Ennis v. Interstate Distributors, Inc.
Texas Court of Civil Appeals
598 S.W.2d 903 (1980)
William Ennis (defendant) was the president and one-third owner of Interstate Distributors, Inc. (Interstate) (plaintiff), which sold ice machines. When Ennis left the company, Interstate paid almost $20,000 specifically for Ennis’s promise not to compete with Interstate. That agreement provided that Ennis would not give any information about Interstate’s business to competitors or call on any of Interstate’s customers for business. The agreement was limited to a geographic region and a three-year timeframe. However, Ennis worked for Interstate’s competitors throughout most of the three-year period. Ennis also contacted Interstate’s customers and sold competing products to them. And Ennis got some products from Interstate’s manufacturers and worked with some of Interstate’s distributors. Ultimately, Interstate sued Ennis, asking the court to rescind the contract. Interstate also asked the court to grant restitution in the form of returning the $20,000 Interstate had paid to Ennis for the covenant not to compete. A jury heard the case and ruled in favor of Interstate. Ennis appealed, arguing that rescission and restitution were improper because Ennis had partially performed under the covenant not to compete.
Rule of Law
Holding and Reasoning (Storey, J.)
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