delivered the opinion of the Court. [After stating the facts.] So that the only question is, whether the breach is well assigned, and whether the condition, as to this part of it, is valid in law ; for it is admitted that if it is, it is not vitiated by any illegality in the other stipulations in the condition.
The question then is, whether any agreement which may be supposed to discourage competition in trade, is unlawful, and is such a restraint of trade as is inconsistent with public policy.
In the case of Mitchel v. Reynolds, 1 P. Wms. 161, Parker C. J. lays down the reasons why restraints of trade are not allowed.
“ The true reasons,” says he, “ of the distinction upon which the judgments in these cases of voluntary restraints are founded, are 1st, the mischief which may arise from them first to the party, by the loss of his livelihood, and the subsistence of his family ; secondly, to the public, by depriving it o, a useful member.”
“ Another reason is, the great abuses these voluntary restraints are liable to ; as for instance, from corporations, who are perpetually laboring for exclusive advantages in trade, and
“ 3dly, Because in a great many instances, they can be of no use to the obligee ; which holds in all cases of general restraint throughout England ; for what does it signify to a tradesman in London, what another does at Newcastle ? And surely it would be unreasonable to fix a certain loss on one side, without any benefit to the other.”
“4thly, The fourth reason is in favor of these contracts, and is, that there may happen instances wherein they may be useful and beneficial, as to prevent a town from being overstocked with any particular trade.”
These are the principal reasons given for the rules of law in respect to the restraint of trade by voluntary contract, and nothing important can be added from the later cases on the subject. They were collected to a recent date by Chitty in his Digest of laws relating to commerce, and none of them have much bearing upon the question under consideration.
It must therefore be decided on general principles, rather than by express authority. Whether competition in trade be useful to the public or otherwise, will depend on circumstances. I am rather inclined to believe, that in this country at least, more evil than good is to be apprehended from encouraging competition among rival tradesmen or men engaged in commercial concerns. There is a tendency, I think, to overdo trade, and such is the enterprise and activity of our citizens that small discouragements will have no injurious effect in checking in some degree a spirit of competition. An agreement with a tradesman to give him all the promisor’s custom or business, upon fair terms, and not to encourage a rival tradesman to bis injury, can hardly be considered as a restraint of trade. Certainly it is not such a restraint as would be injurious to the public, for in proportion as it discourages one party it encourages another. As to the public therefore such a contract stat indifferenter. It would be extravagant to sup
But it is said that this is a useless and unnecessary contract, and therefore not to be enforced by law; that the plaintiffs have not shown in the pleadings any actual damages. But the plaintiffs in assigning a breach are not obliged to set out their claims for damage ;
As to the first branch of the condition we do not decide. That may be the subject of further consideration on a hearing m chancery, in which case it may be necessary to ascertain other facts than those appearing on the pleadings. One fact in particular appears to be important, namely, whether the plaintiffs are in fact engaged in boating up and down the river coextensively to the terms of the condition. If not, the ques tion will arise whether a restraint can be valid which can be of no use to the plaintiffs, and which may be prejudicial to the rights of the defendant.
Replication adjudgea good.
Notes
Story on Equity, 289, 290; Chitty’s Contracts (3d Amer. ed.) 217, 218, Pierce v. Woodward,
An agreement on the part of a turnpike corporation to grant to individuals the privilege of passing the gate free of toll, in consideration that they would withdraw their opposition to the passage of a legislative act, touching the alteration of the road, was held to be against sound policy and prejudicial to correct and just legislation, and void. Pingry v. Washburn, 1 Aiken’s R. 264. An agreement which contravenes the policy of an act of Congress and tends to defraud the United States, is void. Gulich v. Ward, 5 Halst. 87. See also Sharp v. Teese, 4 Halst. 352; Hosmer C. J. in Preston v. Bacon, 4 Connect. R. 480. A contract to reprint any literary work in violation of a copy-right secured to a third person, is void. Nichols v. Holly,
The damages sustained are matter of evidence, ami need not be alleged, nor are they scarcely ever stated, but in a general manner Barruso v Madan, 2 Johns. R. 149; Boorman v. Nash, 9 Barn. & Cressw. 145, 152; 1 Chitty’s Pl. (6th Amer. ed.) 370.
The proper question in such cases is, whether the restraint is such only as to afford a fair protection to the interests of the party in favor of whom it is granted, and not so large as to interfere with the interests of the public. Horver v. Graves, 7 Bingh. R. 735; Pierce v. Woodward,