reasonable and merely delusive. I do not agree with these suggestions. It will be remembered that if the plaintiffs and their successors cease to trade the restraint comes to an end. The £287,500 which the plaintiffs or their predecessors paid to the defendant for the business must obviously take many years before it can be recouped by trading; and why am I to hold that twenty-five years is more than a fair protection to the plaintiff? No facts have been given in evidence from which I can draw such an inference. Indeed, what facts have been proved tend in the contrary direction. In considering this it does not seem to me that the age of the covenantor is the matter to be considered, but what is the fair protection of the covenantee; and I may say that my own opinion is that if the limit here had been the covenantor's life, in the special circumstances of the case, it would not have been unreasonable.' 1

§ 42. The Subject Continued.-While it is well settled, as above shown, that where a contract in restraint of trade is properly limited in regard to space, indefiniteness of time is not material, it does not follow that a contract in general restraint of trade is rendered valid by a limitation in time. In the leading case of Wiley v. Baumgardner, the rule on this point is stated by Mr. Justice Black, as follows: "A contract in restraint of trade is void, if the restraint be unreasonable, and the question as to the reasonableness of the restriction is one of law, to be determined by the court, and the contract is supported or avoided on grounds of public policy. Whatever restraint is larger than the necessary protection of the party with whom the contract is made is unreasonable and void, as being injurious to the interests of the public, on the ground of public policy.' In the contracts now before us the transaction was not expressed as a sale of the good will of the business, or as a sale of the business. But it would have made no difference if there had been an express sale of the good will. Where a person carrying on any business sells his stock in trade,

1 Maxim-Nordenfelt v. Nordenfelt, L. R. (1893) 1 Ch. 630, 673.

per A. L. Smith, L. J.

or his business and his good will, and in the transaction agrees not to carry on the same business with a limitation space, the agreement as to This must be so if the test supported or avoided on the

as to the time, but none as to such restraint is wholly void. be that the contract is to be ground of public policy. If it be prejudicial to the public interests for a citizen to be debarred from pursuing anywhere the calling in which he has acquired skill or proficiency, or to encourage the establishment of monopolies by preventing competition, it must be for definite as well as indefinite periods of time. A contract that would put it in the power of one party to prevent the other from carrying on his calling anywhere whatever is unreasonable."1 In an English case the rule is stated, as follows:

1 Wiley v. Baumgardner, 97 Ind. 66; s. C., 49 Am. Rep. 427, 429. As this is the leading case on this point in this country, the following statement of the case, taken from the opinion, may be of interest: "The action was upon a contract in writing by which the appellant sold to the appellees the former's entire stock of dry goods, boots and shoes, merchandise and fixtures in his store in Bluffton at cost, less a certain per cent., and agreed to transfer to them his lease on the building occupied by him for his storeroom, and his unexpired insurance on said stock, and agreed not to engage in the dry goods business for a term of five years from the date of the agreement, being the 29th day of December, 1881, the appellees agreeing on their part, by way of payment, to transfer to the appellant a certain farm, which was to represent $6,000, to execute to him their promissory note for $1,000, and for the balance to execute their promissory notes, secured by mortgage on certain lands of one

of the appellees. And it was agreed by all the parties, that 'for the faithful performance of the above contract, we hereby bind ourselves to each other in the sum of $1,000 liquidated damages.' It was alleged that the appellees intending to engage in the dry goods business in said town, the contract was entered into by them and the appellant for such purpose; that immediately after the purchase the appellees engaged in said business in said town, and that they were still continuing the same. The breach alleged was that in September, 1882, the appellant purchased a large stock of dry goods of the value of $10,000, and with them opened a dry goods store in said town within a few doors of the place of business of the appellees, and engaged in the dry goods business in said town and still continued the same; that during the time he had been thus engaged in business he had sold a large amount of dry goods in said town, the amount of $10,000, thereby taking away from the appellees

"A limit in time does not by itself convert a general restraint into a partial one. "That which the law does not

allow is not to be tolerated because it is to last for a short time only. In considering, however, the reasonableness of a partial restraint, the time for which it is to imposed may be a material element to consider."1

§ 43.

Touching Territorial Limitations.-It is the rule that a contract in restraint of trade is valid only as it is limited as to space. If it is without limit it must be shown, in order to render it valid, that the peculiar circumstances render it a fit and reasonable agreement. agreement. Where this question is raised it will be settled by the court, not according to any hard and fast rule, but by an investigation of all the circumstances of the case, and by what, in view of the circumstances, appears to be reasonable and just. In a case before the Supreme Court of California, it was held that a contract in restraint of trade to be upheld must be restricted as to territory, and it must appear to the court in considering the nature of the business in connection with the territorial limits assigned that the limits designated are not unreasonable in extent.2 In the opinion in this case the

said trade, to their damage, $1.500, for which they demanded judgment." See also Ward v. Byrne. 5 M. & W. 548; s. C., 3 Jur. 1175; Lawrence v. Kidder, 10 Barb. 647. However, in Proctor v. Sargent. 2 Man. & G. 20; s. c., 2 Scott, N. R. 289, Tindal, C. J., uses this language: "I think that when we are deciding upon the unreasonableness of a contract of this kind, we cannot leave out of consideration the duration of the restraint; for although I admit that where we once hold a restriction to be unreasonable in point of space, the shortness of time for which it is imposed will not make it good, yet where the question is whether the restraint is unreasonable or not in point of space, that which would

be unreasonable, were it to continue for any length of time, may not be so when it is to last only for a day or two."

1 Maxim-Nordenfelt Co. v. Nordenfelt, L. R. (1893) 1 Ch. 630, 662. 2 Callahan v. Donnolly, 45 Cal. 152. See also generally the following cases involving questions of space where contracts were upheld: Butler v. Burleson, 16 Vt. 176; Miller v. Elliott, 1 Ind. 484; McClurg's Appeal, 58 Pa. St. 51; Mott v. Mott, 11 Barb. 127; Dwight v. Hamilton, 113 Mass. 175; Gravelly v. Barnard, L. R. 18 Eq. 518; s. C., 43 L. J. Ch. 649; 30 L. T. 863; Mercer v. Irving, El., B. & E. 563; Reynolds v. Bridge, 6 El. & B. 528; Sainter v. Ferguson, 7 Com. B. 716; s. c., 13 Jur. 828; 18 L. J.

court said: "A contract in restraint of trade and which is not by its terms limited as to the territory embraced in its operation is not to be supported. 'It is to be remembered, however (said Tindal, C. J., in Horner

v. Graves), that contracts in restraint of trade are in themselves, if nothing more appears to show them reasonable, bad in the eye of the law.' A contract in restraint of trade must designate the space within which it is to operate and must not be unreasonably extended. Such contracts, when upheld, are only in cases where the parties have restricted the territory in which they are to operate, and where the court, in considering the nature of the business in connection with the territorial limits assigned, is of opinion that the designated limits are not unreasonable in extent."2 In a case in Alabama the rule is stated, as follows: "It is true that such contracts must be limited as to the space they are intended to cover, or they cannot be supported. The meaning of a contract of this character is not to be found solely from a consideration of its expressed terms. Courts look to all the circumstances surrounding the parties and attendant upon the transaction, and from a consideration of these circumstances in connection with the expressions of the undertaking, they will first construe the contract and then proceed to pass upon its reasonableness as thus construed.' This rule, so far as it can be termed a rule, relating to territorial limitations, is stated by the Supreme Court of the United States, in the case of the Oregon Steam Navigation Company, as follows: "In accordance with these principles it is well settled that a stipulation by a vendee of any trade, business or establishment, that the vendor shall not exercise the same trade or busi

3

the holders, in case of sickness or injury, to maintenance and treatment in hospitals provided by the company. The plaintiff had established a lucrative business in Wisconsin, Minnesota and the northern peninsula of Michigan, and had acquired valuable hospital contracts. The plaintiff agreed to refrain for three years from selling certificates in the territory named, except to railroad employes, and to turn over its hospital contracts, in consideration of which the de

fendant promised to make certain payments, and also to refrain for three years from selling certificates to railroad employes within said territory. Held, that the contract was not void as an unreasonable restraint of trade. Nat'l Ben. Co. v. Union Hospital Co., 45 Minn. 272; s. C., 47 N. W. Rep. 806.

1 Horner v. Graves, 7 Bing. 744. 2 Callahan v. Donnolly, 45 Cal. 152.

3 Moore & Handley Co. v. Towers Hardware Co., 87 Ala. 206.