ciple that the seller may not derogate from his own grant. In an involuntary sale, as by a receiver or trustee in bankruptcy, there is no such implied contract. A discharged bankrupt may compete with the purchaser from his trustee, and solicit his own former customers.67 Though the seller of a business may subsequently use his own name in a competing business, he cannot make use of any other trade name under which his former business was conducted.69 Nor can he represent himself as successor of the old business.70 § 1641. Sale of business with restrictive covenant is valid. The importance of enabling the owner of a business to dispose of it and the consequent necessity of allowing him to secure to the purchaser the value of the business which is sold by engaging not to destroy the good will thereof by immediate competition, has led to the well-established rule that a restriction Fed. 864; Myers v. Tuttle, 183 Fed. 235; Ranft v. Reimers, 200 Ill. 386, 65 N. E. 720, 60 L. R. A. 291; Brown v. Benzinger, 118 Md. 29, 84 Atl. 79, Ann. Cas. 1914 B. 582; Foss v. Roby, 195 Mass. 292, 81 N. E. 199, 10 L. R. A. (N. S.), 1200; Fairfield v. Lowry, 207 Mass. 352, 93 N. E. 598; Myers v. Kalamazoo Buggy Co., 54 Mich. 215, 19 N. W. 961, 20 N. W. 545, 52 Am. Rep. 811; Althen v. Vreeland (N. J. Eq.), 36 Atl. 479; Snyder Pasteurized Milk Co., 80 N. J. Eq. 185, 83 Atl. 907; Von Bremen v. MacMonnies, 200 N. Y. 41, 93 N. E. 186, 32 L. R. A. (N. S.) 293; Wentzel v. Barbin, 189 Pa. 502, 42 Atl. 44; Zanturjian v. Boornazian, 25 R. I. 151, 55 Atl. 199. But see Cottrell v. Babcock Printing Press Mfg. Co., 54 Conn. 122, 6 Atl. 791; Williams v. Farrand, 88 Mich. 473, 50 N. W. 446, 14 L. R. A. 161; Fish Bros. Wagon Co. v. LaBelle Wagon Works, 82 Wis. 546, 52 N. W. 595, 16 L. R. A. 453, 33 Am. St. Rep. 72. 67 Walker v. Mottram, 19 Ch. D. 355; Dawson v. Beeson, 22 Ch. D. 504; Griffiths v. Kirley, 189 Mass. 522, 70 N. E. 201; Von Bremen v. MacMon nies, 200 N. Y. 41, 93 N. E. 186, 32 595, 16 L. R. A. 453, 33 Am. St. Rep. 72. L. R. A. (N. S.) 293; Van Dyk v. F. V. Reilly Co., 130 N. Y. S. 755, 73 N. Y. Misc. 87. 68 Ranft v. Reimers, 200 Ill. 386, 65 N. E. 720, 60 L. R. A. 291; Newark Coal Co. v. Spangler, 54 N. J. Eq. 354, 34 Atl. 932; White v. Trowbridge, 216 Pa. 11, 64 Atl. 862. 69 Drake v. Dodsworth, 4 Kans. 159; Myers v. Kalamazoo Buggy Co., 54 Mich. 215, 19 N. W. 961, 20 N. W. 545, 52 Am. Rep. 811; Horner v. Lawrence, 86 N. Y. Misc. 95, 149 N. Y. S. 82. In Churton v. Douglas, Johns. (Eng.) 174, John Douglas, sold his interest in the firm of John Douglas & Co., and subsequently started a competing business under that name. An injunction was granted. 70 Knoedler v. Glaenzer, 55 Fed. 895, 5 C. C. A. 305, 14 U. S. App. 336, 20 L. R. A. 733; Myers v. Kalamazoo Buggy Co., 54 Mich. 215, 19 N. W. 961, 20 N. W. 545, 52 Am. Rep. 811; Fish Bros. Wagon Co. v. LaBelle Wagon Works, 82 Wis. 546, 52 N. W. 595, 16 L. R. A. 453, 33 Am. St. Rep. 72. no wider than is necessary to protect the business sold and which does not tend to create a monopoly is valid,"1 subject to the possible qualification, previously alluded to, that even 71 Brampton v. Beddoes, 13 C. B. (N. S.) 538; Leather Cloth Co. v. Lorsont, L. R. 9 Eq. 345; Vernon v. Hallum, 34 Ch. D. 748; Nordenfelt v. Maxim Nordenfelt Co., [1894] A. C. 535; Goldsoll v. Goldman, [1914]2 Ch. 603; Herbert Morris Co., Ltd., v. Saxelby, [1916], 1 App. Cas. 688, 701; Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 22 L. Ed. 315; United States Chemical Co. v. Provident Chemical Co., 64 Fed. 946; National, etc., Stamping Co. v. Haberman, 120 Fed.. 415; Walker v. Lawrence, 177 Fed. 363, 101 C. C. A. 417; Hall Mfg. Co. v. Western Steel & Iron Works, 227 Fed. 588, 142 C. C. A. 220, L. R. A. 1916 C. 620; Moore, etc., Hardware Co. v. Towers Hardware Co., 87. Ala. 206, 6 So. 41, 13 Am. St. Rep. 23; Knowles v. Jones, 182 Ala. 187, 62 So. 514; Webster v. Williams, 62 Ark. 101, 34 S. W. 537; Hampton v. Caldwell, 95 Ark. 387, 129 S. W. 816; Kimbro v. Wells, 121 Ark. 45, 180 S. W. 342; Akers v. Rappe, 30 Cal. App. 290, 158 Pac. 129; Barrows v. McMurtry Mfg. Co., 54 Colo. 432, 131 Pac. 430; Cook v. Johnson, 47 Conn. 175, 36 Am. Rep. 64; Styles v. Lyon, 87 Conn. 23, 86 Atl. 564; Bullock v. Johnson, 110 Ga. 486, 35 S. E. 703; Busk v. Wolf, 143 Ga. 18, 84 S. E. 63; Hursen v. Gavin, 162 III. 377, 44 N. E. 735; Alcock v. Alcock, 267 Ill. 422, 108 N. E. 671; Telford v. Smith, 186 Ill. App. 631; Bowser v. Bliss, 7 Blackf. 344, 43 Am. Dec. 93; Duffy v. Shockey, 11 Ind. 70, 71 Am. Dec. 348; Eisel v. Hayes, 141 Ind. 41, 40 N. E. 119; Trentman v. Wahrenburg, 30 Ind. App. 304, 65 N. E. 1057; Bennett v. Carmichael Produce Co., (Ind. App. 1917), 115 N. E. 793; Swigert v. Tilden, 121 Ia. 650, 97 N. W. 82, 63 L. R. A. 608, 100 Am. St. Rep. 374; Mills v. Cleveland, 87 Kan. 549, 125 Pac. 58; Sauser v. Kearney, 147 Ia. 335, 126 N. W. 322; Fox v. Barbee, 94 Kans. 212, 146 Pac. 364; Thorn v. Dinsmoor (Kans.), 178 Pac. 445; Western District Warehouse Co. v. Hobson, 96 Ky. 550, 29 S. W. 308; Linneman v. Allison, 142 Ky. 309, 134 S. W. 134; Breeding v. Tandy, 148 Ky. 345, 146 S. W. 742; F. T. Gunther Grocery Co. v. Koll,, 153 Ky. 446, 155 S. W. 1145; Kochenrath v. Christman, 180 Ky. 799, 203 S. W. 738; Moorman v. Parkerson, 131 La. 204, 59 So. 122, Ann. Cas. 1914 A. 1150; Whitney v. Slayton, 40 Me. 224; Flaherty v. Libby, 108 Me. 377, 81 Atl. 166; Guerand v. Dandelet, 32 Md. 561, 3 Am. Rep. 164; Warfield v. Booth, 33 Md. 63; Smith v. Brown, 164 Mass. 584, 42 N. E. 101; Anchor Electric Co. v. Hawkes, 171 Mass. 101, 105, 50 N. E. 509, 41 L. R. A. 189, 68 Am. St. Rep. 403; Beal v. Chase, 31 Mich. 490; Doty v. Martin, 32 Mich. 462; Buck v. Coward, 122 Mich. 530, 81 N. W. 328; Buckhout v. Witwer, 157 Mich. 406, 122 N. W. 184, 22 L. R. A. (N. S.), 506; Weickgenant v. Eccles, 173 Mich. 695, 140 N. W. 513; National Benefit Co. v. Union Hospital Co., 45 Minn. 272, 47 N. W. 806, 11 L. R. A. 437; Espenson v. Koepke, 93 Minn. 278, 101 N. W. 168; Southworth v. Davison, 106 Minn. 119, 118 N. W. 363, 19 L. R. A. (N. S.) 769, 16 Ann. Cas. 253; Holliston v. Ernston, 124 Minn. 49, 144 N. W. 415; Angelica Jacket Co. v. Angelica, 121 Mo. App. 226, 98 S. W. 805; Engles v. Morgenstern, 85 Neb. 51, 122 N. W. 688; Ammon v. Keill, 95 Neb. 695, 146 N. W. 1009, 52 L. R. A. (N. S.) 503; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 43 Atl. 723, 46 L. R. A. 255, 78 Am. St. Rep. 612;/ Artistic Porcelain Co. v. Boch, 76 N. J. Eq. 533, 74 Atl. 680; Palumbo v. though the business sold was unlimited in extent geographically, the restrictive promise must not be.72 If a sale of the business is made to one who previously was not a competitor, it is obvious that there is no diminution of competition by the sale, and the promise accompanying it. There is less competition than there would be if the purchaser had entered the field as a competitor without making the purchase in question, but non constat that he would have done this. Where, however, one who is at the time a competitor purchases a business there is a real restriction of competition if the seller engages not to compete. Nevertheless, a restrictive promise in such cases is regarded as reasonable and is upheld.73 Piccioni (N. J. Eq.), 103 Atl. 815; Gross Kelly & Co. v. Bibo, 19 N. Mex. 495, 145 Pac. 480; Dunlop v. Gregory, 10 N. Y. 241, 61 Am. Dec. 746; Diamond Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. 419, 60 Am. Rep. 464; Leslie v. Lorillard, 110 N. Y. 519, 18 N. E. 363, 1 L. R. A. 456; Wood v. Whitehead Bros. Co., 165 N. Y. 545, 59 N. E. 357; Magnolia Metal Co. v. Price, 65 N. Y. App. D. 276, 72 N. Y. S. 792; Broadbrooks v. Tolles, 114 N. Y. App. Div. 646, 99 N. Y. S. 996; Metropolitan Opera Co. v. Hammerstein, 162 N. Y. App. D. 691, 147 N. Y. S. 532; Kramer v. Old, 119 N. C. 1, 25 S. E. 813, 34 L. R. A. 389, 56 Am. St. Rep. 650; King v. Fountain, 126 N. C. 196, 35 S. E. 427; Anders v. Gardner, 151 N. Car. 604, 66 S. E. 665; Wooten v. Harris, 153 N. C. 43, 68 S. E. 898; Threlkeld v. Steward, 24 Okl. 403, 103 Pac. 630, 138 Am. St. 888; Feenaughty v. Beall (Oreg.), 178 Pac. 600; Harkinson's Appeal, 78 Pa. St. 196, 21 Am. Rep. 9; Smith's Appeal, 113 Pa. 579, 590, 6 Atl. 251; Patterson v. Glassmire, 166 Pa. 230, 31 Atl. 40; HarbisonWalker, etc., Co. v. Stanton, 227 Pa. 55, 75 Atl. 988; Public Opinion Pub. Co. v. Ransom, 34 S. Dak. 381, 148 N. W. 838; Baird v. Smith, 128 Tenn. 410, 161 S. W. 492, L. R. A. 1917 A. 376; Erwin v. Hayden (Tex. Civ. App.), 43 S. W. 610; Nelson v. Brassington, 64 Wash. 180, 116 Pac. 629, Ann. Cas. 1913 A. 289; Washington Charcrete Co. v. Campbell, 72 Wash. 566, 131 Pac. 208, Ann. Cas. 1914 D. 630; Boggs v. Friend, 77 W. Va. 531, 87 S. E. 893; Kellogg v. Larkin, 3 Pinn. (Wis.) 123, 56 Am. Dec. 164; Cottington v. Swan, 128 Wis. 321, 107 N. W. 336; Cussen v. O'Connor, 32 L. R. Ir. 330; Parker's Dye Works v. Smith, 20 Dom. L. R. 500; Mizon v. Pohoretzky, 38 Dom. L. R. 214; Kelly v. McLaughlin, 21 Manitoba, 789. See also United States v. Trans-Missouri Freight Assoc., 166 U. S. 290, 41 L. Ed. 1007, 17 Sup. Ct. 540; United States v. Joint Traffic Assoc., 171 U. S. 505, 43 L. Ed. 259, 19 S. Ct. 25; Berghuis v. Schultz, 119 Minn. 87, 137 N. W. 201. But see California, Michigan, S. Dakota and N. Dakota statutes referred to supra, § 1639, n. 60; and infra, § 1643. Also Strobeck v. McWilliams (N. Dak.), 171 N. W. 865. 72 Supra, § 1639. 73 Nordenfelt v. Maxim Nordenfelt Guns Co., [1894] A. C. 535; United States Chemical Co. v. Provident Chemical Co., 64 Fed. 946; Moore, etc., Hardware Co. v. Towers Hardware Co., 87 Ala. 206, 6 So. 41; California Steam Navigation Co. v. Wright, 6 Cal. 258, 65 Am. Dec. 511; Beard v. Dennis, 6 Nor is the promise invalidated by the circumstance that no tangible property was transferred and the transaction amounts merely to the sale of good will accompanied by a promise not to engage further in a competing occupation.74 If, however, the restrictive promise is unduly harsh or wider than the necessities of the promisee require, it is invalid; 75 and likewise if the effect of a sale or lease with restrictive covenants to a competitor is designed to give a monopoly, or a predominance approximating thereto.76 Ind. 200, 63 Am. Dec. 380; Hubbard v. Miller, 27 Mich. 15, 15 Am. Rep. 153; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 43 Atl. 723, 46 L. R. A. 255, 78 Am. St. Rep. 612; Palumbo v. Piccioni (N. J. Eq.), 103 Atl. 815; Chappel v. Brockway, 21 Wend. 157; Diamond Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. 419, 60 Am. Rep. 464; Kellogg v. Larkin, 3 Pinn. (Wis.) 123, 56 Am. Dec. 164. But see contra Gamewell Fire-Alarm Co. v. Crane, 160 Mass. 50, 35 N. E. 98, 22 L. R. A. 673, 39 Am. St. Rep. 458; Carroll v. Giles, 30 S. C. 412, 9 S. E. 422, 4 L. R. A. 154. In Palumbo v. Piccioni (N. J. Eq.), 103 Atl. 815, the plaintiff, then proprietor of a business, bought out a competitor's business taking a restrictive covenant, and for a time operated both establishments. Later he sold the establishment which he had purchased to a third person who did not object to the resumption of business by the defendant, the original seller. It was held that the plaintiff was entitled to enjoin such resumption. See also Tuscaloosa Ice Co. v. Williams, 127 Ala. 110, 120, 28 So. 669, 50 L. R. A. 175, 85 Am. St. Rep. 125. 74 Wickens v. Evans, 3 Y. & J. 318; Rowe v. Toon (Ia.), 169 N. W. 38; National Benefit Co. v. Union Hospital Co., 45 Minn. 272, 47 N. W. 806, 11 L. R. A. 437; Leslie v. Lorillard, 110 N. Y. 519, 18 N. E. 363, 1 L. R. A. 456; Wood v. Whitehead Bros. Co., 165 N. Y. 545, 59 N. E. 357; Mapes v. Metcalf, 10 N. Dak. 601, 88 N. W. 713. 75 Tarr v. Stearman, 264 Ill. 110, 105 N. E. 957; Consumers' Oil Co. v. Nunnemaker, 142 Ind. 560, 41 N. E. 1048, 51 Am. St. Rep. 193; Roberts v. Lemont, 73 Neb. 365, 102 N. W. 770; Fleckenstein Bros. Co. v. Fleckenstein, 76 N. J. L. 613, 71 Atl. 265, 24 L. R. A. (N. S.) 913; Marvel v. Jonah, 81 N. J. Eq. 369, 86 Atl. 968. See cases cited supra, n. 71. 76 Shawnee Compress Co. v. Anderson, 209 U. S. 423, 52 L. Ed. 865, 28 Sup. Ct. 572; affirming Anderson v. Shawnee Compress Co., 17 Okla. 231, 87 Pac. 315, 15 L. R. A. (N. S.) 846; Stewart v. Stearns, etc., Lumber Co., 56 Fla. 570, 48 So. 19, 24 L. R. A. 649; Harding v. American Glucose Co., 182 Ill. 551, 55 N. E. 577, 64 L. R. A. 738, 74 Am. St. Rep. 189 (writ of error dismissed, 187 U. S. 651, 47 L. Ed. 349, 23 Sup. Ct. 841); American Strawboard Co. v. Peoria Strawboard Co., 65 Ill. App. 502. See also Clark v. Needham, 125 Mich. 84, 83 N. W. 1027, 51 L. R. A. 785, 84 Am. St. Rep. 559; Lufkin Rule Co. v. Fringeli, 57 Oh. St. 596, 49 N. E. 1030, 41 L. R. A. 185, 63 Am. St. Rep. 736. Cf. Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 43 Atl. 723, 46 L. R. A. 255, 78 Am. St. Rep. 612; Monongahela River Consolidated, etc., Co. v. Jutte, 210 Pa. 288, 59 Atl. 1088, 105 Am. St. Rep. 812. In certain corporations the value of the business is largely dependent on the good will of one or more officers or stockholders, and just as the corporation might on sale of its business contract to refrain from competition, so officers or stockholders either on selling their stock, or on the corporation selling its business, may make effectively a reasonable restrictive agreement not to compete with the corporation or with a purchaser of its business.77 § 1642. Sale or lease of property with restrictive covenant. The seller or lessor of property as distinguished from a business or good will may by a restrictive promise reasonably limited agree to refrain from himself engaging in a business or from disposing of his property in such a way that others can engage in a business which would impair the value of the property to the buyer for the purpose for which he intended to use it,78 or from selling other property remaining in his hands at a 77 S. Jarvis Adams Co. v. Knapp, 121 Fed. 34, 58 C. C. A. 1; Robinson v. Suburban Brick Co., 127 Fed. 804, 62 C. C. A. 484; Davis v. Booth, 131 Fed. 31, 65 C. C. A. 269; Barrows v. McMurtry, 54 Colo. 432, 131 Pac. 430; Holtman v. Knowles, 141 Ga. 613, 81 S. E. 852; Up River Ice Co. v. Denler, 114 Mich. 296, 72 N. W. 157, 68 Am. St. Rep. 480; Buckhout v. Witwer, 157 Mich. 406, 409, 122 N. W. 184, 23 L. R. A. (N. S.) 506; KronschnabelSmith Co. v. Kronschnabel, 87 Minn. 230, 91 N. W. 892; Anders v. Gardner, 151 N. C. 604, 66 S. E. 665; Bradford v. Furniture Co., 115 Tenn. 610, 92 S. W. 1104, 9 L. R. A. (N. S.) 979; Kradwell v. Thiesen, 131 Wis. 97, 111 N. W. 233. Under a local statute (see supra, § 1639, n. 60), the California court felt constrained to reach a different conclusion. Merchants' Ad Sign Co. v. Sterling, 124 Cal. 429, 57 Pac. 468, 46 L. R. A. 142, 71 Am. St. Rep. 94; Dodge Stationery Co. v. Dodge, 145 Cal. 380, 78 Pac. 879. But the Michigan court, construing a similar statute followed the rule of the common law. Buckhout v. Witwer, 157 Mich. 406, 122 N. W. 184, 23 L. R. A. (N. S.) 506. 78 Altman v. Royal Aquarium Soc., 3 Ch. D. 228; Holloway v. Hill, [1902] 2 Ch. 612; Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 22 L. Ed. 315; Hitchcock v. Anthony, 83 Fed. 779, 28 C. C. A. 80; Fleischman v. Rahmstorf, 226 Fed. 443, 141 C. C. A. 273; Morris v. Tuscaloosa Mfg. Co., 83 Ala. 565, 3, So. 689; Harris v. Theus, 149 Ala. 133, 43 So. 131, 10 L. R. A. (N. S.) 204, 123 Am. St. Rep. 17; University Club v. Deakin, 265 Ill. 257, 106 N. E. 790, L. R. A. 1915 C. 854; Vanover v. Justice, 180 Ky. 632, 203 S. W. 321, L. R. A. 1918 E. 662; Boone v. Burnham, 179 Ky. 91, 203 S. W. 315; Wittenberg v. Mollyneaux, 60 Neb. 583, 83 N. W. 842; Western Union Tel. Co. v. Rogers, 42 N. J. Eq. 311, 11 Atl. 13; Dunlop v. Gregory, 10 N. Y. 241, 61 Am. Dec. 746; Stines v. Dorman, 25 Oh. St. 580; Tardy v. Creasy, 81 Va. 553, 59 Am. Rep. 676; Shaft v. Carey, 107 Wis. 273, 83 N. W. 288. Cf. Carr v. King, 24 Cal. App. 713, 142 Pac. 131; Stewart v. Stearns &c. Lumber Co. 56 |