65 S.E. 137); Orkin Exterminating Co., Inc. of South Georgia v. Dewberry, 204 Ga. 794, 803 ( 51 S.E.2d 669); Wood v. McKinney, 205 Ga. 370 ( 53 S.E.2d 684). The contention of the defendants (plaintiffs in error in the main bill of exceptions) that the contract of Brittain not to re-enter the taxicab business for a period of 25 years is unreasonable as to time is without merit and can not be sustained.
2. The defendants were bound by the admissions made in their answers under oath, which admissions were neither stricken nor amended. Cheney v. Selman, 71 Ga. 384, 387; Youngblood v. Youngblood, 74 Ga. 614, 618; Lydia Pinkham Medicine Co. v. Gibbs, 108 Ga. 138, 141 ( 33 S.E. 945); Alabama Midland R. Co. v. Guilford, 114 Ga. 627 ( 40 S.E. 794); Neal Loan Banking Co. v. Chastain, 121 Ga. 500 ( 49 S.E. 618); Elliott v. Marshall, 179 Ga. 639, 641 (4) ( 176 S.E. 770); Hutchins v. McDowell, 202 Ga. 1, 7 ( 41 S.E.2d 300). In Lydia Pinkham Medicine Co. v. Gibbs, 108 Ga. 138, 141, supra, it was said that admissions in pleadings, like admissions from the witness stand, are in judicio and can not be withdrawn so as to deprive the other party of the benefit of them.
In her verified answer Lillie Mae Brittain admitted that she had knowledge of the contract between her husband and the plaintiff whereby her husband was not to engage in the taxicab business. Her answer alleged that she operates solely at Fort Gordon under a license granted by the authorities of Fort Gordon "with the exception of trips initiating from said Post." The verified answers of the defendants and their testimony demanded a finding by the jury that James E. Brittain had engaged in the taxicab business in his wife's name, operating a cab and acting as her agent, and that she had knowledge of his contract and participated with her husband in the violation of his contract.
The testimony of James E. Brittain that he operated one cab for a limited period of time, with the knowledge and consent of the plaintiff, after the execution of the contract with the plaintiff in which he agreed not to engage in the taxicab business, if true, would not have the effect of vacating the written contract in its entirety. However, this testimony of Brittain was contradicted by the plaintiff, who testified that Brittain drove a cab for him for a short period of time, and that Brittain was in his employ.
In the amended motion for a new trial the defendants except to the charge that "if you believe there has been any collaboration or conspiracy between the defendant, Brittain, and his wife, Lillie Mae Brittain, she also should be enjoined . . ." The charge of the court excepted to was amply authorized by the evidence. Both the defendants' verified answers and the evidence showed collaboration between the defendants, husband and wife, to violate the terms of the husband's contract with the plaintiff.
3. By cross bill of exceptions the plaintiff (defendant in error in the main bill of exceptions) excepts to so much of the judgment of the court as permits the defendants to operate a taxicab business within the confines of Fort Gordon. At the time of the execution of the contract between the plaintiff and the defendant James E. Brittain neither had a license to operate at Fort Gordon, and under the uncontradicted testimony, no taxicab can be operated on the premises of Fort Gordon without a license from the Commanding General.
Under the provisions of Art. I, Sec. 8, Par. 17 of the Constitution of the United States ( Code § 1-125), the Federal Government may exercise exclusive jurisdiction over all places acquired for forts, arsenals, and other needful buildings. Jurisdiction of lands composing military reservations in this State has been ceded by the State to the Federal Government. Code §§ 15-301; 15-302, as amended (Ga. L. 1952, p. 264; Ga. L. 1963, p. 555) and 15-303. In Fort Leavenworth Railroad Co. v. Lowe, 114 U.S. 525, 539 ( 5 S.C. 995, 29 LE 264) the Supreme Court said in part: "Where, therefore, lands are acquired in any other way by the United States within the limits of a State than by purchase with her consent, they will hold the lands subject to this qualification: that if upon them forts, arsenals, or other public buildings are erected for the uses of the general government, such buildings, with their appurtenances, as instrumentalities for the execution of its powers, will be free from any such interference and jurisdiction of the State as would destroy or impair their effective use for the purposes designed." See also Pundt v. Pendleton, 167 Fed. Rep. 997.
In International Business Machines Corp. v. Evans, 213 Ga. 333 ( 99 S.E.2d 220), Mr. Chief Justice Duckworth, writing the opinion for the court, after holding that private property on military reservations could be taxed, stated (at page 338): "This does not mean that the United States is restricted in the full use of its property, free from any State interference."
The trial judge in not restricting the use of taxicabs by the defendants on the military reservation of Fort Gordon was authorized to take such action since the question of whether or not taxicabs shall be operated at Fort Gordon is for the determination of the Commanding General or other proper military authorities and not the courts of this State.
Judgment affirmed on both the main bill and the cross bill of exceptions. All the Justices concur, except Duckworth, C. J., and Candler, J., who dissent from the ruling on the cross bill.
I concur in the judgment on the main bill but dissent from the judgment on the cross bill and the portion of the opinion and headnote on which the judgment is based. I am a firm believer in requiring parties to live up to their agreements and never at any time judicially to permit a party to a contract to violate its plain terms.
I am authorized to state that Mr. Justice Candler concurs in this dissent.