Rakestraw v. Lanier

30 S.E. 735, 104 Ga. 188, 1898 Ga. LEXIS 304
CourtSupreme Court of Georgia
DecidedApril 13, 1898
StatusPublished
Cited by104 cases

This text of 30 S.E. 735 (Rakestraw v. Lanier) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rakestraw v. Lanier, 30 S.E. 735, 104 Ga. 188, 1898 Ga. LEXIS 304 (Ga. 1898).

Opinion

Little, J.

Counsel for plaintiff in error, both by his argument and brief, rests his case on the proposition, that the petition on which the judge below granted an injunction, in default of bond, sets forth no cause for ^relief, because the con[192]*192tract sought to be enforced is not a legal and binding instrument. Hence, this court is called upon to determine the question whether the contract which is set out in the foregoing report is void as contrary to public policy, or whether the same is valid and therefore to be enforced. This question is to be settled by the rules of law governing contracts made in restraint of trade; and in seeking to make application of such rules, we find ourselves furnished with precedents which seem to be authority for all phases of the question, and rulings distressingly in conflict. The plaintiff in error submits that the terms of the contract render it invalid because it is harsh and unreasonable; it is against public policy; it is not a reasonable or pro]3er contract within the meaning or the requirements of the law; that it is without consideration to support it. If either one of these contentions is established, then, as we understand the law applioable to contracts of this character, the courts must refuse to enforce the contract relied upon, because agreements which are unlawful, without regard to the manner of execution, never in law become contracts, although frequently denominated and dealt with under the name of illegal contracts. We can not, within reasonable limits, undertake to reconcile conflicting opinions in treating of contracts in restraint of trade, nor cite the authorities which bear upon the different constituent elements which render such contracts valid, or the want of which make them void, for the reason that the first are irreconcilable and the latter inharmonious. It must suffice that we shall in this case present the rules which we consider established by the most satisfactorily reasoned cases of other jurisdictions and the adjudications of our own court.

Mr. Clark in his work on Contracts says, on authority, that at one time in England it was considered that a contract was contrary to public policy if it placed any restraint at all on a man’s right to exercise his trade or calling, but that gradually exceptions were recognized until at last the court, in a leading case, Mitchell v. Reynolds, 1 P. Wms. 181, established the rule that a contract in restraint of trade, upon consideration which shows it was reasonable for the parties to enter into it, is good ; “that whenever a consideration appears to make it a proper [193]*193and useful contract and such as can not be set aside without injury to a fair contractor, it ought to be maintained,” etc. By reference to that case, we find the conclusion of the court tobe that- “In all restraints of trade, where nothing more appears, the law presumes them bad; but if the circumstances are set- forth, that presumption is excluded, and the court is to judge of those circumstances and determine accordingly, and if, upon them, it appears to be a just and honest contract, it ought to be maintained.” Some question has arisen as to the proper construction of our code which declares that: “Contracts in general in restraint of trade are void” (Civil Code, § 3668), and as to whether the prop er interpretation of these words would have the effect to declare that contracts in general restraint of trade are void, or that contracts generally in restraint of trade are void. Speaking for myself, I interpret the language to mean that contracts generally in restraint of trade are void. The words of this section were not codified from any act of the General Assembly, but the same language appeared in our first Code (1863), and ran without change through successive editions and revisions up to and including the Civil Code of 1895; from which I infer that if the words were not intended to be accepted as written, subsequent codifiers, if not subsequent legislatures, would, by change or amendment, more clearly have expressed a different meaning. But I take it that the words, “contracts in general in restraint of trade are void,” meaning that, generally, contracts in restraint of trade are void, were incorporated into the codification of laws in force in this State as expressing a recognized legal principle sanctioned by the highest authority.

In Ross v. Sadgbeer, 21 Wend. 168, Mr. Justice Bronson says: “The law starts out with the presumption that a contract in restraint of trade is void.” The same rule is stated in Pollock on Contracts, side page 311; is recognized in the leading case from 1 P. Wms., supra, and the principle laid down in Clark on Contracts, 447. Besides, such a construction seems to be in harmony with the policy of the law in this State. To one class of persons at least- — -corporations-—contracts of this character are forbidden when they tend to lessen competition in their re[194]*194spective businesses (Constitution of 1877, Civil Code, § 5800); and various acts of the legislature seem to indicate such a policy to exist. However this may be, it is certain that contracts in unreasonable restraint of trade are contrary to public policy and void, because they tend to injure the parties making them, diminish their means of procuring livelihoods and a. competency for their families; tempt improvident persons, for the sake of present gain, to deprive themselves of the power to make future acquisitions, and expose them to imposition and oppression; tend to deprive the public of the services of men in the employments and capacities in which they may be most useful to the community as well as to themselves; discourage industry and enterprise, and diminish the products of ingenuity and skill; prevent competition and enhance prices, and expose the public to all the evils of monopoly. Clark on Contracts, 446. Against evils like these, wise laws protect individuals and the public by declaring all such contracts void. Alger v. Thacker, 19 Pick. 51. Since the early legislative history both of England and this country, statutes have been of force looking to the prevention of monopoly and the interdiction of restraints upon the exercise of business, trades, or professions, and in no instance has a contract which imposed an unreasonable restraint upon the same, in the eye of the judiciary, been upheld. And the question of the reasonableness of the restriction is one of law for the court. 1 Wharton on Contracts, § 433; Bishop on Contracts, § 517; Benjamin on Sales, § 527; 2 Pomeroy’s Eq. Jur. § 934; Mallan v. May, 11 Mees. & W. 653; Wiley v. Baumgardner, 97 Ind. 66. In determining whether such restriction is reasonable, the court will look alone to the time when the contract was entered into. Rannie v. Irvine, 7 Man. & G. 969; Cook v. Johnson, 47 Conn. 175.

It is, however, satisfactorily established that, as a matter of law, such a contract is to be upheld, if the restraint imposed is not unreasonable, is founded on a valuable consideration, and is reasonably necessary to protect the interest of the party in whose favor it is imposed, and does not unduly prejudice the interests of the public. Clark on Contracts, 446. In some jurisdictions it is held that a contract in restraint of trade, which [195]*195is unlimited as to space, is void on its face and will not be enforced. Clark on Contracts, 450, and authorities cited. On' the other hand, it has been held that a contract restraining the exercise of a trade or business throughout the Kingdom or State may be reasonable and therefore valid. Rousillon v. Rousillon, L. R. 14 Ch. D. 351; Beal v.

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Bluebook (online)
30 S.E. 735, 104 Ga. 188, 1898 Ga. LEXIS 304, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rakestraw-v-lanier-ga-1898.