And, the Texas Supreme Court has so held. Frankiewicz v. National Comp Associates, 633 S.W.2d 505, 507-08 (Tex. 1982). See also Peat, Marwick, Mitchell Co. v. Sharp, 585 S.W.2d 905 (Tex.Civ.App.-Amarillo 1979, writ ref'd n.r.e.); Southwestern Bell Telephone Co. v. Gravitt, 551 S.W.2d 421 (Tex.Civ.App.-San Antonio 1977, writ ref'd n.r.e.).But cf. Dollgener v. Robertson Fleet Services, Inc., 527 S.W.2d 277 (Tex.Civ.App.-Waco 1975, writ refd n.r.e.) (allowing forfeiture of all interest in a pension plan entirely funded by the employer, for violation of a restrictive covenant, unlimited as to time or area).
Stroman argues that if he is denied ownership of the stock he will have forfeited a benefit under the contract as a result of Ray Son's unreasonable and unenforceable restraint of trade, a result prohibited by Texas law. Stroman cites Peat Marwick Main Co. v. Haass, 818 S.W.2d 381 (Tex. 1991); Frankiewicz v. National Comp. Assoc., 633 S.W.2d 505 (Tex. 1982); and Peat, Marwick, Mitchell Co. v. Sharp, 585 S.W.2d 905 (Tex.Civ.App. — Amarillo 1979, writ ref'd n.r.e.) in support of his argument. These cases involved contractual provisions that called for forfeiture of benefits in the event of breach of the covenant not to compete.
The district court distinguished Frankiewicz on the basis that the "post-termination payments were renewal commissions on insurance policies employee had sold prior to termination, and were thus not given solely for promise not to compete." Id. at 8-9 and n. 5. The court also distinguished Hanks v. GAB Business Services, Inc., 644 S.W.2d 707, 708 (Tex. 1982) and Peat, Marwick, Mitchell Co. v. Sharp, 585 S.W.2d 905, 907-08 (Tex.Civ.App. 1979, writ ref'd n.r.e.), on similar grounds. We are persuaded that the district court correctly distinguished Frankiewicz.
A stipulation is a contract between the parties, and it is subject to judicial interpretation like any other contract. See, e.g., Fourticq v. Fireman's Fund Ins. Co., 679 S.W.2d 562, 566 (Tex.App. — Dallas 1984, no writ); Peat, Marwick, Mitchell Co. v. Sharp, 585 S.W.2d 905, 909 (Tex.Civ.App. — Austin 1979, writ ref'd n.r.e.). The oral stipulation in this case does not expressly state that the Cahills paid taxes on the cedar tracts.
Second, any limitations as to time, geographic area, and scope of activity contained therein must be reasonable and no greater than that needed to protect the goodwill or other business interest[s] of the employer. Tex.Bus. Comm. Code Ann. § 15.50; Zep Mfg. Co. v. Harthcock, 824 S.W.2d at 660; Peat, Marwick, Mitchell Co. v. Sharp, 585 S.W.2d 905, 908 (Tex.App. — Amarillo 1979, writ ref'd n.r.e.). In applying these criteria to the clause at bar, problems quickly arise. It is not ancillary to an enforceable agreement.
We have previously stated that the failure to request reformation in the trial court operates as a waiver of the right of reformation. See Daytona, 800 S.W.2d at 290; see also Peat, Marwick, Mitchell Co. v. Sharp, 585 S.W.2d 905, 908 (Tex.Civ.App. — Amarillo 1979, writ ref'd n.r.e.) (failure to request reformation of covenant in trial court waived common law right to reformation). There is nothing in the record reflecting that TAMSS requested the trial court to reform the covenant.
A stipulation is an agreement, admission, or concession made in a judicial proceeding by the parties relating to matters incident to the proceedings. Peat, Marwick, Mitchell Co. v. Sharp, 585 S.W.2d 905 (Tex.Civ.App. — Amarillo 1979, writ ref'd n.r.e.). It is generally a voluntary agreement between opposing counsel concerning disposition of some relevant point so as to obviate the need for proof or to narrow the range of litigable issues. See BLACK'S LAW DICTIONARY 1269 (5th ed. 1979).
Consequently, I would hold that the agent's right to renewal commissions may not be forfeited because of a breach of this illegal condition. Peat, Marwick, Mitchell Co. v. Sharp, 585 S.W.2d 905, 908 (Tex.Civ.App. Amarillo 1979, writ ref'd. n. r. e.); Johnson v. Country Life Insurance Co., 12 Ill. App.3d 158, 300 N.E.2d 11, 15 (1973). In Weatherford Oil Tool Co. v. Campbell, 161 Tex. 310, 340 S.W.2d 950, 953 (1960), the supreme court stated:
Cook, 263 S.E.2d 430 (Va. 1980) (upholds post-employment covenant imposing two-year restriction, specifying no geographical limitation, and providing for sizeable liquidated damages); Ebbeskotte v. Tyler, 127 Ind. App. 433, 142 N.E.2d 905 (1957) (upholds two-year restriction; court finds implied territorial limitation); Scott v. Gillis, 197 N.C. 223, 148 S.E. 315 (1929) (upholds three-year restriction with no geographical limitation); Racine v. Bender, 141 Wn. 606, 252 P. 115 (Sup. 1927) (upholds three-year restriction without geographical limitation). Decisions holding invalid covenants which prohibit accountants from soliciting or providing services for clients of their former employers: Smith, Batchelder Rugg v. Foster, 119 N.H. 679, 406 A.2d 1310 (Sup. 1979) (refuses to enforce three-year restriction; focuses on lack of defined geographical area, on onerous liquidated damages provision, and on great disparity in size of plaintiff's and defendant's clientele); Peat, Marwick, Mitchell Co. v. Sharp, 585 S.W.2d 905 (Tex.Ct.App. 1979) (finds two-year restriction without territorial limitation to be invalid as restraint of trade and as violation of public policy); Heller v. Magaro, 148 Ga. App. 591, 252 S.E.2d 11 (Ct.App. 1978) (two-year restriction with no geographical limitation unenforceable as against public policy; Howard Schultz Assoc. v. Broniec, 239 Ga. 181, 236 S.E.2d 265 (Sup. 1977) (court refuses to rewrite covenant with unjustifiably broad territorial restriction which also fails to specify nature of business activities prohibited); Fuller v. Kolb, 238 Ga. 602, 234 S.E.2d 517 (Sup. 1977) (two-year restriction with no geographical limitation unenforceable); Gant v. Warr, 286 Ala. 387, 240 So.2d 353 (Sup. 1970) (covenant unenforceable under statute which voids restrictions on the exercise of a lawful profession). Under Solari Industries, Inc. v. Malady, 55 N.J. 571, 576 (1970), a covenant not to compete will be given effect "if it is reasonable in view of all the circumstances of the particular case."