In a leading case decided by the Circuit Court of Appeals,49 Taft, J., thus summarized what the law permits:

" Covenants in partial restraint of trade are generally upheld as valid when they are agreements (1) by the seller of property or business not to compete with the buyer in such a way as to derogate from the value of the property or business sold; (2) by a retiring partner not to compete with the firm; (3) by a partner pending the partnership not to do anything to interfere, by competition or otherwise, with the business of the firm; (4) by the buyer of property not to use the same in competition with the business retained by the seller; and (5) by an assistant, servant, or agent not to compete with his master or employer after the expiration of his time of service. Before such agreements are upheld, however, the court must find that the restraints attempted thereby are reasonably necessary (1, 2) to the enjoyment by the buyer of the property, good will, or interest in the partnership bought; or (3) to the legitimate ends of the existing partnership; or, (4) to the prevention of possible injury to the business of the seller from use by the buyer of the thing sold; or (5) to protection from the danger of loss to the employer's business caused by the unjust use on the part of the employe of the confidential knowledge acquired in such business.50 to follow from the tests laid down for determining the validity of such an agreement that no conventional restraint of trade can be enforced unless the covenant embodying it is merely ancillary to the main purpose of a lawful contract, and necessary to protect the covenantee in the enjoyment of the legitimate fruits of the contract, or to protect him from the dangers of an unjust use of those fruits by the other party." 51

46 Gross v. Bibo, 19 N. Mex. 495, 145 Pac. 480. See infra, Sec. 1644. This is true even though the promisor had previously been a party with the promisee to a contract of sale, employment or partnership to which the promise might legally have been attached. Cleaver v. Lenhart, 182 Pa. 285, 37 Atl. 811; Prescott v. Bidwell, 18 S. Dak. 64, 99 N. W. 93.

47 See infra, Sec. 1641.

48 Mitchel v. Reynolds, 1 P. Wms. 181; Hutton v. Parker, 7 Dowl. P. C. 739; Pierce v. Fuller, 8 Mass. 223, 5 Am. Dec. 102; Marvel v. Jonah, 81 N. J. Eq. 369, 86 Atl. 968.

48a Young v. Timmins, 1 Cromp. &

J. 331; Thayer v. Younge, 86 Ind. 259; Mandeville v. Harman, 42 N. J. Eq. 185, 7 Atl. 37; Fries v. Parr (N. Y. Supr.), 139 N. Y. S. 220; Carroll v. Giles, 30 S. Car. 412, 9 S. E. 422, 4 L. R. A. 154. Cf. Styles v. Lyon, 87 Conn. 23, 27, 86 Atl. 564; Tarr v. Stearman, 264 111. 110, 119, 105 N. E. 957; Nelson v. Brassington, 64 Wash. 180, 183, 116 Pac. 629, Ann. Cas. 1913 A. 289.

49 United States v. Addyston Pipe, etc., Co., 85 Fed. 271, 29 C. C. A. 141, 150, aff'd in Addyston Pipe, etc., Co. v. United States, 175 U. S. 211, 44 L. Ed. 136, 20 Sup. Ct. 96.

" It would be stating it too strongly to say that these five classes of covenants in restraint of trade include all of those upheld as valid at the common law; but it would certainly seem v. Dolph, 138 U. S. 617,34 L. Ed. 1083, 11 Sup. Ct. 412, 28 Fed. 553, and Matthews v. Associated Press, 136 N. Y. 333, 32 N. E. 981, 32 Am. St. Rep. 741. In the fourth class are American Strawboard Co. v. Haldeman Paper Co., 83 Fed. 619, 27 C. C. A. 634, and Hitchcock v. Anthony, 83 Fed. 779,28 C. C. A. 80, both decisions of this court; Oregon Navigation Co. v. Winsor, 20 Wall. 64, 22 L. Ed. 315; Dunlop v. Gregory, 10 N. Y. 241, 61 Am. Dec. 746; Hodge v. Sloan, 107 N. Y. 244, 17 N. E. 335, 1 Am. St. Rep. 816. While in the fifth class are the cases of Homer v. Ashford, 3 Bing. 322; Horner v. Graves, 7 Bing. 735; Hitchcock v. Coker, 6 Adol. & E. 438; Ward . v, Byrne, 5 Mees. & W. 548; Dubowski v. Goldstein, [1896] 1 Q. B. 478; Perls v. Saalfeld, [1892] 2 Ch. 149; Taylor v. Blanchard, 13 Allen, 370, 90 Am. Dec. 203; Keeler v. Taylor, 53 Pa. St. 467,91 Am. Dec. 221; Herreshoff v. Boutineau, 17 R. I. 3, 19 Atl. 712, 33 Am. St. Rep. 850."

50 The court continued: "Under the first class come the cases of Mitchel v. Reynolds, 1 P. Wms. 181; Fowle v. Park, 131 U. S. 88, 9 Sup. Ct. 658, 33 L. Ed. 67; Nordenfeldt v. Maxim Nordenfeldt Co. [1894] App. Gas. 535; Rousillon v. Rousillon, 14 Ch.Div. 351; Leather Cloth Co. v. Lorsont, L. R. 9 Eq. 345; Whittaker v. Howe, 3 Beav. 383; Diamond Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. 419, 60 Am. Rep. 464; Tode v. Gross, 127 N. Y. 480, 28 N. E. 469, 13 L. R. A. 652, 24 Am. St. Rep. 475; Beal v. Chase, 31 Mich. 490; Hubbard v. Miller, 27 Mich. 15, 15 Am. Rep. 153; National Benefit Co. v. Union Hospital Co., 45 Minn. 272, 47 N. W. 806, 11 L. R. A. 437; Whitney v. Slayton, 40 Me. 224; Pierce v. Fuller, 8 Mass. 223, 5 Am. Dec. 102; Richards v. American Desk & Seating Co., 87 Wis. 503, 58 N. W. 787. In the second class are Tallis v. Tallis, 1 El. & Bl. 391, and Lange v. Werk, 2 Ohio St. 519. In the third class are Troy Laundry Machinery Co.