Court Opinion

ID: 8002437
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:50:25.119384+00
Date Added: 2024-06-11T16:35:45.954319
License: Public Domain

Baker, Judge,
delivered the opinion of the court.
Previous to the execution of the instrument on which this suit was brought, the plaintiffs were in possession of a tract of mineral land in Washington county, from which a number of miners were engaged in taking lead ore under an agreement to sell the ore to the plaintiffs. In violation of their agreement, some of the miners sold ore taken from the plaintiffs’ land to the defendant. The plaintiffs instituted several suits before a justice of the peace against the defendant for purchasing ore thus taken from their land, which were pending when the agreement sued on was entered into. By this instrument the plaintiffs agreed to dismiss these suits. The defendant agreed on his part that he would not pay for ore he might thereafter purchase, taken from the plaintiffs’ land, a greater price than they wore paying for such ore, and that he would not pay a greater price for ore taken from other lands than they were paying for ore taken from their own. He also agreed to sell the plaintiffs all ore thereafter purchased by him, for-which he was to receive four dollars per thousand pounds more than they were pajdng at the time to the miners on their own land. The defendant further “binds himself, his heirs, executors, and administrators, firmly by these presents, in the sum of five hundred dollars lawful money, liquidated damages ; which said sum the said George Towl agrées and binds himself to pay to the said party of the second part, to be collected in any court of competent jurisdiction, upon the violation of any of the stipu*549lations or conditions of tins agreement, or upon his failure to perform the same.”
Two breaches of the conditions of the agreement are assigned in the petition. One is, that the defendant purchased 6,000 pounds of ore at two dollars per thousand more than the plaintiffs wore paying. The other is, that he purchased 25,400 pounds, which he refused to sell to them.
It is urged that the contract is in restraint of trade and against public policy, and is therefore void; that it is void for want of sufficient consideration ; and that the sum of five hundred dollars mentioned in it is a penalty, and not liquidated damages.
A contract prohibiting one of the parties from carrying on any specific trade or business, without limit as to time or place, is doubtless void; such contracts, to be binding, must have reasonable limitations as to the place. What would be reasonable limitations must greatly depend on the circumstances of each case. It must appear that such contract imposes no restraint upon one party that is not beneficial to the other. The prohibition should not extend any further than will fully protect the party ’for whose benefit the contract is made in his occupation or business. If the prohibition extends beyond this, it is an unreasonable restraint of trade, and will render the contract void. (21 Wend. 158; 19 Pick. 51; 7 Blackf. 344; 10 Barb. 641; Story on Cont. § 552.)
Does the contract under consideration come within the rule above prescribed ? It docs not prohibit the defendant from carrying on the business designated at any place he may choose. It only limits the manner by fixing the prices at which he may buy and sell, and the persons to whom he may sell. It is not a restriction of trade according to any proper construction of the rule. This principle of law had its origin in the apprentice system of England, whore an apprenticeship was required before engaging in any trade or business. No satisfactory reason has been found for its existence in this country, where no such system prevails; and although it has been too long acquiesced in here to be now disturbed, we are unwilling to extend it to cases not clearly within its provisions and sanctioned by precedents. Under this view of *550the case, we think that the contract is not void for being in restraint of trade. There is no question but that the suits instituted before the justice were without foundation, and that the plaintiffs had not even a color of right to recover. To make the settlement of assumed rights a sufficient consideration for a promise, there must be at least an appearance of right sufficient to raise a possible doubt in favor of the party asserting the claim. The ore purchased by the defendant, for which the suits were brought, was evidently the property of the parties selling it, and, if they sold it in violation of their contracts with the plaintiffs, they must look to them for redress. The plaintiffs, having clearly no just claim against the defendant, had no right to sue him, and can derive no advantage from having done so. The dismissal of suits so palpably unjust forms no adequate consideration for a promise. (13 Pick. 284; 5 Pet. 114; 21 Penn. 237; 2 Moore, 297; 14 Conn. 12; 4 Met. 270.)
In the case of Basye v. Ambrose, 28 Mo. 39, the court says that “where the agreement secures the performance or omission of various acts which are not measurable by any exact pecuniary standard, together with one or more acts in respect to which the damages on a breach of contract are readily ascertainable by a jury, and there is a sum stipulated as damages for a breach of any one of the covenants, such sum is held to be a penalty merely.”
The authority is clearly in point in the question we are now considering. The sum sued for is to be treated as a penalty, and not liquidated damages.
The judgment of the court below is affirmed.
The other judges concur.