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then stipulat for, this £1,000 should be returned to me.
+
As stated in your letter to me, the repayment of so much of my salary in the way of interest, etc., will mean that fully half of same will he absorbed, but whilst this is so, I can only tell you that I am quite prepared to suffer such inconvenience as this may cause me so long as I feel I am doing all in my power to repay my debts, looking to the future to recoup me for the sacrifices I shall require to make. Believe me, yours very truly,
E. J. Moss, Mr. Pollock said there were one or two small matters on which he would like to address the Court. Errors had crept into the particulars supplied by his learned friend and there was also an error in the first paragraph of the plain- tiffs' petition. With regard to the particulars which had been filed on behalf of the defendant it ought to have run "prior to the overtaking of the business by Dodwell, Carlill and Co. With regard to paragraph 1 of the plaintiff's petition after the wording "merchants" it ought to run "shipping agents." He asked that the petition be amended accordingly.
Mr. McNeill said he did not think his Lordship ought to grant this application for the alteration of paragraph 1 of the plaintiffs' petition. First the plaintiffs had asked for a restraint on the defendant carrying on business in Foochow, then they asked for it to include Colombo, and now they went further and asked that he should be forbidden from carrying ou the bus ness of a shipping agent.
THE HONGKONG WEEKLY PRESS AND
alone or in partnership with others under the title of Moss & Co., Ld., that business pur. porting, by an advertisement of the firm of Moss & Co. of the 30th of May, to be of exactly the same nature as that carried on by the plaintiffs and their predecessors Dodwell, Carlill & Co.
Article 4 of the agreement of the 29th of November, 1900, is as follows:-"Each of the veudors hereby agree with the company that he will not at any time hereafter while the com- pany shall carry on business either solely or jointly with or as manager or agent for any other person or persons or company directly or indirectly carry on or be engaged or concerned or interested in any business of a similar character to any of the businesses carried on by the company at Foochow or Colombo or London or any other place where the company has heretofore carried on or shall hereafter carry on businesses or open a brauch or agency and that he will not permit or suffer his name to be used or employed in carrying on or in con- nection with any such busin ss as aforesaid savo so far as he sball as a member of the company be interested or as officer or servant or agent of the company be employed in the business of the company."
Under this article the plaintiffs now seek for an injunction restraining the defendant, so long as the plaintiffs carry on business there, from carrying on at Foochow or Colombo the business from which he contracted t› abstain.
The defendant admits the agreement and his breach of it, but pleads that the agreement is in restraint of tride, opposed to public policy and therefore voil.
The principal difficulty in this case is the constraction of the agreement which may be read in two ways. According to the defendant's contention the words "at F.ochow or Colombo, etc., refer to the business carried on by the compamy thus leaving the area in which defendant is not to carry on business undefined or world-wide, while the plaintiffs contend that the words at Foochow and Colombo, etc.," do not relate to the business but specify the places at which the defendant is debarred from competing with the plaintiffs. There is no evidence to show which of these construce tions wa in the mind of the parties at the tim- the contract was mide, and grammatically
T
Mr. Pollock replied that if bis Lordship would refer to paragraph 1 of the amended petition he would see that it was stated that the plaintiffs were general merchants, shipping agents, insurance, and commission agents, &c. It was stated that the plaintiffs were shipping agen's and that was admitted in the re-amended answer filed on behalf of the defendant. In paragraph 7 of the amended petition it was stated that defendant had permitted his name to be used in the business of Moss and Co., as merchants, insurance agents, and general shipping agents. His learned friend could not now come into this Court and say that he did not know there was any question about shipping. Counsel sub- mitted that it was only reasonable that he should be allowed to make paragraph 1 of the prayer correspond with para-either interpretation is possible. graphs 1 and 7 cf the amended petition. Mr. McNeill seemed to rely on the original petition, but that was expressed in very general and wide terms, and plaintiffs asked that defendant should not engage in the business of similar character to the plaintiffs in Foocbow. Here they were asking much more specifically with regard to the business.
It could not possibly be sug gested seriously that such amendment made at such a time could seriously prejudice the defen, dant. He did not really expect that bis learned friend would have opposed it seriously.
Mr. McNeill-We did not believe up to this point that the plaintiffs wished to restrain with regard to shipping.
Counsel argued the case at great length and judgment was reserved.
JUDGMENT.
Judgment was delivered as follows:-
The facts of this case as admitted or as appearing on the record are as follows:
Prior to the year 1900 the firm of Dodwell, Carlill and Co., of which the defeudant was a member, was carrying on the business al Foochow and Colombo as general merchauts and shipping and insurance and com- mission agents. By an agreement dated the 29th of November, 1990, George Benjamin Dodwell and the defendant, who at that date appear to have acquired all the interest in the firm of Dodwell, Carlill and Co., assigned to the plaintiffs the goodwill of that business at Foochow and Colombo. I he defendant received £1.000 in cash for his share of the goodwill, which in certain events which happened was to be refunded, and became the manager of the new firm at a salary of £1,000 a year with a yearly increase of £50. I am unable to find that the defendant was a shareholder in the new com- pany, but it would seem that he is not, but he has received the sum of £1,000 which is liable to be refunded, and has been manager of the new company in Foochow down to the 8th of May last, when he resigned of his own free will, and has commenced business in Foochow, either
The law a to contracts in restraint of trade
[October 16, 1905.
view of the casus of Mallan and May, Price v. Green, it cleary is divisible. The plaintiffs accordingly say "we don't ask you to decide as to the reasonableness of the whole clause but we rely on the covenant not to carry on in Foochow or Colombo business such as we carry on there, and it is for the defendant to shew that this is unreasonable." What are the facts? The defendant joins in selling the goodwill of a business and becomes the manager of the new company to whom that business is sold. It is a business of wide scope and is carried on at the two important 880 ports of Foochow and Colom. bo, it is a business which must require a large amount of correspondence, and the defendant, who was first vendor and then manager of this business is in a position of great confidence both with his employers and their correspondents. Can the defendant show that a covenant restraining him from entering into competition with his employers at the place where they carry on business is unreasonable ? On the contrary I think his conduct is calculated to seriously injure the plaintiffs in their enjoyment of what he srld to them and in their business with which he has contracted not to compete ; this covenant is reasonable and is therefore enforceable.
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Now we have two constractions, one offered by the defendant, which if it is not absurd, is such as to render the coven int void; another offered by the plaintiffs, which, at all events as regards that part on which I am asked to pro. nouuce, is intelligible and such as tɔ render the covenant enforceable. In default of more I must give it the construction by which res magis veleat quam pereat.
The plaintiffs are, therefore, entitled to an in- junction restraining the defendant in the terms prayed, sive that the word; "a general mer- chaat or of a shipping insurance or commission agent" must be substituted for the words "life marine or fire insurance or merchant shipping - agent or commission agent." The defendant must also pay the costs of this proceeding and of those in connection with the procedings for an interim injunction.
SUPREME COURT.
Tuesday, 10th October.
IN SUMMARY JURISDICTION.
A QUESTION OF PARTNERSHIP.
1
This action, partly heard last week, in which. Wong Chik Yueu alias Wong Ching Shi claimed from Lung Tsun Tang and Leung Hon Ching, partners in the Kung Sun firm of No. 10 Wilmer Street, and lately carrying on business at No 62 Bonham Strand, the sum of $1,001, being priucipal of the sum of $1,177.96 due by the defenda its to plaint ff for balance of money lent by the plaintiff to the Kang Sun firm on 27th January, 1903, again came on for bearing, plaintiff having agreed to waive the sum of $177.06 in order to bring the action within summary jurisdiction.
Mr. R. A. Harding appeared for the plaintiff, and Mr. H. G. Calthrop (instructed by Mr. H. Hursthous) represented the defendants.
Evidence in support of defendants' case was called.
is well settled. A clause in an agreement such BEFORE Mr. A. G. WISE (PUISNE Judge). as that before me will be hell good or bad as it is reasonable or unreasonable; and the test of its reasonableness is whether it is necessary for the protection of the covenantee in respect of the business which is the subject matter of the contract. Tak ng the defendant's reading as correct, I find an agreement that he will not so long as the plaintiffs carry on their business, which may b for ever, directly or in directly carry on or be engaged or concernel or interested in certain businesses. Now whatare these businesses? To begin with the business of general merchants and shipping and insurance and commission agents, as those were the businesses carried on by the plaintiffs at Foochor, Colombo, Loudon or elsewhere; then further the businesses carried en at any other place where the p'aiutiffs may hereafter carry on business. As there is nothing to restrict the business they may engage in the future this last adds to the already e nsider able number of businesses from which the defendant is excluded да underfined and elastic number of trades and might well be said to preveut the defendant from ever doing anything again at any place. This Did you at any time lend money to the would, of course, be an unreasonable restric-defendant firm ?—Yes. tion, but it is so unreasonable that, if the clause will bear another construction, I should besitate to adopt it as being that intended by the parties, Now the plaintiff's' construction is free from this difficulty; they say so long as we carry on busin es you shall not carry on or be interested in a business of the same nature at Foochow, Colombo or London, or elsewhere where we have carried on business, or elsewhere when we may carry on business. It is sufficiently wide, it may or may not be good in law, but it is not ridionlous. The plaintiffs say "if you adopt our reading of the clause we ask you to say that it is a severable contract and that we are entitled to enforce such part of:it as is good." It was scarcely argued by the defendant's counsel that this is not a severable contract; in
The second defendant, Leung Hong Ching, stated he had never been a partner in the firm but had been employed by them as a writer or clerk.
Where did you get this money from?—It was sent to me on trust (from California) to send to the country,
His Lordship-Nobody would entrust him with money. He was not a member of the firm.
Mr. Calthorp-He was a writer. His Lordship-But nobody would entrust him with money like that. He was only a shop coolie.
Mr. Calthorp-He was a junior accountant. His Lordship-Hare the people got their money back?
Witness.-Yes, partly.
His Lordship The money was sent to you to forward to the conntry and you invested it in the firm ?
Witness--Yes.
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