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Northeast Georgia Artificial Breeders Association Inc. v. Brown

Supreme Court of Georgia1953-02-09No. No. 18056
209 Ga. 547

Summary

Holding. The corporation's charter was valid and authorized it to engage in artificial breeding of livestock and employ agents for that purpose. The restrictive covenant limiting the employee's post-employment competitive activities to six named counties for two years was reasonable and enforceable. Judgment reversed.

The Northeast Georgia Artificial Breeders Association, organized as a nonprofit cooperative under Georgia law, possessed valid authority to conduct artificial insemination of livestock and to employ agents to perform this work. The corporation's charter, granted under the Cooperative Marketing Act and governed by the 1938 Corporation Act, expressly authorized these activities, making the charter valid and enforceable.

The court upheld a restrictive covenant in an employment contract that prevented the employee from performing artificial insemination of dairy cattle in six named counties for two years after employment ended. Although the employee's primary work area encompassed only a twenty-mile radius around Royston, Georgia, the territorial restriction was reasonable because the association actually served customers throughout all six counties identified in the covenant. The restriction was limited in both time and geography and did not amount to an unreasonable restraint on the employee.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a nonprofit cooperative corporation had authority under its charter to conduct artificial insemination services
  • Whether an employment restrictive covenant was reasonable in time and territory
  • Whether a territorial restriction extending beyond an employee's primary work area could still be enforceable based on the employer's broader service area

Procedural posture

The trial court held the restrictive covenant unreasonable and invalid, and the case was appealed to the Georgia Supreme Court.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Hawkins, Justice.

1. Under the provisions of Code (Ann. Supp.), § 22-1881, that “A corporation not organized for pecuniary gain or profit and without capital stock, shall be incorporated under the 1938 Act, the same as a business corporation,” and the Corporation Act of 1938 as amended (Code, Ann. Supp., § 22-1828(g)), that a corporation organized under that act shall have authority “To exercise any and all powers stipulated in its charter not contrary to the Constitution and laws of the United States and of the State of Georgia,” the charter of the Northeast Georgia Artificial Breeders Association Inc., organized in accordance with the “Cooperative Marketing Act” as amended (Code, Ann., § 65-201 et seq.), authorizing it to engage in artificial breeding of livestock, is not void and of no effect, and the corporation was not without authority to engage in such business, or to employ and contract with agents to carry on the business of artificially inseminating cattle, since its charter expressly conferred upon it the power to do so.

2. The restrictive covenant of the contract entered into between the corporation and its employee, whereby the latter agreed that, “While employed under this agreement, and any extension or renewal thereof, and for a period of two years after the termination of such employment, the Technician shall not, either on his own account, or as an employee, agent, salesman, or representative of any other person or organization, or otherwise, in the (Counties) of Hart, Eranldin, Stephens, Banks, Madison, Elbert, State of Georgia, artificially inseminate dairy cattle, or take orders for, or promote the artificial insemination of dairy cattle, with semen other than such as furnished him by,or through or with the permission of the employer,” is reasonably limited as to time and territory, is not otherwise unreasonable, and is not void. Burdine v. Brooks, 206 Ga. 12 (55 S. E. 2d, 605); Kirshbaum v. Jones, 206 Ga. 192 (56 S. E. 2d, 484). The fact that the defendant’s contract of employment provided that his work would be primarily in the territory within a twenty-mile radius of Royston, Georgia, and that this area did not extend to the limits of the six counties referred to in the restrictive covenant would not render the territorial limit unreasonable, since the evidence disclosed that the plaintiff association served members or customers “in the counties referred to in the contract.” The trial court, therefore, erred in holding the restrictive covenant unreasonable, and for that reason invalid.

(a) What is here held is not in conflict with the rulings of this court in Rakestraw v. Lanier, 104 Ga. 188 (30 S. E. 735), where the time was unlimited, or in Orkin Exterminating Co. v. Dewberry, 204 Ga. 794 (51 S. E. 2d, 669), where the territorial limitation was held unreasonable as extending to almost the entire State, in many sections of which the employer was not and never had been engaged in business, and amounting to virtual banishment of the employee from the State.

3. Other questions raised by the defendant’s answer but not passed on by the trial court will not be considered, since “This court sits to review rulings of the trial courts, and it will not pass upon questions on which no ruling has ever been made by the trial judge.” Bourquin v. Bourquin, 110 Ga. 440, 442 (35 S. E. 710); Ballard v. Waites, 194 Ga. 427, 430 (21 S. E. 2d, 848); Rogers v. Taintor, 199 Ga. 192, 196 (33 S. E. 2d, 708); Stout v. Pate, 208 Ga. 768 (69 S. E. 2d, 576).

No. 18056.

Argued January 12, 1953

Decided February 9, 1953 —

Rehearing denied February 25, 1953.

A. S. Skelton, Carey Skelton, Cíete D. Johnson, Linton S. Johnson and B. D. Murphy, for plaintiff in error.

George L. Goode and Carter Goode, contra.

Judgment reversed.

All the Justices concur, except Atkinson, P. J., and Wyatt, J., not participating.