EMERY, V. C.
Bill by George P. Althen against James H. Vreeland for an injunction. Heard on bill, answer, replication, and proofs. Decree for complainant.
A. R. Denman and J. E. Howell, for complainant.
W. B. Guild and R. V. Lindabury, for defendant.
EMERY, V. C. This is an application for an injunction restraining the violation of a covenant in restraint of trade, and to restrain the interference with the good will of a business, and is made under the following state of facts: On or about October 22, 1895, the complainant purchased from the defendant the interest of the defendant in the partnership property and estate, real and personal, of the firm of Mulford & Vreeland,complainant is entitled to an injunction restraining defendant within the state. It is not claimed that the covenant is in terms so divisible as to admit of a separate application within the state and outside of the state, but it is insisted that, the whole doctrine of illegality of restriction being based upon reasons of public policy, the courts of each state should consider only the legality of the re striction so far as relates to trade and commerce within its own limits, and, if the restriction within the state is reasonable, then the agreement should be enforced within the state, according to its terms. But the answer to this proposition is twofold. In the first place, the contract might then be enforced without the state, for, if enforced at all, it must be enforced according to its terms, and would legally and in fact control defendant's right to manufacture or sell anywhere outside of the state within the limit of 1,000 miles. Defendant, if within the state, would be punishable for contempt of such violation, or his property within the state might be sequestered. In the second place, trade and commerce within the area of the United States, so far as restrictions of this character are concerned, are in law and in fact national. Many decisions of our courts, both federal and state, recognize in this respect a public policy based upon the consideration of the effect of the restriction without regard to the existence of state lines, and counsel have not referred me to any cases in our court sustaining a contrary doctrine. Navigation Co. v. Winsor, 20 Wall. 64, 67; Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. 419. See opinion of Andrews, J., page 485, 106 N. Y., and page 423, 13 N. E. The English cases are relied on as supporting this contention, but, if this be the rule there established, it is altogether inapplicable in this country. It should be noticed, moreover, that, even admitting complainant's claim in this respect, the restraint imposed by the contract in question, being general and unrestricted as to time, extends to the whole of the vendor's life, and it would then become also, on complainant's theory, general and unrestricted as to space. No case has been referred to in which a restraint, general both as to time and space, has been held either reasonable or legal. I must decline to enforce this restrictive contract, as not reasonable under the circumstances of the case disclosed by the proofs, and the preliminary injunction enforcing it, pending the hearing made for the purpose of preserving the status quo pending the determination of this question of fact, must be discharged.
The bill also alleges that the defendant Vreeland, since the sale of his interest in the property and good will of the firm of Mulford & Vreeland to complainant, solicited the trade of old customers of the firm, and prays relief against interference with the good will of the business, and for general relief. The defendant admits in his answer that he may have solicited the trade of the old customers, and upon this point, which was within his knowledge, the answer in its evasive form is a sufficient admission. Wills v. McKinney, 30 N. J. Eq. 465, and authorities there cited. Sanborn v. Adair, 29 N. J. Eq. 338. It was besides proved at the hearing that the defendant did in fact trade with one or more of the old customers, and that the trade of the complainant with the old customers was to some extent interfered with by defendant's trading with them. Defendant, having sold to complainant his interest in the good will of the firm, along with his interest in the property, and received the price agreed upon by the parties, cannot now be permitted to get back part of the property conveyed by solicitation of the old customers. Where the good will of a business is sold, without further provision, the vendor may set up a rival business, but he is not entitled to canvass the customers of the old firm, and may be restrained by injunction from soliciting any person who was a customer of the old firm prior to the sale to continue to deal with the vendor or not to deal with the purchaser. This doctrine is put upon the ground that these acts are direct and intentional dealings with the good will sold, and efforts to destroy it, in which the vendor takes advantage of the business connection of the old firm, and his knowledge of that connection. I have considered this subject in Coal Co. v. Spangler (May, 1896) 34 Atl. 932, with a reference to the latest decisions. The defendant's answer set up that the contract should not be enforced because it was unfairly obtained from him, and because the value of the good will was not included, but the proofs failed to sustain these allegations. The bill of sale does not contain an express conveyance of the defendant's interest in the good will of the business, but it was included in the written agreement of purchase, and the bill alleges that the good will was included in the purchase. The answer admits this, and seems also to admit that the good will was conveyed. In view of this evident intention of the parties, this is the construction of the answer which I took upon the application for preliminary injunction, and which I still think should be taken. The complainant, therefore, having purchased from the defendant, for a valuable consideration, defendant's interest in the good will of the firm, the complainant is entitled to enforce against the defendant the obligations which are implied as arising from the purchase, and an injunction to prevent defendant's solicitation of the customers of the old firm will therefore be advised. The form of the injunction will be settled, if not agreed on.