consisting of the increased danger of his becoming a public burden, or simply a diminution of the production of commodities useful to the public. Save for the comparatively recent introduction of the exception of reasonable contracts, it is the general doctrine that a contract in total restraint of trade, that is, without limit as to space, is illegal. But it has not generally been regarded as necessary that the contract embrace the entire world in order that it be thus illegal. In this country it has frequently been considered sufficient that it embrace merely the territory of a single State,5 though there is a tendency to relax so arbitrary a rule, so that the contract must embrace at least the entire United States. 3 According to 2 Parsons on Contracts (8th ed.), p. 872 (star p. 749), the doctrine grew out of the law of apprenticeship, it being here said: "By this law, in its original severit, no person could exercise any regular trade or handicraft except after a long apprenticeship, and, generally, a formal admission to the proper guild or company. 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 burden upon the community; to become a pauper." See also Greenhood on Public Policy, p. 685; Pollock on Contracts (2d Am. Ed.), p. 312; Spelling on Trusts and Monopolies, § 3; Beal v. Chase, note 2, supra; Bingham v. Maigne, 52 N. Y. Super. 90 (1885); Long v. Towl, 42 Mo. 545; 97 Am. Dec. 355 (1868); Skrainka v. Scharringhausen, 8 Mo. App. 522 (1880). In Lawrence v. Kidder, supra, was suggested as an additional and distinct reason for the rule, the desirability that "all the various trades and employments of society should be pursued each in its due proportion." S. P., Harri son V. Lockhart, 25 Ind. 112 (1865). In Mitchel v. Reynolds, 1 P. Wms. 181, 190 (1711), it was stated as the true reasons of the doctrine "the mischief which may arise to the party by the loss of his livelihood and the subsistence of his family; to the public by depriving it of a useful member." See also, Oregon Steam Navigation Co. v. Winsor, 20 Wall. 64; 22 L. Ed. 315 (1873); Gibbs v. Consolidated Gas Co. of Baltimore, 130 U. S. 396, 409; 9 Supm. 553, 557; 32 L. Ed. 979 (1889); Union Strawboard Co. v. Bonfield, 193 Ill. 420; 61 N. E. 1038; 86 Am. St. Rep. 346 (1901); Alger v. Thacher, 19 Pick. (Mass.) 51; 31 Am. Dec. 119 (1837); Newell v. Meyendorff, 9 Mont. 254; 23 Pac. 333; 8 L. R. A. 440; 18 Am. St. Rep. 738 (1890); Downing v. Lewis, 59 Neb. 38; 80 N. W. 261 (1899); Tecktonius v. Scott, 110 Wis. 441; 86 N. W. 672 (1901). 4 See 24 Am. & Eng. Enc. of Law, 2d ed., p. 842. 5 See 24 Am. & Eng. Enc. of Law, 2d ed., p. 845. • Id. 8 In its original form the doctrine condemned any agreement in restraint of trade without any reference to the character of any limitation as to time or space. For some two centuries the doctrine seems to have thus stood without modification. Afterwards it was modified by allowing an exception of contracts containing limitations as to space; in other words, partial restraints. At last, in the present century, more than five centuries after the introduction of the doctrine, the test of limitation as to space has been generally abandoned, and the simple test of reasonableness, without reference to limitations as to time and space, adopted. Such a contract has frequently appeared as an incident to a contract of sale of a business or of property connected therewith, the seller agreeing not to engage in business of that or a similar character,10 so frequently as an 7 In Colgate v. Bacheler, 3 Cro. Eliz. 872 (1602), an agreement not to use the trade of haberdasher "within the county of Kent, the cities of Canterbury or Rochester" was held bad, the court saying: "This condition is against law, to prohibit or restrain any to use a lawful trade at any time or at any place." It seems to have long been established that a contract in restraint of trade may be sustained, though without limit as to time. See 24 Am. & Eng. Enc. of Law, 2d ed., p. 847. 8 Rogers v. Parrey, Bulstrode, 136 (1613), is said in Spelling on Trusts and Monopolies, § 5, to be the first case that recognized the validity of a contract containing such limitations. But since Mitchel V. Reynolds, 1 P. Wms. 181 (1711), their validity has been well established. Here was sustained an agreement by the lessor of a bakehouse not to exercise the trade of baker within a certain parish for five years. See also 24 Am. & Eng. Enc. of Law, 2d ed., p. 843. Thus, in Nordenfelt v. Maxim Nordenfelt Guns & Ammunition Co., App. Cas. 1894 (535), a contract was sustained as reasonable and valid without limit as to space. Compare Trenton Potteries Co. v. Oliphant, 56 N. J. Eq. 680; 39 Atl. 923 (1898); reversed in 58 N. J. Eq. 507; 43 Atl. 723; 46 L. R. A. 255; 78 Am. St. Rep. 612 (1899). See 24 Am. & Eng. Enc. of Law, 2d ed., p. 850. In Michigan there is a curious prohibition (see § 217` of such contracts "whether reasonable or unreasonable, partial or general, limited or unlimited." But the ordinary contracts incident to the sale of a business are excepted. 10 For numerous instances see article on "Restraint of Trade," 24 Am. & Eng. Enc. of Law, 2d ed., p. 841; see also Cal. Civ. Code, §§ 1674, 1675, which have in several instances been copied elsewhere. Whether such a contract would be sustainable as an independent contract, see 24 Am. & Eng. Enc. of Law, 2d ed., p. 851; also article in 35 Am. Law Rev. 836 (1901). incident to a contract of employment, the employee agreeing not to engage after the expiration of his term of employment in business of that or a similar character.11 § 160. Prevention of restriction upon competition, not basis of doctrine. Not only is the basis of the doctrine against contracts in restraint of trade clearly as above stated, but it seems equally clear that the doctrine, in its origin, had no reference whatever to the evils produced by a monopoly or other restriction upon competition.12 Nevertheless the view has been fre In Wayne Monroe Tel. Co. v. Ontario Tel. Co., 112 N. Y. Suppl. 424 (Supm. Ct., Sp. T., 1908), the rule sustaining contracts in restraint of trade was applied in sustaining a provision in an agreement between telephone companies in restriction upon competition, as "only incidental and contributory to the attainment of the main object of the agreement, an extension of the business of each party through the connection of their two systems." 11 For numerous instances see article on "Restraint of Trade," 24 Am. & Eng. Enc. of Law, 2d ed., p. 841. 12 See dissenting opinion of Holmes, J., in Northern Securities Co. v. U. S., 193 U. S. 197, 404; 24 Supm. 436, 469; 48 L. Ed. 679 (1904). It was indeed intimated in Mitchel v. Reynolds as an additional reason for the rule, "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." But this remark was made without apparent consideration, and seems entitled to little weight, coming after the doctrine had been established in England for three centuries. Such remark is the starting point of the view expressed in subsequent cases, that the prevention of monopolies is an additional ground for the doctrine. Thus, in U. S. v. Addyston Pipe & Steel Co., 85 Fed. 271, 279; 29 C. C. A. 141, 149; 46 L. R. A. 122, 129 (6th C., 1898); Talcott v. Brackett, 5 Ill. App. 60, 67 (1879); Chapin v. Brown, 83 Iowa, 156; 48 N. W. 1074; 12 L. R. A. 428; 32 Am. St. Rep. 297 (1891); Alger v. Thacher, 19 Pick. (Mass.) 51; 31 Am. Dec. 119 (1837); Taylor v. Blanchard, 13 Allen (Mass.), 370; 90 Am. Dec. 203 (1866); Bishop v. Palmer, 146 Mass. 469; 16 N. E. 299; 4 Am. St. Rep. 339 (1888); Clark v. Needham, 125 Mich. 84; 83 N. W. 1027; 51 L. R. A. 785; 84 Am. St. Rep. 559 (1900); Skrainka v. Scharringhausen, 8 Mo. App. 522 (1880); Heim Brewing Co. v. Belinder, 97 Mo. App. 64, 76; 71 S. W. 691, 695 (1902); Newell v. Meyendorff, 9 Mont. 254; 23 Pac. 333; 8 L. R. A. 440; 18 Am. St. Rep. 738 (1890); Eastern Express Co. v. Meserve, 60 N. H. 198 (1880); Pocahontas Coke Co. v. Powhatan Coal & Coke Co., 60 W. Va. 508; 56 S. E. 264; 10 L. R. A. N. S. 268; 116 Am. St. Rep. 901 (1907); Milwaukee Masons & Builders' Assoc. v. Nieze quently expressed or acted upon that the doctrine against restrictions upon competition is based on that against contracts in restraint of trade.13 This misapprehension is comparatively harmless where the same result would be reached whichever rowski, 95 Wis. 129; 70 N. W. 166; 37 L. R. A. 127; 60 Am. St. Rep. 97 (1897); Tecktonius v. Scott, 110 Wis. 441; 86 N. W. 672 (1901). In U. S. Chemical Co. v. Provident Chemical Co., 64 Fed. 946 (C. C. Mo., 1894), it was even said that "the substantial ground in all cases, especially where corporations are concerned, is that such contracts tend to create monopolies." Compare Lufkin Rule Co. v. Fringeli, 57 Ohio St. 596; 49 N. E. 1030; 41 L. R. A. 185; 63 Am. St. Rep. 736 (1898). 13 Thus, in National Harrow Co. v. Hench, 83 Fed. 36; 27 C. C. A. 349; 39 L. R. A. 299 (3d C., 1897); U. S. v. Addyston Pipe & Steel Co., 85 Fed. 271, 291; 29 C. C. A. 141, 161; 46 L. R. A. 122, 136 (6th C., 1898; a conspicuous illustration, in view of the elaborate discussion of authorities); State v. Central of Georgia Ry. Co., 109 Ga. 716, 722, 726; 35 S. E. 37, 38, 40; 48 L. R. A. 351, 353, 355 (1900); Brown v. Jacobs Pharmacy Co., 115 Ga. 429, 434; 41 S. E. 553, 555; 57 L. R. A. 547, 550; 90 Am. St. Rep. 126 (1902); Craft v. McConoughy, 79 Ill. 346; 22 Am. Rep. 171 (1875); More v. Bennett, 140 Ill. 69; 29 N. E. 888; 15 L. R. A. 361; 33 Am. St. Rep. 216 (1892); State v. Smiley, 65 Kan. 240, 257; 69 Pac. 199, 205; 67 L. R. A. 903, 911 (1902); Klingel's Pharmacy v. Sharpe, 104 Md. 218; 64 Atl. 1029; 7 L. R. A. N. S. 976; 118 Am. St. Rep. 399 (1906); State ex inf. Crow v. Firemen's Fund Ins. Co., 152 Mo. 1, 41, 42; 52 S. W. 595, 606, 607; 45 L. R. A. 363, 375 (1899); Finck v. Schneider Granite Co,. 187 Mo. 244, 268; 86 S. W. 213, 220; 106 Am. St. Rep. 452 (1905); Strait v. National Harrow Co., 18 N. Y. Suppl. 224 (Supm. Ct., Sp. T. 1891); Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 666 (1880); Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. St. 173, 184; 8 Am. Rep. 159, 163 (1871); Monongahela River Consolidated Coal & Coke Co. v. Jutte, 210 Pa. St. 288, 300: 59 Atl. 1088, 1092; 105 Am. St. Rep. 812 (1904); Slaughter v. Thacker Coal & Coke Co., 55 W. Va. 642; 47 S. E. 247; 65 L. R. A. 342; 104 Am. St. Rep. 1013 (1904). See also Milwaukee Masons & Builders' Assoc. v. Niezerowski, 95 Wis. 129; 70 N. W. 166; 37 L. R. A. 127; 60 Am. St. Rep. 97 (1897); Urmston v. Whitelegg, 63 L. T. R. (N. S.) 455 (1890); Dueber Watch-Case Manuf. Co. v. Howard Watch & Clock Co., 66 Fed. 637, 643; 14 C. C. A. 14, 20 (2d C., 1895), and cases cited infra. In Cummings v. Union Blue Stone Co., 164 N. Y. 401; 58 N. E. 525; 52 L. R. A. 262; 79 Am. St. Rep. 655 (1900), where an agreement was held illegal according to the doctrine against restrictions upon competition, cases of a vendor agreeing not to engage in the same business were distinguished as cases of contracts "not in general restraint of trade." On the other hand, the distinction between these doctrines doctrine be applied. But it is otherwise where a transaction that should be held illegal according to the doctrine against restrictions upon competition, is upheld by applying that against contracts in restraint of trade.14 A further serious result of has been apprehended by some courts. Thus, in National Benefit Co. v. Union Hospital Co., 45 Minn. 272; 47 N. W. 806; 11 L. R. A. 437 (1891), where a contract between two corporations was sustained as not illegal as in restraint of trade, the court said: "Neither one nor both of these companies have any exclusive right to engage in this business, it being one open to all. Hence this contract does not and cannot create any monopoly. The most that can be claimed against it is that it reduces by one the number of competitors." So, in Diamond Match Co. v. Roeber, 106 N. Y. 473, 483; 13 N. E. 419, 422; 60 Am. Rep. 464, 469 (1887), it was said: "To the extent that the contract prevents the vendor from carrying on the particular trade, it deprives the community of any benefit it might derive from his entering into competition. But the business is open to all others, and there is little danger that the public will suffer harm from lack of persons to engage in a profitable industry. Such contracts do not create monopolies. They confer no special or exclusive privilege. If contracts in general restraint of trade, where the trade is general, are void as tending to monopolies, contracts in partial restraint, where the trade is local, are subject to the same objection, because they deprive the local community of the services of the covenantor in the particular trade or calling, and prevent his becoming a competitor with the covenantee." To similar effect, Excelsior Quilting Co. v. Creter, 36 Misc. 698; 74 N. Y. Suppl. 361 (Supm. Ct., Sp. T., 1902). See also National Enameling Co. v. Haberman, 120 Fed. 415, 421 (C. C. Conn., 1903). Compare Barber Asphalt Paving Co. v. Brand, 7 N. Y. Suppl. 744 (Supm. Ct., Gen. T., 1889). See, as to application to "trusts," of rules governing contracts in restraint of trade, articles in 4 Harv. Law Rev. 128 (1890) by A. M. Eaton; 13 Id., 198, 265, 273 (18991900) by E. Q. Keasbey; 21 Id. 167 (1907) by Herbert Pope; 2 Eddy on Combinations, §§ 657, 719. For an expression of view similar to that stated in the text, see Noyes on Intercorporate Relations, 2d ed., c. 33. 14 In Leslie v. Lorillard, 110 N. Y. 519, 534; 18 N. E. 363, 366; 1 L. R. A. 456, 461 (1888), an agreement between two rival steamboat companies by which one discontin ued business, was sustained. It would seem from the statement of facts that the agreement was between the only two steamboat companies running between New York and certain ports in Virginia. The agreement seems to have resulted in a practical monopoly, and it seems difficult to sustain the decision, in view of later ones, even in New York. See comments on this decision in U. S. v. Addyston Pipe & Steel Co., 85 Fed. 271, 285; 29 C. C. A. 141, 155; 46 L. R. A. 122, 133 (6th C., 1898). The court (in Leslie V. Lorillard) asked: |