Chamberlain v. Augustine

SHAW, J.

This is an action to recover of the defendant Augustine the sum of five thousand dollars ($5,000) as liquidated damages for the breach of an agreement. The defendant Buchanan is made a party defendant because of his refusal to join as a party plaintiff. The defendants filed separate demurrers to the complaint which were sustained by the court below, and, upon plaintiff’s failure and refusal to amend his complaint, the court entered judgment in favor of the defendants. The plaintiff appeals from the judgment.

The defendant Augustine sold sixty shares of stock in the Los Angeles Foundry Company to Chamberlain and Buchanan at the price of five thousand dollars. The contract of sale recited that this was more than the purchasers considered it would be worth, except for the agreement of Augustine embraced in the contract and presently to be stated. It also recited that Augustine had for a long time devoted his energies to the establishment and development of the business of said corporation and was familiar with it in all its details and was experienced therein, and that he desired to withdraw therefrom. The agreement of Augustine above referred to was as follows:

“Said Augustine for the consideration aforesaid does hereby covenant and agree with said Chamberlain and Buchanan that in case he at any time within a period of three years from date hereof, while said corporation, its successors or assigns, shall continue in the business now and heretofore conducted by it, be or become either directly or indirectly interested in any business either as principal, or as agent, em

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ployee or otherwise, of any person or persons, corporation or corporations, or a stockholder of any corporation engaged in or carrying on any business, carried on or in any manner conducted in the state of California, Oregon or Washington, similar to that now or heretofore conducted by said corporation, he will pay to said Chamberlain and Buchanan the sum of $5,000.00 as liquidated damages.”

There was a stipulation at the end of said contract that said Augustine might engage in the occupation as molder or laborer in several named corporations without violating the above contract.

The complaint alleges that during the months from September, 1911, to and including January, 1912, the defendant Augustine became financially interested in and assumed the control and charge of the Pacific Sashweight Foundry in the city of Los Angeles, and that the business of the said Pacific Sashweight Foundry was similar to, independent of, and in competition with the business of the Los Angeles Foundry Company; that the defendant Augustine on or about October 1, 1912, became interested as a stockholder and in control and charge of the business carried on by the U. G. Augustine Foundry and Manufacturing Company which conducted a business similar to, independent of, and in competition with the Los Angeles Foundry Company, in the state of California.