Greenfield v. . Gilman , 140 N.Y. 168 ( 1893 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The plaintiff has recovered in this action for an alleged breach of a covenant with defendants' testator not to practice medicine or surgery within a prescribed territory for a period of five years. For convenient description the defendants' testator will be referred to as the defendant. The contracting parties were physicians and surgeons at Durhamville, Oneida county. The defendant had been practicing medicine at that place for ten or twelve years, and the plaintiff had but recently moved there, when, on April 11th, 1884, they entered into an agreement by the terms of which they were to practice medicine and surgery as co-partners for the term of one year, at the expiration of which the contract provided that the defendant would execute to the plaintiff a valid written agreement and guarantee that thereafter he would not practice medicine or surgery in Durhamville, or within a radius of five miles thereof, or if he did he would forfeit and pay to the plaintiff a sum double the consideration named in the agreement with an amount double the fees usually charged in such cases. The special consideration of the agreement so to be executed was the sum of $500 then paid by the plaintiff; and it was stipulated that in case of failure to execute such agreement the defendant should forfeit and pay to the plaintiff the sum of $1,500 as liquidated damages agreed on by the parties. At the expiration of the year the further agreement was made by the defendant in which he covenanted that he would not practice medicine and surgery for five years either in the town of Verona, Oneida county, or the town of Lenox, Madison county, in which towns the village of Durhamville is situated. The agreement then contained the following provision: "Second. It is mutually agreed by and between the parties hereto that to practice medicine and surgery as above mentioned shall be construed to mean to prescribe for, to compound medicine for, advise or visit any person sick or disabled, or to perform any act or service which the laws of the state of New York at present require to be done by a person legally qualified to practice medicine and surgery."

The agreement further provided that owing to the impossibility of obtaining sufficient evidence on which to base the measure of damages for a violation of it, the defendant should forfeit and pay to the plaintiff the sum of $1,500, which was not to be regarded as a penalty for such violation, but as a measure of liquidated damages agreed on by the parties.

After the execution of this agreement the defendant remained at Durhamville for nearly a year, but did not practice his profession, and no claim is made for any breach of the agreement during that time. He then removed to the village of Oneida in the town of Lenox and two miles distant from Durhamville, and entered into partnership there with another in the business of selling drugs, books, stationery, law blanks, wall paper, pictures and picture frames and artists' materials, in which he was engaged until 1889, when he retired from the business, and died in July of that year. The plaintiff purchased drugs at the store, and it is not shown that he made any objection to the conduct of the business by the defendant. After the latter's death the plaintiff presented a claim against his estate to the executors of his will for the sum of $1,500 damages for the breach of the defendant's covenant not to practice medicine and surgery, and upon its rejection brought this action. During the four years and over which intervened between the execution of the agreement and the death of the defendant only nine different acts were proven which it is insisted constituted the breach complained of and made his estate a debtor to the plaintiff in the sum of $1,500. The first of these occurred in April, 1887, when he attended as counsel with two other physicians upon a person in extremis for which he made no charge, but was paid and accepted a small fee. This was the only professional visit proven. In all the other cases the persons prescribed for came to the drug store and were furnished with medicines suitable for their respective ailments. Some of these medicines were what are known as patented remedies and such as are kept in stock and for sale at all drug stores. No charge was made for medical advice; only the medicines were paid for; and the aggregate of all was less than $10. It is not contended by the plaintiff that this proof is sufficient to establish the fact that the defendant was engaged in the practice of medicine and surgery within the prohibited period or radius according to either the popular or legal signification of these terms, but it is insisted that the parties have by their agreement, defined what shall constitute such practice, and that the performance by the defendant of a single act, such as is described in the second paragraph of the article above quoted, rendered him liable for the full amount of damages recoverable for a breach of its conditions. Undoubtedly the parties might so stipulate and they would be bound by their contract and the courts could not refuse to enforce it; but before such a meaning should be given to an agreement of this kind it should appear, upon a fair and reasonable interpretation of its provisions, in the light of the circumstances under which it was made and of the evident intent and object of its execution, that no other inference is justly permissible. While the law, to a certain extent, tolerates contracts in restraint of trade or business when made between vendor and purchaser and will uphold them, they are not treated with special indulgence. They are intended to secure to the purchaser of the good will of a trade or business a guaranty against the competition of the former proprietor. When this object is accomplished it will not be presumed that more was intended. Construing this agreement in accordance with its obvious purpose, we think the definition in paragraph two of the acts, which shall be construed to constitute the practice of medicine and surgery did not enlarge or restrict the meaning of that term, but was regarded by the parties as a specification of the things which, if systematically, or habitually, or frequently done, would be a breach of the agreement. If the plaintiff's contention prevails it would follow that the visitation of a single patient and as an act of charity would render the defendant liable for the full penalty of the contract. Even the filling of a physician's prescription would be a breach, if this literal and technical construction is to be adopted, for it would be a compounding of medicine for a sick person and thus within the description of the prohibited acts. It was evidently the purpose of the second paragraph of the agreement to explain and illustrate the meaning of the generic terms employed in the first paragraph and not to subvert or destroy their ordinary signification. Effect should be given to both paragraphs, otherwise the first was superfluous. A covenant not to do any act described in the second would have been sufficient.

The agreement should also be read in the light of the previous one by which the defendant had bound himself to execute it, and which specifically described the terms of the obligation he was to assume and which supplied the consideration for it. That required a guaranty not to practice medicine and surgery and nothing more. There was no hint or suggestion of a covenant which would render the defendant liable for an isolated act which would not in law be deemed to constitute the practice of medicine. Unless the language employed in the later agreement imports an irreconcilable variance it will be presumed that the executed covenant was not intended to have a different meaning or a wider scope from that required by the terms of the agreement which compelled its execution.

It was not necessary to wait until the expiration of the five years named in the contract before asserting a claim to the liquidated damages. If the respondent's position is tenable the making of a single professional visit, or the giving of medical advice in a single case constituted a breach of the entire covenant, and rendered the defendant liable for the full sum stipulated. No more could be recovered if the defendant made daily calls upon the sick, and administered professional treatment to all who applied for relief. Neither reason nor justice favors such a view of the rights of the parties under this contract.

The defendant was not restrained by his covenant from engaging in the business of a druggist. At the present day the occupation of a pharmacist and that of a physician are essentially distinct. An agreement not to engage in the one does not preclude the party from engaging in the other, so long as the one is not used as a cover for the operations of the other. There is no sufficient evidence in the record to support the conclusion that the defendant made use of his business as a druggist for the fraudulent purpose of escaping liability for a violation of his covenant. The business was conducted in the usual manner, and the plaintiff suffered no damage on that account.

The judgment must be reversed and a new trial granted, with costs to abide the event.

All concur.

Judgment reversed.