Court Opinion

ID: 6966867
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:55:27.008093+00
Date Added: 2024-06-11T16:08:39.096162
License: Public Domain

Mr. Justice Magruder delivered the opinion of the court: When appellant sold to appellee his undivided one-half interest in the livery and undertaking business at 976 and 978 West Lake street and 1391 West Madison street in the city of Chicago for $5500.00, he executed a bill of sale in-which was inserted the following provision: ■ “It is expressly agreed that Patrick Hursen shall not engage in the livery and undertaking business in the city of Chicago for a period of five years from this date,” (April 20, 1892). It is conceded, that the contract was entered into, and the only question is whether it was valid and whether it has been violated by the appellant. It is charged, that the agreement of appellant not to engage in the livery and undertaking business in the city of Chicago for a period of five years is invalid as being in restraint of trade. Undoubtedly contracts in total restraint of trade are void, and upon two grounds, first, because of the injury to the public by being deprived of the industry of the party who is restrained, and, second, because of the injury to the party himself by being deprived of the opportunity to pursue his occupation and thereby support his family. A contract in restraint of trade is thus total and general, when by it a party binds himself not to carry on his trade or business at all, or not to pursue it within the limits of a particular country or State. Such a general contract in restraint of trade necessarily works an injury to the public at large and to the party himself in the respects indicated, and is, therefore, against public policy. But a contract, which is only in partial restraint of trade, is-valid, provided it is reasonable and has a consideration to support it. (5 Lawson on Rights, Remedies and Practice, sec. 2403; 3 Am. & Eng. Ency. of Law, p. 882, and cases in notes; Oregon Steam Navigation Co. v. Winsor, 20 Wall. 64). The restraint is reasonable, when it is such only as to afford a fair protection to the interests of the party, in whose favor it is imposed. If the restraint goes beyond such fair protection, it is oppressive to the other party and injurious to the interests of the public, and, consequently, void upon the ground of public policy. A contract in restraint of trade, to be valid, must show that the restraint imposed is partial, reasonable- and founded upon a consideration capable of enforcing the agreement. “Courts will not enquire whether the consideration was adequate or equal in value to that which the party loses by the restraint. The contract must be construed by the court, and its reasonable character and the consideration for it determined.” (Linn v. Sigsbee, 67 Ill. 75). Where the restriction embraces too large a territory, it will be unreasonable and void as being wider than is necessary for the protection of the party in whose favor it is imposed, but where the restriction limits the exercise of the occupation within reasonable bounds, it is valid as being no larger than is necessary to protect the covenantee. (5 Lawson on Rights, Remedies and Practice, secs. 2403-2405; Linn v. Sigsbee, supra). In Linn v. Sigsbee, supra, a practicing physician sold his house and lot for $2000.00, and-included in the sale his practice and obligated himself to the purchaser, who was also a practicing physician, not to establish or attempt to establish a medical practice within a certain township, nor within six miles of his residence; and we held, that the limitation was reasonable, that there were good reasons which induced the contract, and that there was a legal consideration. In Pelz v. Eichele, 62 Mo. 171, a contract not to engage in the manufacture of matches in the city of St. Louis “or at any other place” was held to be divisible, and valid as to that portion which restrained the manufacture of the matches within the city of St. Louis. To the same effect, substantially, is Gill v. Ferris, 82 Mo. 156. In Washburne v. Dorsch, 68 Wis. 436, it was held that an agreement not to engage in the dry goods and grocery trade in a certain town for a period of five years, leaving the party at liberty to engage in any other business in that town, was valid as only a partial or limited restraint upon trade. Where one engaged in business sells his stock or his business and good will with a limitation upon the restraint as to time, but none as to territory, the restriction is void, and a contract preventing one from carrying on his calling anywhere is unreasonable. (Wiley v. Baumgardner, 97 Ind. 66; Johnson v. Gwinn, 100 id. 466). In Mallan v. May, 11 M. & W. 653, an agreement not to carry on the practice of surgeon dentistry in the city of London was valid, although it was claimed by counsel, that the agreement was an undue, unreasonable and unlawful restriction of trade, because London contained a population of 1,500,000. (See, also, Green v. Price, 13 M. & W. 695; Price v. Green, 16 id. 346). In Dean v. Emerson, 102 Mass. 480, A and B entered into an indenture, in which B covenanted not to be interested in a certain business within a certain county, and also covenanted not to be interested in the same business for five years within the United States, and it was held that B was liable for a breach of the first covenant, although the second might be void as being in restraint of trade. Applying these authorities and the principles therein announced to the case at bar, we are of the opinion that the contract between appellant and appellee was valid. It was only in partial restraint of trade. It was limited in time to the period of five years, and in space to the city of Chicago. One element of the value of the business transferred by appellant to appellee was the probability, that the customers of the former would continue to trade with the latter, and this probability was increased and the value of the purchase enhanced by the agreement of appellant'not to engage in the same business in Chicago for five years. Such an agreement was, in part, an inducement to appellee to make the purchase, and was based upon a sufficient consideration. Appellant was at liberty to engage in any other business, or in the same business in any other,place than Chicago. There was, therefore, only a limited restraint upon him as a tradesman, and not upon trade generally. Where one person is restrained from doing a particular business in a particular place, competition is left open to all others, and there is no injury to the public. The person restrained, in such case, merely yields to another the use of what he has disposed of to that other for value. The limitation here did not go beyond what was necessary for the protection of appellee in the prosecution of the business purchased by him, and was, therefore, reasonable. That the appellant opened an undertaking establishment at 1057 West Lake street is clearly proven by the evidence. This was a violation of the agreement. We think that the decree of the circuit court was proper. Accordingly, the judgment of the Appellate Court is affirmed. Judgment affirmed.