Trenton Potteries Co. v. Oliphant. The omission of James V. Oliphant to execute the instrument of July 6th, 1892, unquestionably deprives appellant of any right to enforce its provisions against him in this cause. If necessary to construe the contract contained in the letter of January 23d, 1891, I think it would be difficult if not impossible to hold it to be a mere partnership undertaking. No doubt an obligation entered into by more than one person is presumed to be joint, and a several responsibility will not arise except by words of severance. Alpaugh v. Wood, 24 Vr. 638. But the purpose of this letter was to give an option to purchase a business carried on by individuals who were partners. It recites that "we, the undersigned," do business under a firm name and own and control the Delaware pottery, which was the subject of the offer to sell. It contains an agreement that, in case of sale, "we will not, directly or indirectly," engage in a competitive business. In my judgment, it would not be an unnatural or strained construction to attribute to these words a several force, and to find that the firm signature thereto bound the members of the firm not merely jointly but also severally. Upon any other construction it is obvious that the protection of the business and good will proposed to be sold would only be partially secured. But we are not required to construe the terms of the letter by themselves. By the extension of the option by the writing executed by all the firm members, including James V. Oliphant, on February 1st, 1892, a several quality in the contract contained in that letter, either was recognized as originally in it or was imparted to it. By that instrument each partner agreed to an option of purchase for a fixed period, and that such agreement should be part of the original option given by that letter. When they all executed that instrument and declared that it was to be attached to and become part of the original option, the then owners made a new contract, in the terms of the former contract, which bound those signing as if they had signed the original option with the extended term. The contracts thus amalgamated stipulated that in the event of sale "we will not directly or indirectly" engage in a competitive business. These Trenton Potteries Co. v. Oliphant. words, over individual signatures respecting a business previously averred to be a partnership business, indicate several as well as joint undertakings. It is as if they undertook that they would not directly, by their joint act as a firm, or indirectly, by any several act of any member, engage in a competitive business. This construction is greatly aided by the exception from the undertaking, whereby the proposing vendors are permitted to engage in the business of manufacturing pottery ware as agent or employe of the proposing purchaser. These words indicate a relation which might be formed between vendors and purchaser in case of sale effected. While the firm could become the purchaser's agent, it could not in any other sense become his employe. Individual members of the firm might become either agents or employes. The exception therefore indicates that the contract it limited was one affecting individual members of the firm. As James V. Oliphant, upon this construction, became bound by this contract, and as the proofs show that he has broken it, the decree dismissing the bill as to him cannot be supported on this ground. It is next to be considered whether the decree can rest upon the ground that the contracts sought to be enforced are in illegal restraint of trade. The contract contained in the letter of January 23d, 1891, and the covenant of June 6th, 1892, are the obligations which the bill was filed to enforce. They are identical in terms and purport to bind respondents to absolutely refrain from engaging in the business of manufacturing pottery ware "within any state in the United States of America or within the District of Columbia, except in the State of Nevada and the Territory of Arizona, for the period of fifty years." They are contracts in restraint of trade. This court, speaking by Chief-Justice Beasley, more than thirty years ago, declared that contracts in general restraint of trade are illegal. Brewer v. Marshall, 4 C. E. Gr. 537. The learned chief-justice found that to have been the undisputed rule of the English and of our own courts since the decision Trenton Potteries Co. v. Oliphant. in 1711 of Mitchell v. Reynolds, 1 P. Wms. 181. In that celebrated case Lord Macclesfield placed the illegality of such contracts upon the sole ground of their being inimical to the public. interest or public policy. To the same origin the rule denying validity to such contracts was attributed by the chief-justice in our leading case above cited. Our court of chancery has announced and applied the rule, and upon the same ground. Mandeville v. Harman, 15 Stew. Eq. 185; Sternberg v. O'Brien, 3 Dick. Ch. Rep. 370; Althen v. Vreeland, 36 Atl. Rep. 479. In determining what is the public policy in this regard we have, however, to take into account certain contracts which restrain trade. It is of public interest that every one may freely acquire and sell and transfer property and property rights. A tradesman, for example, who has engaged in a manufacturing business and has purchased land, installed a plant and acquired a trade connection and good will thereby, may sell his property and business with its good will. It is of public interest that he shall be able to make such a sale at a fair price and that his purchaser shall be able to obtain by his purchase that which he desired to buy. Obviously, the only practical mode of accomplishing that purpose is by the vendor's contracting for some restraint upon his acts, preventing him from engaging in the same business in competition with that which he has sold. His contract to abstain from engaging in such competitive business is a contract in restraint of trade, but one which, from the time' of Mitchell v. Reynolds to this time, has been recognized as not inimical to, but permitted by, public policy. Therefore, while the public interest may be that trade in general shall not be restrained, yet it also permits and favors a restraint of trade in certain cases. Contracts of this sort which have been sustained and enforced by courts have been generally declared to be such as restrain trade, not generally, but only partially, and no more extensively than is reasonably required to protect the purchaser in the use and enjoyment of the business purchased, and are not otherwise injurious to the public interest. This is the doctrine declared and applied in the court of chancery and recognized in this Trenton Potteries Co. v. Oliphant. court by our affirmance of its decrees. Richardson v. Peacock, 11 C. E. Gr. 40; S. C., 1 Stew. Eq. 151; S. C., 6 Stew. Eq. 597; Mandeville v. Harman, supra; Finger v. Hahn, 15 Stew. Eq. 606; S. C., 17 Stew. Eq. 604; Sternberg v. O'Brien, supra. It is observable that of late and elsewhere it has been questioned whether the rule as thus stated is not too broad to be applicable to present conditions. In 1711 trade was subject to limitations which have largely diminished or ceased to exist. Where orders and responses had to be transmitted by mail or messenger, and the mail and travelers were carried by coaches drawn by horses, and goods were transported by pack or wagon, the area of the trade of a manufacturer or tradesman was necessarily limited by those conditions. Now that orders and responses may be transmitted for long distances by telephone and over the world by telegraph, and goods and travelers may have quick transit over land and sea, the area of such trade may be immensely greater. Thereupon, it is contended with great force that the true test of the validity of such contracts in restraint of trade is to be found alone in their being reasonably essential to the protection of the purchaser, and that, considering the vast extent of the area of some trades, there are cases in which a general restraint cannot be held to be unreasonable. Diamond Match Co. v. Roeber, 106 N. Y. 473; Nordenfelt v. Maxim, &c., Co., App. Cas. 535 (1894); Rousillon v. Rousillon, 14 Ch. Div. 351; Leather, &c., Co. v. Lorsont, L. R. 9 Eq. 345; Morse Trust Drill Co. v. Morse, 103 Mass. 73; Gibbs v. Consolidated Gas Co., 130 U. S. 396; E. Underwood & Son v. Barker, 1 L. R. Ch. 300 (1899). The question thus suggested does not arise in this case unless the contracts before us are found to be contracts in general restraint of trade. This leads us to inquire whether they are general or only partial in their restraint, and, if the latter, whether they extend beyond what is reasonable for a fair protection of the business and good will which appellant purchased from respondents. The contention on the part of respondents is that the contracts in question restrain them from engaging in the business of Trenton Potteries Co. v. Oliphant. manufacturing pottery ware in an area comprising the whole United States, and that the exception of one state and one territory was illusory and colorable because they claim the proofs show that such manufacture cannot be carried on in those localities with profit. It is insisted that a restraint extending over the whole nation is a general and not a partial restraint. It was well said by Judge Andrews, in his opinion in Diamond Match Co. v. Roeber, ubi supra, that "the boundaries of the states are not those of trade or commerce." It may also be said that in these days the business of many concerns extends not only beyond the boundaries of the state in which it has a local habitation, but even beyond the limits of the nation. Yet the public policy of that state may be involved in favor of or against the restraint of such trade however widely extended. It is possible to conceive of a business so widely extended that a restraint of it within the limit of one country might be in fact but a partial restraint. In the case last cited an exception of one state or territory similar to that contained in the contracts in question was pronounced not colorable, but the case does not indicate that the exception was shown by the proofs to be of territory in which the restrained manufacture could not be carried on with practical results. In this case the proofs establish that to be the fact as to the area included in the exception. It is contended for appellant, however, that the fact so established is immaterial because the rule against general restraint of trade is an arbitrary one, and an exception from the restraint, however unsubstantial or illusory, will make the restraint partial. It is not easy to perceive how a rule of this character, founded on considerations of public policy and applied in the public interest, can be rightly deemed arbitrary in the sense intended in this contention. Nor is it obvious that the courts would permit the evasion of the rule by illusive contrivances. But the question presented need not be decided unless the contracts, properly construed, extend the restraint of respondents over the whole area of the United States except the excepted parts. If, by the true construction, the contracts are divisible |