The plaintiffs are practicing physicians and copartners. They conduct a medical center and clinic in the village of Penn Yan, and contiguous territory, in the county of Yates, New York, under the name of the Foster-Hatch Medical Group. This is their suit in equity against defendant, also a practicing physician, for a perpetual injunction, in accordance with the provisions of a written contract, under which he was employed by them. The contract provides that defendant would not engage in or practice his profession as a physician or surgeon at any time in the county of Yates, except while in the employment or associated with the Foster-Hatch Medical Group, without the consent in writing of plaintiffs; and in case of violation of the covenant by him, he should pay plaintiffs the sum of $10,000 liquidated damages; not a penalty.
Here is an appeal from a judgment entered pursuant to an order dismissing the complaint on the ground that it does not state facts sufficient to constitute a cause of action; the agreement being void as against public policy, its enforcement unreasonable, harsh and oppressive, defendant’s services not being unique or extraordinary, no trade or professional secrets having been divulged by him, and the “ restrictive covenant [being] more extensive than protection to the plaintiffs reasonably required.”
It appears in the complaint that plaintiffs have spent large sums of money in setting up the medical center and clinic which they are endeavoring to maintain. For that purpose they have purchased a building and have caused it to be remodeled and equipped at great expense, and they have established and maintain offices for the general practice of medicine at various locations in Yates county, under the same auspices, for the purpose of rendering medical service in accordance with the plan of the medical group.
Defendant entered the employ of plaintiffs in December, 1932, and continued his service to them under the contract, receiving various sums of money as wages and bonus, until August 24, 1935, when he quit. Since then he has continued to practice in Yates county, without the consent in writing of plaintiffs. He did not live or practice there before his employment by plaintiffs. It is the contention, of plaintiffs that the conduct of defendant in
The Special Term bases its decision on our holding in Corpin v. Wheatley (
“ ' In all cases such as this, one has to ask oneself what are the interests of the employer that are to be protected, and against what is he entitled to have them protected. * * * He is * * * entitled not to have his old customers by solicitation or such other means enticed away from him. * * * ’ Each case must depend upon its own facts and circumstances. Any unfair competition or practice may move equity to enforce a negative covenant.” (Crane, J., in Clark Paper & Mfg. Co. v. Stenacher,
It is fundamental that the test to be applied in cases of this sort is, first, is the injunction proposed necessary and reasonable for the protection of the plaintiffs’ property and good will, and second, is it unreasonable, unjust or oppressive to defendant?
In the ordinary employment case equity will not restrain a breach of a covenant for personal services unless the services are of peculiar merit or character. This principle is without
Agreements imposing restraints upon the right of an employee to engage in competitive service after the termination of the contract of service are analogous to, and governed by, the same general rules applicable to restrictive covenants in the sales of business and good will. (McCall Co. v. Wright,
It is manifest that the physician employed as an assistant to another must in the course of his duties become acquainted with the clientele of his employer and acquire their confidence and good will. It is clear that this precise situation was contemplated by the parties to this contract, and that it was drawn to provide against the business and good will of the plaintiffs being lost to them in case of the severance of the employment, and defendant’s locating in Yates county. Defendant’s establishing himself in Yates county for the practice of medicine was a deliberate choice on his part to disregard and violate his solemn bond not to compete with his former employers. In such circumstances courts of equity will extend the arm of injunction where the interests of justice require such a drastic remedy for the protection of a physician’s business, practice and good will.
In Palmer v. Mallet (L. R. 36 Ch. Div. 411) an assistant to a partnership, consisting of two surgeons, was hired, upon the condition incorporated in a bond, that he should not at any time “ set up or carry on ” the business or profession of surgery in a certain town or within ten miles thereof, and that he should not “ at any time hereafter directly or indirectly, and either alone or in partnership with or as assistant of any other person or per
Injunctions permanently to refrain from the practice of a profession in defined localities have been sustained in many cases. (See Webster v. Williams,
The fact that the covenant is unlimited as to time will not preclude the granting of an injunction, where the area of the restraint is limited and reasonable.
“ The covenant in the present case is partial and not general. It is practically unlimited as to time, but this, under the authorities, is not an objection, if the contract is otherwise good. (Ward v. Byrne, 5 M. & W. 548; Mumford v. Gething, 7 C. B. [N. S.] 305, 317.) ” (Diamond Match Go. v. Roeber,
In Fitch v. Dewes (L. R. [1921] 2 A. C. 158) a solicitor’s clerk’s covenant not to engage in the same profession within seven miles of the town hall in the place of employment, was held valid, and a breach enjoined; the court holding that a covenant although unlimited as to time, will nevertheless be held valid where it was reasonably limited as to space. “ Where there is a good will to be protected a covenant in restraint of trade, even where imposed as a condition of employment, may be so framed as to give adequate protection not only to the covenantee himself but also to his successors in the business, and this although it may be necessary for that purpose to impose a restriction upon the covenantor for the remainder of his life. * * * It is impossible to say that there must in every case be some specified limit of time defined by a figure. Nor can we say that the contract ought to be confined to the life of the covenantee, for he might die in the next year or so and the good will might then be lost to his successors. It was no doubt thought necessary to continue the protection throughout the period during which the covenantee and his successors in interest might carry on the practice, and for that purpose to bind the appellant (so far as the limited area was concerned) for the remainder of his
According to the weight of authority as applied to contracts by physicians, surgeons and others of kindred profession, relief for violation of these contracts will not be denied merely because the agreement is' unlimited as to time, where as to area the restraint is limited and reasonable. For, generally, where the restraint is unlimited as to time, the contract is not thereby rendered unconscionable or oppressive, for equity will refuse to enforce it if the breach does not result in material injury to the promisee. Hence, such agreement may be said to extend only for such period of time as is necessary to protect the promisee from material injury. (Malian v. May, 11 M. & W. 653; 152 Eng. Reprint, 967; 6 Eng. Rul. Cas. 383.)
"We do not think the covenant is invalid if no time is therein specified during which the defendant is not to re-engage in the practice of his profession in the limits of the city and county designated.” (Gordon v. Mansfield,
Sustaining an injunction without time limit, gave rise to the following statement in French v. Parker (16 R. I. 219, 220, 221;
To the same effect see Foss v. Roby (
On a motion like this we cannot condemn the contract upon the ground that equity should not or might not lay the injunction for the whole of the time open to it by the terms of the contract. That question should not be determined now. Here we have only the complaint. The facts and circumstances of the case and the events of the trial are uncertain and unknown. They must be consulted in the making up of the judgment which equity may see fit to render as of the day that it is moved to do so. (See Mallan v. May, supra.)
We find the contract to be clear and the obligations it imposes to be mutual. In our view, the facts and the relationship of the parties, all being physicians, present a situation appropriate for the granting of equitable relief to enforce its provisions.
We are of opinion that the stipulation in the contract for liquidated damages does not oust a court of equity from jurisdiction to entertain an application for injunctive relief in the circumstances. (Diamond Match, Co. v. Roeber, supra, 486; Wirth & Hamid Fair Booking, Inc., v. Wirth,
The judgment and order should be reversed, and the motion denied, with costs.
All concur, Sears, P. J., in result on the ground that the nature of the employment of the defendant by the plaintiff, namely, to practice his profession as a physician, distinguishes this case from that of an ordinary employee of a mercantile establishment, except Crosby, J., who dissents and votes for affirmance. Present—' Sears, P. J., Taylor, Edgcomb, Thompson and Crosby, JJ.
Judgment and order reversed on the law, with costs, and motion denied, with ten dollars costs.