not unreasonable for the protection of the parties,' because they impose too great a restraint on trade and are oppressive to one party without being of benefit to the other.'

It has often been held that an agreement in general restraint of trade is illegal and void. For a contract in restraint upon trade to be valid must not be general; the consideration must be adequate, not colorable, and the restriction must be reasonable; so an agreement in general or total restraint of trade has been held to be void without regard to the consideration upon which it is founded. Such an agreement is one not to carry on a certain business anywhere, whether for a limited or unlimited time.*

At a public auction, if the purpose be not to prevent competition, nor this result likely to follow, one may bid as the agent of others; but if made, or if it tend to stifle competition, the act is unlawful."

An agreement among stockholders of a corporation that they will neither of them give powers of attorney to anyone to vote their stock, nor will they sell any portion of such stock to other parties, is in restraint of trade and void.' But an agreement between a corporation and its stockholders, that the latter should 1Chappel v. Brockway, 21 Wend. 157; Maier v. Homan, 4 Daly, 168; Dunlop v. Gregory, 10 N. Y. 243; Hedge v. Lowe, 47 Iowa, 137, 140; Smalley v. Greene, 52 Iowa, 241; Ward v. Byrne, 5 Mees. & W. 548; Hinde v. Gray, 1 Man. & G. 195; Allsopp v. Wheatcroft, 27 L. T. N. S. 372, L. R. 15 Eq.

59.

Heichew v. Hamilton, 3 G. Greene, 596, 598; Mitchel v. Reynolds, 1 P. Wms. 184, 10Mod. 27, 85, 130; Hunlocke v. Blacklowe, 2 Saund. 156, note 1; Colmer v. Clark, 7 Mod. 230; Chesman v. Nainby, 2 Ld. Raym. 1456; Davis v. Mason, 5 T. R. 119.

Morris Run Coal Co. v. Barclay Coal Co. 68 Pa. 173; Oregon Steam Nav. Co. v. Winsor, 87 U. S. 20 Wall. 64, 22 L. ed. 315; Boutelle v. Smith, 116 Mass. 111; Hubbard v. Miller, 27 Mich. 15; Wiggins Ferry Co. v. Chicago & A. R. Co. 73 Mo. 389; Sinn v. Sigsbee, 67 Ill. 75; Bowser v. Bliss, 7 Black f. 344; Holmes v. Martin, 10 Ga. 503; Brewer v. Marshall, 19 N. J. Eq. 537.

'Story, Cont. § 650; Dean v. Emerson, 102 Mass. 480; Rousillon v. Rousillon, L. R. 14 Ch. Div. 351.

'National Bank of the Metropolis v. Sprague, 20 N. J. Eq. 159; Smith v. UUman, 58 Md. 183; Hunt v. Elliott, 80 Ind. 245; Kearney v. Taylor, 56 U. S. 15 How. 494, 519, 14 L. ed. 787, 797; Woodruff v. Berry, 40 Ark. 251; Marie v. Garrison, 83 N. Y. 14; Huntington v. Bardwell, 46 N. H. 492; Smith v. Greenlee, 13 N. C. 126; Breslin v. Brown, 24 Ohio St. 565; James v. Fulcrod, 5 Tex. 512; McMinn v. Phipps, 3 Sneed, 196.

'Gibbs v. Smith, 115 Mass. 592; King v. Winants, 71 'N. C. 469; Jones v. Caswell, 3 Johns. Cas. 29; Swan v. Chorpenning, 20 Cal. 182; Hannah v. Fife, 27 Mich. 172; Wooten v. Hinkle, 20 Mo. 290.

'Fisher v. Bush, 35 Hun, 641.

not purchase goods of a certain class, during a limited period, of anyone other than the members of an association with which that corporation had entered into a contract, resulting in benefits to itself and members, is not in restraint of trade.'

So agreements or conditions imposed in the conveyance of real property, restricting its use to certain purposes, or excluding certain named uses of the property, come under the same general rules and are often held invalid as without a justifiable purpose, or without sufficient consideration, or as creating and sustaining monopoly.'

A contract entered into between a baker and a grocer, for a fixed payment of money, on conditions which would naturally tend to enhance the price of the baker's bread and render it a monopoly, is void as in restraint of trade. So are all agreements to create corners in grain, produce, etc.3

A contract entered into by the grain dealers of a town, the true object of which is to form a secret combination, which would stifle all competition, control the price of grain, cost of storage and of shipment, is in restraint of trade, and void as against public policy.

Where one producer enters into a contract with another producer, binding the latter to withhold and keep out of the market his supply, the contract is against public policy and void.*

An agreement of members of a trade protection society not to employ any commercial travelers, salesman or outside employé who had left the service of another member of the trade union, without his written consent, for the period of two years, is void.

Persons controlling water powers individually in a stream cannot bind themselves in a liquidated sum as damages, not to sell to certain persons negotiating for the purchase of some of the rights, nor to make, without any limit in time, any compromise or set

Van Marter v. Babcock, 23 Barb. 633; Curtis v. Gokey, 68 N. Y. 304; Live Stock Asso. of N. Y. v. Levy, 3 N. Y. S. R. 514.

Taylor v. Blanchard, 13 Allen, 370; Morris Run Coal Co. v. Barclay Coal Co. 68 Pa. 173; Craft v. McConoughy, 79 Ill. 346; Arnot v. Pittston & E. Coal Co. 68 N. Y. 558; Crawford v. Wick, 18 Ohio St. 190.

Raymond v. Leavitt, 46 Mich. 447.

Craft v. Mc Conoughy, 79 Ill. 346.

Arnot v. Pittston & E. Coal Co. 68 N. Y. 558.

"Mineral Water Bot. Ex. & Tr. Prot Soc. 31 Solic. Jour. 626.

tlement with such persons except on the written consent of the others. Such a contract, while it restrains the parties from compromising litigation, which is favored in law, also tends to the same evil consequences as attend the enforcement of a contract in restraint of trade; but if the restraint be natural and not unreasonable for the protection of the parties it will be sustained. "

1

§ 33. Contracts Imposing Limited Restraints Territorially as a Condition of Employment.-Where the restraint contracted for appears to have been for a just and honest purpose, for the protection of the legitimate interests of the party in whose favor it is imposed, reasonable as between the parties and not specially injurious to the public, the restraint will be held valid.' Thus a contract in restraint of trade as to a particular place is valid, such as a contract not to engage in a particular trade or business in a certain place within a specified time.

5

A limit in space to the exercise of a trade, where there are reasons for the limit imposed, will be sustained.'

One may contract not to run steamboats on a particular river, as between Albany and New York.'

An agreement that a steamer should not be used in the waters of a State for a fixed period was held legal.*

1 Ford v. Gregson, 7 Mont. 89; Horner v. Ashford, 3 Bing. 322, 336; Mitchel v. Reynolds, 1 P. Wms. 181; Mallan v. May, 11 Mees. & W. 653.

2 Leather Cloth Co. v. Lorsont, 39 L. J. Ch. 86, L. R. 9 Eq. 345; Smith's App. 5 Cent. Rep. 209, 113 Pa. 579; Mandeville v. Harman, 5 Cent. Rep. 625, 42 N. J. Eq. 185; Rousillon v. Rousillon, L. R. 14 Ch. Div. 351; Diamond Match Co. v. Roeber, 9 Cent. Rep. 181, 106 N. Y. 473; Herreshoff v. Bou tineau, 8 L. R. A. 469, 17 R. I. --; Alcock v. Gilbertson, 5 Duer, 76; Jones v. Lees, 1 Hurlst. & N. 189; Mumford v. Gething, 7 C. B. N. S. 305; Harmo v. Parsons, 32 L. J. Ch. 247; Keeler v. Taylor, 53 Pa. 467. 'Hubbard v. Miller, 27 Mich. 15, 19. See Guerand v. Dandelet, 32 Md. 562; Berl v. Chase, 31 Mich. 490; Ewing v. Johnson, 34 How. Pr. 202; Pierce v. Woodward, 6 Pick. 206; Hedge v. Lowe, 47 Iowa, 137, 140.

• Chappel v. Brockway, 21 Wend. 157; Jenkins v. Temples, 39 Ga. 655; Smalley v. Greene, 52 Iowa, 241; Hedge v. Lowe, 47 Iowa, 137; Guerand v. Dandelet, 32 Md. 562; Beal v. Chase, 31 Mich. 490; Ewing v. Johnson, 34 How. Pr. 202; Pierce v. Woodward, 6 Pick. 206.

Arnold v. Kreutzer, 67 Iowa, 214; Hedge v. Lowe, 47 Iowa, 137; Smalley v.
Greene, 52 Iowa, 241; Baumgarten v. Broadway, 77 N. C. 8; Tallis ▼.
Tallis, 1 El. & Bl. 391.

Smith v. Fell, 5 Cent. Rep. 208, 113 Pa. 579.

'Dunlop v. Gregory, 10 N. Y. 241.

• Oregon Steam Nav. Co. v. Winsor, 87 U. S. 20 Wall. 64, 22 L. ed. 315.

A contract restraining a party from following a particular business in a designated city for five years is held valid, as the party may pursue any other employment in the same locality.'

An agent of a wholesale house may contract not to sell his goods to but one purchaser in the town.'

A contract by a dealer in New Jersey not to ship poultry to New York or Washington has been held not to contain an unreasonable restriction."

An agreement not to sell marl off the vendor's land was held valid;* and so of an agreement not to manufacture goods in general;" so a restriction as to the use of a particular name in doing business for a period of five years is held reasonable, although the space is unlimited."

A tailor may limit his sphere of business by excluding himself from a space within ten miles of Charing Cross for three years.'

All contracts in restraint of trade are not void; it is not against public policy for a person entering an employment to enter into a covenant restricted as to space not to carry on the same business in his own country, even if his employer should leave the business. The employer wishes to have security given to the business, not only while he is carrying it on himself, but in favor of his successors and during the whole life of the covenantor; and if reasonable when made, subsequent circumstances will not affect the operation of the contract under the rule as to contracts in restraint of trade."

One who on entering a merchant's employ covenants not to er gage in or carry on the same business within a mile of the shop at any future time, will be restrained from violation of his covenant, because the business was sold with its good will to another and removed to another shop, near by. The covenant was held to exist in favor of the purchaser and to bind the covenantor for his life.

1 Washburn v. Dosch, 68 Wis. 436.

Keith v. Herschberg Optical Co. 48 Ark. 138.
Richardson v. Peacock, 33 N. J. Eq. 597.
Brewer v. Marshall, 19 N. J. Eq. 537.

b Taylor v. Blanchard, 13 Allen, 370.

6 Vernon v. Hallom, 35 Week. Rep. 156, 56 L. J. Ch. 115.

Nicoll v. Beere, 53 L. T. N. S. 659.

Hare v. Whitmore, 49 L. T. N. S. 335.

If the removal had been to a new neighborhood the result might have been otherwise. But the right of an employer to guard his business and his good will as an article of value in the market was recognized as against those he took into his employ, and thus afforded them access to his customers and information as to the details of his business.'

A contract in restraint of trade, made on good consideration and not extending beyond the obligee's sphere of actual business, is valid.'

§ 34. Territorial Limitations Sustained-Distance, how Determined-Instances.-A contract not to carry on a trade in a particular town or county is valid.' The question as to what is a general restraint of trade does not depend upon state lines; and a restraint is not necessarily general which embraces an entire State. Where such contract is made with the purchaser and his assigns, his successor and assignee may maintain an action upon it; and the fact that the purchaser was a foreign corporation is no objection.*

As to the section of the country which may be lawfully covered, the following contracts have been held valid:-not to practice medicine within 12 miles of a place; not to practice as a physician in a particular town or its vicinity. Before a covenant not to practice medicine in the neighborhood can be enforced, evidence must show the extent of the practice sold."

So one may agree not to engage in the business of iron casting within 60 miles of a certain place for ten years; not to run a stage on a certain route; not to set up business of apothecary

Jacoby v. Whitmore, 40 L. J. N. S. 335.

'Palmer v. Stebbins, 3 Pick. 188, 15 Am. Dec. 204.

2 Grundy v. Edwards, 7 J. J. Marsh. 368, 23 Am. Dec. 409.
'Diamond Match Co. v. Roeber, 9 Cent. Rep. 181, 106 N. Y. 473.

McClurg's App. 58 Pa. 51; Butler v. Burleson, 16 Vt. 176.

• Haldeman v. Simonton, 55 Iowa, 144; Amedon v. Gannon, 6 Hun, 384; Warfield v. Booth, 33 Md. 63; Hoyt v. Holly, 39 Conn. 326, 12 Am. Rep. 390; Butle v. Burleson, 16 Vt. 176; Smith v. Smith, 4 Wend. 468; Linn v. Sigsbee, 67 Ill. 75; Spier v. Lambdin, 45 Ga. 319; Mell v. Mooney, 30 Ga. 413; Dwight v. Hamilton, 113 Mass. 175; McNutt v. McEwen, 10 Phila. 112. 1 Whitney v. Slayton, 40 Me. 224.

Pierce v. Fuller, 8 Mass. 223, 226.