This is а suit by appellee to restrain appellant from engaging in the same business in which appellee is engaged or in, a competing business in the state of Texas for a рeriod of one year from January 16, 1917. The business of appellee is that of enlarging photographs into portraits finished in oil, crayon, and pastel, and in selling frames and оther merchandise in connection with said business. It was alleged that appellee, on or about January 1, 1916, entered into a contract with appellant whereby the lаtter agreed to perform certain stipulated duties, and continued to perform such duties until January 16, 1917, and engaged in the same business in competition with appellee in violation of his agreement as follows:
“Second party agrees, as a special consideration for the obligation assumed by first party herein and the commissions to be paid to him under this agreement, that he will not for a period of one year from the date of the termination of his employment hereunder, without the written consent of first pаrty so to do, (a) engage in the same business as that conducted by him for first party or engage in any competing business in the territory or any parts thereof in which second party was employed for the year last preceding the termination of his employment hereunder; (b) employ directly or indirectly, or aid, assist, encourage, advise or direct any other person, firm or corporation in employing in any territory or business for said 'period of one year immediately succeeding the termination of his employment hereunder any person or persons at any time employed by first party, unless such party shall have been out of the employ of the first party for six months; (c) knowingly, intentionally or willfully aid, assist, *620 encourage, advise or direct, directly or indirectly, any person or persons who may be employed by first party for the year next succeeding the termination of the second party’s employment hereunder, to quit or abandon such employment by the company during said period, for the purpose of entering into any other business or employment whatever.”
The court, upon a hearing, granted a temporary writ of injunction as prayed for.
It was agreed that the contract was duly executed by the parties, and that it’ had been breached by appellant as to the stipulations in the paragraph hereinbefore copied, and that he is insolvent.
The only questions to be solved in this case are as to whether a contract not to enter into the same business for a year as that in which appellant was engaged is valid and binding, and, if so, if the provision for liquidated damages for a breach does not take the case out of the jurisdiction of a court of equity, and thus prevent the issuance of a writ of injunction.
The authorities seem to establish beyond question that where a contract is made not to engage in a rival business in a certain locality and provision is made for the рayment of a stipulated sum on a breach, such amount is treated as stipulated damages, rather than as a penalty. However, the weight of authority seems to be that, аlthough liquidated damages are provided for in such contracts, such provision does not oust equity jurisdiction unless it appears from the contract -that it was the intention of the xiarties thereto that the damages should be the only remedy, and that no equitable remedy was contemplated. Wilkinson v. Colley,
But as said by the New York Court of Appeals in the cited case of Diamond Match Co. v. Roeber:
“It is, of course, competent for parties to a covenant to agree that a fixed sum shall be paid in case of a breach by the party in default, and that this should be the exclusive remedy. * * * It is a question of intention, to be deduced from the whole instrument and the circumstances ; and if it appеar that the performance of the covenant was intended, and not merely the payment of damages in case of a breach, the covenant will be enforсed.”
In the case of Wills v. Forester,
“The fact that the damages are liquidated does not of itself change the rule. It is a ques-" tion of the real intention of the parties to be deduced from the whole instrument .and the sur-, rounding circumstances, and if it appear from "these that the performance of the contraсt was" intended, and not merely the payment.,of; damages in case of its breach, the agreement will then be enforced by specific performance.”
The contract herein provides:
“The partiеs hereto having considered the damages which might or will accrue to the first party by reason of the violation of any of the provisions of this section by second party, and the difficulty or practical impossibility of arriving b¡y computation or legal proof at the exact amount of such damage, to first party, and having considered what would bе a fair and reasonable amount of such damages for violation by second party of the provisions a, b or c, of this section, as hereinbefore set out, shall be fixеd at the sum of one thousand ($1,000.00), as liquidated damages, which the said second party and his sureties agree to pay for such violation of any or all of said provisions on demand, and the first party shall have the right to set off said amount against any amounts due or to become due from first party to second party or stock owned by second party in thе company, and any bond given to secure this contract shall include the stipulated damages under this section.”
It is clear that it was the intention of the parties that the $1,000 .was to give all the relief that could, be obtained from a breach of the contract, and that it was never contemplated that a court of equity should interpose with a writ of injunction. It appears that the liquidated damages were deemed sufficient to meet every breach of the contract, and we would judge from the evidence which fails to show any damages whatever, that full compensation can be obtained from the $1,000 for any possible breach of the contract. No actual damages were claimed or proven. There was no evidence of trade secrets connected with inducing people to have their photographs magnified into portrаits and placed in expensive frames. Any good canvasser could .do all that was necessary to gain the desired end.
As said in the case of Gossard v. Crosby,
“Even where there is an express negative cоvenant, the authorities all agree that an injunction will not be granted save in those exceptional cases where the promised service 'is of a special, uniquе, unusual and extraordinary, or intellectual character which gives it peculiar value, the loss of which cannot be reasonably "or adequately compensated in damages in an action at law.”
In the case of Osius v. Hinchman,
“Complainant, having failed to show that he has in reality suffered any loss, or will suffer any loss by reason of the acts of defendant, or that he is in any way actually prejudiced .by such acts, or that the enforcement of the agreement was necessary to his protection, is not entitled tо relief.”
In the case of Simms v. Burnette,
Courts will not favor contracts that would drive a man out of Tesas to seek occupation in a business, with which he is perhaps better acquainted than any other, or put him in another business for which he is not trained or suited. This is a different case from the sale of a business induced by a contract not to engage in а similar business in a named locality in a specified time. The contract in this case is aimed at the right to obtain employment in a similar business. It is an attempt to restrain the right to eаrn a living. As said in an Ontario case, Allen Mfg. Co. v. Murphy, 23 Ont. L. Rep. 467, cited in note to Kinney v. Scarbrough Co. (Ga.) 40 L. R. A. (N. S.) 473:
“Bestraints which may fairly be regarded as entirely reasonable when imposed in connection with the sale of a business or good will, or with the transfer of patent rights or of a trade secret, or with the dissolution of a partnership, should not be accepted in all cases as necessarily or even approximately applicable to restraints imposed upon employes to whom the only consideration for their covenant is employment and receipt of wages or remuneration for a more or less certain number of years.”
The judgment is reversed, and the cause remanded.