§ 679. An agreement in general or total restraint of trade is void, although it be founded on a legal and valuable consideration. And this doctrine was held at as early a period as during the second year of the reign of Henry V., in the Year-Book of which year (1415) a case is reported where a weaver, in a moment of passion against his trade, gave a bond never to carry it on more, and suit was brought thereupon. Whereupon Mr. Justice Hall, in a violent burst of indignation, exclaimed, "A ma intent vous purres aver demurre sur luy que 1'obligation est voide, eo que le condition encountre common ley, et per Dieu si le plaintiff fuit icy, il irra al prison, tanqu'il ust fait fine au Roy." In commenting on which language, Lord Macclesfield, in a much later case, says:3 "I cannot but approve of the indignation that judge expressed, though not his manner of expressing it." The same rule has been uniformly adhered to, even to the present day, and the attempt, which was at one time made to restrict it by raising a distinction between parol and sealed contracts, never obtained. An agreement, therefore, not to carry on a certain business anywhere, is invalid, whether it be by parol or specialty, or whether it be for a limited or for an unlimited time;4 as an agreement not to run a steamboat in any of the rivers, bays, or waters of a State for ten years.1 The reason of this rule is said to be, that the tendency of such agreements would be to promote monopolies, to check competition, enterprise, and industry, and to deprive the public of beneficial services and labors.2 Thus, where A. gave a bond by which he bound himself never afterwards " in his own name, or in the name of another, to conduct, carry on, use, or employ the art, trade, or occupation of an iron-founder or caster, or be concerned, interested, employed, or engaged, directly or indirectly, in any manner whatsoever, or under any pretence whatsoever, in the business of founding or
1 Pickett v. School Dist. No. 1, 25 Wis. 551 (1870).
2 See Treat v. Shoninger Melodeon Company, 35 Conn. 543 (1869); Jones v. Lees, 1H.&N. 189 (1856).
3 Mitchel v. Reynolds, 1 P. Wras. 193.
4 Mitchel v. Reynolds, 1 P. Wms. 181, where the subject is elaborately discussed. Homer v. Ashford, 3 Bing. 323; Pierce v. Fuller, 8 Mass.
223; Nobles v. Bates, 7 Cow. 307; Morris v. Colman, 18 Ves. 437; 1 Pow. on Cont. 167; Hitchcock v. Coker, 6 Ad. & El. 438; 2 Comyn on Cont. 467, 1st ed.; Gale v. Reed, 8 East, 80; Com. Dig. Trade; Archer v. Marsh, 6 Ad. & El. 967; Hinde v. Gray, 1 Man. & Grang. 195; Alger v. Tbacher, 19 Pick. 51; Lange v. Werk, 2 Ohio St. 519.
1 Wright v. Ryder, 36 Cal. 342 (1868).
2 Parker, C. J., in Mitchel v. Reynolds, 1 P. Wms. 190, states the reasons for this rule to be: "1st. The mischief which may arise from them, 1st, to the party by the loss of his livelihood and the subsistence of his family; 2dly, to the public, by depriving it of a useful member. Another reason is the great abuses these voluntary restraints are liable to; as, for instance, from corporations, who are perpetually laboring for exclusive advantages in trade, and to reduce it into as few hands as possible; as likewise from masters, who are apt to give their apprentices much vexation on this account, and to use many indirect practices to procure such bonds from them, lest they should prejudice them in their custom, when they come to set up for themselves. 3dly. Because in a great many instances they can be of no use to the obligee, which holds in all cases of general restraint throughout England; for what does it signify to a tradesman in London what another does at Newcastle ? and surely it would be unreasonable to fix a certain loss on one side, without any benefit to the other. The Roman law would not enforce such contracts by an action. See Puff. Lib. 5, c. 2, sect. 3; 21 H. 7, 20. 4thly. The fourth reason is in favor of these contracts, and is, that there may happen instances wherein they may be useful and beneficial, as to prevent a town from being overstocked with any particular trade; or in case of an old man, who finding himself under such circumstances either of body or mind as that he is likely to be a loser by continuing his trade; in this case, it will be better for him to part with it for a consideration, that by selling his custom, he may procure to himself a livelihood, which he might probably have lost by trading longer. 5thly. The law is not unreasonable, as to set aside a man's own agreement for fear of an uncertain injury to him, and fix a certain damage upon another; as it must do, if contracts with a consideration were made void." casting in iron," it was held, that as it purported to exclude A. everywhere, and at all times, from a participation in the trade or business referred to, it was void, as being against public policy.1 So, also, a covenant by the lessor of a brewery that he will not, during the continuance of the demise, carry on the business of a brewer or merchant, or agent for the sale of ale, etc, in S. and elsewhere, or in any other manner whatsoever be concerned in the said business, is void, as being a general restraint of trade.2 So, of a covenant not to carry on a certain trade at any place within the United States.3 So, a contract not to carry on the business of making or selling shoe-cutters "within the Commonwealth of Massachusetts," is void as in restraint of trade.4 So, " throughout the State of New York." 5 So, of "all the territory west of Albany." 6 The purchase of an exclusive right to the use of a patent or secret is not, however, within the rule.7 But a contract by which the lessee of a mine agreed to use his influence with his employees to induce them to trade only at the store of the lessor, and that the lessee would accept no order given him by his employees for goods purchased elsewhere, and that he would neither give an order on any other store, nor any note or other evidence of indebtedness to be transferred to any other store, is in restraint of trade and unlawful.8 On the other hand, a contract in restraint of the sale of liquor is not illegal in those States in which it is restrained by statute.9