Mar-hop Co. Inc v. Rosenbacher

• Decision Date: 06 November 1918
• Docket Number: (No. 360.)
• Citation: 97 S.E. 169
• Parties: MAR-HOP CO., Inc. v. ROSENBACHER.
• Court: North Carolina Supreme Court

97 S.E. 169

MAR-HOP CO., Inc.

v.ROSENBACHER.

(No. 360.)

Supreme Court of North Carolina.

Nov. 6, 1918.

Appeal from Superior Court, Forsyth County; Lane, Judge.

Action by the Mar-Hof Company, Incorporated, against Mrs. Carrie Rosenbacher. From an order sustaining demurrer to defendant's counterclaim, defendant appeals. Reversed.

The action was to recover the sum of $414.10 for goods sold and delivered. Defendant answered, admitting the amount due, subject to some inconsiderable reductions specified, and further set up a counterclaim arising from breach of contract by plaintiff, in that plaintiff, having agreed for value that defendant should, in Winston-Salem, have the exclusive sale of an article of plaintiff's manufacture, described as the "Marhof Middy Suits" for the seasons of 1916 and 1917, in breach of said contract, placed a quantity of these suits with regular retail dealers in Winston-Salem, amount and place stated, whereby defendant's sales were diminished and profit lost, to the amount of $750. Plaintiff demurred, on the ground that said answer and counterclaim set up an agreement in violation of our antitrust act, as set forth in Gregory's Supp. § 3028ft, § 5, subsec. "f" (Laws 1913, c. 41). The demurrer having been sustained in the county court, the ruling was affirmed in the superior court and defendant excepted and appealed.

L. M. Swink, of Winston-Salem, for appellant.

Craige & Vogler, of Winston-Salem, for appellee.

HOKE, J. (after stating the facts as above). [1] Originally, at common law. agreements in restraint of trade were held void, as being against public policy. The position, however, has been more and more modified by the decisions of the courts until It has come to be the very generally accepted principle that agreements in partial restraint of trade will be upheld when they are "founded on valuable considerations, are reasonably necessary to protect the interests of the parties in whose favor they are imposed, and do not unduly prejudice the public interest." Clark on Contracts (2d. Ed.). The modification suggested has been approved and applied in numerous cases in this state, where, on sale and disposition of a business, trade, or profession, stipulations restrictive of competition, on the part of the vendor, have been held valid. Such deals between mere individuals do not as a rule tend to unduly harm the public, and are ordinarily sustained to the extent required to afford reasonable protection to the vendee in the enjoyment ofproperty or proprietary rights he has bought and paid for, and to enable a vendor to dispose of his property at its full and fair value. Bradshaw v. Milliken, 173 N. C. 432, 92 S. E. 161, L. R. A. 1917E, 880; Sea Food Co. v. Way, 169 N. C. 679, 86 S. E. 603; Kramer v. Old, 119 N. C. 1, 25 S. E. 813, 34 L. R. A. 389, 56 Am. St. Rep. 650; Oregon Steam Nav. Co. Winsor, 87 U. S. (20 Wall.) 64, 22 L. Ed. 315; McCurry v. Gibson, 108 Ala. 451, 18 South. 806, 54 Am. St. Rep. 177; Southworth v. Davison, 106 Minn. 119, 118 N. W. 363, 19 L. R. A. (N. S.) 769, 16 Ann. Cas. 253; Herreshoff v. Bontineau, 17 R. I. 3, 19 Atl. 712, 8 D. R. A. 469, 33 Am. St. Rep, 850; Diamond Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. 419, 60 Am. Rep. 464; Nordenfield v. Maxim, [1894] App. Cases, 535; Clark on Contracts, supra; 6 R. C. L. p. 793; 9 Cyc. pp. 523-529. In Bradshaw v. Milliken, supra, the doctrine as it now prevails with us is stated as follows:

"Contracts in restraint of trade, like the one we are now considering, were formerly held to be invalid as against public policy, but the more modern doctrine sustains them when the restraint is only partial and reasonable. The test suggested by Chief Justice Tindal in Honer v. Graves. 7 Bing. 743, by which to determine whether the restraint is a reasonable one and valid, is to consider whether it is such only as to afford a fair protection to the interests of the party in favor of whom it is given, and not so large or extensive as to interfere with the interests of the public."

And in Sea Food Co. v. Way, supra, the court in its opinion quotes with approval from 6 R. C. L. p. 793, on the subject as follows:

"Public policy requires that every man shall be at liberty to work for himself, and shall not he at liberty to deprive himself or the state of his labor, skill, or talent by any contract that he enters into; on the other hand, public policy requires that when a man has, by skill, or by any other means, obtained something which he wants to sell, he should be at liberty to sell it in the most advantageous way in the market; and, in order to enable him to sell it advantageously in the market, it is necessary that he...