Greite v. Henricks — 53 N.Y. St. Rep. 851

Majority

p. 851

Charles Greite, Resp’t, v. Charles Henricks et al., App’lts.

(Supreme Court, General Term, Second Department,

Filed July 28, 1893.)

Headnote

Covenant—Agreement not to engage in certain business within specified time.

Defendant H., who owned- certain premises and leased others on which he ran an hotel and saloon business, sold said business to one K., and covenanted that neither himself nor his wife would engage in similar business within a half mile of said premises for five years. K. sold said business to plaintifi by bill of sale making the covenants and conditions in defendant’s bill of sale applicable. The following year H. purchased the premises formerly leased by him, gave notice to plaintiff to vacate, and on the termination of the lease opened the same business on the old premises. Held, that the covenant was not in general restraint of trade, was based on good consideration and was valid and passed to plaintiff on the sale to him.

Appeal from judgment of special term for the sum of $1,200 damages and awarding plaintiff a permanent injunction against the defendant, restraining him from carrying on a hotel, restaurant, etc., at Nos. 18 and 20 West First street in the city of Mount Vernon.

David Swits, for app’lts; L. L. Van Allen, for resp’t.

The defendant Kernick conveyed a hotel, saloon, boarding house and restaurant business to the plaintiff in Mount Yernon, N. Y. The consideration for the transfer was $5,000, and by the terms of the bill of sale the covenants and conditions contained in a bill of sale from defendant Henricks to defendant Kernick were made applicable to the sale to plaintiff.

' The bill of sale from Henricks to Kernick contained this covenant : “ I, the said party of the first part, nor my wife, shall, in any manner, engage in any hotel, inn keeping, saloon, restaurant or boarding house business within one-half mile from said premises, at any time within five years from the date hereof.” The date was 15th of January, 1891. The business was conducted upon premises known as 3 South Fifth avenue and 18 and 20 West First street, Mount Yernon. The Fifth avenue property was owned by Henricks and he was the lessee of the West First street property when he sold to Kernick under a lease which expired May 1, 1892. In 1891, Henricks .bought the First street property and gave notice to plaintiff to vacate at the end of the lease. The plaintiff then bought the adjoining property and continued his business therein. On the 2d of May, 1892, Hendricks "opened the same business on the old premises. The covenant was valid. It is not in general Restraint of trade. It was based upon a good consideration. It was beneficial to the purchaser and its violation will be injurious to him. The rule governing such covenants is settled by the court of appeals in Diamond Match Co. v. Roeber, 106 N. Y., 473 ; 11 St. Rep., 47 .

The covenant between the defendants was personal when made, but when the sale was made to the plaintiff this covenant was legally incorporated in it. The case "was then one where Henricks had sold a business carried on in certain premises partly owned by him and partly hired, and had covenanted not to open a like business within a half-mile within five years, nor -to permit any •one to carry on the business in the Fifth avenue premises owned by him. The lease was given under this condition to Kernick ■and before it expired it was sold to plaintiff. This personal covenant under these circumstances passed to plaintiff. It was bought by Kernick as incident to these premises and was assignable.

The judgment should be affirmed, with costs.

Pratt, J. concurs; Dykman, J., not sitting.