A contract by a father for relinquishment of the right to the custody of his child is void as against public policy.8 The trust is personal to the father, and he has no right to dispose of the child to another. Such contracts, however, when carried out, may have the indirect effect of preventing the father from asserting his rights, if the interests of the child so require.
167. A restraint is not unreasonable if it is founded on a valuable consideration, and is reasonably necessary to protect the interest of the party in whose favor it is imposed, and does not unduly prejudice the interests of the public.
7 A contract between husband and wife to drop matters in dispute, refrain from scolding, fault-finding, and anger, and live together as husband and wife; that the wife should keep her home in a comfortable condition; and that the husband provide necessary expenses, and pay the wife a certain sum per month, held illegal. Miller v. Miller, 78 Iowa, 177, 35 N. W. 464, 42 N. W. 641, 16 Am. St. Rep. 431. See "Contracts;' Dec. Dig. (Key-No.) § I11; Cent. Dig. §§ 515-520.
8 State v. Baldwin, 5 N. J. Eq. 454, 45 Am. Dec. 397; People v. Mercein, 3 Hill (N. Y.) 410, 38 Am. Dec. 644; Brooke v. Logan, 112 Ind. 183, 13 N. E. 669, 2 Am. St. Bep. 177; Washaw v. Gimble, 50 Ark. 351, 7 S. W. 389; Weir v. Marley, 99 Mo. 484, 12 S. W. 798, 6 L. R. A. 672; Hibbette v. Baines, 78 Miss. 695, 29 South. 80, 51 L. R. A. 839. Cf. Enders v. Enders, 164 Pa. 266, 30 Atl. 129, 27 L. R. A. 56, 44 Am. St. Rep. 598. Bee "Parent and Child," Deo. Dig. (Key-No.) § 2; Cent. Dig. §§ 4,-32.
9 See Tiffany, Pers. & Dom. Rel. 253-255.
168. It was formerly thought, and is still held in some jurisdictions, that though the restraint might be unlimited as to time, it could not be unlimited as to space; but modern decisions hold that such a restraint is not invalid, if it is reasonable.
A contract in unreasonable restraint of trade is contrary to public policy and void. "The unreasonableness of contracts in restraint of trade and business is very apparent from several obvious considerations: (1) Such contracts injure the parties making them, because they diminish their means of procuring livelihoods and a competency for their families. * * * (2) They tend to deprive the public of the services of men in the employments and capacities in which they may be most useful to the community as well as to themselves. (3) They discourage industry and enterprise, and diminish the products of ingenuity and skill. (4) They prevent competition and enhance prices. (5) They expose the public to all the evils of monopoly.10 Public policy requires, however, that the freedom of persons to enter into contracts shall not be lightly interfered with. Some restraint of trade, therefore, must be permitted, but we shall see that it must not be unreasonable.
At one time in England it was considered that a contract was contrary to public policy if it placed any restraint at all on a man's right to exercise his trade or calling. Gradually, however, exceptions were recognized, until in 1711 the court, in a leading case, established the rule that a contract in restraint of trade, upon consideration which shows it was reasonable for the parties to enter into it, is good; "that wherever a sufficient consideration appears to make it a proper and useful contract,11 and such as cannot be set aside without injury to a fair contractor, it ought to be maintained, but with this constant diversity, viz., where the restraint is general, not to exercise a trade throughout the kingdom, and where it is limited to a particular place, for the former of these must be void, being of no benefit to either party, and only oppressive." 12 Although in that case the restraint was limited both as to time and space, so that it did not call for a decision on a contract in general restraint of trade, it has since been assumed in numerous cases, and in some directly decided, that a contract which imposes a restraint which is unlimited as to space is void on its face.13 In England the law is now settled that a restraint, although unlimited as to space, is valid, if, under the particular circumstances, it is reasonable.14 Some diversity of opinion exists, however, among the courts of this country.15
10 Alger v. Tbacher, 19 Pick. (Mass.) 51, 31 Am. Dec. 119. Bee "Contracts," Dec Dig. (Key-No.) § 116; Cent. Dig. §§ 542-552.
11 A contract In restraint of trade must be based on a sufficient consideration. Ante, p. 143. See Chapin v. Brown, 83 Iowa, 156, 48 N. W. 1074, 12 L. R. A. 428, 32 Am. St Rep. 297; Cleaver v. Lenhart, 182 Pa. 285, 37 Atl. 811. And see Urmston v. Whitelegg, 63 Law T. 455. Bee "Contracts" Dec. Dig. (Key-No.) § 62; Cent. Dig. § 263. Clark Cont.(3d Ed.) - 25
In determining whether a particular restraint is reasonable, the court will consider the nature and extent of the trade or business, the situation of the parties, and all the other circumstances. If, on such a consideration, the restraint seems unreasonable, the contract will be declared void, however partial the restraint may be. As said in a leading case, the court will consider "whether the restraint is such only as to afford a fair protection to the interests of the party in favor of whom it is given, and not so large as to interfere with the interests of the public. Whatever restraint is larger than the necessary protection of the party can be of no benefit to either. It can only be oppressive, and, if oppressive, it is, in the eye of the law, unreasonable. Whatever is injurious to the interests of the public is void on the ground of public policy." 16
To illustrate this rule, a retail merchant, a mechanic, or a professional man, whose trade or business does not extend beyond the limits of the city in which he does business, or the immediate neighborhood, may, on selling his business, bind himself not to engage in the same business in that city or neighborhood. This is clearly necessary to protect the interests of the other party.17 On the other hand, it could only oppress him, and could not benefit the other party, to uphold a promise not to engage in the same business anywhere in the state, and such a promise would be unreasonable and void.18 We can even imagine cases in which an agreement by a person, on selling his business, not to engage in the same business in the same city, would be unreasonable; as, for instance, in case of a small bakery in a large city, the trade of which is only in the vicinity of the shop. Again, a wholesale merchant selling only in a particular section of the country could not, on selling his business, bind himself not to engage in the same business anywhere in the United States, though the restriction would be valid if limited to the district covered by his trade, even though it might extend over several states.19 The business of some wholesale houses extends over the entire United States, and even further; and the courts, as we shall see, show a tendency in some of the modern cases to allow a restriction coextensive with the business. Other courts, however, looking upon the restraint as general, hold it void on its face for that reason alone, without regard to what the interests of the other party may require.
12Mitchel v. Reynolds, 1 P. Wins. 181, 1 Sm. Lead. Cas. 694. See "Contracts," Dec. Dig. (Key-No.) § 117; Cent. Dig. §§ 554-669.
13 Post, p. 3S8. 14 Post, p. 389. 15 Post, p. 8S9.
16 Horner v. Graves, 7 Bing. 735. See, also, Rousillon v. Rousillon, 14 Ch. Div. 358; Herreshoff v. Boutineau, 17 R. I. 3, 19 Atl. 712, 8 L. R. A. 469, 33 Am. St. Rep. 850; Keeler v. Taylor, 53 Pa. 467, 91 Am. Dec. 221; Arnold v. Kreutzer, 67 Iowa, 214, 25 N. W. 138; Ellerman v. Stockyards Co., 49 N. J. Eq. 217, 23 Atl. 287; Gill v. Ferris, 82 Mo. 156; Tecktonius v. Scott, 110 Wis. 441, 86 N. W. 672; Harrison v. Sugar Refining Co., 116 Fed. 304, 53 C. C. A. 484, 58 L. R. A. 915; Fisheries Co. v. Lennen (C. C.) 116 Fed. 217; Kron-Bchnabel-Smith Co. v. Kronschnabel, 87 Minn. 230, 91 N. W. 892; Trentman v. Wahrenburg, 30 Ind. App. 304, 65 N. E. 1057. Injury to the interests of the public is always to be taken into consideration. See Western Wooden-Ware Ass'n v. Starkey, 84 Mich. 76. 47 N. W. 604, 11 L. R. A. 503, 22 Am. St. Rep. 686. See "Contracts," Dec. Dig. (Key-No.) § 117; Cent. Dig. §§ 554-569.
17 Washburn v. Dosch, 68 Wis. 436, 32 N. W. 551, 60 Am. Rep. 873; Dwight v. Hamilton, 113 Mass. 175; Finger v. Hahn, 42 N. J. Eq. 606, 8 Atl. 654;
A contract between manufacturers or dealers, not incidental to a sale of the business, to refrain from selling or competing, tending, as it does, to destroy competition, and not being necessary for the protection of the promisee, has been held unreasonable and void.20 Where a contract places it within the power of the contracting parties to at least partially control the available supply of commodities useful if not necessary to at least a considerable portion of the local public, as to unreasonably limit the places where useful articles may be purchased, or to increase the price and consequently to restrain trade, it is substantially injurious to the portion of the public affected thereby, and is an unreasonable, and consequently an unlawful, restraint of trade." 21
Linn v. Sigsbee, 67 I11. 75; Hubbard v. Miller, 27 Mich. 15, 15 Am. Rep. 153; Handforth v. Jackson, 150 Mass. 149, 22 N. E. 634; Smith v. Leady, 47 I11. App. 441; McClurg's Appeal, 58 Pa. 51; Boutelle v. Smith, 116 Mass. I11. An agreement not to sell a particular line of goods in a certain town may be valid, Clark v. Crosby, 37 Vt. 188; or not to sell to anybody in certain town or state except promisee, Newell v. Meyendorff, 9 Mont. 254, 23 Pac. 333, 8 L. R. A. 440, 18 Am. St. Rep. 738; Roller v. Ott, 14 Kan. 609; Keith v. Optical Co., 48 Ark. 138, 2 S. W. 777. The following agreements have been held a reasonable restraint: Covenant in deed not to sell intoxicating liquors on premises in less quantities than five gallons, Sutton v. Head, 86 Ky. 156, 5 S. W. 410, 9 Am. St Rep. 274; or not to carry on trading or mercantile business thereon, Morris v. Manufacturing Co., 83 Ala. 565, 3 South. 689. Agreement by vendee of land not to sell sand from it. Hodge v. Sloan, 107 N. Y. 244, 17 N. E. 335, 1 Am. St Rep. 816. Not to manufacture ochre in certain county. Smith's Appeal, 113 Pa. 579, 6 Atl. 251. Not to use premises sold for hotel Wittenberg v. Mollyneaux, 60 Neb. 583, 83 N. W. 824.. Covenant by lessee not to sell any beer on premises except that made by a certain company. Ferris v. Brewing Co., 155 Ind. 539, 58 N. E. 701, 52 L. R. A. 305. See "Contracts;' Dec. Dig. (Key-No.) § 117; Cent. Dig. §§ 554-569.
18 See Herreshoff v. Boutineau, 17 R. I. 3, 19 Atl. 712, 8 L, R. A. 469, 33 Am. St Rep. 850. See "Contracts," Dec. Dig. (Key-No.) § 117; Cent. Dig. §§ 554-569.
19 See DIAMOND MATCH CO. v. ROEBER, 106 N. Y. 473, 13 N. E. 419, 60 Am. Rep. 464, Throckmorton Cas. Contracts, 264. See "Contracts," Dec. Dig. (Key-No.) § 117; Cent. Dig. §§ 551,-569.