Exhibitors Herald (1927)

March 19, 1927 EXHIBITORS HERALD 47 Against Seller Quit Business Opening New Theatre Buyer of His House Writer on Legal Subjects merit of facts and find that there is evidence tending to show that the lot upon which the new building was erected and the new picture show as conducted by Bray was owned by Clay at the time of Clay’s sale of his former business to Richardson, and that, while denied by both Clay and Bray, the evidence also tends to show that the leasing of the new building for a picture show business by Clay and Bray amounted, in effect, to a violation of the clause in the contract between Clay and Richardson, quoted above, and the court so found. * * * ^ ^ ^ “Richardson, testified, in substance, that at the time of his purchase he did not think the town of Olney would support another picture show ; * * * that the wife of * * * Bray, prior to the purchase by Richardson, had acted for Clay as ticket seller in the business sold by him, and that she was so acting in the new business conducted by Bray; that Bray had full knowledge and notice of the restrictive clause in the contract between Clay and Richardson ; that, after the erection of the new building, and the rental thereof to Bray, at a rental of $350 per month. Clay was seen in and about the building; and that in his own name he contracted with one or more producers for films to be run and shown in the business conducted by Bray. * * * ” Following the foregoing review of the record, the court in stating its conclusions on the whole case said ; “We do not think such an arrangement between the parties can be supported. While Bray was not a party to the contract between Clay and Richardson, he has injected himself into the subject-matter in such a manner and way as to render himself liable to the restriction. That a seller of property may, by a restrictive promise, reasonably limited, agree to refrain from himself engaging in a business or from disposing of his property in such a way that others can engage in a business which would impair the value of the property to the buyer for the purpose for which he intended to use it, is not to be questioned. ” In conclusion the court affirmed the judgment rendered by the lower court in favor of Richardson restraining Clay and Bray from operating the new theatre in competition. Holding, as outlined in the opinion, that the evidence of record amply supported the conclusion that the acts of Qay and Bray, constituted a violation of the contract not to compete between Clay and Richardson, and would not be permitted. The foregoing case constitutes an apt illustration of how far the courts may go, in the matter of enforcing a restrictive agreement, in respect to competition between the buyer and seller of a going business. And, in the light of the facts and holding of this Texas case, it is obvious that where the seller of a business contracts in reasonable terms not to compete with his buyer, the courts will enforce the terms, and not permit him to evade them by operating a business under cover of another person. Truly, the case reviewed is one of force and value on the question involved, and, in view of the subject matter of the litigation, of particular interest to moving picture theatre operators in general. EQUIPPED ! Ascher’s “SHERIDAN” Theatre Chicago, 111. Footlights Border Lights Spotlights Cloud Machines Flood Lights Cove Lighting A beautiful theatre, symbolic of the progress of our era necessitated the finest of equipment. Naturally “MADELITE” equipment was chosen — assurance of satisfactory operation of the whole as one unit. Send us your specifications — ^we will give our services to you, and satisfaction is assured. BELSON MANUFACTURING CO. 804 Sibley St., Chicago, 111. Representatives at: New York, New Orleans, Kansas City, Mo., Minneapolis, Los Angeles, Philadelphia, St. lyouis, Omaha, San Fr^cisco, Seattle. Signs That Indicate Good Business No one need have any doubts about plenty of business for 1927 if his place is attractive — and if Rawson & Evans signs are properly used. TTiey pull day and night. Send for our bulletin '‘Signs of Class Made of Glass” Rawson & Evans Co. 710-712 Washington BlvcL, Chicago (3804-C)