The contract in question is in restraint of trade, and is void. The general rule laid down by the Civil Code upon this subject is that " every contract by which one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void." ( Civil Code, Sec. 1, 673 .)
There are exceptions to the general rule that contracts in restraintof trade are void, but the contract in question is not within either of them. The exceptions are as follows:
First: " One who sells the good will of a business may agree with the buyer to refrain from carrying on a similar business within a specified county, city, or a part thereof, so long as the buyer, or any person deriving title to the good will from him carries on a like business therein." ( Civil Code, Sec. 1, 674.)
Secondly: " Partners may, upon, or in anticipation of a dissolution of the partnership, agree that none of them will carry on a similar business within the same city or town where the partnership business has been transacted, or within a specified part thereof." ( Civil Code, Sec. 1, 675.)
Then, under the provisions of the Code, unless the restriction in the contract is limited to a city or county--no limitation as to time can take it out of the operation of the general rule; and we think such was the common law. There are some dicta, but no adjudged case to the contrary. (Moore v. Bonnett , 40 Cal. 251; Wright v. Rider , 36 Cal. 357.)
OPINION By the Court:
The contract recited in the answer is not illegal, as being in restraint of trade. The Court erred in sustaining the demurrer to the answer.
Judgment reversed and cause remanded, with directions to overrule the demurrer to the answer.