the manufacture of chaplets or anchors, for the term of one year from and after date hereof, with the right in second parties to extend said time one year at a time until the expiration of five years, if the second parties give to first parties thirty days' notice of their intention to extend the time for another year, before the expiration of the current

year.

"In consideration of the above and the agreement hereinafter set forth, the second parties agree to pay to the first party the sum of fifteen hundred dollars per year, payable three hundred dollars in cash, and one hundred dollars each month in advance. As a part consideration of the above, and the payment of the sum aforesaid by the second parties, the first parties agree and do hereby bind themselves not to manufacture or sell, or in any way engage in the manufacture or sale of, said chaplets or anchors during the continuance of this lease, except that they may sell to and manufacture for the A. A. Griffing Iron Co. of Jersey City, N. J., double-headed chaplets for their own

use.

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The balance of this agreement is immaterial.

"This agreement, entered into this 4th day of November, 1897, between the Empire Wire & Nail Company, of Detroit, Michigan, party of the first part, and Clark & Cowles, of Plainville, Conn., parties of the second part, witnesseth: The first party in consideration of one dollar, receipt of which is hereby acknowledged, and other valuable considerations, received to its full satisfaction of the parties of the second part, does hereby lease and let to the said second parties, their heirs, executors, and assigns, all the machinery of every name and nature now controlled by or belonging to the party of the first part, by virtue of a lease from the parties of the second part, of even date herewith, situated in the buildings of the parties of the second part at Plainville, Conn., or elsewhere, used by them or others for the manufacture of chaplets or anchors, for the term of one year from and after date hereof, with the right in the second party to extend said lease for one year at a time until the expiration of five years, for the purpose of manufacturing anything whatever, except chaplets or anchors; it being the intention hereof to permit the parties of the second part, their heirs, executors, or assigns, to use said machinery for any purpose, except the manufacture of said chaplets or anchors."

Defendants paid for one year. It is claimed by the plaintiffs that the agreement was extended for the second year. Defendants claim that it was not. Plaintiffs sued to recover for the cash payment due under the lease, and for the rent for the month of June, 1899. The court directed a verdict for the defendants on the ground that the agreement was void as against public policy.

GRANT, J. (after stating the facts). These two instruments constitute but one instrument, and must be construed together. Briefly stated, the agreement is this: Plaintiffs, in consideration of $1,500, to be paid to them annually, agreed for a period of five years not to manufacture or sell chaplets, except for only one party. Plaintiffs' sales were not limited to the place of manufacture, but extended into other The plain object of the agreement was to substantially close this part of plaintiffs' business, and to give defendants a monopoly of it. The parties evidently recognized the invalidity of such a contract, put in plain and unequivocal language, and sought to evade it by these two so-called leases. The arrangement was a bare subterfuge to evade

the law. Defendants did not buy out plaintiffs' business, machinery, and plant, or lease them for the purpose of continuing their (plaintiffs') business. The result intended and accomplished was to close that part of plaintiffs' business, to throw their employés out of employment, and to deprive the public of any benefit from the continuance of their business. This is not the case of Beal v. Chase, 31 Mich. 490, where Beal purchased the entire plant, business, and good will of Chase for the purpose of continuing the same business. In that case both the employés and the public derived the same benefit as though the business were to be continued by Chase.

The learned counsel for plaintiffs concede the invalidity of those contracts which are entered into for the express purpose of, and result in, closing one's business for the benefit of a rival business, in throwing employés out of employment, and in depriving the public of the benefit of such business. Such contracts tend to destroy competition and create monopolies, and are void. Plaintiffs, however, seek to avoid the result of this contract on the ground that it is not in general restraint of trade, but is limited as to time and subject-matter. They concede that it is unlimited as to territory, and that the contract, if binding, covers the entire United States.

* * *

Any such contract is invalid, whether the restraint be for one year or any number of years, or is unlimited as to time. The agreement to close one part of a business is as much against the policy of the law as a contract to close the entire. The one is as reprehensible as the other. They only differ in degree. Under this contention a party might agree with one person to close one part of his manufactory, and then agree with a second person to close the other part; the two constituting his entire business. In U. S. v. E. C. Knight Co., 156 U. S. 1, 16, 15 Sup. Ct. 249, 39 L. Ed. 325, it is said: "All the authorities agree that, in order to vitiate a contract or combination, it is not essential that its result should be a complete monopoly. It is sufficient if it really tends to that end, and to deprive the public of the advantages which flow from free competition." * * *

This contract is clearly within the inhibition of the laws of the United States (26 Stat. 209, c. 647) and the laws of this state (Comp. Laws, § 11,377). We settled the principle governing contracts of this character in Association v. Starkey, 84 Mich. 76, 47 N. W. 604, and further discussion is unnecessary. Judgment affirmed. The other justices concur.

SECTION 3.-AFTER PURCHASE OF PROPERTY

WITTENBERG et al. v. MOLLYNEAUX.

(Supreme Court of Nebraska, 1900. 60 Neb. 583, 83 N. W. 842.) Action by John T. Mollyneaux against Marcus Wittenberg and others. Judgment for plaintiff, and defendants bring error.

SULLIVAN, J. John T. Mollyneaux brought this action in the district court to recover damages of Marcus Wittenberg and his codefendants for breach of a covenant contained in a deed of conveyance. In June, 1889, the plaintiff was the owner of a hotel in the city of Sutton, and the defendants were at the same time the owners of another

hotel in the same city. The parties agreed to exchange their properties, and the agreement was carried into execution. The conveyance made by Mollyneaux to the defendants provided that the premises therein described should not be used for hotel purposes for a period of two years. The petition alleges that this stipulation has been violated, and that the plaintiff has been damaged thereby. Issues were joined by the filing of an answer and reply. The cause was tried to a jury, and, there having been a verdict and judgment for the plaintiff, the defendants bring the record here for review, alleging error in the admission and exclusion of evidence, and in the giving and refusal of in

structions.

Many of the rulings assigned for error assume that the covenant upon which the action is grounded is valid and enforceable. This position is resolutely assailed by counsel for the defendants. They contend that, there being only two hotels in Sutton, the closing of one would give the owner of the other a monopoly, and that such a result would be prejudicial to the interests of the traveling public, and contrary to the policy of the state. We think the restriction upon the use of defendants' property was not unlawful. Contracts which impose unreasonable restraints upon the exercise of any business, trade, or profession are said to contravene sound public policy; but partial restraints are not deemed to be unreasonable when they are ancillary to an actual purchase of property, made in good faith, and are apparently necessary to afford fair protection to the purchaser. Although such agreements tend to suppress competition, and bring about conditions favorable to the creation of monopolies, they are in harmony with the policy of the state, which is to promote commerce by facilitating the sale and transfer of property. Of course, if it be shown that the main purpose of the agreement is to secure a monopoly, and that the purchase of the property was a mere incident or means to that end, it is within the rule applicable to ordinary combinations in restraint of trade, and will not be enforced. * *

*

The defendants in this case, notwithstanding the contract in question, were at liberty to engage in the hotel business at Sutton. So was any one else who might choose to do so. And the business might be established and carried on anywhere within the corporate limits except upon the premises formerly owned by Mollyneaux. Under these circumstances, it would seem that the public interests were not formidably threatened by the restrictive covenant, which was doubtless designed to secure to the plaintiff the patronage of his old customers. But the suggestion is made that when the case was first here it was intimated that the facts alleged in the answer would, if proven, constitute a good defense to the action. We are aware of the rule that forbids an appellate court to reconsider and correct, on a subsequent appeal of a cause, an erroneous decision made by it on a former`appeal.

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The judgment rendered by this court when the cause was first here is, we conclude, a finality. It is the law of the case, an adjudication binding upon the parties, and settling definitively, for the purposes of the litigation, all questions adjudicated. This rule, however, does not apply to a mere expression of opinion in regard to matters not actually involved in the decision. The only point determined in Mollyneaux v. Wittenberg, 39 Neb. 547, 58 N. W. 205, touching the agreement of the defendants, was that the district court erred in holding it to be unenforceable. The legal effect of the averments of the answer, except

those relating to the waiver, was not considered by the court, and was not decided. Upon this branch of the case our conclusion is that the restrictive covenant was valid when made; that events subsequently arising could not, and did not, render it invalid; and that, therefore, the trial court did not err in excluding evidence offered, and instructions requested, on the hypothesis that such covenant was null in its inception, or else became null by reason of the failure of Mollyneaux to furnish fair and reasonable entertainment to all comers.

We have not overlooked the contention of counsel that the public has a special interest in hotels, that they are affected with a public use, and that it is contrary to public policy to discontinue the operation of a business of this kind. The first answer to this argument is that the evidence does not show that the Oakland Hotel was in operation when the exchange of properties was effected, and consequently there is no proof that the contract made only one hotel to run where two were running before.

The second answer is that the right to run a hotel is not a franchise. An innkeeper is not clothed with any authority from the state, and he owes no duty to the public, except to render to all who come, and are fit to be received, fair accommodations, at fair prices, while he sees fit to remain in business. * * *

It is said that the court erred in permitting Mollyneaux to testify to the fact that the Oakland Hotel, the one which he acquired by the exchange, was incumbered at the time the exchange was made. This evidence was offered for the purpose of showing that there was an adequate consideration for the covenant here in question. Such proof was unnecessary. It was immaterial, but we are not able to see that it was in the least degree prejudicial.

Other assignments of error are grounded upon the theory that the measure of damages is the difference between the loss which would have resulted to the plaintiff from the operation of the Occidental Hotel at one dollar a day and the loss resulting from its operation at two dollars a day. This view is erroneous. If the right of the defendants under the waiver was lost by failing to comply with its conditions, the plaintiff was entitled to be compensated for any loss of patronage occasioned by the operation of the hotel, regardless of the rate charged. The question whether the condition was violated was submitted to the jury under proper instructions, and their decision must, under the evidence in the record, be deemed conclusive.

Exception was taken to the ruling of the court admitting in evidence the deed from Mollyneaux to the defendants. This evidence responded to no issue, but it was obviously incapable of mischief, and consequently furnishes no reason for reversing the judgment.

The plaintiff undertook to prove his damages by showing loss of patronage resulting from the operation of the hotel conveyed by him to the defendants. The evidence offered for that purpose was the best attainable under the circumstances, and was of the same character as that recognized as competent in Wittenberg v. Mollyneaux, 55 Neb. 429, 75 N. W. 835, and Wittenberg v. Mollyneaux, 59 Neb. 203, 80 N. W. 824. Feeling entirely satisfied with the views entertained by the court when these decisions were made, we will not enter upon a reexamination of the question at this time. That a party may recover for gains prevented, as well as for losses sustained, when such damages are not only the certain, but the natural and probable, result of the

wrong complained of, is a point no longer open to dispute in this state. Telegraph Co. v. Wilhelm, 48 Neb. 910, 67 N. W. 870; Wittenberg v. Mollyneaux, 55 Neb. 429, 75 N. W. 835.

* * *

The defendants undertook to show that the plaintiff sustained loss of patronage as a result of the drouth of 1890. I. N. Clark was questioned upon this subject, but the court declined to receive his testimony, on the ground that no sufficient foundation had been laid. The rulings were probably not erroneous, but we do not determine the point, because, there having been no formal offer to prove the facts sought to be elicited, no advantage can be taken of the alleged errors. These remarks are also applicable to many of the specifications of error based upon the exclusion of evidence of the class to which Mr. Clark's testimony belongs.

The testimony of Wittenberg as to the effect of the crop failure of 1890 upon the hotel business in Sutton was stricken out for the reason that he was not shown to be qualified to testify on that point. This ruling affords no just ground for complaint, because it does not appear that he knew to what extent the loss of hotel patronage was due to the crop failure. He testified to a general falling off of hotel patronage in 1890, and showed the percentage of loss by comparing the business of 1890 with that of 1889, and that evidence was permitted to go to the jury.

It is claimed that the court erred in refusing to receive proof of the consideration for the waiver referred to in the answer. No proof was necessary. The execution and validity of the waiver were admitted by the reply. The effort of the plaintiff was to show that it ceased to be effective by events occurring after its execution. There is no prejudicial error in the record, and the judgment is therefore affirmed. Affirmed.

SECTION 4.—AFTER EMPLOYMENT

HERRESHOFF v. BOUTINEAU.

(Supreme Court of Rhode Island, 1890. 17 R. I. 3, 19 A. 712, 8 L. R. A. 469, 33 Am. St. Rep. 850.)

Bill for injunction by Julian L. Herreshoff against A. Boutineau. Defendant demurs to the bill.

STINESS, J. The complainant, director of a school of languages in Providence, employed the respondent to teach French from January 7, 1889, to July 1, 1889. The contract, in writing, provided that the respondent would not, during the year after the end of his service, "teach the French or German language or any part thereof, nor aid to teach them, nor advertise to teach them, nor be in any way connected with any person or persons or institutions that teach them, in the said state of Rhode Island." The respondent's service ended July 1, 1889, after which time he gave lessons in French, in Providence. This suit is brought to restrain him from so doing within the time covered by this contract. The respondent demurs to the bill, contending-First, that the contract is void on the ground of public policy, because it imposed a general restraint throughout the state; and, secondly, because it is unreasonable.