Merchants' Ad-Sign Co. v. Sterling

Citations

• 124 Cal. 429
• 57 P. 468
• 1899 Cal. LEXIS 1012

Syllabus

<p>Goodwill—Trading Corporation—Invalid Agreement by Vendor of Stock—Restraint of Trade.—The vendor o£ stock in a trading corporation has no vendible interest in the goodwill of the business, and cannot transfer such goodwill; and an agreement by such vendor not to engage in a similar business in the city where the business of the corporation is carried on so long as the vendee or his successor in interest should carry on a like business therein, not being within any statutory exception, is void, as being in restraint of trade, and cannot be enforced.</p> <p>Id.—Liberal Construction of Code Provisions—Permitted Exceptions. The rule of liberal construction to be given to the code provisions as to contracts accompanying sales of goodwill is in aid of agreements falling within the permitted exceptions of the code as to contracts in restraint of trade, and does not apply to cases not falling within those exceptions.</p> <p>Id.—Estoppel of Vendor—Knowledge of Vendee—Presumption.— The vendee must be presumed to have known that the vendor had no vendible interest in the goodwill of the corporation, and the vendor is not estopped from denying the existence of such Interest.</p> <p>In.-—Maxim—Void Contract—Injunction.—The maxim ex turpi causa non oritur actio applies to prevent' an action to enforce a void contract in restraint of trade by injunction to restrain the defendant from engaging in business contrary to the terms of such void contract.</p>