premises to lend or borrow money or receive credit, directly or indirectly, to or from any manufacturer, wholesaler, or importer of alcoholic beverages, and for any such manufacturer, wholesaler, or importer to lend money or otherwise extend credit except in the usual course of business and for a period not exceeding ninety days, directly or indirectly, to any such licensee, or to acquire, retain, or own, directly or indirectly, any interest in the business of any such licensee. The commission may revoke the license of any licensee who in its opinion is violating this section or participating in such a violation. Nothing in this chapter shall prevent a person holding any interest in a business licensed to manufacture alcoholic beverages from holding at the same time any interest in not more than one business as a licensed wholesaler and importer.

Section 62 provides that a violation by any person of any provision of this chapter for which a specific penalty is not provided or a violation by a licensee or permittee of any provision of his license or permit or of any regulation made under authority of this chapter shall be punished by a fine not less than $50 nor more than $500 or by imprisonment for not less than one month nor more than one year, or both.

No provisions.

3. Anticoercive Financing Statutes

Judicial Decisions

In order to prevent duplication of services, an electric and gas company's agreement to divide certain undeveloped territory between them was held valid. Weld v. Gas and Electric Light Commissioners, 197 Mass. 556, 84 N. E. 101 (1908). A municipality's revocation of a jitney license which, if permitted to operate, threatened discontinuance of a certain street-railway service in town was held not to contravene the antitrust laws. The public expressed preference for the streetrailway service. David C. Burgess v. Mayor and Aldermen of Brockton, 235 Mass. 95, 126 N. E. 456 (1920).

For the extent and effect of a franchise granted to a railroad company, see Boston & Lowell Railroad Corp. v. Salem & Lowell Railroad Company, 2 Gray (68 Mass.) 1 (1854).

An agreement not to bid or prevent others from bidding for the service or labor of inmates in a house of correction is invalid. Any

agreement for the purpose of preventing competition is against public policy. It is immaterial whether the seller or any other person is injured thereby. Gibbs v. Smith, 115 Mass. 592 (1874).

II. CONTRACTS NOT TO COMPETE

No statutory provisions.

Judicial Decisions

Restrictive Covenants Ancillary to Sale of a Business.
In General.

A valid agreement, ancillary to sale of business and goodwill, not to compete with the buyer must be reasonably restrictive as to time and place. Taylor v. Blanchard, 95 Mass. (13 Allen) 370 (1866) (manufacture of shoe-cutters-agreement not to compete in the whole state of Massachusetts held invalid); Stearns v. Barrett, 18 Mass. (1 Pick) 443 (1823) (agreement between joint patentees to divide up the sales territory of the United States between them held valid); Alger v. Thacher, 36 Mass. 51 (1837) (business of founding ironagreement unrestricted in time or territory held invalid); Gilman v. Dwight, 79 Mass. 356 (1859) (physician-agreement restricted to specified town held valid); Angier v. Webber, 96 Mass. (14 Allen) 211 (1867) (teaming business in a particular locality-agreement valid). Perkins v. Lyman, 9 Mass. 522 (1813) (trade of otter and beaver skins on the northwest coast of America-held valid). The agreement, to be valid, must be "partial," reasonable, and for an adequate consideration. Pierce v. Fuller, 8 Mass. 223 (1813).

An agreement not to compete with buyer ancillary to sale of business and goodwill is valid if not injurious to the public, is of benefit to the buyer, and restricts the seller no more than is reasonably necessary. The restraint, if reasonable, need not be restrictive in duration or territory. Morse Twist Drill and Machine Co. v. Morse, 103 Mass. 73 (1869) (sale of twist drill patents-no restriction in time or place-held valid); Boutelle v. Smith, 116 Mass. 111 (1874) (sale of bread route and bakery); Gamewell Fire Alarm and Tel. Co. v. Crane, 160 Mass. 50, 35 N. E. 98 (1893) (sale of police and fire alarm patent-unrestricted territory for 10 years-held invalid); Anchor Electric Co. v. Hawkes, 171 Mass. 101, 50 N. E. 509 (1898) (no

restriction in territory-held valid); United Shoe Machinery Co. v. Kimball, 193 Mass. 351, 97 N. E. 790 (1907) (shoe machinery-no restriction in time or space-held valid); Marshall Engine Company v. New Marshall Engine Co., 203 Mass. 410, 89 N. E. 548 (1909) (no restriction in time or space-held valid-manufacture of machine for reducing pulp to paper); Ruggiero v. Salomone, 248 Mass. 237, 142 N. E. 764 (1924) (barber shop).

Implied Covenants Not to Compete.

In every sale of a business and goodwill, the courts will imply an agreement by the seller that he will do nothing that will impair the value of the goodwill sold. Rosenberg v. Adelson, 234 Mass. 488, 125 N. E. 632 (1920); Hutchinson v. Nay, 187 Mass. 262, 72 N. E. 974 (1905); Dwight v. Hamilton, 113 Mass. 175 (1873) (sale of physician's practice and goodwill); Foss v. Roby, 195 Mass. 292, 81 N. E. 199 (1907) (sale of dentist's practice and goodwill); Munsey v. Butterfield, 133 Mass. 492 (1882) (sale of milk routeseller enjoined from soliciting even new customers in territory); Marshall Engine Co. v. New Marshall Engine Co., 203 Mass. 410, 89 N. E. 548 (1909).

Formerly it was held at common law that an agreement not to complete would not be implied in a sale of a local retail store. Bassett v. Percival, 87 Mass. (5 Allen) 345 (1862) (grocery store); Hoxie v. Chaney, 143 Mass. 592, 10 N. E. 713 (1887). The rule, however, is no longer so rigid. An agreement not to compete will be implied insofar as it is necessary to protect the goodwill of the store sold. Old Corner Book Store v. Upham, 194 Mass. 101, 80 N. E. 228 (1907) (sale of book store, with Episcopalian book department-vendor had charge of the department and was prominent in Episcopalian circles-court enjoined him from competing in the sale of such books); Martino v. Pontone, 270 Mass. 158, 161, 170 N. E. 67 (1930). ("Plaintiffs are entitled to freedom from interference by the defendant in the neighborhood of the store which he sold, but not throughout the entire area of the city.")

Whether or not the court will imply an agreement not to complete is a question of fact, depending on the nature of the goodwill sold, the situation of the parties, and the implications involved in the terms of the contract of sale. Moore v. Rawson, 199 Mass. 493, 85 N. E. 586 (1908); Old Corner Book Store v. Upham, supra; Gordon v. Knott, 199 Mass. 173, 85 N. E. 184 (1908).

A contract not to compete will not be implied, if only the assets and not the goodwill of the business are sold. Webster v. Webster, 180 Mass. 310, 62 N. E. 383 (1902).

A contract not to compete will not be implied where the sale of the goodwill is forced and is not a voluntary one. Hutchinson v. Nay, supra (one member of partnership died-forced sale of goodwill-held surviving partner can compete with buyer and solicit former customers); C. H. Batchelder & Co. v. Batchelder, 220 Mass. 42, 107 N. E. 455 (1914) (receiver's sale of insolvent corporationheld former owner can compete with buyer.)

Construction.

A covenant, in the sale of a milk route, not to "engage in the milk business in any manner whatsoever" does not preclude the seller from operating a pasteurizing plant. Begley v. O'Neill, 281 Mass. 164, 183 N. E. 151 (1932).

Remedies.

Breach of the covenant not to compete will be enjoined despite a provision for liquidated damages. Ropes v. Upton, 125 Mass. 258 (1878).

Assignment.

Benefits of an agreement not to compete are assignable. Rosenberg v. Adelson, 234 Mass. 488, 125 N. E. 632 (1920); Adamowicz v. Iwanicki, 286 Mass. 453, 190 N. E. 711 (1934).

A covenant not to compete is assignable from one partner of a business to another. Jenkins v. Eliot, 192 Mass. 474, 78 N. E. 431 (1906).

Restrictive Covenants Ancillary to Employment.

The rule with respect to agreements not to compete ancillary to employment contracts is, in all respects, similar to the rule with respect to agreements in connection with the sale of a business and goodwill. Hence, an employee's agreement not to engage in a similar business after the termination of his employement, if not injurious to the public, and if not unduly burdensome on the employee, and if reasonably necessary for the protection of the employer will be held valid. Sherman v. Pfefferkorn, 241 Mass. 468, 135 N. E. 568 (1922) (covenant preventing laundry driver from engaging in the business generally is unreasonable; he may be employed by a competitor in a capacity not requiring contact with the customers of his former employer); Chandler, Gardner & Williams, Inc. v. Reynolds, 250 Mass. 309, 145 N. E. 476 (1924) (unique methods of doing business and certain secret processes were taught to employees-held 10 years is not an unreasonable restraint); Boston & Suburban Laundry Co. v. O'Reilly, 253 Mass. 94, 148 N. E. 373 (1925) (agreement for 2 years not to interfere with the company's customers in certain cities

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was held valid); Carnig v. Carr, 167 Mass. 544, 46 N. E. 117 (1897) (restraint on employee so long as he is in the employ held valid); Commonwealth Laundry Company v. Daggett, 283 Mass. 79, 186 N. E. 41 (1933) (agreement "never" to disturb employer's customers-held unreasonable as to time).

An employee in charge of customer's lists is restrained from working for a competitor in a similar capacity. Walker Coal & Ice Co. v. Westerman, 263 Mass. 235, 160 N. E. 801 (1928). But if the information acquired is not confidential, a restrictive covenant will not be enforced. Horn Pond Ice Co. v. Pearson, 267 Mass. 256, 166 N. E. 640 (1929) (list of customers of the employer-ice company comprising the only people in town who used ice held not confidential).

An employer cannot, by contract, prevent his employee from using the skill or intelligence required or increased through experience or instruction received in the course of employment. Club Aluminum Co. v. Young, 263 Mass. 223, 160 N. E. 804 (1928) (salesman of aluminum cooking utensils under a "plan" which was not secret but required training and ability was not restrained). See also Padover v. Axelson, 268 Mass. 148, 167 N. E. 301 (1929), May v. Angoff, 272 Mass. 317, 172 N. E. 220 (1930).

An agreement by a former employee not to engage directly or indirectly in any branch of the laundry business within definite territory will not prevent him from holding stock in a competing company. Sherman v. Pfefferkorn, supra. A restrictive agreement may be enforced even prior to actual breach. Walker Coal & Ice Co. v. Westerman, supra.

The scope of a restrictive covenant if broader than necessary either in territory or duration, or both, may be narrowed by court to more reasonable limits. Edgecomb v. Edmonston, 257 Mass. 12, 153 N. E. 99 (1926) (business of supplying shorthand reporters-restriction in state of Massachusetts narrowed to city of Boston); Metropolitan Ice Co. v. Ducas, 291 Mass. 403, 196 N. E. 856 (1935) (duration of 15 years narrowed to 18 months); Brannen v. Bouley, 272 Mass. 67, 172 N. E. 104; Walker Coal & Ice Company v. Love, 273 Mass. 564, 174 N. E. 199 (1931); Whiting Milk Companies v. O'Connell, 277 Mass. 570, 179 N. E. 169 (1931) (a reasonable time limitation however does not save an unreasonable territorial limitation); Suburban Coat, Apron & Linen Supply Co. v. Le Blanc, 15 N. E. (2d) 828 (1938) (duration narrowed by court).

A restrictive covenant otherwise valid was not enforced in Economy Grocery Stores Corporation v. McMenamy, 290 Mass. 549; 195 N. E. 747 (1935) because employee was unjustifiably discharged during an existing emergency. An employee breaching a similar cove