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All ER Reprints/[1908-10] All ER Rep /Bromley v Smith - [1908-10] All ER Rep 384

Bromley v Smith
[1908-10] All ER Rep 384 Also reported [1909] 2 KB 235; 78 LJKB 745; 100 LT 731 KING'S BENCH DIVISION Channell J 12 JANUARY 1909 12 JANUARY 1909 Infant - Contract - Contract of service - Covenants in restraint of trade - Some clauses unenforceable against infant - Severance. The defendant, while an infant, entered into an agreement with the plaintiff to act as an assistant in the plaintiff's retail bakery business, and his duty was to take the bread out and sell it to customers and others on a round. He agreed that he would not within three years after leaving the service and within a distance of ten miles be engaged in the business of miller, baker, and some other employments which the plaintiff did not then carry on. After several years' service and having ceased to be an infant he left the employment and set up a bakery business within the restricted area. Held: in the circumstances the agreement was operative so far as concerned the restriction relating to the retail bakery business, but was inoperative with regard to the other restrictions; on construction of the agreement the operative part was severable from the non-operative parts; when the defendant entered into the agreement it was for his benefit as an infant despite the unenforceable clauses; and, therefore, the plaintiff was entitled to an injunction to restrain him from being engaged in the bakery business. Notes Applied: Gadd v Thompson, ante p 288 Referred to: Attwood v Lamont, [1920] All ER Rep 55; Express Dairy Co, Ltd v Jackson, [1929] All ER Rep 327. As to contracts by infants, see 21 HALSBURY'S LAWS (3rd Edn) 138-148; and for cases see 34 DIGEST 4144. [1908-10] All ER Rep 384 at 385 Case referred to: (1) Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co, [1894] AC 535; 63 LJ Ch 908; 71 LT 489; 10 TLR 636; 11 R 1, HL; 43 Digest 22, 139.

Also referred to in argument: Sir WC Lang & Co, Ltd, v Andrews, [1909] 1 Ch 763; 78 LJ Ch 80; 100 LT 7; 25 TLR 93, CA; 34 Digest 43, 196. Mitchel v Reynolds (1711) 1 P Wms 181; Fortes Rep 296; 10 Mod Rep 130; 24 ER 347; 43 Digest 11, 59. Meakin v Morris (1884) 12 QBD 352; 53 LJMC 72; 48 JP 344; 32 WR 661; DC; 34 Digest 506, 4196. Corn v Matthews, [1893] 1 QB 310; 62 LJMC 61; 68 LT 480; 57 JP 407; 41 WR 262; 9 TLR 183; 37 Sol Jo 190; 4 R 240, CA; 34 Digest 506, 4197. Green v Thompson, [1899] 2 QB 1; 68 LJQB 719; 80 LT 691; 63 JP 486; 48 WR 31, DC; 34 Digest 506, 4198. Chesman v Nainby (1727) 2 Stra 739; 2 Ld Raym 1456; 93 ER 819; affirmed, 1 Bro Parl Cas 234, HL; 43 Digest 28, 206. Mallan v May (1843) 11 M & W 653; 12 LJ Ex 376; 1 LTOS 110, 258; 7 Jur 536; 152 ER 967; 43 Digest 32, 258. Haynes v Doman, [1899] 2 Ch 13; 68 LJ Ch 419; 80 LT 569; 15 TLR 354; 43 Sol Jo 553, CA; 43 Digest 24, 158. Baines v Geary (1887) 35 Ch D 154; 56 LJ Ch 935; 56 LT 567; 51 JP 628; 36 WR 98; 3 TLR 523; 43 Digest 40, 394. Evans v Ware, [1892] 3 Ch 502; 62 LJ Ch 256; 67 LT 285; 36 Sol Jo 731; 3 R 32; 43 Digest 28, 217. Action tried by CHANNELL, J, without a jury. The action was brought in the Clacton-on-Sea County Court, but was removed into the High Court by certiorari. The plaintiff's claim was for damages for breach by the defendant of an agreement made between him and the plaintiff, and for an injunction to restrain the defendant from continuing the breach of the agreement for three years from 9 October 1908, and from being engaged either as principal, servant, or agent, or otherwise, in the business of a baker or manufacturer of flour, meal, bread, or confectionery, wholesale or retail, at Little Clacton or elsewhere within ten miles from Great Clacton. The plaintiff carried on a bakery business at Great Clacton, and, wanting a man to help him in the business, he entered into correspondence with the defendant On 6 November 1895, the plaintiff wrote to the defendant:
"In reply to your letter, I keep two men in bake office. You would be required as second help in the office work and serve the town round. You would be indoors. I want a very energetic young man who can serve a round well and keep customers and look up new ones..."

On 18 November 1895, an agreement was made between the plaintiff and the defendant as follows:
"Agreement made this 18th day of November, 1895, between Henry Bromley, of Great Clacton, in the county of Essex,

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miller, baker, corn merchant, &c. (hereinafter called the master) of the one part, and George Smith, of Great Beddow (who is hereinafter referred to by the term "the servant") of the other part. Whereby the master in consideration of the engagement on the part of the servant hereinafter contained agrees to employ him as a baker and general assistant at his mills and bakeries in Great Clacton aforesaid at the remuneration of 15s per week and a commission of 6d in the pound for all ready money taken upon the following terms:... Clause 5 In consideration of the master taking the servant into the service of the master on the terms aforesaid the servant agrees that he will not at any time within the

[1908-10] All ER Rep 384 at 386

space of three years from the date of leaving the master's service either as principal, servant, agent or otherwise be directly or indirectly engaged in any of the businesses of miller, baker, hay, straw, and corn merchant, &c, or engaged in the manufacture of flour, meal, bread, or confectionery, restaurant keeper or assistant to such, either wholesale or retail within a radius of ten miles from Great Clacton."

By cl 4 either the master or the servant could terminate the agreement by fourteen days' notice in writing. At the time of entering into this agreement the defendant was an infant, being then of the age of nineteen years and three or four months. He had been employed in the bakery trade since he was twelve years of age, but he had no connection with the particular place (Great Clacton) in which the plaintiff was carrying on the business. All the places where he had been at work were in the same county, but not in that particular part. The plaintiff's mode of business was to send out a man with a bread cart; the man sold the bread to regular customers and also for ready money to other persons, and by the agreement he got a commission upon these ready-money sales. The plaintiff himself did not go about and see the customers. After the defendant had been in the plaintiff's service for nearly thirteen years, he left the plaintiff's employment and set up a bakery business in the same place, and several of the plaintiff's customers left the plaintiff and went to the defendant. The plaintiff had had the same agreement with the man whom the defendant succeeded, and he had had similar agreements with the men whom he had employed to take the bread round to customers. He said in his evidence that his men had been previously restricted; that he considered the restriction necessary for his trade, and that be would not leave employed the defendant if he had refused to accept the agreement. JA Hamilton, KC (Edward Morten with him) for the defendant Hohler, KC (CE Jones with him) for the plaintiff.

CHANNELL J: This case is by no means free from difficulty in point of law, and I am not at all sure that the judgment which I am about to give is right, but it is one which it is very desirable in the interests of the parties should be given. The way in which this business is carried on by the plaintiff is that he sends a man round with a cart and with bread, to sell that bread to people whom the servant calls on regularly, and who take their bread from him. The servant also sells it to other people who are willing to take it, because the agreement contains terms as to commission upon the ready-money sales, which were the sales of the bread which he hawked about. The plaintiff himself did not go about and see those customers; he obviously would not. That is a business that is not quite an ordinary baker's business: it certainly is not like the baker's business in a his town. It has no resemblance to it at all. It is much more like the business in which these contracts are very common, almost universal, namely, the business of carrying milk round by a carrier and selling the milk to the people who buy it, to the regular customers who take so much each day according to their requirements, and have the carrier calling on them. The plaintiff's bread business is far more like that than it is like the business of an ordinary baker in a big town who sends out his bread to his own regular customers. It is a business in which it is quite clear that the person who carries round that bread will get a connection with the customers which the master does not himself get. If the master wants to keep that business for himself, he must protect himself in this way. It may be that he may not foresee what may happen, but it seems a business in which this protection is very specially necessary. The defendant came to the plaintiff and he had this agreement proposed to him, and the evidence clearly is

that this particular agreement is the same agreement as had been signed and acted upon by the man whose place he was taking. There was ample consideration for the agreement in the taking the [1908-10] All ER Rep 384 at 387 defendant into employment. I am dealing with the question now entirely as a matter of agreement. It was perfectly proper, so far as it related to the business which the defendant was to be taken in to do, namely, the retail baker's business of selling this bread upon the round. The defendant accepted it, as he said, because he saw that he would be likely to lose the job if he did not agree to it, and so he agreed to it, quite understanding the substantial effect of it. He continued in the service for some twelve or thirteen years, getting acquainted with all the customers, introducing a large number of new customers and getting paid for doing so. If he had not been paid for doing so some other moral considerations at any rate might arise, but he has taken the money for introducing those customers, and has made them the plaintiff's customers. Then he saw an advertisement of a baker's shop to be let in the neighbourhood, and he got into communication with Mr Green, the owner of it, and he frankly enough told Mr Green that there was a difficulty because he had entered into this contract. In the meantime the defendant when he went round to introduce his own successor takes the opportunity not only of telling the people that he is going to set up business on his own account, but of asking them for their custom, with the result that forty of the customers went to him and left the plaintiff. The plaintiff said that 100 of the customers did so, but forty is admitted. On those facts the necessity for protection is obvious. If it had not been obvious before the defendant's own conduct makes it clearly obvious. Judges have made some remarks about contracts of this kind being usual or unusual, and it has been pointed out that if it is not usual in the trade that is very good evidence that it is not necessary, and if the people who know their own business do not consider it necessary, why should the court think it necessary. That is a very cogent argument, but I do not think it applies here. It can only happen where the businesses are the same. In this particular case the business is not the ordinary baker's business. It is much more analogous to the kind of business in which an agreement of this kind is almost universal. But it is said that because bakers generally do not require this, therefore it cannot really be necessary. The court, in talking about a thing being usual or unusual, did not contemplate a case in which it was only unusual, which was not usual because people usually were not shrewd enough to see the necessity for it. That is a totally different matter from a thing being unusual and unreasonable when it is suggested. The fact that it is not suggested, and is not thought of, does not make it unusual in the sense in which the court used the word. I am dealing first with the facts, and I have dealt with them as between the parties upon the evidence which has been given. The only outside evidence was that of other bakers, who said that this agreement was unusual. But the plaintiff's business was not at all analogous to the businesses which these witnesses were speaking about, and they themselves only said that they had never thought of it, and that they did not consider it necessary. Most of them said that from what had happened in this case they did see the value of such an agreement, and did think that it was reasonably necessary. The question arises upon those facts whether this agreement is or is not binding in law. We have to deal with the cases on the question. The law has been laid down in general terms, and it may well be that although upon all the merits this agreement ought to be enforceable, yet it may not be so in law. First of all, the law is clear that a man cannot restrict himself as regards his future labour and his future work in general terms so as to be restrained in regard to that work, unless there is a good reason for his doing so. The principal thing which is recognised as a sufficient reason for his doing so is that such a contract is necessary for the protection of the business in respect of which it is entered into. It is necessary, therefore, in order that this contract should be valid, that it should be reasonably necessary for the protection of the plaintiff's business. I have already intimated that, so far as regards the retail business of selling bread in the special way in which the plaintiff sold it, it was quite clearly necessary. The facts in this case show beyond a [1908-10] All ER Rep 384 at 388 doubt that when the servant breaks the contract and gives up the employment, he forthwith takes away a very large proportion of the plaintiff's customers. That, therefore, clearly shows the necessity of it. But then the restriction must not be made too wide. The contract must be made according to what is necessary for the

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protection of the trade. In this case the contract is wide so far as regards the subject-matter of what the servant is required not to engage in. It is not absolutely necessary that these contracts should be limited so far as regards time, or even as regards space, in certain particular special businesses. I think Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co (1) shows that. But, speaking generally, it is necessary that these contracts should be limited, both as regards space and as regards time. The contract in this case is so limited. The restriction is for three years after leaving the service, and it is for a space of ten miles from Great Clacton. Those limitations are very reasonable and, therefore, no difficulty arises. The difficulty which arises is that the agreement prevents the servant from entering into employments which upon the face of them do not appear as though they would in any way compete with the plaintiff's business, or take away any of his customers in his business. That seems to have arisen in this way. The plaintiff was probably contemplating extending his business, and extending it, among other things, to that of a restaurant keeper, and possibly extending it in the way of making it a wholesale business, so that he put in those words "wholesale or retail." That is probably how those words got into the agreement, because it appears that the same words were in the last agreement which he had made with the servant who came before the defendant, but had not been in the prior agreement, which he had been in the habit of making for some years. If the agreement had been that the servant should serve the plaintiff not only in the business which he was then carrying on, but also in the businesses which he was contemplating adding to that, and, if the employment contemplated by the contract had been an employment not only in the existing business but also in the future businesses, the agreement would have been all right; but inasmuch as he was only employing this man in one portion of the business which he was then carrying on, it is unreasonable that he should have restricted him from entering into businesses in which he would really do no harm to the plaintiff's business, even if be began to carry them on. One does not see how a man who got into connection with people who wanted bread in Clacton-on-Sea could do any harm in respect of a restaurant where people coming down for the day to Clacton-on-Sea or Great Clacton go for their refreshments. Therefore, this agreement so far as it deals with restaurant keeping, and one or two other matters, went beyond that which was necessary, because what was necessary was that the plaintiff's business of selling bread on a round to customers who were seen by his men should be protected. That being so, the question is whether or not the agreement which might have been made, and which was made, to protect that business, is made invalid by the fact that other things are included in it which cannot be enforced. The law seems to be very clear in its principle, and somewhat difficult of application. Where the agreement has provided for something which is legal, and has also provided for something which is illegal, the fact that there is one illegal thing of a severable kind in the agreement does not make the whole agreement illegal; but the difficulty always arises on the construction of the agreement whether or not the thing is severable, and I have come to the conclusion that it is severable, and that it may be separated in the way contended for by the plaintiff. The words of the agreement are "directly or indirectly engaged in any of the businesses," and I think that "any of the businesses" is, on the face of it, alternative, and that probably, if necessary, we might read it "one or another of those businesses." That difficulty does not arise with regard to the restaurant keeping, which does not come into that part of the clause. As to the businesses of miller, baker, and hay, straw, and corn merchant, we ought to leave out the [1908-10] All ER Rep 384 at 389 hay, straw, and corn merchant, because no protection is wanted for that part of the plaintiff's business. That can be done by reason of the word "any"; "any of the businesses" treats them as separate matters. Then, "or engaged in the manufacture of flour, meal," etc. As to that, that is clearly an alternative, and I do not think that protection is really wanted for any one of those things, as the only suggestion of protection that the plaintiff really needs is the dealing with customers on the round. Therefore, the whole of that may be excluded. If this were the case of an adult I should hold that the injunction ought to be granted in the form asked for, that is, as an injunction against the defendant being directly or indirectly engaged for the period of three years in the business of a baker within a radius of ten miles from Great Clacton. That is the injunction I should grant apart from the question of infancy.

I have now to deal with the question of infancy as an entirely separate question. The defendant was about the age of nineteen years and three months when he entered into this agreement. The plaintiff says that he did not know that, but he also says that he did not know it was material, and that his attention was not drawn to it. He certainly does not tell us that the defendant was represented to be over twenty-one years of age, and he did not think it mattered. It certainly does not matter whether he knew it or not, as the validity of infants' contracts does not depend on the knowledge of the other parties to the contracts. They depend upon the fact of the infancy. Does this agreement bind the infant? If it had been limited in the way which I have described, if it had been merely a contract that he would not directly or indirectly be engaged in the business of a baker within this district for this time and if it had been that only, there are abundant authorities absolutely in point to show that the infancy would not have mattered. The only doubt about it that could have arisen would be this point about its not being usual. The defendant was obtaining employment by it, and employment which it is clear that he could not have obtained except upon those terms, and, what is equally important, which he knew he could not obtain except upon those terms. Was it or was it not for his benefit to get employment upon those terms? Looking at the matter as a whole and excluding these extra things, I should certainly say it was. There were what are said to be perfectly proper wages. What he was giving up was the right to go into business in a place in which he had then no connection at all. It was not as if he had been previously in business in that place and was giving it up. He was an absolute stranger to the place. Why was it not for his benefit to get employment and wages, there upon the terms that when he left that business he was not to set up in opposition and take advantage of the service to get customers whom be never could have got but for the service? That is only ordinary honesty, and it is quite impossible to say that it was not for his benefit to serve upon those terms. The only difficulty to my mind about the infancy is the very ingenious argument which counsel for the defendant put forward. He said: Is an agreement which would be reasonable and which would be for the benefit of the infant, binding upon him when, in addition to that which is reasonable and is binding upon him, there is put into it clauses which are inoperative in law, and as to which, possibly, be would not know anything whether they were operative or not, and clauses which possibly might involve him in a law suit? Does that make this agreement as a whole one that is not for his benefit? That seems to depend upon what the court in one of the cases meant by the contract "as a whole." If it meant as a whole piece of paper with everything written on it, then this part is not for his benefit. It is certainly not for the infant's benefit to have clauses put into an agreement about which there is a doubt, and upon which the decision of a court is wanted, even though the point may be a very plain one, as to whether or not those clauses are valid. But does it make the real agreement one that cannot be enforced against him? On the whole I do not think it does. I think that when the court spoke of the agreement [1908-10] All ER Rep 384 at 390 as a whole, it meant the whole operative part of the agreement and not any inoperative parts there might be in it, and that inoperative parts, as they might be disregarded in the case of so adult, might also be disregarded in the case of an infant. I am not sure that that is thoroughly sound, but on the whole I think it is. This agreement in its operation, excluding the part that in my judgment is inoperative, is a mere agreement that the infant shall get employment upon the terms that when he gives up or is dismissed from that employment, he shall not take advantage of what he has learned and done in the course of that employment in the way of getting a connection and setting up a business in that place where he never had any connection before. He can go back to the place from which he came and employ himself as a baker there, and if he still lives in Great Clacton he can do a great many other things, but he cannot take advantage of the connection he has got through the plaintiff to take away the plaintiff's business and practically give it to Mr Green, because that is what he is doing in this case. So far as the merits are concerned, my judgment is that there must be an injunction in the form in which counsel for the plaintiff has asked for it - that is, limited to the bakery business. Judgment for the plaintiff. Solicitors: Kingsford, Dorman & Co, for Elwes, Leaning & Chamberlayne, Clacton-on-Sea; Tarry, Sherlock & King, for Turner, Turner & Martin, Ipswich.

Reported by WW ORR, ESQ, Barrister-at-Law.

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