Styles v. Lyon

• Decision Date: 17 April 1913
• Citation: 86 A. 564,87 Conn. 23
• Parties: STYLES v. LYON.
• Court: Connecticut Supreme Court

86 A. 564

87 Conn. 23

STYLES

v. LYON.

Supreme Court of Errors of Connecticut.

April 17, 1913.

Appeal from Court of Common Pleas, Hartford County; Edward L. Smith, Judge.

Action by Ernest L. Styles against Waterman Lyon for an injunction to restrain defendant from practicing medicine in New Britain. From a judgment overruling a demurrer to the complaint, defendant appeals. Affirmed.

E. Peck, of Bristol, for appellant B. F. Gaffney, of New Britain, for appellee.

WHEELER, J. This action is brought to enforce a contract entered into on June 1, 1908, between the plaintiff and defendant for the period of one year, by which the defendant, a physician and surgeon, agreed for a stipulated consideration to take charge of the plaintiff's business as a physician and surgeon in New Britain. The fifth clause of the contract recited: "It is agreed by and between the parties hereto that this agreement may terminate at any time when desirable by either party. In that event the said Waterman Lyon agrees that he will not locate or open an office within the limits of the town of New Britain for the practice of his profession." This contract was continued by the parties, and on May 17, 1911, an amendment thereto relating to the consideration to be received by the defendant was made. Thereafter, in 1912, the defendant left the employ of the plaintiff, and subsequently opened an office for the general practice of medicine in said New Britain. The assignment of errors is confined to the overruling of the defendant's demurrer to the complaint.

The first ground of demurrer is that the restriction against the defendant practicing his profession in New Britain took effect only in the event that the agreement of hiring terminated within the specified period of one year, being the life of the contract.

The complaint, fairly construed, alleges the continuance of the contract until the defendant left the employ of the plaintiff.

The continuance of the contract may have been by renewal from year to year, or by general agreement or acquiescence of the parties. If its continuance was under a general agreement or acquiescence, all of its provisions, so far as applicable, remained in force; and such provisions as were inapplicable to the period beyond the term of the original contract ceased to be effective. The only provision of the contract falling within this ineffective class was that providing that the contract should continue "for a period of one year." Obviously this could apply only to renewals of the contract for the term of one year. The provision of restriction was a necessary part of the contract, containing, as it did, protection for the experienced practitioner against the taking away of his practice by his assistant upon leaving his employ, in which the assistant had had the opportunity to gain the confidence and favor of the patients of his employer. The continuance of the contract continued the restriction.

We agree with the defendant that Exhibit B, amending the terms of the contract, did not renew the contract; all that it did was to modify the terms of the consideration of an existing contract. The defendant says this amendment is equivalent to saying "either party may terminate this agreement during said term of one year." Such a construetion does violence to the language used, and goes counter to the plain intent of the contract. If the defendant could begin practice the day after the year ended, he would be in a better position to hold his employer's practice than if he had left the employ in the middle of the year. Grounds 1 and 2 are not well taken.

The demurrer further attacks the validity of this contract because it is (1) an agreement in restraint of trade; and 2) so inequitable, oppressive, and contrary to public policy as to be uninforceable in a court of equity. This contract is not claimed to be one in general, but in partial, restraint of trade.

A contract of this character, if not against public policy, is valid if it be founded upon a legal consideration and be reasonable. Cook v. Johnson, 47 Conn. 175, 36 Am. Rep. 64.

A contract in partial restraint of trade will not, as a rule, be held to be against public policy, unless it unduly interferes with the interests of the public. Gibbs v. Balto. Gas Co., 130 U. S. 396, 409, 9 Sup. Ct 553, 32 L. D. 979; Swlgert & H. v. Tilden, 121 Iowa, 650, 657, 97 N. W. 82, 63 L. R. A. 608, 100 Am. St Rep. 374; Underwood v. Barker, 1 Ch. D. 300, 304. If its restrictive features be so large as to be likely to injure (lie public, it must be held contrary to the public welfare. A contract of sale restricting one entering a similar business in a limited area might not injuriously affect the public, while a contract restricting the exercise by one of his ordinary avocation might. In determining whether the public interest be involved in contracts restricting employment, we must keep before us the necessity of preserving Inviolable the agreements of men so far as they be reasonable, and of maintaining the freedom of individuals to pursue their ordinary avocations. There is no attempt by this restrictive provision to restrain the defendant from pursuing in an extended territory his avocation for either an indefinite or a limited time. The area of restriction is confined to a single city; the rest of the world is open to him. Under such circumstances, it cannot be said that the defendant's liberty of pursuing his profession is interfered with to such an extent as to be unreasonable or to work injury to the public. Ryan v. Hamilton, 205 Ill. 191, 205, 68 N. E. 781.

The consideration of the contract is a valid one; its adequacy is not open to inquiry in an examination of the legal validity of the contract....