§ 65. In Its Application to Traveling Salesmen.-It has been held that the rule, as stated in the preceding sections, is applicable to contracts relating to service by this class of employes. In the leading case of Mumford v. Gething, a mercantile house in London, dealing in lace, employed travelers to obtain orders and sell for them, in England, each in a particular district or journey. A vacancy having occurred in the travelership of the M journey, the plaintiffs acquainted the defendant with the fact, he being then in their employ in another occupation, and it was verbally agreed with him that he should fill the place, the understanding being that a contract in writing should be afterwards drawn up and signed. The defendant started on the M journey and sometime afterwards the following form of contract was sent down to him, and he signed it: "In consideration of my entering upon your employ at a salary of, etc., I herewith agree to do so with the understanding that in the event of my wishing to travel, and doing so for any other house in the same trade, on any part of the same ground, to pay you the sum of £50." The defendant, after having traveled for the plaintiffs on the M journey for about a year, quitted their service, and commenced traveling for a rival house of business over the M journey. In an action for the penalty by the plaintiffs it was held that the plaintiffs were entitled to recover, for that a good consideration for the defendant's undertaking appeared on the face of the writing; that the circumstances under which the defendant became traveler to the plaintiffs showed a good consideration, in fact, that the contract meant to engage the entire services of the defendant so long as he was in the plaintiffs' employ, and that it would have been a breach of it to travel for anyone else in the absence of the prohibitory part; and that, therefore, the contract intended the penalty to attach in case the defendant traveled over the same ground for any other house in the same trade after he left the plaintiffs' employ; that extrinsic evidence was properly admitted to identify the particular service in which the defendant was to be employed,

viz. that of traveler, and the ground over which he was to travel, viz. the M journey; that the contract was not unlimited in point of space and so void as in restraint of trade. In the recent case of Mills v. Dunham, plaintiffs engaged defendant as their traveler and assistant in the business of anti-septic manufacturers, "to call upon and solicit orders from" customers for the said business, defendant agreeing that he would not after the termination of the agreement, for or on account of any employer or on his own account "call upon, or directly or indirectly solicit orders from, or in any way deal or transact business with," any one who during such agreement was a customer of plaintiffs. It was held that, notwithstanding the generality of the language, the true intent of the parties was to bind the defendant not to engage in any competing business; that the agreement was not in restraint of trade; and that plaintiffs were entitled to an injunction restraining the defendant from soliciting orders for a rival firm."

1 Mumford v. Gething, 6 Jur. (N. terprise, made a market for his S.) 428.

2 Mills v. Dunham, L. R. (1891) 1 Ch. 576. "It seems to me that the rule, clearly deducible from all these authorities, is that an employer has the right to bind an employe not to go into the employ of a competitor, for a reasonable time after his employment terminates, within the territory where the employer seeks his market; and whether such covenant is reasonable and binding is a judicial question which must depend in each case upon its peculiar facts and circumstances. It has been well said that trade has obliterated State lines. The modern agencies of commerce have enlarged the field for the manufacturer and salesman to, or even beyond, the limit of the continent; and to whatever extent a manufacturer or dealer has, by his energy and en

wares, to that extent he has the right to protect his business from piratical competition by contracts like the one under consideration. In the case now under consideration the complainants were manufacturers of inks and similar commodities, and their business extended throughout the entire United States and Canadas. The defendant Alling was employed to canvass for purchasers, and to advertise the products of complainants' business. Prior to making the contract now under consideration, he had been for several years employed in a similar capacity by the complainants, and it must be presumed that he had acquired an extensive knowledge not only of the complainants' business methods, but of their trade secrets, and this knowledge he had acquired while under the pay of complain

§ 66. Constraint of Trade Construed as a Limited Partnershio.-It has been held that a contract in restraint of trade, under which the parties agree to divide the profits of the business established by the agreement, may be construed as a limited partnership, and that, as such, it is subject to the rules by which partnerships are governed. In Carroll v. Giles, it was held that barbering is such a business as will support a sale of its "good will" for a definite time and within a defined territory; but where G, a barber, who had no shop or patronage of his own, entered into an agreement with C, the proprietor of a barber shop, that C

any

should keep the shop and pay all its expenses, and G was to manage it, and "not to do any work, now or hereafter, outside of the shop owned by C, or hire to any party or open a shop of kind to carry on the barber business in" that town, and to "convey all patronage extended to him heretofore to the business owned by C," "the gross receipts to be divided equally," such agreement was only a contract of indefinite partnership, and G's stipulation never to do any barbering business outside of C's shop was unreasonable, and will not be specifically enforced or its violation enjoined.1 In the opinion in this case, the court said: "It is true that the defendant was a barber, going about the town and county barbering, but had no shop, patronage or good will to sell. The plaintiff did not purchase his outfit from the defendant, giving him a liberal price in consideration of his unusual stipulation to stay with him or go out of the business. It seems to us that the contract was really nothing more than one of a partnership indefinite in duration, in which one party stipulated to furnish the capital or outfit, and the other to contribute his labor and skill, 'dividing the gross receipts equally,' and that the stipulation on the part of the defendant never to do any barbering in B, outside of plaintiff's shop, 'now or hereafter,' was 'unreasonable,' and not of such a character as to call for the exercise of the equitable jurisdiction in requiring it to be specifically performed."2

1 Carroll v. Giles, 30 S. Car. 412; S. C., 9 S. E. Rep. 422.

2 Carroll v. Giles, 30 S. Car. 412, 418; s. C., 9 S. E. Rep. 422.

§ 67. Introductory.-The general principles by which contracts in restraint of trade are governed, as expounded in the preceding chapters, are applicable to all contracts between individuals, firms or corporations for the limitation or regulation of any branch of business. The object of this chapter is to discuss the application of these general principles, not to monopolies or to extensive combinations, the object of which is to control prices, but to transactions of a general and limited character. It is proposed to consider that class of contracts that relate to the restriction of business operations on a smaller scale. Business men, business firms and corporations of limited resources attempt to effect, in a narrow sphere, essentially the same thing that is accomplished by the great combinations in a broader field. To this class of restrictions our attention for the present is to be directed.

§ 68. Contracts Granting an Exclusive Business Privilege. A contract binding an individual or company not to engage in business at a particular place and for a limited