certain annual share of the profits of the office, Lord Loughborough refused to recognise that there was a good consideration, and declared the agreement invalid (i). For similar reasons the Courts have declared that agreements for a sale or an assignment of the profits or emoluments of such offices (k) are invalid. But in order to come within the principle, the offices must be really of a public character. In Grenfell v. The Dean and Canons of Windsor (1), it was proved that the defendant, M., a canon of Windsor, had granted his canonry and the profits of it to the plaintiffs to secure a sum of money. There was no cure of souls; the only requirement was residence within the Castle, and attendance at chapel twenty-one days a year. Lord Langdale held the agreement to be valid, the duties not having been shown to be in any way for the benefit of the public or the maintenance of the dignity of the sovereign (m). (2.) Contracts for Assignment of Salary, Pension, &c. It is said to be contrary to public policy that payments made to induce persons to keep themselves ready for the service of the Crown, as the half-pay of officers in the army or navy, or payments for actual service rendered to the Crown, should be assigned. The other class of cases is that of pensions, like the retiring allowance of a beneficed clergyman, which are by statute (n) expressly made not assignable (o). In In re Mirams (p) it was held that the assignment of the salary of a chaplain to a workhouse was not void as being against public policy, such an office not being public in any but a remote and secondary sense (p). (i) Parsons v. Thompson (1790), 1 Н. В. 322. (k) Palmer v. Bate (1821), 2 B. & Β. 673. (Sale of profits of clerk of the peace.) (I) (1846), 2 Beav. 544. (m) See also Low v. Low (1735), 3 P. W. 391; Blackford v. Preston (1799), 8 T. R. 89; Hanington v. Duchastel (1781), 1 Bro. C. C. 124; Flarty v. Odlum (1790), 3 T. R. 681; Waldo v. Martin (1825), 4 Β. & C. 319; Thomson v. Thomson (1802). 7 Ves. 478; Card v. Hope (1824), 2 B. & C. 661 (a deed of sale of ship in service of East India Company); Richardson v. Mellish (1824), 2 Bing. 229; Cooper v. Reilly (1829), 2 Sim. 560 (salary of assistant parliamentary counsel to Treasury not assignable); R. v. Charretie (1849), 13 Q. B. 447; Graeme v. Wroughton (1855), 11 Ex. 146; Corporation of Liverpool v. Wright (1859), 28 L. J. Ch. 868. (For other cases under the above Acts, see Chitty's Statutes, 5th ed., by Lely, vol. viii. sub tit. "Offices.") (n) 13 Eliz. c. 20. See notes on that Act in Chitty's Statutes (5th ed., by Lely), vol. ii. sub tit. "Church and Clergy," p. 9. (0) Per Jessel, M. R., in Ex parte Huggins (1882), 21 Ch. D. 85, 91, where the pension of a retired colonial judge was held to be "property" within sects. 87-95 of the Bankruptcy Act, 1869, vesting in the trustee. (p) [1891] 1 Q. B. 594. See the cases on this point in notes (k). (1) and (m), supra. (3.) Contracts in Restraint of Trade. Contracts which are in general restraint of trade are void. The origin of the rule is uncertain, and its exact limitation was not always understood (q). But by the decision in Mitchel v. Reynolds (r), in the King's Bench, in 1711, the following principles were established:-(1.) That all contracts in general restraint of trade are void; (2.) That particular or limited restraints, if for good consideration, are valid. (1.) For a time it was supposed that agreements in any way in restraint of trade must be partial as regards space; otherwise, even if limited in time, they would be void. Thus, a bond by which a person bound himself not to follow, or be employed in, the business of a coal merchant for nine months after he should have left his employment, was held bad (s). But since the decision of the House of Lords in the Nordenfelt case, which will presently be referred to, the question of partial restraint has become comparatively unimportant. (2.) The restraint or limitation must be reasonable. This is a question of law for the judge (t); and the onus is on the defendant, (q) As to the difference of opinion, see Jollyfe v. Broad (1621), Cro. Jac. 596. no Mr. Parsons suggests (Contract, 2, 748) that the law as to restraint of trade grew out of the English law of apprenticeship, by which person could exercise any regular trade or handicraft, except after a long apprenticeship, and generally a formal admission to the proper guild. "If he had a trade, he must continue in that trade, or have none. To relinquish it, therefore, was to throw himself out of employment; to fall as a burthen upon the community; to become a pauper." The principle was not, perhaps, definitely laid down until 1711, when Mitchel v. Reynolds was decided; but it is stated long before the passing of the 5th of Elizabeth---the first reported case bearing date 1415 (2 Hen. V. f. 5, pl. 16)-and at Common Law there was no such restriction. In Claygate v. Bacheler, reported in Owen, p. 143, the doctrine is based on the words of Magna Charta. Probably it arose out of the necessity of putting limits to the practice of corporations, by bye-laws and otherwise, preventing persons exercising trades, except they were free of the city. See for the history of the principle the judgment of Bowen, L. J., in Nordenfelt's Case, [1893] 1 Ch. 630. (r) 1 P. W. 181; 1 Smith's L. C., 11th ed. 406. For reasons of the distinction, Ward v. Byrne (1839), 5 M. & W. 548. (8) Ward v. Byrne; see note (r). Lord Macnaghten thinks that no such absolute rule ever existed, but that the test always has been: Is this covenant reasonable having regard to (i) the public interest, and (ii) the protection of the covenantee ? Nordenfelt's Case, [1894] A. C. pp. 568 et seq. But see Lord Herschell's judgment, ibid. Apparently there is no case in which, there being a limitation as to space, the contract has been avoided on the ground of unlimited duration. See Haynes v. Doman, [1899] 2 Ch. 13. (t) Parke, B., in Mallan v. May (1843), 11 M. & W. at p. 668; Tallis v. Tallis (1853), 1 E. & B. 391; Haynes v. Doman, [1899] 2 Ch. 13; Dowden & Pook v. Pook, [1904] 1 Κ. Β. 45. the contractor-at least in cases of partial restraint-to show the unreasonableness (u). The test will be whether the limit imposed is in excess of what is required for the protection of the party in favour of whom it is made, and is injurious, or not, to the public interests (x). "Whatever restraint," it has been said, " 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 eyes of the law unreasonable" (y). Agreements not to carry on business of perfumer and hair merchant within London or Westminster, or 600 miles from the same (z); not to be employed as coal merchants for nine months (a); not to carry on trade as brewer, &c. in Sheffield or elsewhere for ten years (b), have been held void. On the other hand, agreements by vendors of a patent process of manufacture, not to carry on in any part of Europe a manufacture with the same object as the patent (c); not to carry on business as a surgeon within ten miles of a place for fourteen years (d); not to practise as attorney within London or 150 miles of it (e); not to carry on business in horsehair within 200 miles of Birmingham (f); not to carry on trade as a milkman for twentyfour months within five miles of Northampton Square (g), have been held valid. In Nordenfelt v. Maxim Nordenfelt, &c. Co. (h), the law on this point was considered by the House of Lords, when the whole doctrine and the principal authorities were examined. The covenant in that case was unrestricted as to space; but it was upheld as valid and enforceable by injunction. Lord Herschell, (u) Rousillon v. Rousillon (1880), 14 Ch. D. 351, at p. 365; Haynes v. Doman, [1899] 2 Ch. 13, per Romer, L. J., at p. 30; Badische Anilin v. Schott, [1892] 3 Ch. 447; and the remarks of Bowen, L. J., in Nordenfelt's Case, [1893] 1 Ch., at pp. 654-656; but see the judgment of Vaughan Williams, L. J., in Underwood v. Barker, [1899] 1 Ch. 300, at pp. 314, 315. (x) Hitchcock v. Coker (1837), 6 A. & E. 438, per Tindal, C. J., at p. 454; Rousillon v. Rousillon (1880), 14 Ch. D. 351; Mills v. Dunham, [1891] 1 Ch. 576; Badische Anilin, &c. v. Schott, [1892] 3 Ch. 447; Nordenfelt v. Maxim Nordenfelt, &c. Co., [1894] А. С. 535; Underwood v. Barker, [1899] 1 Ch. 300. (y) Tindal, C. J., in Horner v. Graves (1831), 7 1), 7 Bing. 35, 743; see also Parke, B.'s, judgment in Mallan v. May (1843), 11 M. & W. 653. (z) Price v. Green (1839), 16 M. & W. 346. (g) Proctor v. Sargent (1840), 2 M. & G. 20. As to what is meant by "carrying on business," see Turner v. Evans (1852), 2 E. & B. 512; Avery v. Langford (1854), 23 L. J. Ch. 837; Jones v. Heavens (1877), 4 Ch. D. 636. As to mode of measurement of distance, Atkyns v. Kinnier (1850), 19 L. J. Ex. 132; Duignan v. Walker (1859), 28 L. J. Ch. 867; Mouflet v. Cole (1872), L. R. 8 Ex. 32. (h) [1894] А. С. 535. discussing the distinction between "general" and "partial" restraints, said (p. 548) : Whether the cases in which a general covenant can now be supported are to be regarded as exceptions from the rule, which I think was long recognised as established, or whether the rule is itself to be treated as inapplicable to the altered conditions which now prevail, is probably a matter of words rather than of substance. When once it is admitted that, whether the covenant be general or particular, the question of its validity is alike determined by the consideration whether it exceeds what is necessary for the protection of the covenantee, the distinction between general and particular restraints ceases to be a distinction in point of law. Lord Watson (at p. 554) says: A restraint which is absolutely necessary in order to protect a transaction which the law permits in the interest of the public ought to be regarded as reasonable, and cannot, in deference to political ideas which are now obsolete, be regarded as in contravention of public policy. Regard must be had to the changing conditions of commerce (i); and the "general" or "partial" character of the covenant (k), as well as the particular kind of business in question, are matters material to the question of "reasonableness" (1). For instance, the protection of a general restraint may well be necessary to the purchase of a secret process (m). If there be occupations where a sale of the goodwill would be greatly impeded, if not prevented, unless a general covenant could be obtained by the purchaser, there are no grounds of public policy which countervail the disadvantage which would arise if the goodwill were in such cases rendered unsaleable ("). (i) Per Lord Herschell in Nordenfelt's Case, at p. 547; per Lord Watson, ibid., at p. 553; per Lord Macnaghten, ibid., at p. 571; Badische, &c. v. Schott, [1892] 3 Ch. 447, at p. 452. (k) Proctor v. Sargent (1840), 2 M. & G. 20; Badische Anilin v. Schott, l. c.; Nordenfelt's Case, l. c., pp. 548, 549, 553, 554, 568 et seq.; Haynes v. Doman, [1899] 2 Ch. 13; Hood v. Jones, [1899] 81 L. T. 169. (1) In Leetham v. White, [1907] 1 Ch. 322, the Court of Appeal held a covenant unreasonable and void on the ground that the restraint extended to businesses in which the employers were interested as well as their own particular business. See the remarks of Neville, J., on this decision, and restraint of trade generally, in Dottridge v. Crook (1907), 23 Times L. R. 644. (m) Leather Cloth Co. v. Lorsont (1869), L. R. 9 Eq. 345; Bryson v. Whitehead (1822), 1 Sim. & St. 74; Haynes v. Doman, [1899] 2 Ch. 13 (a contract of service). See also the remarks of Parke, B., in Mallan v. May (1843), 11 M. & W. 653, at pp. 665, 666, quoted by Erle, C. J., in Mumford v. Gething (1859), 7 C. B. N. S. 305, at p. 320. See as to injunctions against servants to prevent the use of knowledge gained during service, p. 176, infra. (n) Per Lord Herschell in Nordenfelt's Case, l. c., at pp. 548, 549; Badische Anilin v. Schott, [1892] 3 Ch. 447; in both of which cases the world-wide character of the business was made an important consideration. The question is: - Is the contract reasonable at the time it is made, without regard to contingencies which may make it unreasonable (o)? It may be that a covenant, reasonable for the protection of the covenantee, may still be void as being injurious to public interests. There may, as I understand the law, he cases in which, even though the restraint is not unreasonable in the interests of the parties concerned, it may of itself be of such a character as to be injurious to the public, and in such cases again the restraint is void (p). There must be a consideration for a contract in restraint of trade. It was once supposed that the consideration must be "adequate." It has, however, long been settled that the Courts will not inquire into the adequacy or sufficiency of the consideration (q). It is enough that it is not merely nominal or colourable. The mere continuance of the engagement (r) is good consideration for such a covenant, as is the original engagement itself (s). These contracts are to be interpreted by the ordinary canons of construction; therefore general words such as "business"-" call upon or solicit orders"-" in any way deal or transact business with"-have been construed by reference to the plaintiff's particular business, or the locality where it is being carried on (t). In covenants of this character, the good is severable from the bad part, but only if "the Court find in the agreement itself sufficient ground for making the severance" (u). (o) Rannie v. Irvine (1844), 7 M. & G., at p. 976; Nordenfelt's Case, l. c., per Lord Macnaghten, at p. 574; Haynes v. Doman: see note (k). (p) Per Walton, J., in Tivoli, &c. v. Colley (1904), 20 Times L. R. 437. See per Lord Herschell in Nordenfelt's Case, 1. c., p. 549; per Lord Macnaghten, ibid., p. 565; per Bowen, L. J., in the same case in C. A., [1893] 1 Ch. pp. 667, 668. (q) Hitchcock v. Coker (1837), 6 A. & E. 438; Archer v. Marsh (1837), 6 Α. & E. 959: Pilkington v. Scott (1846), 15 M. & W. 657; Gravely v. Barnard (1874), L. R. 18 Eq. 518. Even when the covenant is under seal there must be consideration; Hutton v. Parker (1839), 7 Dowl. 739; otherwise, semble, the covenant would be unreasonable. See notes on Mitchell v. Reynolds, 1 Sm. L. C. (11th ed.), p. 406. (v) Gravely v. Barnard, see note (q); Hood v. Jones (1899), 81 L. Τ. 169. (8) Sainter v. Ferguson (1849), 7 С. В. 716; Davis v. Mason (1793), 5 T. R. 118; Benwell v. Inns: see note (x); Mumford v. Gething (1859), 7 С. В. N. S. 305; Gravely v. Barnard: see note (q). (t) Mills v. Dunham, [1891] 1 Ch. 576; Peris v. Saalfeld, [1892] 2 Ch. 149; Dubowski v. Goldstein, [1896] 1 Q. B. 478; Moenich v. Fenestre (1892), 61 L. J. Ch.737 (anytrade or business"); Avery v. Langford (1854), 23 L. J. Ch. 837 ("any trading establishment"); Hood v. Jones (1899), 81 L. T. 169 ("business"). (u) Per Chitty, J., in Mills v. Dunham, [1891] 1 Ch., at p. 580; see Price v. Green (1847), 16 M. & W. 346; Mallan v. May (1843), 11 M. & W. 653; Nicholls v. Stretton (1847), 10 Q. B. 346; Baines v. Geary (1887), 35 Ch. D. 154; Baker v. Hedgecock (1888), 39 Ch. D. 520; Perls v. Saalfeld, [1892] 2 Ch. 149; Rogers v. Maddocks, [1892] 3 Ch. 346; Nordenfelt's Case (in C. A.), [1893] 1 Ch. 630; Underwood v. Barker, [1899] 1 Ch. 300; Davies v. Lowen (1891), 64 L. T. (N. S.) 655. |