ity, and for a limited time. This ancient rule has been so far modified that, although agreements in general restraint of trade are invalid, because they deprive the public of the services of the citizen in the occupation or calling in which he is most useful to the community, and expose the people to the evils of monopoly, and prevent competition in trade, yet an agreement in partial restraint of trade will be upheld where the restriction does not go beyond some particular locality, is founded upon a sufficient consideration, and is limited as to time, place and person. It is accordingly everywhere now held that when one engaged in any business or occupation sells out his stock in trade and good will he may make a valid contract with the purchaser binding himself not to engage in the same business in the same place for a time named, and he may be enjoined and restrained from violating his contract. This is about as far as contracts in restraint of trade have been upheld by the courts in this country or in England. The general principles above announced will be found in all textbooks upon contracts, and find support in many adjudged cases.

Applying these rules to the contract under consideration, the inquiry is made first whether there is a sufficient consideration for the promise of the defendants and the other parties who executed the instrument not to engage in dealing in butter at Storm Lake. It is said that it is very plain that there was no money paid to them as a consideration. The plaintiffs did not purchase any stock of butter which the defendants had on hand. They paid nothing for an established plant or place of doing business, nor for the good will of any business. So far as appears, they went into the town and proposed to go into the butter business if the other persons then engaged in that business would agree to quit that line of trade for two years. No warrant is found by the court in any precedent for holding that this is a sufficient consideration. There are cases which hold, and the law is well settled, that where a party proposes to expend money in erecting a manufactory or other plant which may be a public benefit, subscriptions in aid of the enterprise are valid obligations. But such contracts are widely different in principle from the agreement under consideration. Suppose the plaintiffs had made a proposition to the dry-goods merchants that if they would all quit the business for two years,

without any consideration being paid to them for so doing, the plaintiffs would establish a dry-goods store at that place, and the proposition had been accepted; it would be a marvelous decision if any court would hold that there was any consideration for such

a contract.

The court also declared that the decision of the district court is manifestly right upon the question that the agreement is against public policy. It plainly tends to monopolize the butter trade of that locality, and destroy competition in that business. It is not necessary that the enforcement of the agreement would actually create a monopoly in order to render it invalid, and surely, where all the dealers in a commodity in a certain locality agree to quit the business, and the plaintiffs are installed as the only dealers in that line, the tendency is, for a time at least, to destroy competition, and leave the plaintiffs as the only dealers in that species of property in that locality. It was accordingly held that such contracts could not be enforced.

Nor will a contract between a purchaser of a stock in a manufactory, with the machinery, materials, tools and good will, be sustained, where it excludes the seller from engaging in the business in an unreasonably extensive territory, and does not occupy the field itself, being a foreign corporation, and excludes the use of the premises for the same manufacturing purposes for a period of five years.'

§ 40. Sale of Discovery.-One may sell a secret of a business and restrain himself generally from using or divulging it. The vendor is entitled to sell to the best advantage and in so doing to exercise the right to preclude himself from entering into competition with those who purchase the secret from him."

A contract, by which defendants, for a valuable consideration, agreed not to sell a certain medicinal preparation, within the territory which it was covenanted complainants should occupy exclusively, nor sell to others for sale there, nor promote such sales, is valid.

1 Western Wooden Ware Asso. v. Starkey, 11 L. R. A. 503, 84 Mich. 76. *Bryson v. Whitehead, 1 Sim. & Stu. 74; Jarvis v. Peck, 10 Paige, 118, 4 L. ed. 910; Hard v. Seeley, 47 Barb. 428; Alcock v. Gibertson, 5 Duer, 79; Vickery v. Welch, 19 Pick. 523.

Such a contract, relating to a compound involving a secret in its preparation, based upon a valuable consideration, and limited as to the space within which, though unlimited as to the time for which the restraint is to operate, is reasonable and enforceable.

Where one has and transfers property in the secret process of manufacturing an article he has discovered, he and his grantees can claim relief as against breaches of trust in respect to it.

The policy of the law is to encourage useful discoveries by securing their fruits to those who make them.

A contract in regard to the manner in which the parties shall exercise their alleged patent-rights, under which they make conflicting claims, and which contract has reference merely to the manufacture of goods under the specified patents,—is not void because in restriction of trade.'

An agreement authorized by each member of an association, by which an owner of a patented process is to confine the sale and use thereof to the members of the association, each of which is to pay a percentage on the manufactured articles, no member being responsible for anything but his own work, and there being no community of profits and losses,-is not a contract in restraint of trade, although there is no agreement on the part of any of the members to use the machinery at all, or as to the amount of the articles they will offer for sale.'

The public are only interested in securing the preparation and not in the vendors, and the latter is entitled to exclude competition from his grantor or from those to whom he may sell within a reasonable territory unless they intend indeed to occupy the entire field."

The contract does not deprive the public of the benefit of this secret nor is any party, possessing the secret, debarred from its use. They are simply circumscribed as to the territory within which they may sell.*

'Bowling v. Taylor, 40 Fed. Rep. 404.

Good v. Daland, 121 N. Y. 1.

8 Foule v. Park, 131 U. S. 88, 33 L. ed. 67.

Benwell v. Inns, 24 Beav. 307; Harms v. Parsons, 32 Beav. 328; Leather Cloth Co. v. Lorsont, L. R. 9 Eq. 345; Bryson v. Whitehead, 1 Sim. & Stu. 74; Rannie v. Irrine, 7 Man. & G. 969; Jones v. Lees, 1 Hurlst. & N. 189; Allsopp v. Wheatcroft, L. R. 15 Eq. 59; Rousillon v. Rousillon, L. R. 14 Ch. Div. 351.

§ 41. Monopoly Secured to a Patent Right.-A limited monopoly secured by a patent granted for a new discovery or invention is an admitted exception to the general rule against monopolies, for this is the only way the inventor can be paid and it is adopted as a matter of public policy to encourage discovery. A contract not to aid, assist or encourage, in any manner, competition against purchasers of patents of twists, drills and collets, was held valid in a suit to restrain defendants from violating it by making the articles in another State and selling them in the restricted market. As the business was not local the restraint was regarded as only reasonable protection.'

A contract between an individual and three manufacturers under several patents forming a combination of the parties, with a view to regulate competition between the parties to it in the sale of the particular commodity which they severally make, is a contract for a lawful purpose where it does not refer to an article of prime necessity, to a staple of commerce, or to a merchandise to be bought or sold on the market.'

In Jones v. Lees, 1 Hurlst. & N. 189, a covenant by the defendant, a licensee under a patent, that he would not, during the license, make or sell any slubbing machines unless the invention of the plaintiff applied to them, was held valid. A contract for the exclusive right to supply a certain district with flour prepared under a certain patent, for a royalty, is not invalid.'

An assignment of the sole right to make, use and vend a certain patented article for a certain time "within the southern half of Alabama, less Chambers County," is not void for uncertainty as to the territory.*

But contracts between holders of patents are often sustained upon the ground that the contract is reasonable in itself, leaving out of view the question of monopoly rightly yielded to a patent invention. In a case decided in Massachusetts June 25, 1891," the plaintiff and defendant corporations, which had been engaged in litigation with each other as to the alleged infringement of a

1Morse T. D. & M. Co. v. Morse, 103 Mass. 73, 4 Am. Rep. 513.

Central Shade Roller Co. v. Cushman, 3 New Eng. Rep. 505, 143 Mass. 363. Hecker v. Fowler, 69 U. S. 2 Wall. 123, 17 L. ed. 759.

Gloucester Isinglass & G. Co. v. Russia Cement Co. (Mass.) 12 L R. A. 563.

patent owned by the plaintiff, believing that they would be able to practically control the profitable manufacture of fish glue, entered into a contract with each other by which the defendant was to pay a certain sum for damages and one half of the costs of the suits, and to be allowed the use of the patent. Each party was to conduct its own establishment and they were to unite in the purchase of fish skins, an article of which the supply was limited and from which the fish glue is manufactured, so that there should be no competition between them. The plaintiff was to fix the price of all skins purchased, the parties were to have certain places assigned to them by two persons named, of which they were respectively to have the product; from the proprietors of certain other places mentioned the defendant was to have the entire product and to allow the plaintiff to receive from it one third thereof, and the two parties were to divide equally between them the skins which might be obtained from new producers. They were both to sell the glue at the same price, to be agreed upon from time to time, and the contract contained other stipulations, the effect of which was to prevent competition between them. The contract was made in February, 1884. After they had conducted the business in this manner until early in 1887, it became evident to both that the patent was invalid, although no formal judgment was rendered declaring it so. Thereupon, Mr. Brooks, the manager of the defendant company, made a large number of what are known as the long term contracts for the purchase of all skins to be produced until the year 1900, with nearly all the producers of fish skins known to the parties. The plaintiff received its share of these skins and no difficulty arose between the two companies, until early in July, 1890, when the defendant notified the producers of skins by whom the plaintiff had been supplied up to that time not to deliver it any more skins, and notified the plaintiff of its abandonment of the contract. Until then the parties had gone along under the contract as modified by mutual consent, and no intimation had been given the plaintiff of any intention to abandon it. The object of the bill is to compel the defendant to permit the plaintiff to obtain directly from the producers, or through the defendant, what it deems its share of the fish skins. The defendant contends that the contract as originally made was void as contrary to public policy.