Opinion
No. 21841.
1947-09-20
SCHUMACHER v. LOXTERMAN et al.
M. N. Goodrich and R. H. Goodrich, both of Painesville, for plaintiff. Wayne Milburn, of Painesville, for defendant.
Action by Henry Schumacher, doing business as Reed Sunshine Dairy Company, against Jack Loxterman and others to enjoin defendants from soliciting, selling or delivering milk or other dairy products along designated routes served by them while in the employ of plaintiff.
Judgment in accordance with opinion.M. N. Goodrich and R. H. Goodrich, both of Painesville, for plaintiff. Wayne Milburn, of Painesville, for defendant.
This case came before the Court on the plaintiff's suit for an injunction.
The plaintiff's petition stated in substance that he is the owner of and doing business as Reed Sunshine Dairy Company and as such is operating milk routes selling and delivering milk and other dairy products in and about the City of Painesville, Township of Painesville, Village of Fairport, Village of Richmond, Township of Leroy, Township of Concord, Township of Mentor, Village of Mentor, Township of Willoughby, and Village of Willoughby, all being situated in Lake County, Ohio; and that he owns said routes as far as it is legally and equitably possible to own the same. He claimed that during the past year he has employed the defendants, Jack Loxterman, Andrew Loxterman, and William Loxterman, as driver-salesmen to sell and deliver milk and other dairy products on several routes in the above area, the said Jack Loxterman having been employed by this plaintiff to serve Route 6, so-called, during the past 12 months, said Route 6 covering territory in Mentor, Willoughby, Leroy, Concord and the western part of the city of Painesville; the said Andrew Loxterman having been employed by this plaintiff to serve Route 3, so-called, during the past 12 months, said Route 3 covering territory in Fairport, part of Painesville City, Village of Richmond and Mentor Headlands; the said William Loxterman having been employed by this plaintiff to serve Route 4, so-called, during the past 12 months, said Route 4 covering territory in the greater part of Painesville City, Painesville Township, including Painesville Township Park; and that the defendants, while in the employ of the plaintiff, were members of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local No. 918, hereinafter called the Union; and that under date of August 13, 1946, the Union and the plaintiff entered into a written agreement as follows: ‘No driver-salesman or relief driver, after leaving the employ of the Employer, shall sell, solicit, or deliver for any other firm, or for himself, on the route or routes served by him during the preceding year, until twelve (12) months shall have elapsed after leaving the service of the Employer previously employing him.’ This agreement provided further that it should go into effect as of August 1, 1946, and continue until September 30, 1947, and these defendants were in the employ of the plaintiff during the period covered in this contract.
The defendants, Andrew Loxterman and William Loxterman, left the employ of this plaintiff under date of August 11, 1947, and the defendant, Jack Loxterman, left the employment of this plaintiff under date of August 12, 1947, and they have ever since said dates solicited customers for the sale of milk and other dairy products for themselves along the several routes previously served by them while in the employment of this plaintiff and under date of September 21, 1947, the defendants began to sell and deliver milk and other dairy products for themselves along the routes previously served by them while in the employ of this plaintiff and are now engaged in the dairy business as and for themselves, contrary to the terms and provisions of the aforesaid contract. Plaintiff has been informed and therefore believes that the defendants are operating their business as a partnership, known as the Lockie Lee Dairy with their principal place of business located at Mentor, Lake County, Ohio.
The plaintiff claimed that he has and is selling and delivering milk and other dairy products along the aforementioned routes served by the defendants while in his employ but that by reason of the solicitations, sales and deliveries of milk and other dairy products by these defendants this plaintiff has lost customers on said routes and his business is being damaged, and that he has no adequate remedy at law and that unless an injunction is granted as hereinafter prayed for plaintiff will suffer irreparable damage. The plaintiff then prayed for a temporary injunction to restrain the defendants or any agents of defendants from soliciting, selling, or delivering milk or other dairy products along the several routes served by them while in the employ of the plaintiff, to-wit, Routes 3, 6, and 4 until final hearing of said matter and that upon final hearing said order may be made permanent, and for such other relief as may be proper.
The defendants' answer denied that the plaintiff has any legal or equitable ownership in the routes described in his petition, that since the 27th day of September, 1947, they have sold, or delivered, or solicited the sale of milk or dairy products on routes serviced by them while in the employ of the plaintiff; that since the 3rd day of October, 1947, they have sold or delivered or solicited the sale or delivery of milk or dairy products to anyone whomsoever; that the plaintiff has no adequate remedy at law or that he will suffer irreparable damage if an injunction is not granted. The defendants admitted the allegations of plaintiff's petition not herein denied.
Defendants claimed that they terminated their partnership on September 27, 1947, and sold and conveyed their entire interest in said partnership on said date to Norman Lee Dietrich and Lawrence Loxterman, and that they are not parties to the contract set forth in plaintiff's petition and that the provisions thereof, are not binding upon them. Then the defendants prayed that any injunction restricting them be refused, that the petition be dismissed, that they recover their costs, and for such other and further relief as equity and the nature of the case may require.
The evidence in substance sustained the allegations of the plaintiff's petition, and further showed that even as early as July 13, 1947, the defendants were attempting to start up a dairy business and had purchased equipment for said dairy and made arrangements to commence their own dairy business; that the plaintiff upon learning of their activities called them into his office and asked whether or not they were starting their own dairy business. The defendants neither denied nor admitted their activities, but the defendant Jack Loxterman when asked whether or not these facts were true, answered, ‘Is it?’
The defendants were then discharged by the plaintiff and after they left his employ they joined with Lawrence Loxterman, their brother, and one Norman Lee Deitrich, and formed a partnership known as the Lockie Lee Dairy. They solicited customers along the routes served by them while in the plaintiff's employ, and on September 21, 1947, they, together with LawrenceLoxterman and Norman Lee Deitrich, began delivering milk and other dairy products along these several routes. September 27, 1947, the day immediately following the preliminary hearing for a temporary injunction against them, which was granted, defendants met in the office of their lawyer and made a sale of their interest in said partnership to their other two partners Lawrence Loxterman and Norman Lee Deitrich. They made out a Bill of Sale covering their interest in said partnership to Norman Lee Deitrich and Lawrence Loxterman under date of September 27, 1947. They testified that the consideration for said transfer was $5100, $2550 being cash paid on Monday morning, September 29, 1947, and the balance secured by a promissory note in the amount of $2550, payable at the rate of $100 per month. The evidence showed that the note was made out payable to them for $5100 and that there were no credits on said note until October 2, 1947, when said note was endorsed with a $2550 credit.
The evidence further showed that the three defendants continued to work for the Lockie Lee Dairy Company up to October 3, 1947, when this Court found them guilty of contempt. After October 3, 1947 the Lockie Lee Dairy continued and is still advertising in the ‘Painesville Telegraph’ that it is still ready to serve. The Lockie Lee Dairy at present is a partnership of Lawrence Loxterman and Norman Lee Deitrich, two of the original partners therein.
The contract between the plaintiff and the Union under which these defendants worked while in the employ of the plaintiff was introduced in evidence in the case and it was admitted by the defendants that they knew of the provision in this contract set forth in the plaintiff's petition. The defendant Jack Loxterman further admitted, that he had assisted in negotiating several contracts between the employer and the Union, and at least on one occasion had acted on behalf of the employer. The evidence further disclosed that the Lockie Lee Dairy as of October 10, 1947, had taken away from the plaintiff the delivery of some 214 quarts of milk per day.
The Court is of the opinion that Lawrence Loxterman and Norman Lee Deitrich, partners now doing business as Lockie Lee Dairy, are not liable under the terms of the contract, and not subject to any restraining order which this Court may grant. They were neither employees of the plaintiff, nor made parties to this action. Lawrence Loxterman and Norman Lee Deitrich are the sole parties now engaged in this business. The three defendants have no connection therewith and in fact are engaged in employment entirely separated from this dairy business. Upon the sale by Jack, Andrew, and William Loxterman of their interest in the partnership and their withdrawal therefrom, the partnership was dissolved. See 30 Ohio Jurisprudence page 1076.
Since Norman Lee Deitrich and Lawrence Loxterman have now an entirely new partnership and are strangers to the original union contract, it is the opinion of the Court that they can not be enjoined in this proceedings. See Fleckenstein Bros. Co. v. Fleckenstein et al., 66 N.J.Eq. 252, 57 A. 1025; and also Eisel v. Hayes, 141 Ind. 41, 40 N.E. 119.
The Court is of the opinion that this contract is and was binding upon the three defendants, Jack Loxterman, also known as John Loxterman; Andrew Loxterman; and William Loxterman. In this connection see the Whiting Milk Co. v. Grondin et al. which was decided by the Supreme Judicial Court of Massachusetts, February 20, 1933, 282 Mass. 41, 184 N.E. 379. The first syllabus reads as follows: ‘Agreement between union and employer preventing employee from selling dairy products as servant of another to employer's customers for 90 days from cessation of employment held binding on milk wagon driver who worked under agreement as member of union.’ See also the Individual Damp Wash Laundry Co. v. Meyers et al., 3 Ohio Supp. 69. Syllabus No. 1 reads as follows: ‘A contract which does not prevent defendant from entering into the laundry business for a long term of years or in any extensive territory but only limits defendant's operation to the former customers with whom said employee had dealingson behalf of the employer for a term of one year is not so severe as to be unconscionable and against public policy.’
It is therefore the opinion of the Court that it has jurisdiction in equity and should grant a restraining order against the defendants, Jack, William, and Andrew Loxterman only, restraining them from selling, soliciting, or delivering milk or other dairy products along the so-called Routes 3, 6, and 4 formerly respectively served by them, for one year from the date of the expiration of their employment with the plaintiff. Prevailing counsel will therefore prepare a journal entry in accordance with this opinion and submit the same to opposing counsel and the Court for approval, noting proper exceptions.