Beam v. . Rutledge

Stacy, C. J. The case, as presently presented, turns on the validity of the defendant’s agreement not to engage in the practice of medicine in the town of Lumberton, or within 100 miles, thereof, for a period of five years following the dissolution of the partnership between himself and the plaintiff. There being no request to find the facts, and no challenge to any fact found, it will be presumed that the court found sufficient facts to support the judgment. Wood v. Woodbury & Pace, ante, 356; McCune v. Mfg. Co., ante, 351. The case then comes to the single question whether the restrictive covenant in the partnership agreement is valid and enforceable under the law of this State. It would seem that an affirmative answer was adumbrated in the cases of Scott v. Gillis, 197 N. C., 223, 148 S. E., 315, and Hauser v. Harding, 126 N. C., 295, 35 S. E., 586. In Teague v. Schaub, 133 N. C., 458, 45 S. E., 762, a restrictive covenant in a contract between physicians was not upheld because of its indefiniteness. Even so, two members of the Court thought otherwise and expressed their views in a strong dissent. Here, there is no doubt as to the meaning of the stipulation. It is clear and unambiguous. Speaking to a similar situation in Butler v. Burleson, 16 Vt., 176, it was said: “This contract is not forbidden by any principle of policy or law. Dr. Burleson can be as useful to the public at any other town as at Berkshire, and the lives and health of persons in other villages are as important as they are there. Community are, therefore, not injured by any stipulation of this kind between two practicing and eminent physicians.” The application of two principles are here involved: freedom to contract and public policy. The plaintiff invokes the one; the defendant the other. The parties evidently thought the plaintiff had a legitimate interest to protect when the agreement was signed. They so stipulated. And he did. The existence of such an interest is the first thing to look for in *673 passing upon the validity of a restrictive covenant. Its presence is essential to make it enforceable in equity. Williams v. Thomson, 143 Minn., 454, 174 N. W., 307. This right of the parties to say upon what terms and conditions they are willing to form a partnership, or to enter into a contract of the character here disclosed, is not to be lightly abridged. Indeed, it is no small part of the liberty of the citizen. Adkins v. Childrens Hospital, 261 U. S., 525. “Freedom to contract must not be unreasonably abridged. Neither must the right to protect by reasonable restrictions that which a man by industry, skill and good judgment has built up, be denied.” Eureka Laundry Co. v. Long, 146 Wis., 205, 131 N. W., 412, 35 L. R. A. (N. S.), 119. Public policy is concerned with both sides of the question. It favors the enforcement of contracts intended to protect legitimate interests and frowns upon unreasonable restrictions. Granger v. Craven, 159 Minn., 296, 199 N. W., 10, 52 A. L. R., 1356. It is as much a matter of public concern to see that valid contracts are observed as it is to frustrate oppressive ones. Both functions belong to the courts. The test to be applied in determining the reasonableness of a restrictive covenant is to consider whether the restraint affords only a fair protection to the interest of -the party in whose favor it is given, and is not so broad as to interfere with the rights of the public. Horner v. Graves, 7 Bing., 735, 131 Eng. Rep., 284; Mandeville v. Harman, 42 N. J. Eq., 185; Rakestraw v. Lanier, 104 Ga., 188, 69 Am. St. Rep., 154; Faust v. Rohr, 166 N. C., 187, 81 S. E., 1096. The question is one of reasonableness — reasonableness in reference to the interests of the parties concerned and reasonableness in reference to the interests of the public. Milwaukee Linen Supply Co. v. Ring, 210 Wis., 467, 246 N. W., 567. Such a covenant is not unlawful if the restriction is no more than necessary to afford fair protection to the covenantee and is not injurious to the interests of the public. Granger v. Craven, supra. The parties themselves, when the instant contract was made, regarded the restriction as reasonable. They were dealing with a situation of which both were familiar. The defendant insisted on having the contract signed and did not object to the restrictive covenant. It is limited both as to time and place. We cannot say that the restraint put upon the defendant by his contract is unreasonable as presently applied. Hauser v. Harding, supra; Note, 59 Am. Dec., 686, at p. 691. It is not to be overlooked that cases arising out of the conventional relation- of master and servant, or employer and employee, are not wholly applicable to a situation like the present. Comfort Spring Corp. v. Burroughs, ante, 658. The attendant circumstances are different. A workman “who has nothing but his labor to sell and is in urgent need of selling that” may readily accede to an unreasonable restriction at the time of his *674 employment without taking proper thought of the morrow, but a professional man who is the product of modern university or college education is supposed to have in his training an asset which should enable him adequately to guard his own interest, especially when dealing with an associate on equal terms. The line of demarcation, therefore, between freedom to contract on the one hand and public policy on the other must be left to the circumstances of the individual case. Just where this line shall be in any given situation is to be determined by the rule of reason. Of necessity, no arbitrary standard can be established in advance for the settlement of all cases. Looking at the matter in retrospect, the defendant may now regard the stipulation as unwise. Undoubtedly he does. Nevertheless, unless it contravene public right or the public welfare, he is bound by it. B. & O. Ry. v. Voight, 176 U. S., 498. Freedom to contract involves risks as well as rights. There was no error in continuing the restraining order to the hearing. Affirmed. Seawell, J., dissents. ClabksoN, J., took no part in the consideration or decision of this case.