It will be observed that, by the contract in question, defendant agreed, without limitation of time, to abstain from engaging in the shirt business within a radius of one hundred miles of Des Moines; that, as related to the states of Iowa and Nebraska generally, thq agreement provides for a time limit of ten years. Taking the facts as stated in the petition to be true — and, as far as well pleaded, the demurrer admits the truth thereof— it is manifest that the alleged conduct on the part of defendant does now, and, unless he be restrained therefrom, will continue to, interfere 'with, and work injury and damage to the property rights and business interests of plaintiffs. It is certain that the defendant possessed valuable rights, and, without dispute, these were in the nature and character of property rights. It was in consideration of a transfer of such to plaintiffs that they entered into the contract of purchase, and paid the consideration price. It would seem that common fairness requires that plaintiffs should be protected in the rights thus acquired by them, unless, forsooth, some consideration of general public policy dictates that their complaint should go unheard. That the attempted restriction is
The doctrine that contracts in general restraint of trade are to be held void as against public policy found root early in the development of our system of law, and ■recognition of such doctrine has continued down to the •present time, but with more or less of modification as ■different courts have been called upon to make practical .application thereof. Formerly, in the enforcement of this doctrine, the rights of the immediate parties to a contract, :as between themselves, were put entirely out of view until it had been determined that the contract was not one, ■the enforcement of which would operate as an encroachment upon the interests of the general public. The reason ■of the rule is said to- be two-fold — that such restraints work injury to the public by depriving it of the industry •of the restricted party in the vocation for which he is best .adapted, as well as by the tendency thereof to throw the person so restrained upon the public for support, or compel him to expatriate himself and transfer his residence .and allegiance to some other state or country in order to pursue his occupation; also that the tendency of such restraint is to foster monopolies, prevent competition,-enhance prices, and might ultimately enable ¡organized •capital to silence all competition, become the sole producer, and place the public at its mercy. The following cases will serve to illustrate: Alger v. Thatcher, 19 Pick. 51 (31 Am. Dec. 119); Wright v. Ryder, 36 Cal. 342 (95 Am. Dec. 186); Western W. Ass’n v. Starkey, 84 Mich. 76 (47 N. W. Rep. 604, 11 L. R. A. 503, 22 Am. St. Rep. 686);
It has thus come to be the rule of the cases in most jurisdictions that a contract in itself reasonable and based upon good consideration will be enforced according to the rights of the respective parties thereto, and this notwithstanding it may appear that in some respects or in a limited way the enforcement of such contract has for a result a partial restraint of trade. Several of our own cases make it certain that such is the rule in this state. Heichew v. Hamilton, 3 G. Greene, 596; Hedge v. Lowe, 47 Iowa, 137; Smalley v. Greene, 52 Iowa, 241; Chapin v. Brown, 83 Iowa, 160. See, also, the following recent cases from ■other jurisdictions in which the doctrine has found application: Diamond Match Co. v. Rueber, supra; Herreshoft v. Boutineau, supra; Cowan v. Fairbrother, 118 N. C. 406 (24 S. E. Rep. 212, 32 L. R. A. 829, 54 Am. St. Rep. 733); Wood v. Whitehead Bros. Co., 165 N. Y. 545 (59 N. E. Rep. 357); Anchor Electric Co. v. Hawkes, 171 Mass. 101 (50 N. E. Rep. 509, 41 L. R. A. 189, 68 Am. St. Rep. 403); Trenton Potteries Co. v. Olyphant, 58 N. J. Err. & App. 607 (43 Atl. Rep. 723, 46 L. R. A 255, 78 Am. St. Rep. 612). It is to be noted, however, that a distinction is generally drawn, and with much force, between those trades .or avocations, on the one hand, in which the general public, as such, has some special interest, as, for instance,
In giving application to the present-day doctrine, it has been said that the true test 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 given, and not so large as to interfere with the interests of the public. And the restriction must be reasonable, not oppressive, or out of proportion to the benefits which the vendee may, in reason, expect to flow from the restrictive features of the contract. In Hubbard v. Miller, 27 Mich. 15 (15 Am. Rep. 153), it is said: “If, considered with reference to the situation, business, and objects of the parties, and in the light of all the surrounding circumstances with reference to which the contract vtas made, the restraint contracted for appears to have been for a just and honest purpose, for the protection of the legitimate interests of the party in whose favor it is imimsed, reasonable as between them and not specially injurious to the public, the restraint will be' held valid.” And this language is quoted approvingly in Hedge v. Lowe, supra. How whether a contract is reasonable in'respect of the length of time during which the restriction is to run, and in respect of the scope of’ territory which is to be covered thereby, as ap^died to a case like the one before us, it would seem that the fair and full protection of the business and good will which the-vendee has purchased and paid for may well be accepted as the test. Certainly the restriction ought not to be wider in the scope of its operation, and there can be no-good reason for confining it to any narrower limits. It follows naturally that each case must be governed in the main by its own facts. Take, for instance, the case of Hedge v. Lowe. There it appeared that Lowe had sold his. stock of goods at Winterset to Hedge, and, in connection
It follows from what we have said that, as matter of law, at least, the contract involved in this action cannot be held to be void as in general restraint of trade. The good will sold extended over the territory covered by the contract, and, in the absence of any showing, the time limit, as applied to the states of Iowa and Nebraska, cannot be said to be unreasonable. Even though the time limit, as applied to the city of Des Moines ■ and vicinity, may be said to be unreasonable, we cannot agree that this avoids the contract in its entirety; and, as the petition states a cause of action, the demurrer should have been overruled. —Reversed.