delivered the opinion of the court.
Prеvious to the execution of the instrument on which this suit was brought, the plaintiffs were in possession of a tract of mineral land in Washington county, from which a number of miners were engaged in taking lead ore under an agreеment to sell the ore to the plaintiffs. In violation of their agreement, some of the miners sold ore tаken from the plaintiffs’ land to the defendant. The plaintiffs instituted several suits before a justice of the pеace against the defendant for purchasing ore thus taken from their land, which were pending when the аgreement sued on was entered into. By this instrument the plaintiffs agreed to dismiss these suits. The defendant agreed on his part that he would not pay for ore he might thereafter purchase, taken from the plaintiffs’ land, a greater price than they wore paying for such ore, and that he would not pay a greater рrice for ore taken from other lands than they were paying for ore taken from their own. He alsо agreed to sell the plaintiffs all ore thereafter purchased by him, for-which he was to receivе four dollars per thousand pounds more than they were pajdng at the time to the miners on their own land. The defendant further “binds himself, his heirs, executors, and administrators, firmly by these presents, in the sum of five hundred dollars lawful monеy, liquidated damages ; which said sum the said George Towl agrées and binds himself to pay to the said party of the second part, to be collected in any court of competent jurisdiction, upon the violatiоn of any of the stipu
Two breaches of the conditions of the agreement are assigned in the petition. One is, that the dеfendant purchased 6,000 pounds of ore at two dollars per thousand more than the plaintiffs wore paying. The other is, that he purchased 25,400 pounds, which he refused to sell to them.
It is urged that the contract is in restraint of trade and against public policy, and is therefore void; that it is void for want of sufficient consideration ; and that the sum of five hundred dollars mentioned in it is a penalty, and not liquidated damages.
A contract prohibiting one of the parties from carrying on any specific trade or business, without limit as to time or рlace, is doubtless void; such contracts, to be binding, must have reasonable limitations as to the plaсe. What would be reasonable limitations must greatly depend on the circumstances of each case. It must appear that such contract imposes no restraint upon one party that is not bеneficial to the other. The prohibition should not extend any further than will fully protect the party ’for whose benefit the contract is made in his occupation or business. If the prohibition extends beyond this, it is an unreаsonable restraint of trade, and will render the contract void. (
Does the contract under considеration come within the rule above prescribed ? It docs not prohibit the defendant from carrying on thе business designated at any place he may choose. It only limits the manner by fixing the prices at which he may buy and sell, and the persons to whom he may sell. It is not a restriction of trade according to any proper construction of the rule. This principle of law had its origin in the apprentice system of England, whоre an apprenticeship was required before engaging in any trade or business. No satisfactory reason has been found for its existence in this country, where no such system prevails; and although it has been too long acquiesced in here to be now disturbed, we are unwilling to extend it to cases not clearly within its рrovisions and sanctioned by precedents. Under this view of
In the case of Basye v. Ambrose,
The authority is clearly in point in the question we are now considering. The sum sued for is to be treated as a penalty, and not liquidated damages.
The judgment of the court below is affirmed.