Webster v. Buss , 61 N.H. 40 ( 1881 )

The defendant, in consideration of $1,100 paid to him by the plaintiff, sold to the plaintiff his teaming property, and agreed to entirely relinquish to the plaintiff his teaming business in the vicinity of Marlborough over the route theretofore occupied by him, and in no way, directly or indirectly, to interfere therewith or cause it to be interfered with. The agreement was limited as to place, but unlimited as to time. It was made upon an adequate consideration, and was valid. This doctrine is established both in England and in this country. Davis v. Mason, 5 T. R. 118; Bunn v. Guy, 4 East 190; Proctor v. Sargent, 2 Man. G. from; Mallan v. May, 11 M. W. 652; Watson v. Whitley, 2 Ex. 611; Broad v. Jollyfe, Cro. Jac. 596; Green v. Price, 13 M. W. 695; Hitchcock v. Coker, 1 N. P. 796; Price v. Green, 16 M. W. 346; Chappel v. Brockway, 21 Wend. 157; Ross v. Sadgbeer, 21 Wend. 166; Pierce v. Fuller, 8 Mass. 223; Perkins v. Lyman, 9 Mass. 522; Palmer v. Stebbins, 3 Pick. 188; Davis v. Barney, 2 Gill Johns. 382; Guerand v. Dandelet, 32 Md. 562; Pierce v. Woodward, 6 Pick. 206; Butler v. Burleson, 16 Vt. 176; Blanchard v. Weeks, 34 Vt. 589; Hedge v. Lowe,47 Iowa 137; Navigation Co. v. Wright, 6 Cal. 258 — S.C., 8 Cal. 585; Elves v. Crofts, 10 C. B. 241; Pemberton v. Vaughan, 10 Q. B. 87; Benj. Sa. 520 and notes, and notes to Palmer v. Stebbins, 3 Pick. 188, 193; Eastern Express Co. v. Meserve, 60 N.H. 198.

The defendant contends, that Webster having sold the property and now having no interest in the business, and there having been no breach of the agreement while he owned the business and carried it on, there can be no recovery. But the defendant agreed that he would in no way, directly or indirectly, interfere with the business or cause it to be interfered with. He has directly interfered with it, and there is a breach of the bond and a cause of action. But the defendant says that this action cannot be maintained for the benefit of Elwell; that the bond was given for the personal protection of the plaintiff so long as he carried on the business; and that the fact that it runs to him alone, and not to his heirs and assigns, is conclusive on this point. In Pemberton v. Vaughan, supra, Denman, C. J., says, — "There is no case which decides that an agreement in restraint of trade is illegal, because it is for life. It does not follow that the plaintiff will not require the protection of the agreement because he may not himself continue in the business. He may sell it on better terms on account of the protection secured to it by such an agreement."

In Elves v. Crofts, supra, the defendant covenanted that he would not carry on the trade of a butcher within five miles of the premises described in a lease assigned by him to the plaintiff. The defendant pleaded that the plaintiff had discontinued the business before the alleged breaches, also that his term had ceased; and he contended that there was no implied condition in a covenant of this sort that it shall cease to bind the covenantor when no longer useful to the covenantee. Wilde, C. J., delivering the judgment of the court, said "a restriction necessarily limited as to space, but enduring for the life of the party restrained, is valid, as the only effectual mode of securing to the covenantee the full benefit of the good-will of his trade. It is no longer, therefore, open to argument, that a restriction as large in its terms as is contained in the covenant in question, is invalid. It is suggested, that as this decision is based on the assumption that such a restriction is necessary for the entire protection of the covenantee, it must be construed as ceasing to operate where the covenantee has ceased, by himself or his assigns, to carry on the business assigned. This reasoning is fallacious. If the covenant is binding to its full extent when made, its signification cannot be varied by any subsequent occurrence: and to hold otherwise would be to render its import uncertain, and to impair its efficiency for that protection which the law contemplates as just. Cases may be conceived in which, notwithstanding that the covenantee had ceased to carry on the trade or business either by himself or his assigns, the good-will might not be at once extinguished; and, if considerations of time or degree be permitted to affect the right to enforce such a covenant, its value would be diminished, and the salable quality of good-will, which according to all the recent authorities is deserving of protection, would be affected."

The plaintiff's purchase was not confined to the articles of tangible property. It included the good-will of the business; and this was susceptible of valuation, and capable of transfer with the rest of the property to whomsoever the plaintiff might choose. Sto. Part., s. 99; Par. Part. 262.

In Hitchcock v. Coker, 1 N. P. 814, Tindal, C. J., said, — "The good-will of a trade is a subject of value and price. It may be sold, bequeathed, or become assets in the hands of the personal representatives of a trader. And if the restriction as to time is to be held to be illegal if extended beyond the period of the party by himself carrying on the trade, the value of such good-will, considered in those various points of view, is altogether destroyed." There is no reason, therefore, for holding the restriction to extend only to the time that the vendees continued their joint interest.

But it is claimed that the defendant's agreement was personal; that it only applied to the plaintiff; and when his interest in the property and business ceased, the defendant's liability on the bond was at an end. The agreement to relinquish the business formed a material part of the purchase: it constituted, in part, an inducement to the purchase, and enhanced the value of the property purchased. There is no reason why the plaintiff should not avail himself of the agreement in effecting a sale. It is of no consequence whether the agreement could be transferred without the property. That question does not arise here. There seems no doubt, upon the authorities, that it could be transferred with and as an incident of the property, and these authorities are supported by reason, the nature of the property, and the business. Guerand v. Dandelet, 32 Md. 562; Navigation Co. v. Wright, supra; Pemberton v. Vaughan, 10 Q. B. 87; Watson v. Whitney, supra. In the last case, it was held that a suit might be brought by the executors of the obligee for a breach arising after his death.

The only case cited sustaining the defendant's position is Hillman v. Shannahan, 4 Or. 163. In that case the court do not allude to the English cases on this subject, nor indeed to any of the American cases, except Navigation Co. v. Wright, and they draw a distinction between the two, based on the fact that in one case the word heirs is used while in the other it is not, and the court make a difference in the principle governing them. The reasoning of the court in Hillman v. Shannahan is not sufficient to overbalance the authorities which maintain the opposite view.

The evidence objected to was competent as tending to show that Elwell had an interest in the subject-matter of the suit. The suit being for his benefit, this was material. If he had no interest, he was not entitled to damages. It was also competent as showing what the plaintiff sold and what Elwell bought.

The action can be maintained, and the plaintiff may recover for the use of Elwell such damages as Elwell has sustained by the breach of the bond by the defendant, and such as may be presumed to have been in the contemplation of the parties when the bond was made. Noyes v. Blodgett,58 N.H. 502, and authorities.

Case discharged.

ALLEN, J., did not sit: the others concurred.