Court Opinion

ID: 3320788
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:38:23.983455+00
Date Added: 2024-06-11T12:40:38.449489
License: Public Domain

I am unable to agree with the majority opinion in so far as it holds that the plaintiffs are entitled to maintain an action for a declaratory judgment to determine that the contract *Page 206 
was invalid. It is therefore my conclusion that there was error and judgment should be directed for the defendant.
Assuming that the trial court was correct in concluding that the restrictive covenants in question were "against public policy, invalid and unenforceable in toto," it of course does not necessarily follow that the plaintiffs are entitled to affirmative relief by declaratory judgment. Our decisions have recognized, as the two principal considerations affecting the validity of restrictive contracts on grounds of public policy, (1) injury to the public because it is deprived of the restricted party's industry or services, and (2) injury to the party himself by reason of being precluded from pursuing his occupation and thus being prevented from supporting himself and family. May v. Young,125 Conn. 1, 5, 2 A. 385; Styles v. Lyon, 87 Conn. 23,27, 86 A. 564; note, 119 A.L.R. 1452. The record suggests no other significant element in this case. It was the occupation of the plaintiffs in conducting a meat and grocery business only that was involved. Since the court has found that in New London, Groton and Waterford alone there were more than 300 stores where business of this nature was carried on, it is manifest that the conclusion quoted was based upon the effect of the restriction on the plaintiffs themselves, as distinguished from any effect it might have upon the public. This is confirmed by the fact that the court's finding contains the conclusion that the restriction would impose an undue hardship on the plaintiffs but is silent as to any effect upon the public.
A decision which establishes the right of a person, who today has executed such a restrictive contract as here for a substantial consideration paid, to procure tomorrow a decree of court which effectively determines that no liability rests upon him under this contract *Page 207 
and that he can keep the consideration he has received may well constitute a potent temptation to fraud and place a premium upon dishonesty. Accordingly, the decision of this case involves not only the question whether the terms of the contract itself were contrary to public policy but the further question whether to aid the plaintiffs by granting the relief sought violates the sound public policy of fostering rectitude and integrity and discouraging fraud and dishonesty in business dealings. It can hardly be maintained that honesty in business is any less the concern of public policy than is restraint against competition. See Smith v. David B. Crockett Co.,85 Conn. 282, 287, 82 A. 569. It is my conclusion upon the broad question of public policy involved that the importance of so fostering honesty rather than dishonesty far outweighs any possible adverse effect that might result to these plaintiffs by a judgment for the defendant.
The majority opinion recognizes that to sustain the judgment for the plaintiffs and thus enable them to escape the consequences of their acts "smacks of unfairness and savors of an encouragement to dishonesty." It cites no authority setting forth logical and convincing reason for granting affirmative relief by declaratory judgment under these circumstances but bases its reasoning on the principle that a defendant when sued upon such a contract may defend upon the ground of its illegality, because the objection on this ground "is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say." Holman v. Johnson, 1 Cowp. 341, 343. Sustaining illegality as a defense, however, and recognizing it as a basis for affirmative relief are two very different things. That the former was the full *Page 208 
extent of the principle enunciated by Lord Mansfield in the words just quoted is clear from this further language of his, which follows that relied upon by the majority: "So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it [the illegality of the contract]; for where both are equally in fault, potior est conditio defendentis." This limitation upon the principle has been recognized repeatedly by this court. Thus, after quoting from the above case with approval, we went on to say: "The law could not take any other position than that it will not lend its aid to either of the parties to an unmoral or illegal transaction, but will leave them as it finds them. . . . `The purpose of the rule of law . . . is . . . to deprive the parties of all right to have either enforcement or relief from their illegal contract. . . . The court . . . . simply refuses its aid to undo what the parties have already done.'" Funk v. Gallivan, 49 Conn. 124, 128. Again we stated: "Neither courts of law or equity are open to enforce such contracts. If both parties are in pari delicto, the courts will leave them where they find them." Smith v. David B. Crockett Co., 85 Conn. 282, 287,82 A. 569. The majority opinion cites no decision of this court which either overrules or qualifies this language.
To my mind, the reasoning in the majority opinion that the rule of in pari delicto does not bar recovery by these plaintiffs, since they are not seeking to enforce but only to avoid the restrictive covenants, is strictly legalistic and entirely unrealistic. In my judgment it cannot be fairly maintained that this rule is inapplicable for the reason that an action for a declaratory judgment is not one seeking affirmative relief. Such a judgment, in the present case, not only affords *Page 209 
as effective affirmative relief as could be had in an equitable action for rescission or cancellation but furthermore accomplishes the exact result which the doctrine of in pari delicto is designed to prevent. In fact, it nullifies the provisions of the contract and relieves the plaintiffs of all their obligations not only as effectively and affirmatively as a decree of rescission or any other remedy could but in terms more advantageous to them. This being so, that the judgment, as the majority opinion states, would enable the plaintiffs to resume business in the forbidden area and the parties would not be "left in uncertainty as to their rights, with the ultimate solution only to be reached when the plaintiffs have incurred expense in starting a business and the defendant has brought an action for an injunction or damages" shows no ground for sustaining it. For the reasons already pointed out, it would be more in keeping with sound public policy to permit to continue operative whatever restraint upon the plaintiffs' activities their uncertainty as to the contract's validity might afford. The majority opinion, in arguing justification for a declaratory judgment, cites three authorities as suggesting that "in a proper case" affirmative equitable relief may be accorded a plaintiff where a question of this nature is involved. Even if the rule laid down in the two Connecticut decisions quoted above is to be disregarded, the case before us could not be "a proper case," for the reasons already stated.
For these reasons I conclude that there was error and that judgment should be directed for the defendant.
In this opinion ELLS, J., concurred. *Page 210