The sun. [volume] (New York [N.Y.]) 1833-1916, 1910-07-01
TELEPHONE CONTRACT ~ Rg-
STRtINT OP TRADE.


The Court ~ Appeals has decided thA'
contract for q term Of years hot Seen tele-
phone company and the proprietor Of
hotel. under v hich the company installed
~ some expense n private exchange IN ths
hotel. containing a provision that the lines
Of no other company should bo permitted
IN the hotel or connection made thereNith,
l. void ~ la restraint OF trade and against
public policy 80 fnr a. the exclusive clause
- concerned
The court held that " a contract = only In
partial restraint of trade AMI involves an
injury To the public intcr' q To that extent.
Il n void 10 tho contract y divlSible INTO
valid and invalid parts the courts will up
hold and -nforc" that wb'ch j. valid. and IN
that case the company may lawfully insist
that it. system b. retained In the hotel with
out eIcluding other telephone -y-tem-.
The Central New Englan1 Telephone and
Telegraph Company sued to restrain the
proprietoTs Of the Yates Hotel in Syracuse
fTom permitting the Introduction Of any
other telephone system In the hotel. hasinE
~ suit on an agreement that no other com
pany'z lines should he permitted In the
hotel for nine years. Pour years after the
contract was made another telephone line
became available and steps we're taken to
have II Installed IN the hotel. whereupOn the
Judge willard Bartlett. who wrote tho
opinion. said II u manifest that the eNclu-
sive clause l. n contract in restraint OF trade
in that II Restraints persons in che hotel rom
holding communication with customers OF
other companies. and customers Of other
companies from talking with persons In the
hotel. aud also destroys competition by
shutting out all rivals Of the plaintiff. The
plaintiff contended that the Law permits
a Es.N .NIN MI
that the contract at issue Is one Of them. but
Judge Bartlett ruled that where the busi-
ness to which the contract relates ~ Of such
q character that IL cannot he subjected to
even partial restraint without injury to the
public interest. then such partial restraint
cannot he tolerated.
Concerning tho rights Of telephone
company Judge Bartlett wrote:
The telephone l. = scientlnc agenry for the
transmission Of human speech over distances
q thousAndfold greater than could Ne covered
b. the unAlded voice. Interesting. strange and
ma yellous A. the invention seemed when made.
Il - improbable "a the last degree that the STATE
would have granted the right tn exercise the
power Of eminent domain To telephone coInpa
mics or permitted them permanently To occupy the
puhtr strcrts or highway " the only communi
cation f-asihlc hat bern between one customer
and = single other customer. The feature OF the
modern telephone system Which constitutes It,
puhHc value and Arerts - With public Interest
4. a., ABILITY ~ bring each customer into voral
communication gith hundreds and o'i~ahn~~
thou,anis o. atr.r> The franchise having been
rrsrteI se .a-- ~ ih.s y-Ty rierfra;, tia, = {"
~ tho capari.S 10 ~~rNc the community % Ncn
e-A, -, SERVING "a large number Of lndlViiuals
con ututlng the community. IL cannot he toler
Air,l 'hat ANY grantee ~ ihs franchise hail eSer
rIsr n IN surN Nay - ~ l-~,en The value Of the
tcerhonr A. N 'nstrumcntauH 81 service IN the
v,.a fFfe
'ar the exclusion Of any other telephone sefNire
from the premises Of IT. customers u may thus
drprlNe ~ tnos- cu.toucr~ % telephone rom
uru~cat " win Ner, r~r~nr WIN "a - tele
phone service 'sOm rival ronrcrEs snd thus IRE
1.nt .u,, what az t~rrhou~ 'rsrchi>es are de
.t-,r 20 pru,rotr. thNtIs the ,vaiIabiHN tn every
r-rt,r,- o. the conn. unit, Who desires u and
Aro-l 80 30, FOR O., Of ne most extensive te'c
rtor, ~rr,t,r nNfAinshc
,. Bsr'lr't sr-- that In return for
Dol. franchi - tho telephone company under
'ak.s - furnish zach customer With tsle-
phone -"ryi'e 20 ~ many other customers
.. u ian obtain ~ m" legal rate. aud the
law implts. an obligation on ~ tn do moth
ing to loosen thc fncui'ie- "f the puhlt'
to rro-.uTr % more widely extended scr
vice r. ma, not pur~U" policy of rNclu-
sinn injurious 90 tho publ" 10y restricting
the rircls ~ communication by telephone
even n contract to do ~ j. supported
by a sufficient consideration ~ between
parties The evil in such an arrange
msnt l. IT, antagoni-m 80 the interests Of
the public ~ay- the CONT
Tho court cites decisions 10 the eject
that - hen part oI a contract j. legal n may
h~ severed from the illegal part. and men
rion, case before the EVch"pu~r chamber
Of England where the defendant had Gov
en 1ntsd not to carry on the trade of Der
rlrrr. toy man or hair merchant vita in
IN" cittes of London ar Westminster or
within IN hundred miles oi them. N"
court holding that IA" covenant ~aS good
a. tn London sni Westminster but VOID
a. ~ the ~iN hundred miles. Accordingly
Judge Bartlett found that since the defend
ant- had Admitted that they Intended tn
4 isoontinue the u-e of the private tele-
phone exchange Of the plaintir the plain
TN Va entitled Ia iniunctive relief 10 that
extent