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Hubbard v. Logsdon

OPINION FILED JANUARY 6, 1978.

DONALD L. HUBBARD, PLAINTIFF-APPELLEE,

v.

BLANCHE

v.

LOGSDON, INDIV. AND AS EX'R OF THE ESTATE OF ELMER LOGSDON, DECEASED, ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cass County; the Hon. RICHARD MILLS, Judge, presiding.

MR. JUSTICE ALLOY DELIVERED THE OPINION OF THE COURT:

Rehearing denied February 15, 1978.

This is an appeal from a judgment of the Circuit Court of Cass County, following a jury verdict, which assessed damages in the amount of $100,000 against the estate of Blanche Logsdon, and $35,000 against the estate of Elmer Logsdon.

Plaintiff Donald L. Hubbard instituted the action in this cause to recover from the estate of Elmer Logsdon, damages occasioned by breach of an oral contract by Elmer Logsdon in failing to obtain or assist plaintiff in obtaining the signature of Elmer Dale Logsdon (decedent's son) to a written non-competition agreement, and, also, to recover from the estate of Blanche V. Logsdon damages occasioned by the breach of an oral contract by Blanche V. Logsdon by the reason of her re-entry into competition with plaintiff in the tug service business. As we have noted in the jury trial in this cause, the verdict was rendered in favor of plaintiff against the estate of Elmer Logsdon in the sum of $35,000 and, also, in favor of plaintiff as against the estate of Blanche V. Logsdon in the sum of $100,000.

On appeal in this court, defendants contend (1) that the enforcement of the oral agreement is barred (a) by the statute of frauds, (b) because the non-competition agreement constituted an unreasonable restraint of trade, and (c) by the doctrine of mutuality of obligation; (2) that the trial court erred in denying defendants' post-trial motion based on the sufficiency of the evidence to support the jury's finding of liability; (3) that the jury's verdicts are excessive; (4) that the trial court erred in excluding and admitting certain testimony; (5) that defendants were denied their right to a fair and impartial trial by jury; (6) that the trial court abused its discretion in allowing plaintiff leave to amend his complaint; and (7) that the trial court improperly instructed the jury.

Plaintiff filed his complaint on February 20, 1975, and amended the complaint on July 21, 1975, alleging that during January of 1974, Elmer Logsdon, Blanche Logsdon, and Elmer Dale Logsdon were the owners and operators of a certain harbor and fleeting business upon the Illinois River in the vicinity of Beardstown, Cass County, Illinois, and that during January of 1974, Elmer Logsdon, Blanche Logsdon and Elmer Dale Logsdon desired to terminate their involvement in the business by March of 1974. The amended complaint also alleged that in January of 1974, the Logsdons solicited plaintiff to purchase the harbor and fleeting business, and that in February of 1974, Elmer Logsdon, Blanche Logsdon and Elmer Dale Logsdon orally contracted and agreed to sell the business to plaintiff for the sum of $9,000 plus interest, payable in 120 equal monthly installments. The complaint also alleged that plaintiff agreed that he would not fleet any barges adjacent to property located on the Beardstown side of the Illinois River and owned by either Elmer Logsdon or Blanche Logsdon without first obtaining written permission from them, and that he also agreed that he would not use the name "Logsdon" in connection with the operation of his fleeting business. The complaint also alleged that all three of the Logsdons agreed that they would refrain for a period of 10 years from participating in the harbor and fleeting business upon the Illinois River in the vicinity of Beardstown.

The amended complaint, as amended by leave of court on September 16, 1976, alleged that during the last week of February or the first week of March 1974, plaintiff and defendants orally modified the payment provisions of the contract by providing that the plaintiff could pay the purchase price when he got "on his feet," so long as the defendants receive $12,000 at the end of 10 years. Plaintiff alleged in the amended complaint that, in reliance upon the oral contract, plaintiff sold his home in Peoria, Illinois, and moved his family to Beardstown, Illinois, where he purchased a tugboat, entered into leases with owners of certain realty adjoining the Illinois River to use their banks and shore for the docking of boats and barges and began operating a business known as the "Beardstown Harbor and Fleeting Service" in the vicinity of Beardstown on March 7, 1974. Count I of the amended complaint alleged that on or about September 25, 1974, Blanche Logsdon and Elmer Dale Logsdon, in violation of the non-competition covenant, entered into the harbor and fleeting business upon the Illinois River under the name "Logsdon Tug Service", and that they solicited customers of plaintiff within the vicinity of Beardstown. Plaintiff alleged that as a result thereof, plaintiff's harbor and fleeting business lost business to the Logsdon Tug Service. Count III of the amended complaint also alleged that during February of 1974, Elmer Logsdon orally agreed, as a part of the sale transaction, that he would obtain a written non-competition agreement from Blanche Logsdon and Elmer Dale Logsdon that they would not become involved in the harbor and fleeting business upon the Illinois River in the vicinity of Beardstown for a period of ten years. He alleged that Elmer Logsdon failed to perform such obligation, that Blanche Logsdon and Elmer Dale Logsdon re-entered the harbor and fleeting business in September of 1975, and as a result of which plaintiff's harbor and fleeting business had lost business to the Logsdon Tug Service.

It appears from the record that both Elmer Logsdon and Blanche Logsdon died prior to the beginning of the trial. Evidence at the trial established that Elmer and Blanche Logsdon were the owners and operators of the Logsdon Tug Service and the Logsdon River Construction business, and that early in 1974, by reason of Elmer Logsdon's ill health, both Elmer and Blanche Logsdon attempted to divest themselves of the tug service business in the Beardstown area. In January of 1974, plaintiff became aware that the Logsdons desired to terminate their activity in the tug service business and in January or February of 1974, plaintiff first met with the Logsdons to discuss his taking over the tug service business on the Illinois River in the Beardstown area. In February of 1974, the Logsdons and plaintiff reached an oral understanding whereby the Logsdons would withdraw from the tug service business in the Beardstown area and plaintiff would replace them as the sole tug service on the Illinois River in the Beardstown area. Pursuant to this oral agreement, plaintiff could not use the Logsdon name, was required to obtain his own equipment, could not tie onto Logsdon property without permission of the Logsdons, and would pay the Logsdons a purchase price of $12,000 in 120 equal monthly installments.

It also appears from the record that on February 21, 1974, the Logsdons and plaintiff met at the office of Milton McClure, who was acting as the attorney for both the Logsdons and plaintiff, for the purpose of reducing the oral understanding to a written contract. McClure testified that prior to the meeting in his office, the parties had agreed to the sale of the business, and also agreed that plaintiff would have the exclusive right to harbor and fleet tows in the Beardstown area. The attorney testified, also, that neither the Logsdons nor any member of their family would compete with plaintiff for 10 years. McClure also testified that Elmer Logsdon committed himself to having his son join in the non-competition agreement. The attorney also stated that, in preparing the written contract, he was acting purely as a scrivener and was preparing a written memorandum of what the parties had already agreed to. He prepared a written agreement, including an agreement not to compete, but that instrument was never executed. Following the meeting with McClure, Elmer Logsdon told his son, Elmer Dale Logsdon, that he (Elmer Dale Logsdon) was a party to the agreement and would be required to sign the non-competition agreement. The written agreement, as prepared by McClure, stated that Elmer Logsdon would assist plaintiff in obtaining the signatures of Blanche Logsdon and Elmer Dale Logsdon to the non-competition agreement.

It was also apparent from testimony at the trial that in March of 1974, a meeting was held at the Logsdons' home between the Logsdons, plaintiff and Michael Barnett, plaintiff's accountant, for the purpose of explaining the Logsdons' method of accounting. There was testimony at the trial, that conversation at the meeting included mention of a contract between the Logsdons and plaintiff, and that Elmer Logsdon stated that he was not concerned when payments by plaintiff under the contract began, so long as he received $12,000 by the end of 10 years. Additional testimony at the trial, established that Elmer Logsdon informed three grain elevator operators, a farmer who leased fleeting area to Logsdon, and an oil dealer, that plaintiff would be taking over the fleeting service in the Beardstown area.

Pursuant to the oral agreement, plaintiff was to commence service on March 1, 1974, and the Logsdons were to withdraw from service on that date. Plaintiff commenced service in the Beardstown area on March 7, 1974, and was the only tug service business on the Illinois River in the Beardstown area from March 7, 1974, through September 24, 1974.

Following the meeting with McClure, it appears that the Logsdons refused to sign the written agreement, and plaintiff informed McClure and Elmer Dale Logsdon that he would not make any payments under the contract until the Logsdons signed the written agreement.

On September 25, 1975, Elmer Dale Logsdon commenced operations as a fleeting and tug service on the Illinois River near Beardstown, as we have indicated, under the name of Logsdon Tug Service. While the business was nominally owned by Elmer Dale Logsdon, Blanche Logsdon loaned $10,000 to him to start the business, leased to Elmer Dale Logsdon the boats and equipment used by the business, operated the radio with respect to the business, and did bookwork for the business. Subsequent to the filing of the instant action, Elmer Dale Logsdon paid $6,000 rental on the equipment leased from Blanche Logsdon.

The record also shows that the gross income from plaintiff's business for the period from March 7 through December 31, 1974, was $92,413.58, with a net income of $71,384.70. The Logsdon Tug Service had gross receipts in 1974 (from September 25 to the end of the year) of $10,510, with a net loss of $7,845. For the year 1975, however, the gross income of the Logsdon Tug Service was $135,114.43, with a net profit of $2,010.91. There was evidence showing that plaintiff became heavily involved financially in proceeding to take over the fleeting and tug business in reliance on the Logsdons' agreement. There was evidence that plaintiff Hubbard, at the time of trial, was indebted in the sum of $243,000 in establishing the business under the agreement.

Following return of the verdict in this cause, the court denied defendants' motion for judgment notwithstanding verdict and for a new trial, and the court entered judgment on the jury's verdicts.

• 1, 2 Defendants first argue that the enforcement of the oral contract is barred by the Statute of Frauds. Section 1 of "An act to revise the law in relation to frauds and perjuries" (Ill. Rev. Stat. 1975, ch. 59, par. 1) provides in part:

"That no action shall be brought * * * upon any agreement that is not to be performed within the space of one year from the making thereof, unless the promise or agreement upon which such action shall be brought, or some memorandum or note thereof, shall be ...


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