ness for a period of three years in sixteen States and territories of the United States nor in the Dominion of Canada, will not be enforced by a court of equity where it does not appear that there were trade secrets connected with the business that came to the servant's knowledge or proof that his employer's customers have been diverted by the action of the servant in engaging in a similar business. Such an agreement is unreasonable where it is based upon no increase of wages, because of its having been made, being calculated to deprive the servant of his ability to earn his livelihood.1 1 Oppenheimer v. Hirsch, 5 App. Div. 232; s. c., 38 N. Y. Supl. 311. The only thing undisputed before the court is, that the defendant made an agreement by which he contracted not to engage in a particular line of business in sixteen States and territories, and the Dominion of Canada, for three years after he should leave the plaintiffs' employment, which, according to the terms of that agreement, would have enabled the plaintiffs to discharge him within a week after he entered their service, and would have tied his hands for a period of three years afterwards, such a stipulation is unreasonable, and should not be enforced, under the situation of the parties to this action, by injunction, and the plaintiffs having failed to show that there was any reason for coupling such a condition with a simple employment of the defendant to sell their wares in a part of one State of the Union, or that they have in reality suffered any loss by reason of the acts of the defendant, or that they are in any way actually prejudiced by such acts, or that he is using any knowledge acquired from them in an illegitimate way, or that the enforcement of the stipulation of the agreement, pending suit, is necessary for their protection, we must hold that the injunction should not have been continued." Ibid., 236. See also following cases: Norris v. Moss, 25 L. J. Eq. 194; Shackle v. Baker, 14 Ves. 468; Drake v. Dodsworth, 4 Kan. 159; Spicer v. Hoop, 51 Ind. 305; Presbury v. Fisher, 18 Mo. 50; Dakin v. Williams, 11 Wend. 67; Burrill v. Daggett, 77 Me. 545; Dean v. Emerson, 102 Mass. 480; Baumgarten v. Broadaway, 77 N. Car. 8; Heichew v. Hamilton, 3 Greene (Iowa). 596; s. C., 4 Greene (Iowa), 317; Harrison v. Lockhart, 25 Ind. 112; Studebaker v. White, 31 Ind. 211; McAllister v. Howell, 42 Ind. 15; Stines v. Dorman, 25 Ohio St. 580; Elliott's Appeal, 60 Pa. St. 161; Hoagland v. Segur, 38 N. J. L. 230; Duffy v. Shockey, 11 Ind. 70; Hall's Appeal, 60 Pa. St. 458; Hastings v. Whitley, 2 Excheq. 611; Hitchcock v. Coker, 6 Ad. & El. 438; Hayward v. Young, 2 Chit. 407; Price v. Green, 16 M. & W. 346; Ward v. Hogan, 11 Abb. N. C. 478; Baker v. Cordon, 86 N. Car. 116. § 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.2 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 Partnershi".-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 ants and acting for them. It does not, therefore, seem to me unreasonable that the complainants should exact from him a covenant that he would not reveal their trade secrets, and would not enter the employ of any competitor of complainants for the time specified in his covenant after his employment by complainants should terminate. In the wine dealers case just quoted [Rousillon v. Rousillon, L. R. 14 Ch. D. 351] the restriction was for a term of ten years after the employment ceased, and the court held that, under the circumstances, not unreasonable. Here the restriction is for three years only which, it seems to me, was entirely proper for defendant to agree to and for complainants to exact." Carter v. Alling, 43 Fed. Rep. 208, 214. R, a brewer, engaged M as a traveler for procuring orders for and selling malt liquors, and also, if required by R, ærated waters, to the class known as wholesale purchasing agents in a certain district. agreed that for two years after the determination of his employment he would not be concerned in selling malt liquors or ærated waters within a certain district. R never M dealt in ærated waters, nor required M to obtain orders for them. M, after leaving R's employment became traveler to rival brewers within the prescribed district. R brought an action and applied for an injunction. M insisted that the restriction was too wide, and, therefore, void. Stirling, J., construed the restriction as only prohibiting M from selling wholesale, and held that the stipulation as to ærated waters was severable, and granted an injunction limited to selling malt liquors wholesale. Held, on appeal, that the agreement must be construed as prohibiting M from selling wholesale or retail within the limit, and that the restraint was not greater than was reasonably necessary for the reasonable protection of R, for that selling wholesale and retail were not two distinct businesses, but only different modes of carrying on the one business of selling malt liquors, that the selling malt liquors, either wholesale or retail, within the district, might affect R's business, and that R was entitled to restrain M from selling malt liquors in any way within the district. Rogers v. Maddocks, L. R. (1892) 3 Ch. 346. 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 any 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." 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. |