SCHULTZ v. JOHNSON

1. In selling his bus line to complainant, defendant covenanted not to engage directly or indirectly in the operation of bus lines between the State of New Jersey and any other state. Defendant has, since the sale, become the controlling owner of a bus line between New York, Atlantic City and Washington. Complainant has sold his line to a corporation which runs a New York to Atlantic City line. In this application for a preliminary injunction, held, that covenants like the one in this case are in restraint of trade and for that reason cannot be enforced to prevent the vendor from engaging in a business similar to the one he has sold, in a territory beyond the territory in which the business which was sold was transacted at the time of the sale.

2. Inasmuch as defendant's line in no way enters or interferes with the patronage of the territory in which the line he sold to complainant operated or contemplated operating at the time of the sale, complainant cannot obtain an injunction against him.

3. The business conveyed, and not other unrelated businesses which may be elsewhere owned by the purchaser, delineates the territory within which the covenant may be lawfully enforced.

PER CURIAM.

The decree under review will be affirmed, for the reasons stated in the opinion of Vice-Chancellor Leaming.

The grounds stated by him for refusing a preliminary injunction go to the root of the case, and his decision to dismiss the bill as not showing a case for equitable relief was a necessary result of the reasoning contained in the opinion, which we adopt as adequate for an affirmance of the decree under review.

For affirmance — THE CHIEF-JUSTICE, TRENCHARD, PARKER, CAMPBELL, LLOYD, CASE, BODINE, DONGES, VAN BUSKIRK, KAYS, HETFIELD, DEAR, WELLS, KERNEY, JJ. 14.

For reversal — None.