Webster v. Williams

34 S.W. 537, 62 Ark. 101, 1896 Ark. LEXIS 144
CourtSupreme Court of Arkansas
DecidedFebruary 22, 1896
StatusPublished
Cited by23 cases

This text of 34 S.W. 537 (Webster v. Williams) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Webster v. Williams, 34 S.W. 537, 62 Ark. 101, 1896 Ark. LEXIS 144 (Ark. 1896).

Opinion

Wood, J.

This suit was to enjoin appellee from the practice of medicine and surgery in the city of Texarkana and vicinity, under a contract which, omitting unnecessary parts, is as follows: “I agree to move my office and establish myself in the said Medical and Surgical Institute at once, and remain in active connection and practice therewith in any and every thing that pertains to my profession, so long as I remain or continue to reside in Texarkana or the immediate vicinity. I also agree that I will withdraw and retire from the practice of my profession during the month of January, 1892, and, to the extent of my ability, use every reasonable effort and honorable means to introduce and establish the said doctors, H. R. Webster, M. D., and C. A. Reed, M. D., or either of them, as my successor among my clientage. I also agree to recommend them for appointment as examiners for the life insurance companies for whom I am now acting as medical examiner. In short, I have decided to permanently withdraw and retire from the practice of medicine in Texarkana and vicinity, and it is my intention and desire to introduce and establish the above named doctors, Webster and Reed, as my successors to my practice and good will among my clientage; and, to that end, I have promised and agreed that I will use all lawful and honorable means and efforts at my command. Now, upon the faithful performance of all the stipulations and agreements above recited, this bond and obligation shall become null and void;(otherwise to remain in full force and effect.

[Signed.] D. S. Williams.”

The bond referred to as part of the contract was in the sum of $1,000. The consideration for the above contract, as specified therein, was two hundred and fifty dollars paid by the said Drs. Webster and Reed to the said Dr. D. S. Williams, “for his good will, influence and retirement from practice.” This contract was entered into on the 3d day of October, 1891. After-wards,, on the 20th day of February, 1892, the parties agreed in writing to extend the time for the retirement to commence from January, 1892, till 1st day of July, 1892.

Appellants allege that appellee, in violation of this contract, has re-entered, after retirement for a time, upon the practice of medicine and surgery in the city of Texarkana and vicinity, and they contend that his contract bound him to-retire permanently. Appellee, on the other hand, while admitting the execution of the contract, and that it required him to retire for a time, yet contends that it did not bind him to retire permanently, but only for a reasonable length of time, and “that it was understood and agreed that he should resume practice in January,.1893, should he desire, and that he (appellee) had fully complied with the terms of his contract by having retired from the practice for a year.

Validity of contract in restraint of trade.

The first question is: Did the contract bind appellee to retire permanently from the practice of medicine and surgery in Texarkana and vicinity? Second. If such was the contract, was it against public policy, unreasonable, and therefore void?

1. We find the following clause in the contract: “In short, I have decided to permanently withdraw and retire from the practice of medicine in Texarkana and vicinity, and it is my intention to introduce and establish the above named Drs. Webster and Reed as my successors to my practice and good will among my clientage.” Appellants both testified that appellee “agreed to permanently retire from the practice in Texarkana and vicinity.” Another witness testified that he had heard appellee say, soon after the contract was made, that he (appellee) “had contracted to permanently retire from the practice.” Appellee testified that it “was understood and agreed that he should only retire from the practice for six or twelve months; that he did not agree to retire permanently from the practice in Texarkana and vicinity.” The clause of the contract quoted supra, in connection with the testimony of appellants and the other witness on their behalf, makes a decided preponderance in favor of their contention.

2. Was the contract void? Contracts in restraint of trade are either general or partial. Where the contract is unlimited as to space, it is general; where it is limited as to space, it is partial, although it may be unlimited as to time. Clark, Cont. p. 447. Contracts in partial restraint of trade, if they are reasonable and founded upon a legal consideration, will be enforced. Clark, Cont. p. 454; Metcalf on Cont. p. 232; Bish. Cont. sec. 516; Mandeville v. Harman, 7 Atl. 37; Whart. Cont. sec. 431; Chitty on Cont. 984; Smith on Cont. 206-7; Mitchel v. Reynolds, 1 P. Wms. 181; Taylor v. Blanchard, 90 Am. Dec. 203; Dunlof v. Gregory, 61 Am. Dec. 746.

The question as to whether such contracts are reasonable or not is one of law, and the true test to be applied by the court in determining this question is “to consider whether the restraint is such only as to afford a fair protection to the interest of the party in favor of whom it is given, and not so large as to interfere with the interest of the public.” Brewer v. Marshall, 19 N. J. Eq. 547; Horner v. Graves, 7 Bing. 735; Mallan v. May, 11 M. & W. 653; Chitty, Cont. p. 985, and note; 2 Keener, Cont. 827; Beard v. Dennis, 63 Am. Dec. 380.

In passing on the reasonableness of a contract in restraint of trade, the court should have due regard for its subject-matter, and the situation of the parties, the limitations as to space, and all the circumstances which will enable the court to determine what is a proper protection for the covenantee in such a contract. Clark, Cont. 452; Badische etc. Fabrik v. Schott, [1892] 3 Ch. Div. 447.

The Supreme Court of New Jersey, in Mandeville v. Harman, in refusing an injunction upon a contract between two physicians, similar to the one under consideration, said that contracts so extensive in duration were of doubtful validity, for the reason that professional skill, experience and reputation were things which could not be bought or sold; were not, in other words, a right, property, or interest called the “good will” of a trade or business, but were so purely personal that, when the person ceased to exist, they also ceased, and that, after the death of the person, such things could have neither an intrinsic nor market value. The court, however, while strongly intimating that such contracts were void, did not so decide; but simply refused the application upon the ground that the “complainant was not in a position to ask for a preliminary injunction when the right on which he founded his claim was as a matter of law unsettled.” This is the only case we have been able to find which expresses even a doubt as to the validity of a contract of the kind under consideration, and it could hardly be considered an authority for such a position; since it put its ruling, not upon the ground that the contract was void, but that it had not been determined in that state that such contracts were good. On the contrary, we find numerous authorities, English and American, which maintain the validity of such contracts, and enforce same by injunction.

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Bluebook (online)
34 S.W. 537, 62 Ark. 101, 1896 Ark. LEXIS 144, Counsel Stack Legal Research, https://law.counselstack.com/opinion/webster-v-williams-ark-1896.