Prior v. Diggs

BELCHER, C. The plaintiff commenced this action on November 24, 1888, to recover damages in the sum of $2,000 for the alleged breach of a written contract, which reads as follows:

“Whereas, I, Marshall Diggs, of the county of Yolo, state of California, have this day sold to T. M. Prior, of the same place, the good will of the saddlery, harness, and carriage trimming business lately carried on by me in the town of Woodland, in said county, now, therefore, in consideration of said sale and of the sum of two hundred and twenty-five dol[566]Iars, gold coin of the United States, to me in hand paid by the said T. M. Prior, I hereby covenant and agree to and with the said T. M. Prior that, so long as the said T. M. Prior, or any person deriving title to the good will of said business from him, shall carry on a like business within said town, I will not, directly or indirectly, either for myself or as the agent or employee of any other person, carry on, or aid in carrying on, at any place within said town of Woodland, the business of saddlery, harness making, or carriage trimming, or the selling of saddles, harness, carriage trimmings, or other articles usually sold, or which I have been accustomed to sell, in connection with said business, or any other business usually carried on in connection therewith or subsidiary thereto. And whereas, from the nature of the case, it would be extremely difficult to fix the actual damage arising from a breach of this contract, now, therefore, it is hereby agreed that the sum of two thousand dollars shall be presumed to be the amount of damage sustained by a breach of this contract, and the said amount is hereby fixed and agreed upon as liquidated damages for such breach. Witness my hand this 17th day of January, A. D. 1883.

“M. DIGGS.”

By his answer the defendant denied all the averments of the complaint, and set up numerous defenses. The case was tried before a jury, and the verdict and judgment were in favor of the defendant. The plaintiff moved for a new trial, which was denied, and has appealed from the judgment and order. The Civil Code provides that “the goodwill of -a business is the expectation of continued public patronage” (section 992), and that “the goodwill of a business is property, transferable like any other” (section 993). It also provides that “every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void” (section 1673), except that “one who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within a specified county, city, or a part thereof, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein” (section 1674). Here the goodwill sold was only that “of the saddlery, harness, and carriage trimming business,” and the question is, Did the defendant vio