Holmes v. Martin

By the Court. Lumpkin, J. delivering the opinion. We wish it understood in limine, that the isolated question submitted for our review, is, whether the restriction in the deed from Holmes to Arnold, that the lot which the former sold to the latter, in the town of Lawrenceville, should never be used for a tavern, except by the grantor, his heirs and assigns, in the event that they should again become the proprietors of the property, [505] is< void ? The Circuit Judge held that it was. The ground upon which this judgment was rendered, is not stated in the record; we suppose that this clause in the deed was deemed a nullity, because made in restraint of trade, and therefore inconsistent with the policy of the law. [1.] But the distinction was early taken, and is established by an unbroken current of authority, English and American, between such stipulations as are in general restraint of trade, and such as are in restraint of it only as to particular places and persons, or for a limited time. The latter, if founded upon a good and valuable consideration, are valid,' while the former are universally prohibited; as for instance, where one sold another a grocery store for a sum of money stated in the deed, and agreed not to carry on the same business within a certain limited distance, the agreement was enforced, as not against the policy of the law; so an agreement not to run a stage on a specified road was held valid. [2.] The reason assigned for this difference is, that all general restraints tend to promote monopolies and to discourage industry and enterprise and just competition; whereas the same-reason does not apply to special restraints. On the contrary, it may even be beneficial to the public, that a particular place should not be overstocked with persons engaged in the same business. Mitchell vs. Reynolds, 1 P. Wms. 181; where this subject is elaborately considered. 7 Mod. 230, 248, and the cases there cited. 10 Mod. 27, 85, 130. 2 Saund. 156, a note (1.) 2 Str. 739. 2 Ld. Raym. 1456. 3 Bro. P. C. 349. 1 Bro. C. C. 418. 5 T. R. 118. Cro. Jac. 596. 18 Ves. 436. The Jurist, (1844,) Vol. 8, 1051. 14 Ves. 468. 17 Ves. 336. 2 Mad. R. 198. Smith on Contracts, 99. 8 Mass. R. 223. 9 Ibid, 522. 1 Pick. R. 443. 3 Ibid, 188. 6 Ibid, 206. 4 Bibb, 486. 7 Cowen, 307. [3.] It has been suggested in the argument, though not very seriously urged, that the reservation in the deed is inconsistent with the rights of property previously conveyed to the vendee. But a general covenant may be cut down by restrictive words in the same instrument. Nina vs. Marshall, 3 J. B. Mone, 703, [506] 717. Hesse vs. Thomson, 3 Russ, and P. 565. Samuel vs. Ausley, 10 J. B. Mone, 55. Martyn vs. McNamara, 4 Due & W. 411. [4.] It is competent for one to convey the fee to another and reserve the right of mining, of common, of waterway, with the power of entry, for the purpose of making, opening or cleansing water-courses, or the right of entry for making reservoirs, or of planting ladders for the repair of adjoining houses, or the right of sporting. Sugden on Vendors, 353, 366. 2 Swanston, 222. 16 Ves. 390. 1 De G. & S. 609. 1 Jac. & W. 172. The judgment must be reversed and a new trial granted.