(108 A.) CASE, J. (after stating the facts as above). The plaintiff is called city treasurer in some parts of the record, and town treasurer in others, as though the terms were alternative and interchangeable. Nothing amounting to a serious misdescription is apparent, but the matter invites comment, lest we otherwise seem to sanction a loose practice quite capable of working serious mischief if persisted in. The plea in abatement was conclusively disposed of on issues of fact, and one of its grounds was that the plaintiff, as treasurer, had not authorized the bringing of this action. This was determined against the de fendants, and no foundation has been laid for questioning the correctness of the ruling. based upon the overruling of the demurrer. Here the substance of the defendants' claim is that no right to sue upon the bond accrued until the plaintiff, or other proper authority, had actually furnished support to the woman because of Litvin's default This is not so. The bond itself, to which we must look for the strict measure of the accountability of They were answerable upon it when their rethe obligors, contains no such qualification. fusal to meet their undertaking was complete. The liability was neither contingent upon an actual prior disbursement of money for the woman's support, nor limited in any sense to the amount of such payments made before the commencement of the action. They are accountable to the full measure of their default, and it was not a prerequisite of the treasurer's right to a recovery of this nished by the authorities charged with that amount that support had already been furduty under section 6418 of the Revised Statutes. In so far as we may assume from the record that these same claims were urged upon the hearing as bearing upon the amount which the plaintiff was entitled to recover, they are disposed of by what has been said of the ruling upon the demurrer. There is no error. The other Judges concurred. (94 Conn. 248) [1] It is urged as error that the plaintiff's official standing as treasurer was not established. It need not have been until questioned, and it does not appear that the challenge came until after the default. It was then too late. The default necessarily recognized and settled the plaintiff's status and his right to sue. For the same reason the attacks upon the validity of the bond are without effect as the record discloses them. 1. CONTRACTS 108(1)—ONLY PRESENT PUB They went essentially to the merits of the action, and were available only as matters of defense. But the default conclusively admitted the cause of action as alleged, and precluded a defense. Lamphear v. Buckingham, 33 Conn. 237, 250. It conceded the plaintiff's right to a judgment, and left open for determination the single question of amount. SAMUEL STORES, Inc., v. ABRAMS. (Supreme Court of Errors of Connecticut. Dec. 22, 1919.) LIC POLICY APPLICABLE ΤΟ RESTRICTIVE The changing conditions of life modify from time to time the reasons for determining whether the public interest requires that a restrictive contract stipulation be deemed void as against public policy, so that only the present public policy is applicable. 2. CONTRACTS 116(1)-BETWEEN EMPLOYER AND EMPLOYÉ IN RESTRAINT OF TRADE. [2] Several assignments of error rest upon Restrictive stipulations in restraint of trade alleged rulings in the admission or rejection of testimony. The finding wholly ignores the subject, and nothing in the record warrants us in assuming that any such rulings were made. [3] Error is also predicated upon the court's denial of a so-called motion for a nonsuit on the hearing in damages. This mere statement would dispose of the claim, even if the silence of the record upon the matter permitted us to assume that a motion so foreign to the procedure involved was injected into it. in agreements between employer and employe 117(1)-PUBLIC POLICY REN DERS VOID CONTRACT UNNECESSARILY RE- The services of a clothing store manager are not peculiar, special, or extraordinary, and business secrets, so that an agreement, redo not involve employé's acquisition of special straining a manager from engaging in clothing business for five years in any place where em[4] The one remaining ground of error is ployer has stores, is unnecessary and void for For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes violation of public policy, which requires that [ employé's liberty in trading or employment be not unduly restricted. Appeal from Court of Common Pleas, Fairfield County; John J. Walsh, Judge. Action by the Samuel Stores, Incorporated, against Aaron H. Abrams. Demurrer to complaint sustained, and plaintiff appeals. No error. Action for an injunction to restrain the defendant from conducting a clothing business in Bridgeport and from soliciting former and present customers of the plaintiff to trade with him, in alleged violation of a contract, brought to the court of common pleas for Fairfield county upon a complaint containing the following allegations: "(1) The plaintiff is a corporation engaged in the sale of clothing for men, women, and children, and conducts a store for said purpose in said city of Bridgeport. "(2) On June 4, 1918, the plaintiff and the defendant entered into a written contract, a copy of which is hereunto attached as Exhibit A, by which contract the plaintiff engaged the services of the defendant as manager for one of its branch stores for a period of one year from September 5, 1918, for the compensation stated in said agreement, which contract is still in force. "(3) By the provisions of said contract the said defendant agreed that he would not engage in any business that would compete with the business of the party of the first part for five years after the date of the termination of his connection with the plaintiff, and that in the event of his so doing, the plaintiff would be entitled to an injunction, restraining him from continuing such business. "(4) The said defendant, under and in pursuance of said contract, entered into the service of the said plaintiff, and continued in such service until November, 1918, when the defendant left the employ of the said plaintiff. "(5) The defendant, in the course of his said employment, acquired information and knowledge of confidential matters relating to the conduct of said business, including a list of the customers of such business. "(6) The defendant, in violation of his said agreement, on December 9, 1918, opened a store in said Bridgeport, and engaged in the business of selling clothing for men, women, and children, and engaged in the same line of business conducted by the plaintiff in said Bridgeport, and engaged in business in competition with the plaintiff, in violation of the said agreement, and has advertised himself as formerly with 'the People's Store,' the same being the tradename under which the plaintiff, has been conducting business in said Bridgeport, and has been and is soliciting the customers of the plaintiff to trade with him, the defendant. "(7) The plaintiff has fully performed all the provisions of said agreement on his part to be performed. "(8) The plaintiff will be irreparably damaged by the continuation of said competitive business by the defendant, and has no adequate "The plaintiff claims: "(1) That the defendant be enjoined from further conducting and continuing such business, and from soliciting the former and present customers of the plaintiff to trade with him. "(2) Such other and further relief as to the court may seem proper." Exhibit A recites that the defendant is engaged as manager for one year in one of its branch stores. Such other parts of Exhibit A as are essential are found in the opinion. To this complaint the defendant filed a demurrer, pleading, among other grounds of demurrer, the following: "An injunction against the defendant as prayed for would be mischievous and against public policy." This demurrer the court of common pleas sustained; the plaintiff appealed. John Keogh and John T. Dwyer, both of South Norwalk, for appellant. Alexander L. De Laney, of Bridgeport, for appellee. CURTIS, J. (after stating the facts as above). By the complaint and the contract, Exhibit A, attached thereto, the following facts are disclosed: The plaintiff is a corporation of the state of New York engaged in conducting branch clothing stores in various cities. It employed the defendant as manager of one of its branch stores for the period of one year from September 5, 1918, under the written contract attached to the complaint. The contract contains the following stipulation on the part of the defendant: "And, whereas, in the course of such employment, Aaron H. Abrams may be assigned to duties that may give him knowledge and information of confidential matters relating to the conduct and details of the business of the Samuel Stores, Incorporated, as to result in the opinion of the Samuel Stores, Incorporated, irremediable injury to it, for which no money damages could adequately compensate, if the said party of the second part should enter the employment of rival concern while this contract was still in effect, the said Aaron H. Abrams agrees not to engage in any other occupation during the life of this contract, and further agrees not to either directly or indirectly. connect himself with any firm engaged in business similar to that of the party of the first part, which would compete with the business of the party of the first part, nor will he himself engage in any business that will compete with the business of the party of the first part, for five years after the date of his connection with the party of the first part being severed. The said Aaron H. Abrams agrees to use his best endeavors and his entire time to promote the business and business interests of the Samuel Stores, Incorporated." The defendant in November, 1918, left the employ of the plaintiff, and on December 9, (108 A.) gaged in the business of selling clothing for (ity to negotiate than is the case in the ne men, women, and children, and engaged in gotiation of agreements between employer the same line of business conducted by the and employé. plaintiff in Bridgeport, and has advertised himself as formerly with the People's Store, the same being the trade-name under which the plaintiff has been conducting business in Bridgeport and the defendant has been and is soliciting the customers of the plaintiff to trade with him. In a restrictive covenant between a vendor of a business and the vendee, "a large scope for freedom of contract and a correspondingly large restraint of trade" is allowable. In a restrictive covenant between employer and employé on the other hand, there is "small scope for the restraint of This case presents the question whether or the right to labor and trade and a correspondnot the restrictive stipulation in the contractingly small freedom of contract." between the parties is void as against public policy. [1] The public policy to be applied is the public policy of the present time. The changing conditions of life modify from time to time the reasons for determining whether the public interest requires that a restrictive stipulation shall be deemed void as against public policy. The following statement of the law found in the leading case of Maxim v. Nordenfeldt [1895] 11 The Reports, 27, is generally recognized as fundamental: "The true view at the present time, I think, is this: The public have an interest in every person's carrying on his trade freely; so has the individual. All interference with individual liberty of action in trading and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. But there are exceptions; restraints of trade and interference with individual liberty of ac tion may be justified by the special circumstances of a particular case. It is a sufficient justification, and, indeed, it is the only justification if the restriction is reasonable, reasonable, that is, in reference to the interests of the parties concerned, and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favor it is imposed, while at the same time it is in no way injurious to the public." Under this principle, that the reasonableness of a restriction in view of all the circumstances and the interests of the public and the parties is the test of its validity, certain basic considerations have developed as guides to covenantors and the courts. Some of these we will now consider. The cases in relation to restraints of trade soon disclosed two leading classes of contracts, contracts between the vendor and vendee of a business and its good will, and, on the other hand, contracts between an employer and an employé. [2] Under the law, restrictive stipulations in agreéments between employer and employé are not viewed with the same indulgence as such stipulations between a vendor and vendee of a business and its good will. [3] In dealing with a restrictive stipulation between an employer and an employé, as in this case, in order that the court may uphold and enforce the restriction, if it is not otherwise contrary to public policy, the court must find that the facts alleged disclose a restriction on the employé "reasonably necessary for the fair protection of the employer's business or rights, and not unreasonably restricting the rights of the employé, due regard being had to the interests of the public and the circumstances and conditions under which the contract is to be performed." Wm. Rogers Mfg. Co. v. Rogers, 58 Conn. 356, 20 Atl. 467, 7 L. R. A. 779, 18 Am. St. Rep. 278; Eureka Laundry Co. v. Long, 35 L. R. A. (N. S.) 119, note; Simms v. Burnette, 16 L. R. A. (N. S.) 389, note; Herbert Morris, Limited, v. Saxelby, [1916] 1 A. C. 688; Mason v. Provident C. & S. Co., [1913] A. C. 724; Nordenfeldt v. Maxim H. G. & A. Co., [1894] A. C. 565; Id., 11 Reports, 27; Konski v. Peet, [1915] 1 Ch. 530; Herreshoff v. Boutineau, 17 R. I. 3, 19 Atl. 712, 8 L. R. A. 469, 33 Am. St. Rep. 850. We are then to determine whether the facts set up in this complaint make it reasonably necessary for the fair protection of the plaintiff's business to hold that the restrictive stipulation in the contract should be enforced. This stipulation provides, in effect, that the defendant, for five years after he leaves the employ of the plaintiff, shall not either directly or indirectly connect himself with any firm engaged in business similar to that of the plaintiff, which would compete with the business of the plaintiff in any city where the plaintiff conducts one of its branch stores. It appears from the complaint that the services of the defendant contracted for by the plaintiff are not peculiar or individual in their character, nor purely intellectual, nor are they special or extraordinary services or acts. The defendant's services and the plaintiff's business are not of a character to involve the acquisition of special business secrets of the plaintiff by the defendant. The agreement relates merely to services in a local retail business, and primarily aims to restrict competition. In the latter case, the restrictions add to the value of what the vendor wishes to sell, and also add to the value of what the vendee purchases. In such cases also the parties are The plaintiff conducts a local retail clothpresumably more nearly on a parity in abil-ing business in which the defendant was em ployed as manager. The situation of manager could have been filled by any person of sufficient business capacity. The clothing business may be entered upon by any one who desires to enter it, and whether the defendant opened a competitive store or another did so was immaterial to the plaintiff, except that the defendant having acquaintance and knowledge of the plaintiff's customers might solicit their trade. The restriction in question provides, in substance, that in any city where the plaintiff carries on its business the defendant shall not directly or indirectly connect himself with any firm engaged in business similar to that of the plaintiff, which would compete with the business of the plaintiff, for five years after his employment with the plaintiff ceases. of trading and employment, and an unjustified restraint on competition. The case at bar illustrates the following comment found in Herreshoff v. Boutineau, 17 R. I. 7, 19 Atl. 713, 8 L. R. A. 469, 33 Am. St. Rep. 850: trade between employer and employé] desiring There is no error. (94 Conn. 118) CAHILL v. ROYAL INS. CO. (Supreme Court of Errors of Connecticut. Dec. 22, 1919.) This restriction, binding for that period and relating to every city in which the plaintiff has established a branch store, is not reasonably necessary for the fair protection of the plaintiff's business. It covers a number of 1. APPEAL AND ERROR 933(1)—ON REVIEW cities in which the defendant, from his employment in one city, could have had no acquaintance with the local customers. A restrictive agreement, providing that the defendant, while connected with a competing business, should not solicit trade from persons who were customers of the plaintiff at the branch store where the defendant was employed during his employment, might reasonably be claimed to be such a restriction as is reasonably necessary for the fair protection of the plaintiff's business. Konski v. Peet, [1915] 1 Ch. 530. Such a restriction obviously would not unduly restrict the rights of the defendant, since it would not otherwise restrict the field of his employment than by prohibiting the solicitation of the clothing trade of a limited number of people in one city. By the sweeping terms of the restrictive stipulation in question, it is true that the solicitation of such customers of the plaintiff is indirectly prevented. But at what cost tc the defendant? He is prohibited from entering or being employed in the clothing business in various cities, the number of which may be large, and the area, in which he may exercise such experience in and aptitude for that business as he may possess is greatly limited. OF DENIAL OF NEW TRIAL, EVIDENCE VIEWED On review of refusal of trial court to set viewed in the light most favorable to plaintiff's aside verdict for plaintiff, the evidence will be contentions of fact. 2. INSURANCE OF 561-WRITTEN NOTICE LOSS BY HAIL WÄIVED BY ADJUSTMENT AND NEGOTIATIONS FOR SETTLEMENT. Insurer, by electing to act on verbal notice of hail loss given to local agent by sending its inspectors and adjusters to ascertain the loss and offering to settle for an amount which insured refused to accept, waived right to written notice, and ratified local agent's unauthorized acceptance of notice. 3. INSURANCE 560(1)—ESTOPPEL TO OBJECT TO UNVERIFIED PROOF OF LOSS BY SILENCE Where company recognized claim as properly before it for investigation and settlement, and remained silent in regard to proof of loss not being verified until it was too late to correct to proof of loss on ground that it is not veridefect, held company is estopped from objecting fied. 4. INSURANCE 553(1)-FALSE STATEMENT IN PROOF OF LOSS NOT DEFEATING RECOVERY. Where there was no express provision in hail policy that false statement in proof of loss would defeat recovery, and no showing that original proof of loss, stating that damaged tobacco was worth not more than 20 cents a held that repetition of original estimate of value pound, was not fair and reasonable when made, in duplicate proof of loss, made after tobacco had been sold at a higher price, was not so manifestly fraudulent as to defeat recovery; the company having rejected duplicate. The reasonable and fair protection of the plaintiff's business does not require such an extended restriction of the defendant's field of employment. Public policy requires that the defendant's liberty of action in trading or employment shall not be unduly restricted. 5. INSURANCE 137(1)-RECOVERY WARRANTTo enforce the sweeping terms of this restriction would be a useless, unnecessary, and undue curtailment of the defendant's liberty ED THOUGH PREMIUM NOT PAID. That the premium had not been paid at the time of the loss is no defense, where there is no (108 A.) provision in the policy that it shall not take effect until the premium is paid, and no intimation that the agents of the defendant are required to receive payment of the premium before delivery of the policy. 6. INSURANCE 550-FAILURE TO STATE IN WEIGHT OF TOBACCO NOT BARRING RECOVERY Where policy did not require insured to state his claim, if any, for loss in weight directly due to hail, though such loss was covered, failure to state such claim in proof of loss conforming to requirements of policy does not bar recovery for such loss. Appeal from Superior Court, Hartford County; William S. Case, Judge. Action by J. J. Cahill against the Royal Insurance Company. Verdict and judgment for plaintiff, and defendant appeals. No error. On June 6, 1917, the defendant executed and delivered to the plaintiff a policy, insuring the plaintiff against all direct and actual damage by hail to 282 acres of tobacco plants while growing on the land owned or leased by him. The conditions annexed to the policy provided that all liability thereunder should cease unless the insured should give written notice to the company, or to Wakefield, Morley & Co., its general agents, of any loss within 48 hours thereof, and within 60 days thereafter render to the company a sworn statement covering a number of specifically enumerated facts together with an estimate, in the case of partial loss, of the alleged depreciation in market value caused by the hail. Plaintiff claimed and offered evidence to prove the following facts: On July 14, 1917, the tobacco was damaged by hail. Within 48 hours thereafter plaintiff notified, by telephone, one Gilligan, a local agent of the defendant company, of the loss, and the agent promised to take care of the matter at once. Within a week the defendant sent two of its adjusters, who looked over the tobacco and viewed the damage, and thereafter sent other inspectors and adjusters, who inspected the tobacco, both in the field and after it was cut and in the shed. Before 60 days after the loss plaintiff rendered, through his attorney, an unsworn detailed statement of all the particulars required by the policy, supplemented by an identical sworn statement, rendered shortly after the 60 days had expired. Defendant claimed and offered evidence to prove that the plaintiff suffered no damage under the policy, and that any liability of the defendant under the policy had ceased and determined on account of the plaintiff's failure to file a sworn statement of loss within 60 days; that there was no waiver of any of the provisions of the policy; that the attempted proof of loss was false and fraudulent; and that the premium had never been paid. Defendant appeals from the refusal of the trial court to set aside the verdict to the plaintiff, and for errors in the charge. William F. Henney, of Hartford, for appellant. Hugh M. Alcorn and Richard H. Deming, both of Hartford, for appellee. BEACH, J. (after stating the facts as above). [1] The verdict determines all the disputed issues of fact for the plaintiff, upon evidence sufficient to warrant such findings, and the appeal from the refusal to set aside the verdict raises the question whether, taking the whole evidence in the light most favorable to the plaintiff's contentions of fact, the conditions of the policy as to notice of loss, proof of loss, and as to fraud, misrepresentations, and concealments of matters relating to the insurance have been complied with or waived. [2] The condition as to notice of loss is that within 48 hours the insured shall give written notice to the company or to Wakefield, Morley & Co. The verbal notice to Gilligan, the local agent, coupled with Gilligan's promise to take care of the matter, did not of itself bind the defendant, for the notice was not in writing, and Gilligan, though the agent of the defendant for certain purposes, was not authorized to receive notice of loss on its behalf. But the evidence warrants the conclusion that the notice to Gilligan was actually received by the defendant, because it appears that the defendant acted upon it by sending its inspectors and adjusters to ascertain the existence and amounts of the alleged loss, and by offering, through one of its representatives whose authority was not denied, to settle for an amount which the plaintiff refused to accept. That being so, the defendant has had all the benefit of a strict performance of the condition, and by electing to act on a verbal notice given to an agent not authorized to accept it, the defendant has waived the right to a written notice, and has also ratified Gilligan's unauthorized acceptance of notice. 4 Cooley, Briefs on Insurance, § 3526 et seq., and cases cited. [3] The conditions of the policy also required that within 60 days after the loss the insured shall render to the company a sworn statement in writing, specifying the acreage of tobacco injured and a number of other enumerated items of information, together with an estimate, in case of partial loss, of the depreciation in market value caused by the hail. The loss occurred on July 14, 1917, For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |