source: Caselaw Access Project

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text:
    PATENTED MATERIAL FOR STREET IMPROVEMENT AND COMPETITIVE BIDDING.
    [Circuit Court of Lucas County.]
    William L. Holbrook, a Tax-payer, etc., v. The City of Toledo et al.
    Decided, March 31, 1906.

      Streets—Improvement of, with, Patented Material—Not a Restriction on Competitive Bidding—Purpose of the Law as to Competitive Bidding — Municipal Corporations — Public Policy — Specifications Calling for Monopolised Material—Discretion in Selection of Material.

    Competitive bidding is not necessarily narrowed, but may be broadened, by admission to the competition of material which, is monopolized by reason of patents; and in the exercise of a sound discretion, it is competent for the proper city authorities, in advertising for bids for a street improvement, to call for material which, is covered, or the assembling of which is covered, by patents.
    Wildman, J.; Parker, J., and Haynes, J., concur."
    This is a case calling, perhaps, for the application of some of the principles which have been announced in the case of Yarycm v. City of Toledo (ante), just decided by this court. The case before us, however, involves the additional and interesting question as to whether the city, in calling for bids for a street improvement—in this case a pavement—may advertise for and accept a construction, the materials entering into which or the methods and proportions of assembling which, are covered by letters patent.
    The petition in this case, while in no way alleging or suggesting any corrupt intent on the part of either the city officials or the contractor to whom the contract has been let—the defendant Streicher—contends that the letting of the bid and the making of the contract are an infraction of the spirit of the law which provides for competitive bidding.
    It is urged that to permit a proffer of an improvement the right to make which and dispose of it to the city inheres in some individual or company, deprives all other persons of an opportunity for legitimate competition and deprives the city of the benefit of such competition. The case is before us on appeal and was submitted upon a demurrer to this petition, the demurrer alleging that the petition fails to set forth facts stating a cause of action. After the formal averments of the petition, which I need not read, and in which proceedings are alleged for the improvement of Spielbusch avenue, in this city, and Cherry street market place, it is alleged that the bid of one Henry Streicher was accepted and an agreement entered into therefor; that said agreement is void “and involves a misapplication of the funds of said city and an abuse of its corporate powers” for the reason that the specifications for the construction of said improvement call for Warren’s bitulithic pavement exclusively, and that certain elements entering into said pavement are covered by letters patent issued by the United States government to the Warren Brothers Company, a corporation; “that the machinery and appliances for laying said pavement, and the process of mixing the material used in. said pavement are also covered by letters patent issued by the United States government; that all of these patents are owned exclusively by said Warren Brothers Company, and by reason thereof no person can make use of any of the machinery, appliances, methods or material so covered by-said letters patent save and except upon the consent of said Warren Brothers Company to such use upon such terms as the said AVarren Brothers Company may see fit to exact, by reason whereof there could not be and was not such competitive bidding for the improvement of said avenue and market place as is contemplated by the laws of the state of Ohio; that the city of Toledo had not, before said bids were received or before said agreement was executed, acquired the right to secure, at a reasonable cost, the right Of said patents or any of them, with, respect to said improvement,, for any successful bidder for the work, and the bidders were not placed by said city, in that respect,' on substantially equal terms; that while the said notice to contractors called for bids on various kinds of pavement, the said board of public service expressly reserved the right to reject any and all bids for such kinds of pavement as were open to equal and fair competition and accept the bid of said Henry Streicher for the only kind of pavement which was controlled exclusively by said Warren Brothers Company and permitted no competition.”
    Again it is alleged “that said specifications called for the use of a patented and monopolized material and process, owned and controlled exclusively by Warren Brothers Company, which tended to stifle competition among bidders on said improvement and to prevent the letting of said contract to the lowest and best bidder as required by the laws of this state. ’ ’
    Upon the basis of these and some other alleged facts incidental thereto, the plaintiff prays for an injunction to restrain the defendants and each of them (the defendants named other than said city and said Streicher being members of the board of public service of the city of Toledo) “from taking any steps or performing any act under the terms of the agreement herein-above set forth, and enjoining the said Henry P.' Streicher from commencing or doing any work whatever upon said Spielbusch avenue and Cherry street market space, under said agreement” and further praying “that upon final hearing the said agreement for said improvement may be declared to be null and void and the defendants and;each of them perpetually enjoined from performing or attempting to perform the same; and for such other relief as may be proper and equitable in the premises. ’ ’
    The question primarily involved is almost a novel one in Ohio. It has not been expressly passed upon in any adjudication which has been called to our attention, or which by considerable research we have been able to find. It has been made a matter of dictum in three cases at least in the state, but in no one of these cases does the question seem to have been discussed or is it expressly decided. The case of Hastings V. Columbus, 42 Ohio St., 585, does not decide it. There the city, prior to the advertising for bids, had acquired the right to the use of a patent, and the Supreme Court was not called upon to determine what would have been the effect of an attempt to construct such a pavement after the advertising for bids and the letting of a contract without having previously acquired such right, and the point decided by the court which bears even incidentally upon the question at bar, is made the subject of but brief mexxtion and without any special discussion of the principle. The language on„the subject is found in a paragraph on page 595. I will not read it.
    In a case in the 21st Circxxit Court Reports, Polhamus v. Board of Education, page 257, Judge Laubie furnishes us with a dictum indicating his opinion that a city would not have a right to accept a contract for a patexxted improvement. But in so expressing his individual opinion he uses phraseology almost conveying the impression that had the question been one involved in the case, the decision would have been adverse to the opinion expressed by him, by reason of lack of accord with his views entertained by the other xnembers of the court. This fact is not so clearly indicated by him, however, that it is well to place much emphasis upon it.
    In a case decided by our own court, Ohio, ex rel Bryce, v. Board of Education of the City of Toledo, 7 C. D., 338, we have a somewhat emphatic expression by Judge King of his judgmexxt that our law does not prohibit the advertising for the use of a patented invention for the heating and ventilating of public structures. While, as in these other cases, the question here was not directly involved, I may delay for a moment to invite attention to some of his language, merely because it is the language of a former judge of our own court. The proceeding was one for mandamus, brought by the Bryce Furnace Co. to compel the letting of a contract to that company. The city had accepted a bid made by the Smead Fuxmace & Fouxxdry Co., and was aboxxt to award a contract to that company, but the Bryce Furnace Company claimed that it was the lowest and best bidder and was insisting that the contract should be let to it. On pa^e 341, Judge King says:
    “The apparatus is known in these contracts, and in the exhibits as “the Bryce heating and ventilating apparatxxs. ” And it says (speaking of the petition) that the heating and ventilating system provided for in the contract is the fan blast system, wlxich provides for ‘heating the following rooms with warm air’ (and describes all the rooms in the bxxilding, including the basement). A perusal of. that is sufficient to indicate that this is a system of which this corporation owns the right, although nothing is said about patents. It is a.system which it proposes to put into the building for heating and ventilating those various rooms. And from the description given in the bid of the Smead Company, and from the allegations of the petition, it is plain enough that it is also a system which it devises and of which it is the proprietor.”
    On page 342, the judge says:
    “We have had occasion before to say in matters of this kind, and further reflection only strengthens our opinion upon it, that this suit has not yet been so framed as that the discretion which the law has given to these boards can be controlled, either by writ of mandamus or by an injunction,, when it comes to the question of selecting an apparatus that is in the control of a single individual or a single company or firm.”
    On page 343 he says:
    “But after all, the board is not required to finally adopt a system whose owner has bid a lower sum for putting into a public building than the owner of some other system. It can leave the question of determining finally what system it will adopt for consideration after all the bids are in. The question of price, manifestly, might have some influence with the board of education in determining which one it would accept, if all of them, or two or three of them are substantially equal in merit, but it would not be binding on the board to accept one because it was the lowest bid, although they might consider it. It still has the right which the law has given it, to reserve the-determination of the particular system it will adopt until after the bids are opened, especially where those systems are largely covered by patents; and we fail to see any way in which the law controls that discretion in the board of education. * * * But for these things controlled by patents the market is not free and open. It is controlled by a single owner. We know of no way which the law can regulate that. We do not believe that you can control the discretion of the board of education to adopt the system after the bids are in, nor do we think it would be wise to do it. So long as it is the privilege of the inventor to secure from the United States government the right to his own inventions, and so long as the law protects him in that right, we see no object in saying that because some other person has a different patent, the owner of which bids a lower sum than the owner of this one, the discretion of the board to adopt one or the other should be controlled nor do we think it can be.”

      I hardly know what the judge meant by this last phrase, or some of these last phrases, unless he had it in mind that the exclusive right to make and vend an article with regard to which the United States government’ has issued patents and which right is protected by the United States law, may not be the subject of restriction even by a legislative enactment of a. state. Something along this line is quite earnestly urged in the extensive pamphlet brief which was submitted by one counsel as a part of his argument in the present ease, made by Edwin L. Ilarpham, counsel for the city of Evanston in a case pending at the time of this brief in the Supreme Court of Illinois. I am not much disposed myself to accept, without a good deal of consideration, the position that the state might not restrict the use of a patent right by a municipality in the state- of Ohio; the question before us does not necessarily involve it; the question is, rather, as to whether in the course of the powers conferred upon the municipality by the Legislature, we find any expressed or implied qualification as to the -use of those powers in the selection of material or in the manner of construction of an improvement which a municipality is authorized to make. The power of the „city to pave streets is broadly given by the statute and in it there is set forth no express qualification of that right limiting the exercise of the power, to the adoption of' such means as are not exclusively controlled by individuals or concerns. So that we are driven to examine this question in the light of such adjudications as we can find and such principles as we may be disposed to adopt, to determine whether or not the principle of public policy invalidates the action of a city council in not confining its choice*to articles which are open to general use and not controlled exclusively by patentees or otherwise.
    The sole question isIs the restriction, which is contended for by counsel for the plaintiff to be implied from the law applicable to this casé! As I have already intimated, no bad faith is alleged in the petition, or even hinted at, but it may be proper to inquire whether the purpose of the law which makes provision for competitive bidding for such contracts, is destroyed by the advertising for or the acceptance of such a contract as the one let to the defendant, Streieher, in this proceeding. The object of the law probably is two-fold—I refer to the law making provision for competitive bidding. It is, on the one hand to enable the public to obtain that which by reason of its price and quality is the most desirable for it as an investment, precisely as an individual in buying an article will take into consideration both the price and the quality; and the other object of- the law is to prevent as far as it may, improvidence and corruption on the part of municipal authorities; and it is fair to inquire as to what is the effect of permitting a board of public service in making its choice to take into account articles which are the subject of exclusive use by one or more individuals, as bearing upon ¿these, two objects of the law.
    I shall discuss a little more fully not only the object, but what in my judgment is the result of such restriction as is here contended for. But, before reaching that, it is well to say‘that while in our own state no. rule upon the subject has been expressly established, in either the court of last resort or any of the lower courts, so far as we have been able to find, there have been numerous adjudications, many of them entitled to the highest respect, in the courts of other states. As stated by counsel on behalf of the city in oral argument, the controversy seems to have been started in two early cases, in Michigan and in Wisconsin—the one in Wisconsin being decided a little earlier than the other, and in each of those cases there was a division of opinion on the part of the judges who rendered the decision. So far as time would permit, we have made examination of the numerous cases cited—not quite so critically, perhaps, as we should have been glad to do in all instances—but we have not felt altogether compelled to go through the reasoning of all of the judges in the.decisions of the various states, because of the conceded fact that there is an irreconcilable conflict of authority between and among them. In the brief of counsel in the case of Prindle v. City of Evanston, the case to which I have already referred, I find them summarized in a manner which, so far as my investigation goes, seems to be justified. I have examined a number of cases with a view to ascertaining whether he was correct in his conclusions as to the result of adjudications in the several states. On page 28 of this brief he says:
    “The Wisconsin view, as expressed in Dean v. Charlton, 23 Wis., 590, was that where the statute requires the contract to be let to the lowest responsible bidder, such statute applies to patented articles, and no competition is possible. That view, however, has been materially modified by a later decision (Kilvinglon v. Superior, 83 Wis., 222).
    “The Michigan view is that where the statute requires the contract to be let to the lowest responsible bidder, such statute applies to patented articles and all the competition possible is required.
    “The New York, Pennsylvania, New Jersey, California and Tennessee view is that where the statute .requires the contract to be let tó the lowest responsible bidder, such statute. has no application to the case of patented articles; that such statute was intended to regulate the exercise of and not 'to limit the power to purchase what was desired.
    “The Missouri view is that where the statute requires the contract to be let to the lowest responsible bidder, such statute does not prevent the use of a patented article where it appears from the testimony that no other article is equally as good.
    “The federal court view is that the courts have no right to review the discretion of the municipality in the selection of paving materials, even if such materials are patented. ’1
    A large number of cases might be cited, and I have been tempted to incorporate them into this opinion for such reference as it might be worth while to make of them later; but I will not encumber it with further citations of these numerous decisions, because, after all, in our own state it becomes a question of principle and a matter of reasoning to determine what rule should be adopted in view of our statute. It may be said in passing that in many of these decisions of other states, indeed in the most of them that I have had occasion to examine, the phraseology used in the statutes is not that the contract must be let or may be let to the lowest and best bidder, but it must be let either to the lowest bidder, or, in most cases perhaps, to the lowest responsible bidder. Probably in all cases where the statute provides that it shall be let to the lowest bidder it contemplates responsibility as essential before the letting of the pontraet. It is contended by counsel for the plaintiff that the assertion made that the early Wisconsin view expressed in Lhan v. Charlton, supra, had been modified by a later decision in the case of Kilvington v. Superior, 83 Wis., 222, was a contention which could not be sustained in view of a typewritten transcript of a still later opinion decided by the Supreme Court of Wisconsin and which typewritten opinion has been handed up as a part of the argument of counsel for the plaintiff. This late case to which I have made reference is that of Clarence J. Allen v. The City of Milwaukee et al. It may not be very important to follow to its ultimate length the inquiry as to how the Supreme Court of Wisconsin has finally determined this question, but it is interesting, in view of the fact that the Supreme Court of Michigan has steadfastly adhered 'to the opinion announced by Judge Cooley in the early case to which reference has already been made, Hobart v. Detroit, 17 Mich., 245. On page 227 of the 83 Wis., I find this comment upon the Dean v. Charlton ease, supra, and some other adjudications subsequently had in the state of Wisconsin, touching this question. I read:
    “Upon the authority of Dean v. Charlton, 23 Wis., 590, it is contended that, as the' mode of building the crematory was a patented one, the contract was void, on the ground that there could not be fair competition- in bidding for the work, which by the charter was required to be let to the lowest bidder (Section 921, Revised Statutes). The case of Dean v. Charlton was decided by a divided court, and there was a vigorous and able dissenting opinion by Chief Justice Dixon. The Legislature subsequently validated the assessments so held void in that case, and in Mills v. Carlton, 29 Wis., 400, and Dean v. Borchsenius,30 Wis., 236, the validity of this legislation was sustained. Since that time the direct question involved in that case, which was in respect to assessments against abutting lots for paving the street, has not been before the court; but in Dean v. Charlton the majority of the court, after commenting upon the case of Harlem Gas Co. v. Mayor, 33 N. Y., 309, expressly disclaimed deciding whether the city might not have contracted for laying such pavement at its own expense, under its general municipal powers, which is really the question here presented. In view of the legislation which followed Dean v. Charlton, and the fact that it was decided by a divided court, and the general tenor of subsequent decisions, and the further fact that patented methods and processes now enter so largely into various classes and kinds of public work, we are not disposed to extend tbe rule o£ that case beyond the particular point there decided. In Hobart v. Detroit, 17 Mich., 246, and Mote v. Detroit, 18 Mich., 515, decided at about the same time, a contrary conclusion was reached; and in Nicholson Pavement Co. v. Painter, 35 Cal., 699, and Burgess v. Jefferson, 21 La. Ann., 143, the rule of the majority of the court in Dean v. Charlton was sustained. Since then, in In re Dugro, 50 N. Y., 513, the question has been decided in conformity with Hobart v. Detroit, supra, and other like cases; and in Yarnold v. Lawrence, 15 Kan., 129, 131, Brewer, J., notices the diversity of judicial opinion on the question and is inclined to favor the views of the courts of Michigan and New York (Baird v. Mayor, 96 N. Y., 567).”
    There can be no escape from the conclusion that the judge who used that phraseology is himself doubtful of the correctness of the principle enunciated in the earlier case of Dean v. Charlton, and he expressly says, speaking for the whole court, that they are not disposed to extend the rule in that case beyond the particular point there decided. In the recent case decided by the Wisconsin Supreme Court, which, by the way, pertains to a bitulithic pavement, we are informed that subsequent to the Dean v. Charlton case the Legislature of the state had made special provisions as to how and when patented improvements might or might not bé' used. It became a matter of special legislative enactment, so that possibly it was not important for the Supreme Court in either of the cases,, the one in the 83d Wis., or Allen v. Milwaukee, supra, to decide the precise question which is involved in the case now under consideration. It is enough to say that there has been a weakening in the judicial opinion in Wisconsin as to the impotency of a municipality to avail itself of a patented improvement irrespective of statutory enactments expressly referring thereto. It may be remarked that the Wisconsin rule as it started was based upon a statute which provided that a contract should be let to the lowest responsible bidder, and I shall have occasion to refer a-little later to the power which is given the board of public service in Ohio in the construction of a like improvement, to let it to the lowest and best bidder, as bearing upon the question whether a little more liberality is not given, or a little wider scope, to the exercise of authority by the board of public service in Ohio than was given to the municipal authorities in Wisconsin under the statute to which I have referred. We have in Ohio numerous adjudications drawing distinctions between governmental and what may be called proprietary or business powers of municipal corporations. This matter seems to relate more largely to the exercise of business powers—such powers as an individual might exercise in his own behalf—in the protection of private interests, and at the outset the query naturally arises, if an individual may buy that kind of a thing which suits his taste, which is best adapted to his needs and requirements, irrespective of the question whether it is or is not patented, why can not one hundred thousand, or -two hundred thousand individuals who have joined in a great common project do the same thing? If one may do it, why may not many? To be sure there is no restriction upon the exercise of all sorts of powers by an individual, where restrictions may be called-for to prevent improvidence or corruption on the part of trustees of a municipal society; but after all, if it is a benefit—and it surely is oftentimes—for an individual to obtain an article which is protected by letters patent, even if he has -to pay a higher price for it, so it is surely a benefit to an aggregation of individuals sometimes to do the same thing. In the case o£ Field v. Barter Asphalt Paving Go., 117 Fed. Rep., 925, it is held:
    “Where a contract for the paving of a street with asphalt limited the kind of asphalt to be used to Trinidad asphalt, such fact, and the further fact that such asphalt was controlled by a single corporation, did not affect the validity of the contract. ’ ’
    ' And in the determination of the question, the federal judge announcing the opinion for the court, on page 929 of the report, says:
    “An individual certainly has the right, in the erection of an improvement, to get that which he believes the best, and that which he prefers, regardless of the reason; and he should not defeat a recovery by showing that in fact something else was as good or better, or that the vendor had a monopoly. And why should not the same holding be made as to a city? Can it be so that because the city concludes, although wrongly, that Trinidad is the best asphalt, that its contract must be canceled on a showing that the Trinidad is not the best, and that it is the subject of a monopoly?”
    In other words, it is not for the court to say which is the best. Our Supreme Court has expressly held that as to these discretionary powers which are given, it is for the body to which the discretion is given and not for a judicial tribunal, which passes upon the procedure, to determine which is best. It is not for this court, in other words, to exercise the. discretion as to the choice of a pavement, and unless in the exercise of the powers given to the municipal corporation or the board clothed with the power and acting for the municipality, such body has departed from the law or has exceeded the powers to it given, this court has no right to interfere. Now it may be said when we are considering this question as to whether free, fair and wise competition is interfered with by permitting the introduction of a patented article, that the patented article may be cheaper as well as better. It sometimes happens so. A person may-have discovered a method by which some article may be manufactured by a patentable process far more cheaply than it could have been before such discovery, and to exclude him as a competitor when the question of the adoption of a patented or of a non-patented article in improvements is involved, may be to prevent the purchase by the city of what it requires, -at -the lowest price, and we shall have a case of the city being compelled to take the' unpatented article and pay for it a good deal more than perhaps it would have been necessary to pay for a thing which, although protected by letters patent, might well be sold by the exclusive owner at a lower price, because, perhaps, of a lower cost of production.
    It has seemed to me, in the consideration of this question, that the ruling out of competition which involves both patented and unpatented articles is to prevent competition; that it interferes with competition because the scope is not so broad. Here we have a board of public service, and assuming its honesty of purpose and that it is endeavoring to obtain that which is best under -all the circumstances for the people of this municipality, advertising for the construction of a pavement and offering to bidders the choice of a number of kinds of pavement included among which is this bitulithic pavement. Now if the bitulithic pavement were entirely excluded from the category of those which might be under consideration, or the number with regard to which proposals could have been made to the city, there would be a lessening of competition to that extent; instead of fourteen alternatives there would be thirteen, and if there were other patented materials included in the category it would be still further lessened, and instead of making a broader competition we think it makes a restricted one.
    The issuing of letters patent does not confer the only kind of exclusive use or the only kind of a monopoly that may be acquired or owned by an individual or any group of individuals. There are monopolies that grow out of circumstances inherent in nature; there is a monopoly which pertains to a particular skill or particular expertness in an individual, a native genius enabling him to do a thing better than any other man can do it. There is the monopoly which belongs to a proprietary interest in some particular coal mine, in some particular gravel-pit, or other source from which the products of the earth may be extracted for the benefit of man. Shall it be said that a municipality which desires to obtain a large quantity of coal may not encourage bidders among the owners of all the coal mines, and yet those who are offering their proposals will have no power to furnish to the city some particular kind of coal which comes from some particular mine, owned by some one individual, coal which may be the best of all and possibly the only coal just adapted to the needs of the city for some power plant or other public use. If that is excluded, then the city is not permitted to avail itself of the best which can be had in the market. As has been said in the Yaryan ease by my associate, the competition, under our law, is three-fold: It involves the price, .the responsibility of the bidder, and the quality of the thing offered. And if you exclude from consideration any one of these things, you will, as it seems to me, violate the spirit and purpose of the law.

      In the old section, 799 of the Revised Statutes, we had a provision that where a contract was let as an entirety by a municipality it must be let to the lowest bidder. When it was let in separate parts, having regard to the different trades which might enter into it, it was provided that it should be let to the lowest responsible bidder, and while Judge Doyle was on the Supreme bench he considered this Section 799 in one of the eases, not now before me and to which it is perhaps not worth while to make a special citation—it is enough to say that under the Municipal Code adopted in 1902, in this Yol. 96 O. L., we have a repeal of all prior enactments inconsistent with this new Municipal Code. Among those enactments, in my judgment, is this Section 799 which is,- in spirit, repealed by Section 143 of the Municipal Code. Now the statute provides, not only that the board of public service must accept the lowest and best bid, but it may reject “any or all bids.” It may reject any one or any thirteen, and leave the fourteenth, if in its judgment that is the lowest and the best. Taking the two provisions together the court is not inclined to adopt the view of counsel for the plaintiff, that in the provision that the contract must be let to the lowest and best bidder, reference is had only to the responsibility of the bidder and not as well to the quality of the thing proffered.
    It has been very earnestly urged, and perhaps the argument is made upon the claimed implication in the case in 42 O. S. to which I have referred, that the difficulties in the way of permitting a competitive bidding; including those with reference to a patented article, may be obviated by the city’s first procuring ■the right from the owner of a patent and then submitting to all bidders by advertising, the right to compete as to that use which the city itself has acquired. But, in our judgment, that would ordinarily be impracticable, for reasons which have suggested themselves to us even before we found the matter somewhat discussed in one or two cases cited, incidentally perhaps, but still discussed. An owner of a patent is ordinarily, as common experience and observation teaches us, the one best qualified, by reason of familiarity with the construction, the exclusive control of a plant for its production, the acquired skill for the manufacture and furnishing of the improvement, to give it to the city or other buyer upon the best terms and to carry out his proposal with the greatest efficiency, to the most complete satisfaction of the buyer. In other words, in the great majority of cases, and perhaps almost universally, the person who can make the best bid for a patented article is the owner or controller of the patent. But waiving this argument, it may fairly be urged that if the city could buy the right to' make use of the patented article, presumably bidders could do the same; and, as suggested in some of these cases from other states, all that the bidder has to do to make his contract binding upon him is to agree with the city that he will furnish the article. Although patented and controlled by some other person or corporation, the city may hold him to it. There is no immorality in that; there is nothing contrary to law in it, if he has contracted with the city that he will procure the right and that he will then construct the patented pavement according to the terms of his contract.
    In the absence of any provision in the Ohio statutes that a city may 'not let just such a contract as has been let here, in the absence of any provision in this statute, such as we find in the statute with reference to the city of Cincinnati, which was cited to us, containing the express terms upon which a patented improvement may be used, we are of one mind that we ought not to read into this law the restrictions and qualifications for which counsel for plaintiff contend. Wherever the exclusive right to a thing is owned or controlled, it has seemed to us that the people of a city ought not to be deprived of an opportunity to avail themselves of a useful and valuable thing simply because it is so controlled. This kind of monopoly which we guard by the issuing of letters patent is a monopoly which has been encouraged, because it stimulates inventive genius and in the end results in great good to humanity. Not much encouragement would be given to the inventor of a patented pavement if his market were restricted to individuals, if municipalities weré shut out of the number of the purchasers of that which he has invented. Individuals do not ordinarily buy pavements. And the question then comes, whether it is public policy to discourage invention along this line which in the end may inure to the highest benefit of the cities. We have passed through very many stages of bad roads: from the old clay roads, the corduroy and the plank roads, through the divers forms of pavement. Now we have the bitulithic pavement, which has been selected by this board of public service, and it has seemed to this court and to each member of it, that it is wise that the people who have organized themselves into municipalities should be free to avail themselves of every beneficent invention keeping pace with the world’s progress.
    Under all the circumstances which have been disclosed to us and so ably presented in the arguments on behalf of the plaintiff and defendants, we have no misgivings in holding that the petition herein fails to state a cause of action, and accordingly the demurrer will be sustained.

      Doyle, Lewis & Schaufelberger, for the plaintiff.

      ü. G. Denman, for the city of Toledo.

      Kinney & Newton, for H. P. Streicher.


text:
    DAMAGES ON ACCOUNT OF A STREET IMPROVEMENT.
    [Circuit Court of Hamilton County.]
    Robert Carlisle et al v. The City of Cincinnati.
    Decided, March 10, 1906.

      Street—Assessment for Improvement of—Damages to Property Owners Included—Cost of Grading and Lowering Street—Assessment for Surface Improvement—Effect of Signing Petition for Improvement at a Different Grade.

    1. An assessment for a street improvement may be enjoined in so far as it includes damages awarded to the property owners, or the costs of the -suit to assess compensation therefor, or the cost of grading or lowering the street to the new grade.
    2. In an action to assess damages on account of a proposed street improvement, it is 'competent for the jury] while disregarding the general benefits which may result to the property, to consider an incidental benefit wbicfi is blended with an incidental injury, for the purpose of arriving at the extent of the inj'ury sustained by the property.
    3. The signing by a property owner of a petition for the improvement of a street to a certain grade, does not estop him from contesting the legality of the assessment, where the original petition was referred back to the property owners with the direction to file a new petition for an improvement at a different grade, and the second petition was not signed by the contesting owner.
    Gieeen, J. ■; Jelke, P. J., and Swing, J., concur.
    The questions involved in this ease are stated in the brief of' counsel for plaintiffs, as follows:
    1. Is the assessment legal insofar as it includes the damages awarded to property owners and the costs in the suit to assess compensation to the plaintiffs and others for injuries caused by the improvement.

      2. Is the assessment legal insofar as it includes the cost of grading or lowering the street to the new grade ?
    3. What is the effect of the verdict and judgment in the proceeding to assess compensation to plaintiffs, upon the right of the city to make any assessment against plaintiffs’ property for the surface improvement?
    4. What is the effect of the signing by plaintiffs of the first petition for improvement of the street?
    The first question is answered in the negative by the case of The Cincinnati, Lebanon & Northern Railway Company v. The City of Cincinnati et al, 62 O. S., 465.
    The second question is answered in the negative, also, by the' case of Thale v. The City of Cincinnati, Court Index, February 4th, 1902.
    As to the third proposition, the right of an owner of a lot, bounding or abutting upon a proposed improvement, to recover damages by reason of such improvement, is guaranteed by Section 19, Article I, of the Constitution, which provides that “such compensation shall' be assessed by a jury without deduction for benefits to any property of the owner.” In an action brought by a municipal corporation to assess damages which an abutting lot owner claims he will sustain by reason of a proposed street improvement, the jury may not take into account in estimating the amount of compensation to be paid to the owner, the general benefits resulting from the surface improvement of the street, yet where an incidental benefit to the lot is blended or connected with an incidental injury to such lot, the benefit may be considered in fixing the compensation to be paid the owner, not by way of deduction from the compensation, but of showing the extent of the injury done the value of the lot. Cleveland & Pittsburg B. B. Co. v. Ball, 5th O. S., 568.
    Fourth. Where the abutting lot owners petition for the improvement of a street at an established grade, and the petition is by the municipal authorities referred back to the property owners, with directions to file a new petition, which is accordingly done, asking for the improvement at a different grade, a lot owner not signing the latter petition according to the terms of which the improvement was made, is not estopped to contest the validity of the assessment, although he signed the original petition. PLayes et al v. The City of Cincinnati et al, 62 0. S., 116.
    It follows that the collection of the assessment so far as it includes damages assessed in favor of the plaintiffs and also the cost of excavation to the new grade, should be enjoined, and the balance sustained.

      Herma/n Merrell, for plaintiff.

      Geo. H. Kattenhorn, contra.


text:
    COVENANTS RESTRICTING CONDUCT OF LESSEE.
    [Circuit Court of Lucas County.]
    The Huebner-Toledo Breweries v. Joseph Singlar and Annie Singlar.
    Decided, March 17, 1906.

      Lease—Covenants Contrary to Public Policy—Restrictive Clauses Qualifying Use of Premises Leased—Or of the Conduct of the Lessee— Or of His Use of Other Premises—Distinguished from Transfer of Good Will—Is Beer a “Commodity”f—The Anti-Trust Act.

    1. Contracts "in restraint of trade, not connected with, nor for the protection of a good will sold or leased, and which are not mere reservations or qualifications as to the use of sold or leased premises, are contrary to public policy and void.
    2. The covenant of a lease binding the lessee not to sell beer of any other manufacture than that of the lessor within a radius of one mile from those leased, is void as in unlawful restraint of trade.
    Wildman, J.; Parker, J., and Haynes, J., concur.
    This case has been submitted to the court upon a motion to dissolve a temporary injunction heretofore granted. The grounds of the motion are: (1) That the petition filed herein does not. state facts sufficient to entitle the plaintiff to the equitable interference of this court by injunction; (2) that the plaintiff has an adequate remedy at law, and the injury complained of, if any should be sustained, is measurable and not irremediable in character.
    This second alleged ground is manifestly involved in the first, because if the claim so stated is correct, it in itself would make the petition defective, so far as the jurisdiction of this court is concerned, as not stating facts sufficient to entitle the plaintiff to equitable relief. No other grounds are stated in the motion, and the question so presented requires an examination of the petition to determine its sufficiency or insufficiency. It is substantially as follows:

      The brewing company named sues Joseph Singlar and Annie Singlar, alleging that the plaintiff is a corporation organized and existing under and by virtue of the laws of Ohio, engaged in the business of manufacturing and selling beer and having its principal place of business in the city of Toledo, Lucas county, Ohio. It alleges that at the date named Joseph Singlar was a tenant of another party of premises situated in said city, and was engaged at that time in operating a saloon thereon. That on said day the defendant, Joseph Singlar, informed the plaintiff that he had received notice to vacate said premises, and that, for the purpose of retaining possession of the same, an arrangement and agreement in writing was entered into between the plaintiff and the defendant, Joseph Singlar, as follows:
    “September 9th, 1905.
    “This agreement made this 9th day of September, 1905, between Joseph Singlar and the TIuebner-Toledo Breweries Company, witnesseth—
    “That the said Joseph Singlar immediately upon the purchase by the said the TIuebner-Toledo Breweries Company of the premises owned by Michael Szopko and now occupied by the said Joseph Singlar as a saloon, said property being located on Genesee street, between Ann street and Whittemore street, in the city of Toledo, Lucas county, Ohio, and known as No. 624 Genesee street, the said Joseph Singlar will lease said premises for the period of five (5) years at the rate of ten dollars per month and that during the said period of five years said premises will be used for the sale of no other beer, including bottled beer, than of the manufacture of said the TIuebnerToledo Breweries Company, its successors and assigns, and that he will not during said period of five years engage in the sale of any beer, including bottled beer, except of the manufacture of said Huebner-Toledo Breweries Company, its successors and assigns, within one-half mile of said premises, and that he will not assign said lease or sub-let said premises, and the said the Huebner-Toledo Breweries Company agrees to purchase said premises if the same can be secured for not more than $2,500, and that the title to said premises is clear and that there are no restrictions upon the use of said premises, and will make said lease to said Joseph Singlar immediately upon purchase of said premises.”

      The petition alleges substantially that upon the execution of this written agreement the plaintiff purchased the -property mentioned for the sum of $2,700, and immediately thereafter offered to execute to Joseph Singlar a lease for the same for the period of five years at $10 per month, but the defendant refused to execute or accept the lease unless his wife, the other defendant named in the petition, Annie Singlar, would be made a party to the same, and thereupon and in consideration of the plaintiff agreeing to execute said lease to both said defendants the following covenant and agreement was inserted in the said lease and agreed and consented to by both of the said defendants, to-wit:
    “And the said parties of the second part (Joseph Singlar and Annie Singlar) in consideration thereof, do hereby covenant and agree to pay the paid party of the first part (the ITuebner-Toledo Breweries Company) its successors or assigns, as rent for said premises the sum of ten dollars per month payable on the first day of each and every month, and hereby covenant that during said period of five years they will not engage in the sale on said premises or within one mile thereof of. any beer, including bottled beer, except of the manufacture of said Huebner-Toledo Breweries Company, its successors and assigns.”
    The petition alleges that the said defendants, Joseph and Annie Singlar, are owners of the premises known as lot No. 70 named premises are situated within one hundred feet of those described in the lease, and that the defendants,, contrary premises described in the lease, and that the defendants, contrary to the covenant, or perhaps both covenants mentioned, are now engaged in selling on said lot No. 70 beer other than that manufactured by the said plaintiff, to the irreparable damage of the plaintiff. The petition says that neither of the said defendants is the owner of any property not exempt from execution, and that the plaintiff has no adequate remedy at law to protect its rights.
    The prayer of the petition is for an injunction to restrain the defendants from engaging in the sale, for five years from September 9, 1905, on said lot No. 70 in Robison’s Riverside Addition to the city of Toledo, Lucas county, Ohio, as principal, agent or employe, of any beer except that manufactured by the TIuebner-Toledo Breweries Company, its successors and assigns, and for such further relief as may be equitable.
    It may be premised in the consideration of the issue presented that the covenant-in the-lease which was finally executed by all parties to this case supplanted the covenant incorporated in the original contract between the plaintiff and Joseph Singlar. His wife was brought into the second arrangement, and the territory over which the restrictive clause was intended to operate was enlarged; instead of being confined to a space of one-half mile from the leased premises it was extended to a space included in a circumference of one mile therefrom.
    The substantial question, and almost the only question involved, is as to whether such a covenant as we have before us is valid and enforceable in equity, or whether it is contrary to public policy and void. In the able arguments made orally and upon brief to this court many adjudications have been cited bearing more or less closely upon the question stated. It is unnecessary- and would not be profitable to recapitulate or review all of these decisions, or indeed, very many of them. It has seemed to myself that some confusion has arisen, not only in the argument, but in the language of some of the judges rendering the decisions to which we are cited, growing out of the fact that no close distinction is taken between a reservation of the use of property leased or conveyed and a restriction upon some action of the vendor which is intended to protect the vendee in the possession of property and any good will which may attach to it.
    In the one class of cases, we have such clauses as that- found in the case of Sleins v. Dorman, 25 O. S., 580. This was a qualification of the use of the premises transferred, and a similar qualification perhaps is that found in one of the principal cases cited by counsel for the plaintiff, Ferris v. American Brewing Go., 155 Ind., 539.
    The covenant in the other class of cases is almost, if not quite, invariably associated with a sale or transfer of good will attaching either to premises or to a person. It may involve a trade which has grown up and has become a sort of an appurtenance to some premises used for mercantile purposes or otherwise, or it may have reference to the personal skill of a vendor; but in either case it involves the protection to a vendee of the full benefit of his purchase.
    In such case the clause is not, in one sense, restrictive. It indeed restricts the right of the vendor to do- certain things, but there is no restriction upon the vendee. But in the other ease to which I have referred—in the first class mentioned-the restriction is not upon the vendor at all, but it is upon the vendee. It is a qualified use of the premises leased or sold. It is just as clearly so as in a dedication of land to a city for the purposes of a street or any public structure, or in a lease of property to be used as a hotel or saloon, or any other structure or business.
    In the one case, it is a reservation from the conveyance itself. In the other case, it is a restriction upon conduct of the vendor or lessor, designed to prevent him from interfering with the full use of that which he has granted or leased to his vendee or lessee. In the adjudications which have been cited to us, and others which we have examined, we have found it not very hard to make this classification. And no case has been cited wherein a contract, which is purely restrictive upon a vendee or lessee and where there has been no possible conveyance to him of a good will attaching either to a person or premises, has been upheld. In other words, in all these eases where an attempt has been made to restrict the conduct of a vendee or lessee, or to restrict the conduct of any one else (although upon an ample consideration perhaps), so as to prevent full liberty of action by him in carrying out his vocation, whatever it may be—I say that in no ease of this character have we been able to find adjudications upholding such covenants.
    Now, in the case at bar, it is not claimed in the petition that the qualified use of the leased premises has in any way been violated by the vendee. There would seem to be no question that the plaintiff, being the owner of the premises leased, had a right to insert in the lease any qualification as to use that seemed advisable and to the interest of the lessor. But the question here is not that. The question is as to the power of the lessor, in consideration of the purchase of the property and the leasing of it to the lessees, to bind the lessees by contract not to engage elsewhere in the business of vending beer other than that manufactured by the plaintiff.
    Some suggestion was made during the argument before us that the so-called Valentine Anti-trust Law of Ohio might have application here, and the response was made by one of the counsel that this act has been declared unconstitutional by one of the circuit courts of the state. This seems to have been correct. But it also appears that by a very recent adjudication of the Supreme Court the act has been upheld, and in the upholding .of the statute the judge rendering the opinion for the court has announced some principles which may be a guide to us in the consideration of this case. We refer to the case of The State of Ohio v. Gage, 72 O. S., 210.
    Before reading from this opinion, or from the statute which it upholds and to a certain extent construes, I will make some reference to a question incidental to the one under inquiry, which has received consideration from the courts of some states. Ib is this: Whether any public policy of the state is infringed upon, or violated, by a restriction upon the sale of a commodity of the kind mentioned in this petition and in,,this contract. It is not exactly an article of food, nor an article of use, in the ordinary sense, otherwise perhaps than, as a beverage, and yet, under the broad language of the statute of Ohio to which I have referred, it may well be said that to except beer from the definition of the term “commodity” would be judicial legislation. In the case of Anheuser-Busch Brewing Association _v. Houck, el al, decided by the Court of Civil Appeals of Texas in 1894, and reported in the 27th S. W., 692, it was held:
    “1. A contract by a brewing association with dealers in a city to furnish them beer in bulk, and not to furnish it in bulk ‘to any other party’ in such city for one year, is not void as against public policy and in restraint of trade, so as to prevent a recovery for beer sold thereunder.

      “2. A combination of persons and firms in a city for the control of the sale of beer and the cessation of competition inter se is not void at common law as against public policy, although in restraint of trade, since beer is not an article of prime necessity, and its sale is closely restricted by public policy.
    “3. The act of 1889 relating to conspiracies against trade, forbids combinations of persons or corporations to prevent competition in the purchase, sale, or transportation of merchandise, and all agreements not to sell below a certain or graduated price, or to establish ‘the price of any article or commodity between themselves and others to preclude free competition among themselves or others in its sale or transportation.’ Held: That a contract between liquor dealers in a city for the control of the beer traffic there and in all markets tributary thereto, each turning ‘all the beer he or they may handle or control into this co-partnership,’ violates the above statute, and is void, although the persons so combining are the only dealers in the city, and the price was not increased to consumers.”
    I need not read from the case because this question was not especially, if at all, argued before us by counsel, but in our consideration of the matter -the question has occurred to us and perhaps should be met in passing.
    The Ohio statute passed upon in the case of The State v. Gage, supra, is in the the 93d Ohio Laws, 143. Eliminating such portions of the act as have no special reference to the present case, it appears from its title that, among its other objects, is the promotion of “free competition in commerce and all classes of business in the state. ’ ’ Section 1 provides:
    “That a trust is a combination of capital, skill or acts by two or more persons, firms, partnerships, corporations or associations of persons, or of any two or more of them for either, any or all of the following purposes:
    “1. To create or carry out restrictions in trade or commerce.
    “2. To limit or reduce the production, or increase, or reduce the price of merchandise or any commodity.”
    Stopping for a moment, it may be said that it was argued during the presentation of this motion to us that the effect of this covenant and its execution would not be the reduction of production or increase of the price of beer in the circumscribed territory. But it is to be noted that this statute has application to other matters than the mere limitation or reduction of production or increase of the price of merchandise or any commodity. That is only the second clause of this statute. The first, as I have read, is the creation or carrying out of restrictions in trade or commerce, and nothing is said in that clause as to the effect of such transactions. The section continues :
    “3. To prevent competition in manufacturing, making, transportation, sale or purchase of merchandise, produce, or any commodity.
    “4. To fix at any standard or figure, whereby its price to the public or consumer shall be in any manner controlled or established, any article or commodity of merchandise, produce or commerce intended for sale, barter, use or consumption in this state.
    “5. To make or enter into or execute or carry out any contracts, obligations or agreements of any kind or description, by which they shall bind or have bound themselves not to sell, dispose of or transport any article or any commodity or any article of trade, use, merchandise, commerce or consumption below a common standard figure or fixed value, or by which they shall agree in any' manner to keep the price of such article, commodity or transportation at a fixed or graduated figure, or by which they shall in any manner establish or settle the price of any article, commodity or transportation between them or themselves and others, so as to directly or indirectly preclude a free and unrestricted competition among themselves, or any purchasers or consumers in the sale or transportation of any such article or commodity, or by which they shall agree to pool, combine or directly or indirectly unite any interests that they may have connected with the sale or transportation of any such article or commodity, that -its price might in any manner be affected. Every such trust as is defined herein is declared to be unlawful, against public policy and void.”
    Section 8 provides—
    ' “That any contract or agreement in violation of the provisions of this act, shall be absolutely void and not enforceable either in law or equity.”
    Section 9 provides—
    “That the provisions hereof shall be held cumulative of each other and of all other laws 'in any way affecting them now in force in this state.”

      Along the same line, and following the principle of the decision in the Texas case to which I have referred, we have the case of Alice G. Carr v. The J. Walker Brewing Company et al, decided in the Superior Court of Cincinnati, General Term, February, 1906, and reported in Yol. 3, Ohio Law Reporter, page 618, Judges Ferris, Iioffheimer and Caldwell uniting in the opinion. The syllabus reads:
    “The laws of Ohio with reference to the liquor traffic have always been more liberally construed than in some of her sister states, and the Ohio law rendering void all contracts in restraint of trade is applicable to contracts having reference to the sale of liquor.”
    I am not quite sure that this court would go so far as to say that the laws of Ohio are more liberal than the laws of other states in this respect, and indeed, this superior court says only that they have always been more liberally construed than in some of her sister states, especially, one of my associates suggests, in Indiana. The contract involved in the case cited was one wherein under a transfer, or in connection with a transfer of the good will of certain premises, the vendors, Alice G. Carr and Thomas Gilmore, stipulated as follows:
    “* * * we w]]q n0£ agajn enter into the.grocery or saloon business within three blocks or squares, east, west, north or south, of said premises, within eighteen months from data hereof. ’ ’
    It will be noted that this case falls within the class of contracts which I have heretofore mentioned as coupled with th.e transfer of the good will, and designed to afford to the vendee the fullest protection in the enjoyment of the property and all the good will which has grown up in connection therewith. The court in this case held that the contract was so in restraint of trade as to be void, seemingly relying upon several adjudications of Ohio which have been cited in the case before us, including Lange v. Werk, 3 O. S., 519; Field-Cordage Company v. Cordage Company, 6 C. C., 15; Stale v. Gage, 72 O. S., 210.
    Resuming consideration of the Gage, ease, Judge Shauck, on page 229, says:

      “The purposes named in these sub-divisions do not relate to any contract with respect to the use of one’s property or his faculties. They are purposes which made contracts void at common law as being opposed to public policy, which, according to legal views which still prevail, requires that the conditions of competition be maintained. They are also within the combinations which were prohibited by many ancient statutes.”
    Some force is attached to the use of such language as this by counsel for the plaintiff, who earnestly urge that the Ohio anti-trust statute is after all but a placing of penalties upon transactions which before were so unlawful as to be non-enforeeable as contracts. But upon pages 230-231 the judge gives expression to some ideas as to what classes of contracts would be deemed contrary to public policy under the Ohio adjudications, even prior to the enactment of this statute.
    On page 230:
    “Brief attention to the development of the law upon the subject will show that argument” (along a certain line which he mentions) “would be unavailing rather than unnecessary. So long recognized and so frequently applied in the same jurisdictions that their congruity must be admitted are the docti’ines that every contract in restraint of trade is void if nothing else appears; but, nevertheless, that property used in the competition of trade may be sold, including the good will of the vendor’s business, and that to effectuate the sale of the good will, the vendor may make a valid stipulation to abstrain from competition if the stipulation is limited to that purpose. ’ ’
    In other words, if the stipulation is limited to the protection of the good will, then it will be enforced. He continues: “And courts of equity have even required members of a co-partnership to abstain from the conduct of a rival business.”
    The reason for this is manifest. It would interfere with the purposes of a partnership; it would interfere with the interests of the co-partners. And he adds:
    “In short, the courts have uniformly denounced contracts in restraint of trade unless the restraint results as an incident from the use of one’s property and his faculties. The distinction is one of easy grasp and it is too late to question its importance. Within the limits of the present ease, it is obvious that the effect of the statute is to prohibit affirmatively such contracts and transactions as, were previously unlawful, but which could be so adjudged only when the aid of the courts was invoked for their enforcement. It must be obviously unavailing to urge the constitutionally protected right to make contracts with reference to one’s property and his faculties as an objection to a statute which does not prohibit or restrain the power of making such contracts.”
    Now, manifestly, a contract which provides that one selling a business in a certain locality shall not himself enter into competition in that locality with the person to whom he has sold, in the carrying on of the same kind of business, is a very different thing from a contract, based upon no matter how valuable a consideration, that some person to whom a property is sold shall not enter into competition with the vendor in any other localities than on the particular premises so conveyed. It may be said, indeed, that the restricting of the use of the premises conveyed is in partial restraint of trade. So it is; but it is the kind of reservation which a person has a right to make in his grant. Deeds have been not unusual, and have been upheld, that contained the provision that no liquor shall be sold at all upon the premises conveyed, or if any sales of liquor are made, that the title shall revert to the grantor. It is said that the city of Yineland, New Jersey, is practically under prohibitory law by reason of the incorporation of such clauses in the title deeds of vendors of the property. And there is no more reason to set aside and ignore as invalid, contracts or reservations of this character in conveyance or leases than there would be to set aside a restriction to a particular use of property conveyed to be used as a church, or a school, or a street, or an alley. In all these cases the grantor keeps something back. He does not sell all he has. He may not desire to use, and may not be able to use, the property for any purpose himself, but he may put a qualification upon its use by his vendee or his lessee.
    Some confusion may arise in the mind here from the fact that the consideration of this covenant is the leasing of a partieular property, but to our minds it is not different from a ease where, in consideration of a money payment or any other valuable thing, a person agrees to keep out of a certain market in the way of buying or selling or manufacturing -any kind of commodity.
    It is to be noticed that there is no stipulation in this contract, no provision whatever, that the Huebner-Toledo Breweries Company shall sell any of its beer to these defendants. There is no power, in other words, left or given by this lease to the covenantors in it—to the defendants—to continue in the business of selling beer at all, unless by the permission, express or tacit, of the lessor. If the breweries company should conclude not to furnish the defendants with beer, and if this covenant were to be upheld, the defendants would be deprived of any power to use such skill as they may have in the carrying on of this business anywhere within the circumscribed territory.. In other words, they could be put out of the trade entirely by the will of the lessor. There is no provision in this writing either that the lessor shall furnish or that the lessees shall buy any of the beer manufactured by the plaintiff, but the provision strikes entirely at the conduct of the lessees with reference to the beer manufactured by other people or concerns.
    In this connection some reference may be made to the principle stated in 2 Beach Modern Law of Contracts, Section 1565, as follows:
    “There are two grounds on which rests the doctrine that a contract in restraint of trade is void as against public policy. One is the injury to the public by being deprived of the restricted party’s industry; the other is the injury to the party himself by being precluded from pursuing his occupation, and thus being prevented from supporting himself and his family.”
    And in the same connection, 1 Page on Contracts, Section 432, should be cited.
    In the case of People v. Stock, Exchange, 170 111., 556-567, h is said:
    “The common law refused to recognize restrictions upon trade and business among citizens of a common country.' Under this rule of the common law the right of the laborer to dispose of his skill and industry, and to contract in reference to the same with whom he pleased and at such contract rates as might be agreed upon, was recognized and not allowed to be trammeled with restrictions which interfered with individual action and liberty. ’ ’
    There is a recognition in this decision of the principle enunciated in the text-book to which I have referred, 2 Beach Modern Law of Contracts, that the policy of the legal rule is two-fold, and that one of its objects is the protection of the individual in the right to use his own faculties. Reading further from the ease:
    ‘1 Combinations and associations of men have no right to place restrictions upon the right of an individual to contract and engage in business, employing such means and agencies as are not prohibited by law.”
    And taking up the other phase of the proposition the judge says:
    “Effort to prevent competition and to restrict individual efforts and freedom of action in trade and commerce are restrictions hostile to the public welfare, not consonant with the spirit of our institutions and in violation of law. ’ ’
    In further support of the views which I have been endeavoring to express I read from this Illonois case as follows:

      “* * * it seems that the only cases, apart as we have indicated from those just mentioned, in which there can be any legitimate occasion for a covenant on the part of one not to engage in the business proposed to be carried on by another, are those in which the covenantor has sold to the covenantee his stock in trade, as in the case of a merchant, or his part of it, as where one mercantile partner sells out to the other or to a stranger, or, being a professional man with an established practice, as a physician, dentist and the like, or mechanic with a shop and accustomed patronage, as a blacksmith and the like, or, if he be a manufacturer, sells out his practice or business or plant, with or without an express stipulation as to its good will, and in the same transaction and as part of the thing sold and as in part the consideration for the price paid, agrees not to engage in that business, profession or trade, as the case may be, within the territory covered or supplied by the business, practice or factory purchased during the time the vendee shall be interested therein. * * * But there is no room for the application of these reasons in cases in which the covenantee does not purchase the business, practice, trade or plant of the covenantor and the transaction involves nothing but a bald covenant in restraint of trade for which there is no other consideration than the payment of money for the obligation itself. In such cases the business of the covenantor is not transferred merely; it is destroyed.”
    Referring further to the loss to the public by reason of restriction upon the use of the faculties of an individual, the judge says: “Labor is thrown out of employment; ‘the same number of mouths’ are not fed.”
    In other words, the laborer, instead of being a producer, becomes a consumer. Further:
    “The consideration the covenantor receives is not the just reward for his skill and energy and enterprise in building up a business, but is a mere bribery and seduction of his industry and a pensioning of idleness. The motives actuating such a transaction are always in a sense sinister and baleful.”
    We should hardly like to say that here. The motives may be, and probably were, altogether innocent; that is, there may have been no thought of any impropriety in the making of such a contract, or any idea on the part of any of these parties that they were either violating public policy or a public statute.
    Some suggestion having been made in argument that no restriction of this character should be upheld unless coupled with a sale of good will, it seems to have been understood on the other side as a claim that there can be no sale of good will except in connection with some tangible plant, some real estate, or some other property to which the good will pertains. If counsel for the motion entertained that view, we think that it would be going too far. There may be such a thing as a sale of good will as appertaining to a professional business, or an industry, wljere there has been no transfer whatever of any tangible property, real or personal. The cases.mentioned in this Illinois report of the sale of the professional business of a lawyer or a doctor would be an illustration of a class of cases where the good will may be sold in connection perhaps with a business, but without any transfer whatever of any other property right; but still it is a sale of the good will. And sometimes it may be coupled with a direct sale of one’s own faculties, or one’s own skill in business, in connection with a covenant that while working for the covenantee he will give the covenantee the benefit of his whole time and he will do no work for any one else. This is the kind of contract which we find often in the employment of agents or salesmen, wherein the work of the person employed is given exclusively to the employer.
    I have given perhaps more time than I ought to the consideration of this case, but I have done it in view of the importance and interest of the question presented, and also the fact that our view is not in accord with that which seems to have been entertained by the court below.
    I might add to all that has been said that a reading of this petition does not disclose any apparent danger to the petitioner that it will suffer damage by reason of any act or conduct of the defendants. It is not said in the petition that there is any threat of a continuance of sales. It is not said that the defendants have, or ever have had, any good will of value pertaining to the saloon in which it is said they are now engaged in business. As already indicated, there is no averment that the plaintiff was to supply them with beer. There is no averment that the defendants are selling other beer than that manufactured by the plaintiff in the saloon which was leased by the plaintiff to the defendants. There is no averment that the defendants, or either of them, have any personal skill or ability whatever to sell beer, or have any patronage, any custom, which has grown up, which it would be a loss to the plaintiff not to have turned to the purchase of goods manufactured by it. All of these latter matters, to which I have referred, might perhaps be cured by an amendment to the petition, provided the facts exist which would warrant such amendment. But the other considerations which have been given to the particular covenant itself and the principles of law governing its construction and the determination as to whether it is valid or invalid, enforceable or non-enforceable, would seem to be vital to the rights of the parties and hardly susceptible of change by amendment.
    Our conclusion is that this motion should be sustained, that the injunction should be dissolved, and it will be so ordered.

      Swayne, Hayes, Fuller & Tyler and G. P. Hahn, for plaintiff in error.
    ' F. C. School and Fell c& Connolly, for defendants in error.


text:
    ASSUMPTION OF LIABILITY UNDER. SUIT FOR. PERSONAL INJURIES.
    [Circuit Court of Hamilton County.]
    The John Kauffman Brewing Company v. Joseph Betz.
    Decided, March 31, 1906.

      Negligence—Pleading in Suit for Personal Injuries—Amendment as to Cause of Injury•—Assumption by Company of Contracts and Liar bilities Incurred by Receiver—Promise Inures for Benefit of Third Person—Special Findings by Jury—Charge of Court.

    1. An amendment to a petition does not state a new and different cause of action, where in both the amended and original petition the object sought is1 recovery of damages for the same personal injuries, the variation being only as to the precise manner in which the injuries were inflicted.
    2. Where a receiver turns over to the company owning it the plant and assets in his hands, upon the condition that all contracts and liabilities incurred by or incumbent upon him as receiver shall be assumed by the company, a suit against him as receiver for damages for personal injuries is included therein, and -the obligation thus assumed for the benefit of others1 is enforceable by a third person coming within its provisions.
    3. A special finding by the jury to the effect that the plaintiff was under the control of a foreman who is1 named, does not entitle the defendant to a judgment on the ground that the accident happeñed in a different department, where the testimony shows that at the time of the accident the plaintiff’s duties had taken him into another department and under the control for the time being of the foreman of that department.
    4. A refusal to permit the jury to take the general charge to the jury room is not error, where the court was not requested to reduce the charge to writing, but did so for his own convenience and protection.
    Giffen, J.; Jelke, P. J., and Swing, J., concur.
    The plaintiff below, Joseph Betz, brought an action against" the John Kauffman Brewing Company to recover damages for a personal injury received while in the employ of Frank IT. Shaffer, as receiver of the brewing company. The accident occurred while the plaintiff was assisting in removing an .obstruction to the free operation of a freight elevator used for carrying materials between the wash-house on the ground floor and the second cellar below. The negligence charged in the • petition was the faulty construction and want of repair of the elevator.
    It is further averred, in substance, that on the second day of October, 1901, an action was commenced against the receiver to recover damages for such injury, and that in April, 1902, in the cause in this court, wherein a receiver was appointed, he filed his account, which was approved by the court and he was ordered to transfer to the brewing company all assets in his hands, on the condition that said company assume all contracts and liabilities then 'incumbent 'upon the receiver. Thereupon he transferred to the company all assets, and the company in open - court assumed all liabilities, the receiver being discharged and the brewing company giving bond to the receiver to indemnify him and his bondsmen from all liability incurred by him in carrying on the business which might not yet have become due and liquidated and assuming the liability of the receiver to this plaintiff as aforesaid; and that said action commenced by this plaintiff against the receiver was thereupon dismissed without prejudice to the commencement of another action.

      After the jury was impanneled, the plaintiff with leave of court and against the objection of defendant, filed an amendment to his petition in which he avers that a superior servant of the receiver ordered him to go from the wash-room into the cellar where the obstruction to the elevator existed, and assist in removing it; that while attempting’ to do so, such superior servant carelessly caused the elevator to be moved whereby the plaintiff was thrown from the first cellar to the floor in the second cellar, from which he sustained the injuries complained of.
    Defendant by answer denies all allegations of negligence or carelessness contained in the petition and amendment thereto, and avers that the injuries resulted solely from the negligence and want of proper care of the plaintiff and contributing directly thereto.
    The first alleged error is the allowance by the court of the filing of the amendment to the petition, the claim being that it states a new and different cause of action. In each of the pleadings, the object sought is the recovery of damages for the same personal injuries. The precise -manner in which the injuries were inflicted, whether through defects of the elevator or the negligence of a superior servant, each being imputed to the receiver, was of secondary importance. In the case of Spice & Son v. Sieinbruch, 14 O. S., 213, the first proposition of the syllabus is as follows:
    “The restriction upon amendments in Section 137 of the code, that the proposed amendment ‘must not change substantially the claim or defense’ does not refer to the form of the remedy, but to the general identity of the transaction forming the cause of complaint, therefore,
    “2. Where the original petition demanded damages for a wrongful arrest, under an order issued by a justice of the peace, containing averments' making a case of malicious prosecution, an amendment, striking out the averment of ‘want of probable cause,’ and alleging that the same arrest was made ‘illegally and with force,’ may be allowed, if it conform the pleading to the proof, upon such terms as may appear proper and just to the court.”

      If such an amendment may be made by conforming the pleading to the facts proved, with much greater reason should it be allowed before the case is tried, and especially under that general clause of Section 5114, Revised Statutes, which permits an amendment'“by inserting other allegations material to the case.” There was no error in permitting the amendment to be filed.
    The next alleged error is the. refusal of the court to direct the verdict in favor of the defendant when the plaintiff rested his case. It is claimed that the brewing company did not assume the plaintiff’s claim for damages against the receiver. The entry confirming the final account of the receiver contains the following:
    “ And it further appearing that all creditors of the Kauffman Brewing Company, who have an interest in the funds in the hands of said receiver have been fully paid and satisfied, except the following: Bernard Bing, $998.14; S. B. Bing Soehne, $1,074.71; Crystal Lake Ice Co., $8.77; L. A. Greiner & Co., $2.16; W. P. McLaughlin, $3.45, and IT. Sehile & Sons, $66.22, it is ordered that a special deposit of an amount sufficient to pay said claims be made in the Atlas National Bank out of which said claims shall be paid when presented for payment.
    “It is further ordered that a bond in the sum of $15,000 with sufficient sureties to the satisfaction of said Frank H. Shaffer be given by the John Kauffman Brewing Company, to indemnify said Frank H. Shaffer and his bondsmen from all liability incurred by him in carrying on the business which may not have become due or been liquidated.
    “All of which have accordingly been done and all fees and charges of the receiver and his counsel having been paid in full it is now ordered that said receiver transfer and assign to the said the John Kauffman Brewing Company all assets of the trust now in his hands on condition that said company assume all contracts and liabilities now incumbent upon said Frank II. Shaffer as said receiver incurred by him in the administration of the trust. And thereupon said receiver in open court formally transferred to said company all said assets and said company assumed all of said liabilities.”
    Some contention is made that the words “contracts and liabilities” are not broad enough to include the claim for damages or a suit for tort, but we think they include any obligation which the receiver might assume or be subject to in the administration of the trust, and liabilities other than contracts would naturally include a claim such as that of the plaintiff.
    It is urged, however, that the plaintiff not being in privity with either the brewing company or the receiver, can not avail himself of the agreement between the brewing company and the receiver. It has' repeatedly been held in this state that if one person upon a sufficient consideration make a promise to another for the benefit of a third person, such third person may maintain an action at law upon the promise. Nor need he be named, especially, as the person to whom the money is to be paid. Counsel cite us to the case of Railroad v. Bank, 54 O. S., p. 60, at page 69 where Spear, J., says, in commenting upon the case of Emmit v. Brophy, 42 O. S., 82:
    “No one of the cases cited carries, the doctrine further than the foregoing. In no one of them is it held that a right- to sue in a stranger can be raised by mere implication. Nowhere is it held that the obligation will attach in favor of future creditors not named and not known, and as to amounts not specified or then ascertainable to the extent of giving to such creditors the right of action on the contract.”
    The meaning of this evidently is that if a creditor is not named, and not known, and the amount of his claim is not specified or then ascertainable, the parties to the agreement could not have had in contemplation such a creditor or his claim; or, in other words, that the agreement discloses no such intention.
    In this case, the plaintiff, although not named, is known to have a pending suit against the receiver for the same cause of action stated in the petition in this ease, and although the amount which the court or the jury may award is not then ascertainable, the identity of the claim and the maximum amount which may be recovered was fixed by the. petition in the suit pencting against the receiver. When we consider that all the creditors had been fully paid or provided for by a deposit in the bank, it is not unreasonable to conclude that the parties had in contemplation this very claim among others although the amount of the bond executed is ten thousand dollars les7 than the amount prayed for in the petition. A case in many respects like this one, is that of Ryan v. Hays, 62 Tex., p. 42, in which the 8th paragraph of the syllabus is as follows—
    “The resolution of the directors, providing for an indemnifying bond to the receiver, inured to the benefit of any one contemplated by it, having a just debt or claim against the receiver as such, or personally.”
    If the plaintiff had prosecuted his suit against the receiver to final judgment, it could be satisfied only out of the funds in his hands as directed by the court appointing him, unless he was personally at fault (Meara’s Adm’r v. Holbrook el al, 20 O. S., 137). Nor would he be subject to any liability after his discharge. It seems, therefore, that the court instead of reserving jurisdiction over enough of the funds to satisfy any existing claims, authorized the execution of the bond and the release of the assets upon the understanding that whatever judgment might be obtained would be paid by the brewing company, or on default, a resort might be had to the bond. The motion to instruct the jury to return a verdict for the defendant was properly overruled.
    The next error assigned is the refusal to enter judgment in favor of the defendant on the special finding of fact made to the jury in answer to interrogatories submitted to them, and especially upon the first, which is as follows:
    “Was the plaintiff at the time he was injured a cellar, man, and under the authority and control of Wendelin Ludwig as cellar boss or foreman?
    “Answer. Yes. ”
    The amended petition contains the averment that the accident happened by reason of the negligence of Charles Roéhrig, foreman in the wash-room, and the uncontradicted testimony is that plaintiff when employed by John Kauffman, the general superintendent in the brewery, was directed and commanded to obey the orders of Charles Roehrig, and that such authority was never withdrawn except as may be implied from the fact that the plaintiff was transferred from the wash-room to the cellar, where Ludwig was boss. But the duties of the plaintiff required him to transfer chips, via the elevator, from the cellar to the wash-room, and after washing the same to return them to the cellar; he necessarily,-therefore, came in-contact with the cellar boss and the boss of the wash-room, and it is not unreasonable to assume that the jury may have found that the plaintiff while, in the wash-room was under the authority and control of the foreman of that department, although they found that at the time of the' accident Roehrig, the cellar boss, also had authority and control over him. The motion was properly overruled.
    Another ground of error is that the court refused to allow its written general charge to be taken by the jury to the jury room. It appears that the court was not requested to reduce this general charge to writing, as provided by Section 5190, Revised Statutes, but that it was done for the convenience and protection of the court itself, and, therefore, was' not such a written charge as the section requires to 'be taken by the jurors in their retirement.
    We have considered the objections to the general charge and the special charges given at the instance of the plaintiff, and the refusal to give certain special instructions at the request of the defendant; and also the admission of certain evidence on behalf of Betz, and objected to by the brewing company, and our conclusion is that no substantial error has intervened prejudicial to the rights of the defendant and the judgment will be affirmed.

      Worthington & Strong and Benner <& Benner, for plaintiff in error.

      Horstman & Hofstman, for defendant in error.


text:
    LIMITATION OF ESTATE OVER VOID FOR. REPUGNANCY.
    [Circuit Court of Cuyahoga County.]
    Elizabeth Steuer v. Joseph Steuer et al.
    Decided, February 21, 1905.

      Wills—Disposals of Estate in Fee—Attempted, Limitation of Estate Over, Void for Repugnancy.

    Under a will containing a devise to A generally, with no power of disposal expressed, but followed by a devise to B of what shall remain undisposed of at A’s death, A takes an estate in fee simple and the attempted limitation over is void.
    Henry, J.; Marvin, J., and Winch, J., concur.
    Appeal from the Cuyahoga Common Pleas Court.
    This is an appeal in a suit for partition. Jacob Steuer died testate, leaving a widow and children. Afterwards his son Thomas died intestate, leaving a widow, who is plaintiff here. Later the elder widow died testate. Pier will gives Thomas’ widow $200 and divides the rest of the property among the other children, defendants here. Plaintiff claims that Jacob Steuer’s will gave his widow a life estate only, with remainder over to his children, and that Thomas’ interest having thus vested in the latter’s lifetime descends to plaintiff. Defendants claim that under Jacob Steuer’s will his widow took a fee, and that the testator’s attempt to control the disposal of what should remain of the property at her death is ineffectual. The essentials of the will are as follows:
    “I give, devise and bequeath to my beloved wife, Anna Marie Steuer, my real estate and personal property of every description.
    * ‘ I appoint my said wife, Anna Marie Steuer, executrix of this my last will and testament.
    “It is my will that whatever is left of my estate after my wife’s decease, shall be equally divided amongst all my children. ’ ’
    Wills of this character may contain any of four sorts of provisions, viz.:

      I. Devise to A in terms for life but with absolute power of disposal and followed by a devise to B. A’s estate is not enlarged by the power into a fee but is for life only. The power is simply annexed. This is illustrated by Bishop v. Hem-pie, 11 Ohio St., 277.
    • 2. Devise to A generally with absolute power of disposal but followed by a devise of the entire estate to B. A’s estate is for life only. .This limitation over of the corpus of the estate is illustrated in Baxier v. Bowyer, 19 Ohio St., 490. Some authorities, however, deny the rule thus formulated, though they approve the decision cited, on the ground that the power given was not absolute but restricted to the benefit of the estate.
    3. Devise to A generally but with qualified power of disposal and followed by a devise to B of what shall remain undisposed of at A’s death. A’s estate is for life only. Johnson v. Johnson, 51 Ohio St., 446, illustrates a qualification of power whereby the first taker’s right of disposal is restricted to what may be consumed.
    4. Devise to A generally with no power of disposal expressed, or with an absolute power, but followed by a 'devise to B of what shall remain undisposed of at A’s. death. A takes an estate in fee simple and the attempted limitation over is impossible and void. Widows’ Home v. Lippardt, 70 Ohio St., 261, affords illustration of a will of this sort. Though the decision there turns finally on the construction of the power rather than of the estate devised, yet the authorities cited approvingly in the court’s opinion clearly establish the rule as thus formulated. 0
    Jacob Steuer’s will is of the fourth sort and we hold that the interest acquired thereunder by his widow was an estate in fee simple; that the attempted limitation oyer is void for repugnancy; that their son, Thomas, took nothing under his father’s will and that he consequently transmitted to his widow no interest in the estate left by his father.
    The petition is, therefore, dismissed at plaintiff’s costs.

      J. W. Syhora and W. G. Rogers, for plaintiff.

      Foran & McTighe, for defendants.