COKER. HITCHCOCK is entered into: the consideration is therefore executed; and there is no request. But, supposing a legal consideration to exist, there is no adequate one; this has been always required to take the case out of the rule invalidating such contracts; and the Courts will notice the adequacy or inadequacy. The expressions of the Judges can be no otherwise construed. [ *451 } (ALDERSON, B. referred to the language of Lord KENYON, in Daris v. Mason (1).) There the introduction is put as a "fair" consideration. In Mitchel v. Reynolds (2) the words of the Court are, "upon a good and adequate consideration, so as to make it a proper and useful contract." (LORD ABINGER, C. B.: Do you say a bond would be bad, if it were conditioned for any abstinence from trade and no consideration appeared?) The COURT, in Mitchel v. Reynolds (3), say, in answer to such a question, “Wherever such contract stat indifferenter, and for aught appears, may be either good or bad, the law presumes it prima facie to be bad." In the two Anonymous cases (4) (5) in Moore, bonds were held void: yet, in the technical sense, a bond is presumed to be upon consideration. In Jelliet v. Broad (6) a promise, for a good consideration, not to trade in a particular place, was upheld; but Leggate v. Batchelour (6) was there cited and approved of, in which a bond on a condition not to trade in Canterbury or Rochester for four years, no *consideration appearing, was held bad. (ALDERSON, B.: In Jelliet v. Broad (6) the consideration was the sale of goods for 2001.: it might be argued that the goods were to be presumed worth the money.) Prugnell v. Gosse (7) seems to show that the adequacy of the consideration must be discussed. In Young v. Timmins (8) the (1) 2 R. R. 562 (5 T. R. 120). (2) 1 P. Wmns. 186. (3) 1 P. Wms. 192. (4) Moore, 115, pl. 259. (5) Moore, 242, pl. 379; S. C. 2 Leon. 210. (6) Noy, 98. (7) Aleyn, 67. (8) 1 Cr. & J. 331; 1 Tyr. 226. judgment turned entirely on the question of adequacy of consideration there was a clear technical consideration, yet the contract was held bad. (ALDERSON, B.: One party had the power to determine the contract, so that he gave up nothing: here there is an annual salary, which implies at least a contract for a year.) 66 It does appear that the plaintiff could not discharge the defendant; nor that the defendant was still in the plaintiff's service when he signed the agreement. In Gale v. Reed (1) Lord ELLENBOROUGH enquires, whether the consideration be "adequate," whether "the restraint on one side" be "co-extensive only with the benefits meant to be enjoyed on the other," whether the compensation and restraint" be "commensurate with each other." So in Chesman v. Nainby (2) the question is discussed on the commensurability of the consideration with the restraint. The same criterion was recognised in Horner v. Graves (3). Assuming, then, that principle, it cannot be said that the being taken into service at an annual salary, at a time past, is a consideration adequate to a promise by a party to abstain during his whole life from exercising the business in the prescribed limits. Secondly, the restraint is more than is necessary for the plaintiff's protection. It is said that the plaintiff may wish to sell or bequeath: but nothing of that kind appears and, on that supposition, the contract should still have been limited to such time as the plaintiff, or his executors, administrators, or assigns, should carry on the business. Sir W. W. Follett, in reply: There are many expressions which at first sight appear to warrant the argument that the Court will measure the adequacy of the consideration to the restraint; but no decision has turned upon the degree. In Prugnell v. Gosse (4) the words are "no consideration," and "a consideration." PARKER, Ch. J. clearly (1) 9 R. R. 376 (8 East, 80). (2) 2 Str. 739; S. C. 2 Ld. Ray. 1456; S. C. in error, in Dom. Proc. 1 Br. P. C. 234 (2nd ed.). (3) 33 R. R. 635 (7 Bing, 735). HITCHCOCK v. COKER. *452] COKER. HITCHCOCK Speaks only of technical adequacy in Mitchel v. Reynolds (1); yet he uses the word "adequate," which is the expression of the Judges, in Young v. Timmins (2), insisted on here for the defendant. In Wickens v. Erans (3) HULLOCK, B. uses the words "sufficient consideration," but afterwards "no consideration," which shows that the technical sufficiency was meant. The expression of the COURT in Horner v. Graves (4) is "good and sufficient." It is said that the plaintiff might discharge the defendant but in Daris v. Mason (5) such a discharge was admitted on the record. As to the technical objections to the consideration, the original agreement, at the commencement of the service, clearly is that the plaintiff shall take the defendant into service, and that the defendant shall promise: the agreement is afterwards reduced into writing. [ 453 ] : (LORD ABINGER, C. B.: Suppose the plaintiff to die without assigning the business: who is to sue?) The executors, if any action would lie. Cur, adv. vult. TINDAL, Ch. J. on this day delivered the judgment of the COURT: The ground upon which the Court of King's Bench held, after a verdict obtained by the plaintiff in this case, that the judgment of that Court ought to be arrested, was, that the agreement set out upon the record, and upon which the action was brought, was void in law, being an agreement in unreasonable restraint of trade. For, although the inadequacy of the consideration, upon which the agreement was entered into, was urged in argument as one reason for holding the agreement to be void,-and, in the delivering the opinion of the Court, some reference was made to that objection, yet it is manifest that it formed no part of the ground upon which the Court refused to give their judgment in favour of the plaintiff. The consideration for the agreement in question appears to have been, the receiving of the defendant into the service of the (1) 1 P. Wms. 185, 186. (2) 1 Cr. & J. 331; 1 Tyr. 226. (4) 33 R. R. 635 (7 Bing. 735). (5) 2 R. R. 562 (5 T. R. 118). plaintiff as an assistant in his trade or business of a chemist and druggist, at a certain annual salary. And the agreement, on the part of the defendant, founded upon such consideration, is that, if he should at any time thereafter, directly or indirectly, in his own name or that of any other person, exercise the trade or business of a chemist and druggist within the town of Taunton, in the county of Somerset, or within three miles thereof, then that the defendant should, on demand, pay to the plaintiff, his executors, administrators or assigns, the full sum of 500l. as and for liquidated damages. The ground upon which the Court below has held this restraint of the defendant to be unreasonable is that it operates more largely than the benefit or protection of the plaintiff can possibly require; that it is indefinite in point of time, being neither limited to the plaintiff's continuing to carry on his business at Taunton, nor even to the term of his life. We agree in the general principle adopted by the Court, that, where the restraint of a party from carrying on a trade is larger and wider than the protection of the party with whom the contract is made can possibly require, such restraint must be considered as unreasonable in law, and the contract which would enforce it must be therefore void. But the difficulty we feel is in the application of that principle to the case before us. Where the question turns upon the reasonableness or unreasonableness of the restriction of the party from carrying on trade or business within a certain space or district, the answer may depend upon various circumstances that may be brought to bear upon it, such as the nature of the trade or profession, the populousness of the neighbourhood, the mode in which the trade or profession is usually carried on; with the knowledge of which, and other circumstances, a judgment may be formed whether the restriction is wider than the protection of the party can reasonably require. But with respect to the duration of the restriction the case is different. 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 representative 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, HITCHCOCK v. COKER. [ *454 ] COKER. [455] HITCHCOCK Considered in those various points of view, is altogether destroyed. If, therefore, it is not unreasonable, as undoubtedly it is not, to prevent a servant from entering into the same trade in the same town in which his master *lives, so long as the master carries on the trade there, we cannot think it unreasonable that the restraint should be carried further, and should be allowed to continue, if the master sells the trade, or bequeaths it, or it becomes the property of his personal representative; that is, if it is reasonable that the master should by an agreement secure himself from a diminution of the annual profits of his trade, it does not appear to us unreasonable that the restriction should go so far as to secure to the master the enjoyment of the price or value for which the trade would sell, or secure the enjoyment of the same trade to his purchaser, or legatee, or executor. And the only effectual mode of doing this appears to be, by making the restriction of the servant's setting up or entering into the trade or business within the given limit co-extensive with the servant's life. [ *456 ] And, accordingly, in many of the cases which have been cited, the restriction has been held good, although it continued for the life of the party restrained. And, on the other hand, no case has been referred to, where the contrary doctrine has been laid down. In Bunn v. Guy (1) a covenant by an attorney, who had sold his business to two others, that he would not, after a certain day, practise within certain limits, as an attorney, was held good in law, though the restriction was indefinite as to time. In Chesman v. Nainby (2) (in error) the condition of the bond was that Elizabeth Vickers should not, after she left the service of the obligee, set up business in any shop within half a mile of the dwelling-house of the obligee, or of any other house that she, *her executors or administrators, should think proper to remove to, in order to carry on the trade; and in that case the contract was held to be valid, though the restriction was obviously indefinite in point of time, and although one of the grounds on which the validity of the contract was sought to be impeached was, that the restriction was for the life of the obligor. Again, (1) 7 R. R. 560 (1 Smith, 1; 4 East, 190). (2) In Dom. Proc. 1 Br. P. C. 234 (2nd ed.); S. C., in K. B. 2 Str. 739; 2 Ld. Ray. 1456. |