42 N.J. Eq. 185 | New York Court of Chancery | 1886
This is an application for an injunction to restrain the defendant from violating his covenant. The litigants are physicians. The bill says that the complainant, by many years’ practice and diligent attention to business, has succeeded in acquiring a large and profitable practice, and that in the early part of 1885 his practice became so large as to render it necessary for him to em
“In consideration of this contract, made with him by the said Mandeville, the said Harman hereby covenants and agrees not to engage in the practice of medicine or surgery in the city of Newark at any time hereafter.”
The defendant has recently, and since the 1st of October, 1886, rented an office in the city of Newark, and put out a sign as a physician. By his answer he admits that he intends to establish himself in practice there. The complainant asks that an injunction issue restraining him from doing so. The defendant resists the application on two grounds: first, that the covenant is unreasonable, and therefore void; and second, that it is unen
The fault imputed to the covenant is that the restriction which it imposes is to endure for an unreasonable period of time—for a much longer period than will be necessary for the protection of the complainant. It interdicts the defendant, it will be observed, from practicing medicine or surgery in the city of Newark at any time hereafter. The restraint covers the whole period of the defendant’s life, and if an injunction is awarded enforcing the covenant according to its terms, the defendant can never, at any time hereafter, practice his profession in the city of Newark, though the complainant may, the next year, or even the next month, after the injunction issues, lose his life or his reason, or remove to another field of practice. Under such circumstances, the injunction would give no protection to the complainant—he would need none, and the only purpose the injunction could serve would be to causelessly oppress the defendant. The court of king’s bench, in Hitchcock v. Coker, 6 Ad. & El. 438, held a similar contract void. The defendant there had entered the service of the plaintiff, who was a druggist, carrying on his business in the town of Taunton, as the plaintiff’s assistant, under a written contract, whereby he agreed, in consideration of the salary to be paid to him by the plaintiff, that he would not, at any time after leaving the plaintiff’s service, engage, either directly or indirectly, in the business of a chemist and druggist within the town of Taunton. After leaving the plaintiff’s service, the defendant violated his contract; the plaintiff sued him, and had a recovery. The court, in pronouncing judgment on a motion in arrest of judgment, by Lord Denman, C. J., said: “The agreement as to time is indefinite. It is not limited to such time as the plaintiff should carry on business in Taunton, nor to any given’ number of years, nor even to the life of the plaintiff; but it attaches to the defendant as long as he lives, although the plaintiff may have left Taunton, or parted with his
The case was then taken by writ of error to the exchequer chamber, and there the judgment of the king’s bench was reversed. The reversal was put distinctly on the ground that a restriction, so extensive in point of time, was necessary for the protection of the promisee or covenantee in the enjoyment of the good-will of his trade, and should therefore be held to be reasonable. Chief-Justice Tindal, in delivering the opinion of the court, 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 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, 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.” 6 Ad. & El. 453. This doctrine has been adhered to in subsequent cases, and is now the established law of Great Britain. Pemberton v. Vaughan, 10 Q. B. 87; Elves v. Crofts, 10 C. B. 241; Atkyns v. Kinnier, 4 Exch. 782.
The legality of restrictions of this kind is put, it will be observed, exclusively on the ground that they must be upheld as valid, to prevent the destruction of a property right or interest, called the good-will of a trade or business. This right or interest, in this country, is without a well-defined legal character. It would seem that it is scarcely possible for it to exist, even in
Professional skill, experience and reputation are things which cannot be bought or sold. They constitute part of the individuality of the particular person and die with him. There can be no doubt, I think, that if the complainant was the most distinguished physician of the city of Newark, and had by far the most lucrative practice in that city, and he should be so unfortunate as to die next month, or next year, it would be impossible for his personal representative to sell his good-will or practice, as a thing of property, distinct from the office which he had occupied prior to his death, for any price, and I think it is equally obvious that if it were sold in connection with his office, the
These considerations make it apparent, I think, that the reason which induced the court of exchequer chamber to hold a like restraint valid in Hitchcock v. Coker, does not exist in this case. There a right or interest existed, which, according to the law of Great Britain, would, on the death of its possessor, pass to his personal representative. No such right or interest exists here; at least its existence is as yet unrecognized in this state by law. No court of law of this state has as yet decided that a covenant between professional gentlemen, so extensive in duration as the one under consideration, is valid. There is strong reason to doubt its validity. It is one of the natural rights of every citizen of this state to use his skill and labor in any useful employment, not only to get food, raiment and shelter, but to acquire property, and I think it may be regarded as very certain that the courts will never deprive any one of this right, or even abridge it, except in obedience to the sternest demands of justice. Chief-Justice Beasley, in speaking of the covenant on trial in Brewer v. Marshall, supra, said that the restraint which it imposed was general, both as to time, place and person, and it therefore transcended by far the limits of utility to the covenantee, and must for that reason be declared void. And Chief-Justice Woodward, in Keeler v. Taylor, 53 Pa. St. 467, declared that such contracts,
The conspicuous defect of the complainant’s case is that the legal right on which he founds his claim to an injunction is not clear. No court of this state has ever declared that a covenant like that on which the complainant rests his claim is valid; on the contrary, it appears that the general legal presumption is against the validity of such covenants. In this posture of affairs, the duty of the court is plain; for, in the language of Chief-Justice Beasley, no rule of equity is better settled than the doctrine that a complainant is not in a position to ask for a preliminary injunction when the right on which he founds his claim is, as a matter of law, unsettled. Citizens Coach Company v. Camden Horse R. R. Co., 2 Stew. Eq. 299, 304.
My judgment being for the defendant on the first ground taken by him, it is not necessary to express an opinion on the second.
An injunction must be denied.