Case Name: DAVIES et al. v. RACER
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1893-10-13
Citations: 25 N.Y.S. 293
Docket Number: 
Parties: DAVIES et al. v. RACER.
Judges: 
Reporter: West's New York Supplement
Volume: 25
Pages: 293–295

Head Matter:
(72 Hun, 43.)
DAVIES et al. v. RACER.
(Supreme Court, General Term, First Department.
October 13, 1893.)
1. Contract—Validity—Restraint op Trade.
Defendant, on entering the employment of plaintiffs, customhouse brokers and forwarding agents, as a solicitor of business, agreed that for 12 months after the termination of their relations he would not engage in a similar business in the same city, or within 50 miles thereof, or interfere with plaintiffs’ customers. Held, that such agreement was not void as being unreasonable and in restraint of trade.
2. Same—Consideration.
The employment of defendant by plaintiffs was sufficient consideration to support such agreement on his part.
3. Same—Injunction to Restrain Breach—Evidence.
There was evidence that defendant, on leaving plaintiffs’ employment, took a position with another firm in the same city, engaged in the same business, and that he immediately began to solicit custom from persons who had been accustomed to deal with plaintiffs, some of whom then ceased to do so, though they alleged that they would have ceased to do so even if defendant had not solicited the change. Helé, that there was sufficient evidence of damage to justify an injunction to restrain further breaches by defendant of his agreement with plaintiff.
Appeal from special term, New York county.
Action by Alfred Davies and others against Herman F. Racer for an injunction. From an order continuing pendente lite a temporary injunction theretofore granted, defendant appeals.
Affirmed.
The opinion of Mr. Justice INGRAHAM at special term was as follows:
I see no reason for refusing to enforce the agreement of the defendant that he would not engage in the city of New York, or within 50 miles thereof, either directly or indirectly, in any similar business to that carried on by the plaintiff, nor to interfere with any of the customers, directly or indirectly, for the space of 12 months after the termination of the agreement. It is conceded that the defendant was employed by the plaintiff as a clerk to receive, influence, and procure orders and goods from shippers in New York city and elsewhere, and in, consequence of such employment it was apparent that the defendant would obtain knowledge of the plaintiff’s customers, and it certainly would seem to be entirely reasonable that the defendant would agree that he would not use such knowledge in any business carried on by him for a period of 12 months after the termination of the employment. It is not claimed that the defendant was not, at the time he made the contract, of sufficient intelligence to understand what he was doing. The contract does not appear to be at all inequitable, but is reasonable for the proper 'protection of the plaintiff’s business; and the defendant cannot escape from the obligation created by the contract by saying he was told by the resident American partner that it was a matter of form. The contract is not in general restraint of trade, but it is simply to refrain from engaging in a certain business within a certain limited area, and is clearly valid. There was a substantial consideration in the employment of the defendant in such a position that he would necessarily obtain information as to the plaintiff’s customers; and his agreement not to so act that such information could be used against the plaintiff for a limited period after the termination of or his retirement from business relations with the plaintiff was directly connected with the employment and the information he would receive under it. I think the defendant violated the covenant by entering into the service and employment of a firm that was a competitor of the plaintiff in the business which was carried on at the time the agreement was made. He certainly, “directly or indirectly,” has engaged in a similar business. The motion must therefore be granted, and the defendant enjoined from engaging in any business similar to that carried on by the plaintiff at the time of the execution of the agreement, and from interfering with the customers of the plaintiff, either directly or indirectly; with §10 costs of this motion, to abide the event.
Argued before YAK BRUNT, P. J., and FOLLETT and PARKER, JJ.
W. P. Burr, for appellant.
H. H. Whitman, for respondents.

Opinion:
YAK BRUNT, P. J.
There seems to be little to add to the opinion rendered in the court below, but it may be necessary to notice one or two points' which have been urged upon this appeal. It appears that on the 1st. of June, 1887, the plaintiffs, who are engaged in the business of forwarding agents and customhouse brokers, entered into an agreement with the defendant, whereby said firm employed the defendant, as clerk, to receive, influence, and procure orders and goods from shippers in Kew York city and elsewhere, and to perform other duties, in consideration of a salary therein expressed. In and by said agreement the said defendant agreed not to engage in the city of Kew York, or within 50 miles thereof, either directly or indirectly, in a similar business to that carried on by the plaintiffs, or to interfere with any of the plaintiffs' customers, directly or indirectly, for the space of 12 months after the expiration of the agreement; Said agreement was continued in existence until on or about the 29th of December, 1892, • when the defendant voluntarily left the plaintiffs' employment, and engaged as a clerk with a firm in Kew York doing business similar to that of the plaintiffs, and, it is alleged, interfered with the customers of the plaintiffs by systematic solicitation of .their business on behalf of said firm; and that such solicitation was in open violation of defendant's said agreement. There was evidence tending to show the existence of this state of facts. But it is urged upon the part of the appellant that there was no evidence that the plaintiffs have suffered or will suffer such great or irreparable injury as will warrant the granting of this injunction. It is undoubtedly true that the evidence in this regard is slight, but there certainly is evidence from which the conclusion might be drawn that the plaintiffs may suffer injury from the actions of the defendant. It appears beyond contradiction that he is soliciting custom from those who have been accustomed to deal with the plaintiffs, and that some of these customers have ceased dealing with the plaintiffs, although they allege they would have ceased dealing with the plaintiffs even though the defendant had not solicited the change. It is naturally difficult to establish the effect of the mental operations which have brought about the change in the action of these customers, but it is apparent that there has been a plain and willful violation upon the part of the defendant of the covenants contained in his agreement; and it requires but slight evidence of injury to justify the court in restraining such acts, it being apparent that it is impossible to calculate what may be the results of such action.
It is also urged that the covenant is in restraint of trade, and was not supported by a good consideration, and unreasonable in view of the circumstances disclosed, and therefore void. As to the agreement being in restraint of trade, it seems to be difficult to support any such proposition in view of the principles enunciated* by the courts of appeals in the case of Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. Rep. 419, where a very much broader contract was enforced. As to the want of consideration, the fact of the employment was sufficient consideration. It enabled the defendant to become familiar with the customers and the trade of the plaintiffs, and they had a right to protect themselves by such a covenant against such knowledge being used to their disadvantage. As to the policy of the law being against the restraint of clerks, mechanics, and apprentices from pursuing their profession or employment in any particular place, it seems to be sufficient to say that no rule laid down in this state has been called to our attention which in any way militates against the validity or propriety of such an agreement as forms the subject-matter of this action. We think, therefore, that the order should be affirmed, with $10 costs and disbursements. All concur.