Hubbard v. Miller
| Decision Date | 15 April 1873 |
| Citation | 27 Mich. 15 |
| Court | Michigan Supreme Court |
| Parties | George E. Hubbard v. George W. Miller and Others |
Heard January 11, 1873
Appeal in Chancery from Ottawa Circuit.
Decree of the court dismissing the bill reversed with costs; and a decree entered in this court for a perpetual injunction upon the principles, and to operate within the limits.
Boynton & Pratt, for complainants.
Akeley & Stewart, for defendants.
This was a bill for a perpetual injunction to restrain the defendants from carrying on the business of putting down "drive wells," called the "American Drive Wells" (consisting mainly of an iron tube driven into the ground, and a pump attached) and from selling or dealing in the tools or apparatus used for that purpose in the city of Grand Haven, and (as the bill expresses it) "the adjacent vicinity."
The defendants Miller and Decker answered this bill, and defendant Akeley demurred generally. The case was heard in the court below upon pleadings and proofs, and the bill dismissed. The complainant appeals to this court.
The case stated in the bill and sustained by the evidence may be stated substantially as follows: The complainant in September, 1870, and for some time previous thereto, was engaged in carrying on the business of a general retail hardware store in the city of Grand Haven, including the tubing and all necessary apparatus and tools for sinking the drive wells above mentioned, and in connection therewith was also engaged in putting down such wells for those who chose to employ him. And two of the defendants, George W. Miller and Adolphus M. Decker, as partners under the style of "George W. Miller & Co.," kept a like hardware store in the same city, and, like the complainant, kept on hand the tubing and other materials used in putting down such wells, and were engaged in putting them down for those who chose to employ them.
It does not clearly appear how extensive was the territory in which any of the parties were then engaged in putting down wells or in which customers were supplied by them with the articles in question; but so far as does appear, it is fairly to be inferred that this business was mainly confined to the city and a comparatively small portion of country around it, and there is nothing from which we can reasonably infer that it extended beyond the limits of the county of Ottawa, nor, in fact, so far as to include within its limits any other village or city the business of which would be likely to warrant or secure the establishment of a retail hardware store. And both the complainant and George W. Miller & Co. seem to have been of the opinion that the business would not be remunerative or profitable to either concern, while both continued to carry it on and to compete with each other, though there might be enough to make it a paying business for one of them. With this view complainant proposed to Miller & Co. to purchase out all that portion of their stock of materials pertaining to the well business, and to pay them the cost price of the same (including freight), if they would cease to do that kind of business. This was assented to by that firm, and a bill of items with the cost of each article was made out, headed "Mr. George E. Hubbard, bought of George W. Miller & Co., dealers in general hardware, Washington street."
The items footed up amounted to
At the foot of the above bill and preceding the signature of Miller & Co. was written the following: "In consideration of the above sale we agree not to keep well-drivers' tools or fixtures, and not to engage in the business of well-driving after this date.
"Received payment.
(Signed) "Geo. W. Miller & Co."
The defendants, Geo. W. Miller & Co., continued in the same general hardware business as before, with the exception of the particular branch of it pertaining to the drive-well business (which seems to have been but a comparatively small part of it), until January or February, 1871 (the bill says January, the answer, February, and the evidence does not show which), when the firm of George W. Miller & Co. was dissolved, and the dissolution publicly announced. And immediately thereafter the said George W. Miller and the defendant Akeley entered into a new partnership under the former name of George W. Miller & Co., in the same retail hardware business, which they carried on in the same store formerly occupied by the old firm of George W. Miller & Co. when Decker was one of the partners. And the defendant Decker (who had been a member of the former firm), about the same time--the winter of 1871--rented another store in the immediate vicinity of the store of complainant, and also went into the like general retail hardware business.
In April, 1871, the new firm of George W. Miller & Co., (composed of Miller & Akeley), commenced keeping and selling the same kind of materials and articles pertaining to the drive-well business, and went into the business of sinking the same kind of wells, which, by the agreement mentioned above, the old firm had bound themselves not to do--Akeley, as he admits by his demurrer, having notice of that agreement. And soon afterwards the defendant Decker also commenced keeping the same kind of articles in connection with his hardware business, in disregard of the agreement of the firm of George W. Miller & Co., to which he as a member of that firm when the agreement was made, was a party. And both said new firm of George W. Miller & Co. and the said Decker still continued in such well-driving business and in the sale of such prohibited articles, in spite of complainant's remonstrances, down to the time of the filing of the bill.
The only ground of objection relied upon by the defendants in this court, to the case made by complainant, or the relief asked, are ( them in their logical order):
1. That the contract relied upon being in restraint of trade, must be presumed void unless shown to be based upon some special and peculiar consideration; and that the only consideration paid being the cost price of the goods at Grand Haven, this is not sufficient to support the restraint contracted for, though the contract should in other respects be valid; and, 2d, that the restraint imposed upon Miller & Co. by the contract is void, because general and unlimited as to place, forbidding the vendors to enter upon the prohibited business anywhere.
The first objection is wholly independent of the second, and in considering it we must proceed upon the hypothesis that the contract would, but for the first objection, be valid. It has sometimes been said by text writers, and even by courts, that all contracts in restraint of trade, whether general or limited, are prima facie void, or that they are to be presumed void, until it be shown, not only that there was an adequate consideration, but that the circumstances under which the contract was made were such as to render the restraint reasonable. But the rule to be drawn from a careful analysis of the adjudged cases and the reasons upon which they are founded, does not seem to us to involve any such presumption in the accurate or legal sense of the term, and may be more correctly stated to be, that all contracts in restraint of trade are void, if considered only in the abstract, and without reference to the situation or objects of the parties or other circumstances under or with reference to which they were made; and this, though the pecuniary consideration paid may have been sufficient to support the contract in any other aspect, or any ordinary contract for a legal purpose; or even though it may be sufficient in value to compensate the restraint imposed. But if, considered with reference to the situation, business and objects of the parties, and in the light of all the surrounding circumstances with reference to which the contract was made, the restraint contracted for appears to have been for a just and honest purpose, for the protection of the legitimate interests of the party in whose favor it is imposed, reasonable as between them and not specially injurious to the public, the restraint will be held valid. A contract of this kind requires no greater pecuniary or valuable consideration to support it than any other contract but such consideration, however valuable, will not of itself support it. ...
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