Sec 434

Such an agreement must have a valuable consideration; though the courts, if the consideration be the sale of a business, or instruction in a business, will not undertake to determine whether the consideration be adequate.1 A consideration is requisite, even when the contract is under seal.2 In parol contracts, the burden of proving the consideration is on the party setting; up the contract.3 But the consideration need not be specifically stated in the deed. It may be proved by parol.4

Must be valuable consideration.

1 Oregon N. Co. v. Winsor, 20 Wall. 64; Whitney v. Slayton, 40 Me. 224; Warren v. Jones, 51 Me. 146. Agreements not to exercise a trade in a particular state were held void in Taylor v. Blanchard, 13 Allen, 370; Laurence v. Kidder, 10 Barb. 641; Dunlop v. Gregory, 6 Seld. 241. See Catt v. Tourle, L. R. 4 Ch. 654; Allsopp v. Wheatcroft, L. R. 15 Eq. 59.

2 Rousillon v. Rousillon, supra, sec 430. 3 Mouflat v. Cole, L. R. 8 Ex. 32.

4 Wright v. Ryder, 36 Cal. 342. 5 Perkins v. Lyman, 9 Mass. 522.

6 Pierce v. Fuller, 8 Mass. 223. See Pyle v. Thomas, 4 Bibb, 486. 7 Palmer v. Stebbins, 3 Pick. 188.

8 Price v. Green, 16 M. & W. 346. See Mallan v. May, 11 M. & W. 653; Oregon .N. Co. v. Winsor, 20 Wall. 64; West. Un. Tel. Co. v. Burlington R. R., 11 Fed. Rep. 1; Dean v. Emerson, 102 Mass. 480; Lange v. Werk, 2 Oh. St. 520. As to divisibility, see supra, sec 338.

9 Richardson v. Peacock, 33 N. J. Eq. 597.

Sec 435

A sale of good-will does not of itself imply a contract not to resume the same business in the same place,5 but a party so selling out will be restrained from advertising that he has removed his former place of business to another location, in the same vicinity.6 The vendor of the good-will of a business, while he is entitled to carry on the business under the limitation of the contract of sale, and to solicit the continuance of custom by advertisement in the public papers, is not permitted to apply to such customers privately, or by letter, or through travellers, asking for a continuance of the patronage to him personally, even though he is not precluded from so doing by the articles of sale.7 But it was held in England in 1882 that the purchaser from a trustee in bankruptcy is not entitled to restrain the bankrupt, even though he joined in the assignment, from commencing bona fide a new business, and to seek assistance for the purpose privately, as well as otherwise, from his old customers.1 It has also been held that the vendor of a business cannot be restrained, unless there be special covenant, from dealing with his old customers when they come to him.2 - It was ruled in California, in 1881,3 that where an employee of a firm obtained for himself a lease of a building occupied by his employers, whose term was expiring, he not notifying his employers of his intention to apply for the same, he would be enjoined from interfering with the possession of the employer. "We understand it to be the duty of the employee," so it was said, "to devote his entire acts, so far as his acts may affect the business of his employer, to the interests and service of the employer; that he can engage in no business detrimental to the business of the employer; and that he should in no case be permitted to do for his own benefit that which would have the effect of destroying the business to sustain and carry on which his services have been secured. An agent should not, any more than a trustee, adopt a course that will operate as an inducement to postpone the principal's interest to his own. An agent or subagent, who uses the information he has obtained in the course of his agency as a means of buying for himself, will be compelled to convey to the principal." - An attempt by an ex-agent to secure the business of his late principal will be enjoined as a breach of trust.4 - A sale of a Party may be enjoined for breach of trust.

1 Hitchcock v. Coker, 6 A. & E. 438; Pilkington v. Scott, 15 M. & W. 660; Tallis v. Tallis, 1 E. & B. 397, n; Pierce v. Fuller, 8 Mass. 223; Laurence v. Kidder, 10 Barb. 649; McClurg's App., 58 Penn. St. 51; Palmer v. Graham, 1 Pars. 476; Grasselli v. Lowden, 11 Oh. St. 349; Linn v. Sigsbee, 67 111. 75. See Jenkins v. Temples, 39 Ga. 655. That inadequacy will not in general be inquired into, see infra, sec 517.

2 Hutton v. Parker, 7 Dowl. P. C. 739. 3 Ross v. Sadgbeer, 21 Wend. 166.

4 Homer v. Ashford, 3 Bing. 322; Wh. on Ev. sec 1045, 1055.

5 Labouchere v. Dawson, L. R. 13 Eq. 322.

6 Hall's App., 60 Penn. St. 458; Palmer v. Graham, 1 Pars. 476; Rupp v. Over, 3 Brewst. 133.

7 Labouchere v. Dawson, L. R. 13 Eq. 322. This case, however, while approved by Brett, L. J., in Walker v. Mottram, infra, was dissented from by.

Baggally, L. J., while Cotton and James, L. JJ., abstained in the same case at least from approving it. On the other hand, the rule was sanctioned by Lush and Lindley, L. JJ., in Walker v. Mottram. See observations in London Law Times, Feb. 11, 1882.

In Mogford v. Courtenay, 45 L. T. N. S. 303, it was said by Fry, J.: " The rights of a late partner who has no interest in the good-will of the old business to carry on trade are somewhat refined. They amount, I think, shortly to this, that he may carry on a similar trade or similar business, but he cannot carry on the identical business; he is at liberty to do everything which flows from the right to carry on a similar business; he is prohibited or liable to be restrained from doing anything which conduces to his carrying on the identical business; but what acts come within either of those classes is a question of very considerable nicety. In the case of Churton v. Douglas, 33 L. T. Rep. 0.

S. 57; Johns. 174, the late Lord Hath-erley (Wood, V. C, as he then was) came to the conclusion, which Cotton, L. J., in Leggott v. Barrett, 43 L. T. Rep. (N. S.) 641, considered to be in accordance with the previous decisions, that such a person might, if he thought fit, have carried on business with the customers of the old firm, provided that he did not profess to them that his was the old business, or that he was the successor in business of the old firm; but at the same time it has been determined by Lord Romilly, in the case of right to a specific article will not be stretched to cover any article not within the description.1

Labouchere v. Dawson, 25 L. T. Rep. (N. S.) 894, which has received the assent of the Court of Appeal, that the person who has sold the good-will of a business ' must not ask any customers of the old business to continue to deal with the defendant or not to deal with the purchaser.' "

1 Walker v. Mottram, 45 L. T. N. S. 659; Law T. Jan. 7, 1882.

2 Leggott v. Barrett, L. R. 15 Ch. D. 206.

3 Gower v. Andrew, 13 Rep. 43.

4 Rousillon v. Rousillon, supra, sec 430.