The following trade is recognized by the English courts. statement of the rule in relation to this point, as sustained in England, is from the opinion of Lord Justice Bowen, as cited in the preceding section, viz.: "Distinguished from these general restraints, which the English law discountenances, are partial or limited restraints, or, as they are sometimes termed, particular restraints, which, upon certain conditions, the English law permits and enforces. An agreement in 'particular' or 'partial' restraint of trade may be defined as one in which the area of restriction is not absolute, but in which the covenantor retains for himself the right still to carry on his trade, either in some place, or for the benefit of some persons, or in some limited or prescribed manner. Particular restraints, according to the language employed in Mitchell v. Reynolds,1 are those in which there is some limitation in respect of places or persons short of an absolute and total restriction. But there is also a third kind of limitation which the law will sanction under reasonable conditions, namely, a limitation in respect of the mode or manner in which a trade is to be carried on. The above are the three kinds of partial restraint recognized by the law. The English rule, which strikes indifferently at all general restraints in trade, makes the validity of a partial restraint depend on the circumstances of each case. A partial restraint will be binding in law if made on good consideration and if it is reasonable." 1 Mitchell v. Reynolds, 1 P. Wms. have considered that even partial 181. 2 Collins v. Locke, L. R. 4 App. Cas. 674, 686. "In the history of the application to partial restraints of this test, the courts of common law from time to time have been driven by good sense and by altered social circumstances to make gradual advances in the direction of toleration and indulgence. Judges as far back possibly as the reign of Henry V., and certainly during the reign of Queen Elizabeth, appear, as has been already stated, to restraints of trade were uniformly bad in law. But as trade progressed it was necessarily discovered that a doctrine so rigid must be injurious to the State itself. In the same way and at about the same date by-laws which were in mere regulation of trade came to be distinguished by the courts from those which were in unlimited restraint of it. Nevertheless, as late as the year 1601, in Colgate v. Bacheler (Cro. Eliz. 872), the court held that it was against law to Cases where the contract still leaves to the covenantor a right to trade with particular persons fall, as has been pointed out, under the same head as those where the restraint is partial in respect of space. In both instances prohibit or restrain 'any to use a lawful trade at any time or at any place.' This severe view is recorded in a dictum of Justice Croke (1613) in Rogers v. Parry (B. R. trin.; s. C., 11 Jac. 1 Rot. 223; 2 Bulst. 136), though it was repudiated by Justice Coke and the remainder of the court. One reason for the adoption of a more elastic doctrine appears from a judgment delivered in Broad v. Jollyffe (1620) (Cro. Jac. 596). In London and other large towns it had become usual already for traders to let their shops and wares to their servants when they were out of their apprenticeship; and for the servants to covenant that they would not use that trade in such a shop or in such a street. The courts yielding to the progress of industry and commerce, finally decided that a man might restrain himself voluntarily, and upon valuable consideration from using his trade in a particular place. The onus, however, at this time, still lay on the covenantee to show that the covenant on which he was insisting had been made for good consideration and that it was reasonable. The law is so expounded in Mitchel v. Reynolds (1711) (1 P. Wms. 181). "A particular restraint is not good without just reason and consideration." In 1726, Chesman v. Nainby (2 Ld. Raym. 1456; s. c., 1 Bro. P. C. 234), the House of Lords affirmed the doctrine and the qualification, and their decision was followed in Clerke v. Comer (1734) (Cas. t. Hardw. 53) ; Davis v. Mason (1793) (5 T. R. 118), and Bunn v. Guy (1803) (4 East, 190). The reason for favoring such partial restraints is enforced also in Homer v. Ashford (1825) (3 Bing. 322, 326). 'It may often happen' says Chief Justice Best, 'that individual interest and general convenience, render engagements not to carry on trade or act in a profession in a particular place, proper.' Down to as recent a period as Young v. Timmins (1831) (1 Tyrw. 226), it was still, however, considered to be for the person propounding a contract in partial restraint of trade to satisfy the court of the adequacy of the consideration. It was only in 1837, in Hitchcock v. Coker (6 A. & E. 438), that a fresh step forward was taken in reference to partial restraints of trade. The exchequer chamber there for the first time decided that in cases of partial restraint, the examination of the adequacy of the consideration was not properly for the court, but for the parties, although the burden remained as before upon the covenantee to show that there was some good and valuable consideration. The cases of Wallis v. Day (1837) (2 M. & W. 273), Leighton v. Wales (1838) (3 M. & W. 645), and Archer v. Marsh (1837) (6 A. & E. 959), were determined on the amended principle. By this date the idea was fully recognized, that all partial restraints of trade which satisfied the conditions of the law as to reasonableness and good consideration were not an injury, but a benefit to the public. alike, the restriction upon the trade is not general but limited in area, and such contracts, if reasonable and for good consideration, will be supported by the law. The trader, it is true, is prohibited in such cases from serving a portion of the public, but trade in another quarter is still left open to him, 'Where one party,' says Lord Lyndhurst, in Young v. Timmins,1 'agrees to employ another in the way of his trade, and the other undertakes to work exclusively for him, that is a particular restraint of trade which may be supported by proof of adequate consideration.' The covenant in Wallis v. Day," was of this description, and was pronounced good by the court, although its validity was not in fact a necessary condition to the plaintiff's success in that description of action. 'It cannot be said,' according to Lord Abinger, 'to be a contract in absolute restraint of trade, when he' (the contractor) 'contracts to serve another for his life in the same trade.' Instances where one trader covenants not to supply the customers of another, such as in Rannie v. Irvine,1 fall within this category. 'It is to be observed,' says Chief Justice Tindal, 'that this is not a general restraint of trade, but only restricts the defendant from trading with a very limited number of persons.' So also Pilkington v. Scott. Lastly, a covenant ceases to be referable to the class of general restraints of trade when it Ward v. Byrne (1839) (5 M. & W. 548, 559); Proctor v. Sargent (1840) (2 Scott, N. R. 289); Rannie v. Irvine (1844) (7 Man. & G. 969), per Maule, J.; Mallan v. May (1843) (11 M. & W. 653). A further progress in the views with which the law regarded partial restraints was made in Tallis v. Tallis (1853) (1 E. & B. 391). It was then at last resolved that the onus lay upon the person who attached a covenant in partial restraint of trade to displace the consideration-a change in the position of the parties which is illustrated by the language of Chief Justice Erle, in Mumford v. Gething (1859), 7 C. B. (N. S.) 5 3 only regulates or confines the manner in which the trade is to be worked. Such contracts are contracts in partial restraint of trade only, and are recognized accordingly as valid if reasonable and for good consideration.1 Jones v. Lees, is an illustration of this branch of partial restraints. The plaintiff, who was the owner of a patent, had sold to the defendant a license to use a patented invention, the defendant covenanting in turn that he would not make any machines in future without applying the invention to what he so made. If the defendant covenanted, on the one hand, not to sell the machine without the patented invention, he obtained the privilege, on the other hand, of selling the same machine with that improvement to all England. This, as pointed out in Wms. Saunders, is a restraint which affects the mode of exercising the trade, and which, therefore, is partial. The only real question that remained on such a view of that particular bargain, was whether it was a reasonable one, as to which point the remark that the privilege was commensurate with the restraint appears conclusive. The case is similar to those in which rules regulating trade have been distinguished from rules made in restraint of it. The inquiry as to the reasonableness of the restraint in any particular instance is, however, one that appertains only to the case of partial restraints. It is no objection necessarily to such partial restraints that they are sometimes to continue during the life of the covenantor, who may possibly survive the covenantee, for such an arrrangement enables the good will of the business to become the object of purchase and sale.5 The result seems to me to be as follows: General restraints, or, in other words, restraints wholly unlimited in area, are not, as a rule, permitted by the law, although the rule admits 4 1 Collins v. Locke, L. R. 4 App. Bosworth v. Hearne, Andr. 91; Cas. 674. 2 Jones v. Lees, 1 H. & N. 189. 32 Wms. Saunders, 156a, n. 4 Freemantle v. Silk Throwsters Company, 1 Lev. 229; Wannel v. Chamberlain of London, 1 Str. 675; Harrison v. Godman, 1 Burr. 12; 5 Atkyns v. Kinnier, 4 Ex. 776, 782; Pemberton v. Vaughan, L. R. 10 Q. B. 87, 89. of exceptions. Partial restraints, or, in other words, restraints which involve only a limit of places at which, of persons with whom, or of modes in which the trade is to be carried on, are valid when made for a good consideration, and where they do not extend further than is necessary for the reasonable protection of the covenantee. 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 be imposed may be a material element to consider." § 40. Questions of Consideration. It is well established that a contract in restraint of trade is valid only as it is based on a valuable consideration. Moreover, the consideration must not be a mere form intended simply to answer the demands of the law. Where there is no consideration, or it appears that the consideration named is of no real value, the contract will be treated either as a fraud upon the rights of the party restrained or as a mere voluntary-agreement, nudum pactum, and, in consequence, invalid. But where it is in evidence that the contract was a bona fide transaction the court will not inquire into the adequacy of the consideration. The question whether the party restrained made an injudicious bargain will not be considered. But while the court will not consider the ques 1 Maxim-Nordenfelt Co. v. Nordenfelt, L. R. (1893) 1 Ch. 630, 654. 656, 662. 2 Hitchcock v. Coker, 6 Ad. & El. 438; Mitchel v. Reynolds, 1 P. Wms. 181; Davis v. Mason, 5 T. R. 118; Hutton v. Parker, 7 Dowl. P. C. 739; Gale v. Reed, 8 East, 80; Archer v. Marsh, 6 Ad. & E. 959; s. C., 2 Nev. & P. 562; Pilkington v. Scott, 15 M. & W. 657; s. c.. 15 L. J. Excheq. 329; Sainter v. Ferguson, 7 Com. B. 716; s. c.. 13 Jur. 828; 18 L. J. Com. P. 217; Gravelly v. Barnard, L. R. 18 Eq. 518; s. C., 47 L. J. Ch. 659; 30 L. T. 863; Collins v. Locke, L. R. 4 App. Cas. 674; s. c., 48 L. J. P. C. 68; 41 L. T. 292; 28 W. R. 189; Linn v. Sigsbee, 67 Ill. 75; Hubbard v. Miller, 27 Mich. 15, 21; s. C., 15 Am. Rep. 153; Lawrence v. Kidder, 10 Barb. 641; McClurg's Appeal, 58 Pa. St. 51; Perkins v. Lyman, 9 Mass. 522; Palmer v. Stebbins, 3 Pick. 188; Whitney v. Slayton, 40 Me. 231; Green v. Price, 13 M. & W. 695; Pierce v. Woodward, 6 Pick. 206; |