Lanzit v. J. W. Sefton Manufacturing Co.

56 N.E. 393, 184 Ill. 326
CourtIllinois Supreme Court
DecidedFebruary 19, 1900
StatusPublished
Cited by28 cases

This text of 56 N.E. 393 (Lanzit v. J. W. Sefton Manufacturing Co.) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lanzit v. J. W. Sefton Manufacturing Co., 56 N.E. 393, 184 Ill. 326 (Ill. 1900).

Opinion

Mr. Justice Carter

delivered the opinion of the court:

Upon its bill in equity brought in the superior court of Cook county, appellee obtained a decree enjoining appellant, for a period of ten years from February 3, 1897, from following or engaging in, directly or indirectly^ in any capacity whatever, the business of manufacturing, selling, handling or dealing in paper receptacles, oyster pails, paper clothing boxes, folding paper boxes, or paper novelties of any kind or description whatever, and from furnishing any person, firm or corporation with any information relating to or concerning any of said business, in the States of Illinois and Indiana, and each of them, and from continuing in the employment of the Fred Rentz Paper Company, and from dealing in said goods in connection with said company in said two States, and each of them. The bill and decree were based upon the following contract between appellant and appellee:

“Chicago, III., February 3,1897.
“As a special consideration for the purchase this day by the J. W. Sefton Manufacturing Company, an Indiana corporation, (doing business, also, in Chicago,) from me of my share and interest in and to the said business heretofore conducted by myself and Mrs. Margaret Banks at Chicago, Illinois, under the firm name and style of Joseph J. Lanzit Manufacturing Company, in accordance with the terms of a certain bill of sale made at Chicago, Illinois, this day, and as a special consideration for the employment of me by said J. W. Sefton Manufacturing Company as a salesman, in accordance with a certain contract of employment made at Chicago this day, and for one dollar and other good and valuable considerations, the receipt whereof I hereby acknowledge, I, Joseph J. Lanzit, of Chicago, Illinois, do hereby expressly covenant and agree as follows: That for the period of ten years from this third day of February, 1897, Twill not -anywhere in the United States of America, directly or indirectly, either alone or with any other person, firm or corporation, as employee, stockholder, officer, manager or otherwise, or in an advisory capacity, set up, follow or engage in the business of manufacturing, buying, selling, handling or dealing in paper receptacles, paper oyster pails, clothing boxes, folding paper boxes, or paper novelties of any kind or description whatsoever, nor will I furnish any other person, firm' or corporation with any information relating to or concerning any of said business.”

Then follows a paragraph identical with the last, except that the territory named, instead of the United States of America, is the State of Indiana, and this in turn is followed by a paragraph in which the territory named is the State of Illinois, and it by a paragraph in which the territory named is Cook county, Illinois, after which is the following:

“All the above restrictions are subject to the exceptions of my employment with the said J. W. Sefton Manufacturing Company, as per said contract of employment this date.
‘In witness whereof I have hereunto set my hand and seal at Chicago, Illinois, this third day of February, A. D. 1897.
Jos. J. Lanzit. [Seal.]
Feed W. Job, Witness.”

The evidence shows that after Lanzit’s term of employment, which was one year, had expired, he was employed by said Rentz Paper Company, engaged, in part, in the same business in Illinois and Indiana as that carried on by appellee and covered by the contract in question. But there is no allegation that said business was carried on in Cook county, or that appellant was engaged in any business covered by his contract, in Cook county.

The only question for consideration is, were those provisions of the contract by which appellant agreed not to engage for ten years in said business in Illinois, Indiana and the United States, void because in restraint of trade. As drawn, the contract is severable, and may, if within the scope of the bill, be enforced as to any valid provision of it as to the territory therein mentioned, and declared void as to other provisions found invalid.

The bill alleged and the proof showed that appellee was an Indiana corporation, but authorized to do, and was doing, business in this State as well as in Indiana; that it manufactured and sold its goods mentioned in the contract, in both States, and transacted its business, to a great extent, from its office in Chicago, and the prayer of the bill was that appellant be enjoined from violating his contract as to the States of Indiana and Illinois. It is too well settled to require discussion, that contracts in general restraint of trade are void as being against public policy. But contracts only in partial restraint of trade are valid and enforceable, if reasonable and supported by a consideration good in law. (Linn v. Sigsbee, 67 Ill. 75; Hursen v. Gavin, 162 id. 377, and cases there cited.) In Hursen v. Gavin, supra, we said (p. 380): “A contract in restraint of trade is thus total and general when by it a party binds himself not to carry on his trade or business at all, or not to pursue it within the limits of a particular country or State. Such a general contract in restraint of trade necessarily works an injury to the public at large and to the party himself in the respects indicated, and is therefore against public policy.” See, also, Harding v. American Glucose Co. 182 Ill. 551; Wright v. Ryder, 36 Cal. 342.

It is said, however, by appellee, that what was said in the Hursen case was not necessary to the decision, and should not be regarded as authority in a case where the question is directly involved. It is also argued that the strictness of the rule laid down in the early cases has been greatly relaxed because of the different methods and increased facilities of communication and of transacting business, enabling the merchant or manufacturer to extend his trade over greater areas of territory than formerly was possible. Many cases are cited, among them Gibbs v. Baltimore Gas Co. 130 U. S. 409, Tode v. Gross, 127 N.Y. 485, Diamond Match Co.v. Roeber, 106 id. 477, Hodge v. Sloan, 107 id. 248, Leslie v. Lorillard, 110 id. 534, and Cowan v. Fairbrother, 32 L. R. A. 829. But all of these cases fully recognize the rule that the contract must be reasonable under all the circumstances of the case and not in general restraint of trade, and that whether it is so or not is a question to be determined by the court. Thus, in Oregon Steam Navigation Co.v.Winsor, 20 Wall. 64, while -the contract there involved was by a divided court held valid, it was said in the opinion of the court that it has generally been held that a contract not to exercise a trade in a particular State is invalid under the rule, on the ground that it would compel a man thus bound to transfer his residence and allegiance to another State in order to pursue his avocation, but that in this country such a mode of applying the rule should be received with caution. And it was there, and also in Gibbs v. Baltimore Gas Co. 130 U. S. 409, further said: “Cases must be judged according to their circumstances, and can only be rightly judged when the reason and grounds of the rule are carefully considered. There are two principal grounds on which the doctrine is founded that a contract in restraint of trade is void as against publi'c policy.

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Bluebook (online)
56 N.E. 393, 184 Ill. 326, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lanzit-v-j-w-sefton-manufacturing-co-ill-1900.