Hewitt, K.C. in reply.-The fact of there being no legal contract possible strengthens the implication that the debentures created a charge.

[Steele v. Gourley (3 Times L. Rep. 772) was also referred.to.]

EVE, J., after stating the parties and the claims in the action, continued:-I do not pause to consider whether the action is rightly constituted for the relief that is claimed, especially that part of it which is founded on the doctrine of subrogation, but, assuming that I have a properly constituted suit, the first question is whether the plaintiffs have established their right to a declaration that these debentures constitute a charge on the assets and property of the club. That depends mainly upon the construction of the debentures, and this is to be ascertained by an examination of the documents themselves and the consideration of such surrounding circumstances and other contemporaneous materials as are relevant, having regard to the dates of the respective contracts. The acquisition of the premises in Pall Mall involved not only a very large purchase price for the site, but a still larger expenditure for the erection thereon of a suitable club house and for the furnishing and equipment of the same. From the first it was appreciated that the entrance fees and subscriptions to be paid by the members would not be sufficient to produce the funds necessary for these purposes, and accordingly there was included in the rules of the club a power to the trustees to raise a sum not exceeding 50,000l. by mortgage of the site. The rule giving this power (rule 60) laid down in definite terms the nature of the security to be given to the mortgagee, and the limit of the liability to be imposed on the trustees and the members.

In due course a mortgage was created under that power in favour of Mr. Montagu. The rules also provided that another body, not the trustees, but the committee of management of the club, should have power to raise money by the issue from time to time of debentures to such an amount as should be necessary for the purchase of the freehold site, and for the erection of the permanent buildings, such debentures to be held only by members of the club and to bear interest at a rate not exceeding 51. per annum. Does that rule (rule 63) empower the committee to include in the debentures a charge on the site and the permanent buildings to secure the sums raised on debentures? It is somewhat remarkable if such was their intention that the framers of the rules should have omitted from rule 63 any directions or limitations with regard to the security to be created by the committee corresponding with those to be found in rule 60 concerning the mortgage by the trustees. If, in fact, it was contemplated that the committee should have power by the debentures to charge the property, one would have expected to find in the enabling rule some limitation and some express provisions with regard to the conditions upon which the debentures were to be issued, and the circumstances in which the security thereby created was to be enforceable.

Treating it as a matter of construction pure and simple, I think the rule does not and was not intended to authorise the committee to issue what I may call mortgage debentures, that is to say, debentures charging the property of the club by way of security in favour of the lenders. The debentures contemplated were in my opinion certifi

[CHAN. DIV.

cates or acknowledgments of indebtedness, not mortgage debentures. That in my opinion is the extent of the power conferred upon the committee, and having regard to the nature of this association and to the well-known legal principles applicable to clubs, I am not prepared to say that any grounds exist for holding that the committee having a general power to issue debentures have an implied power to issue them with a charge on the club's property. I think if such a power was intended to be conferred it would have been expressly provided for by the rules. If this construction of the rules is right it follows that the debenture holders cannot be treated as entitled to any charges but assuming that the rule is open to the construction for which the plaintiffs contend, and that the use of the word " debentures " in rule 63 confers on the committee a power to issue debentures of any description including debentures constituting a charge on the property and assets of the club, the question then arises : Did they in fact exercise that power, or did they in issuing these debentures abstain from giving the mortgage or charge for which the plaintiffs contend?

For the purpose of considering this question I do not think it is necessary to deal separately with the successive issues. The relevant elements were present on the occasion of each issue and I think I can therefore deal with all the issues as if they had been made at one and the same time. It is pointed out that when the debentures were issued it was stated that they were to be in substitution for the Montagu mortgage and both sides rely upon that statement. The plaintiffs contend that

it meant that the debenture holders were to be substituted as mortgagees of the property for the one mortgagee, Mr. Montagu, and that they were to be put in the same position as the mortgagee had been.

The defendants on the other hand deny that anything of the sort was contemplated. The whole object they say of the issue, made at a time when the club had become well established and was prosperous, was to get rid of the mortgage and to substitute for the secured liability to the mortgagee the unsecured indebtedness to those members who were willing to advance the moneys.

In answer to this contention of the defendants it is urged on behalf of the plaintiffs that when the members were invited to subscribe for the debentures the attractiveness of "the security was emphasized, and that again on the occasion when they were asked to take interest at a reduced rate much the same expression was used.

That is perfectly true, but even in the case of personal security there are degrees of attractiveness and in borrowing money for an association of this nature it was certainly legitimate to point out that the club was possessed of a very valuable property unencumbered by any mortgage debt, and with a large and influential membership, all factors tending to the security of any advances made. I do not think that the mere use of the word "security necessarily imports that a security in the nature of property charged to secure the debt was contemplated. It meant rather that the borrower was a substantial institution not likely to fail in the payment either of principal or interest, and was therefore one from whom the lender ought to be well satisfied to require a moderate rate of interest only.

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I do not say that the statements as to the substitution of the debenture debt for the mortgage, or the references to the character of the security are not to be noted, but I do not think I can or ought to spell out of them the conclusion that the debenture moneys were intended to be secured by 'a charge or that any person was thereby led to believe that they were in fact so secured. So that really it comes back to the point, what is the construction of the debenture itself? It is clear that it contains no express charge, and as I have already indicated, I can see nothing in the description debenture," or in the relevant facts contemporaneous with the issue from which I ought to imply a charge. It is an acknowledgment on behalf of the club of the receipt of the money, and although I agree that from such an acknowledgment there would in any event be implied a promise or agreement to repay the money it is not necessary in this case to have recourse to any implied promise or to speculate as to the terms of such promise because there is in the document itself an express promise or agreement to repay namely, an agreement to repay the principal sum when and as the committee of the club may determine, and in the meantime to pay interest thereon at the agreed rate by half yearly instalments. It is argued that in effect that is an agreement to repay on demand. If that be so the lender of money on these debentures could have demanded repayment of his loan within twenty-four hours of his having made it a startling result having regard to the nature of this association and the relationship of the lender to the borrower. But I do not think that is the true construction of the contract here. This is not a document containing a contract to repay with a super-added proviso or condition making repayment dependent on the will of the debtor in which case the proviso might well be rejected as repugnant to the contract. There is nothing in this contract to make the obligation to repay dependent on the will or pleasure of the debtor; the date when the obligation will arise is to be determined by the committee of the club, who must be trusted as between the lending member and the receiving club to do that which is honourable and right and to determine in the best interests of the club. Bearing in mind the peculiar nature of a club, that it is not a commercial undertaking nor a partnership formed for profit or gain, but is an association to which peculiar and well settled rules have always been applied, I cannot see any ground for not giving effect to the contract for repayment as it stands, and in my opinion the decision in Re The Tewkesbury Gas Company Limited (105 L. T. Rep. 300; (1911) 2 Ch. 279; affirmed 105 L. T. Rep. 569 ; (1912) 1 Ch. 1) has no application

here.

In my opinion no charge is created by the debenture and the obligation to repay does not arise until the committee of the club determines that the same is repayable.

That conclusion disposes of the first claim in the action.

The second claim is in the nature of an alternative one. It is said that if the debenture holders have no charge by virtue of the contract between them and the club, they are, nevertheless, by reason of the fact that their moneys were used to pay off the mortgagee entitled under the doctrine of subrogation to be placed in his shoes at least to the extent to which their moneys were applied in

the redemption of the mortgage, and to that extent they claim to be entitled to a charge on the property comprised in the Montagu mortgage. That is the way in which the claim is put forward in the pleading, but in my opinion that does not disclose a state of things to which the doctrine of subrogation has any application at all.

An individual who advances money to another for the purpose of enabling that other to pay specific debts does not in the absence of a special bargain thereby acquire the rights of the persons whose debts are discharged out of his moneys against the property of the debtor. No case has been cited to show that even in circumstances in which the doctrine of subrogation is properly applicable the subrogated lender has been held to be entitled to the benefit of the security held by the creditor to whose rights he is subrogated, and even assuming it to be established that the moneys raised upon some of these debentures were in fact applied in the discharge pro tanto of the mortgage debt, I am quite unable to adopt the view that the debenture holders were by subrogation or otherwise placed in the position of mortgagees to the extent of the sums so applied. In my opinion the alternative claim to a charge as pleaded also fails. But at the hearing a further claim was put forward. It was of this nature: The committee purported by these debentures to pledge the credit of the club. The club's credit could not be pledged, in these circumstances the committee are themselves liable to the debenture holders. But the money raised was applied for the purposes of the club and, therefore, it is said the committee are entitled to be indemnified out of the assets, and the debenture holders as the persons who actually found the money are entitled by subrogation to the benefit of that indemnity. It is a little difficult to follow this reasoning, but I think there are two complete answers, the one that the committee were not liable, and the other that they never made any payment or did any act against which they required to be indemnified. Before the debenture holders can claim to be subrogated to any indemnity to which the committee would be entitled it is incumbent upon them to establish facts giving rise to a right of indemnity on the part of the committee, and this they have wholly failed to do. In all the circumstances there is only one course open to me and that is to dismiss the action with costs.

Solicitors: Wansey, Stammers, and Co.; Norton, Rose, and Co.

July 19, 20, 21, 22, 26, 1921. (Before YOUNGER, L.J. (sitting as additional judge of the Chancery Division.) BRITISH REINFORCED CONCRETE ENGINEERING COMPANY LIMITED v. SCHELFF, AND BROWN AND TAWSE LIMITED. (a)

Contract in restraint of trade-Sale of business and goodwill-Restrictive covenant of vendor-Reasonableness-Severance of covenant.

By an agreement under seal, dated the 16th July 1918, a firm agreed to sell, and the plaintiffs agreed to buy, the goodwill, patent and stock of the firm, which carried on a small business. Clause 3 of the agreement provided : During (a) Reported by J. B. B. MACMAHON, Esq., Barrister-atLaw.

the present war, and for a period of three years after the date of the declaration of peace in the present war, the firm shall not, nor shall any member of the firm, either alone, or jointly, or in partnership with any other person or persons whomsoever, and either directly or indirectly carry on or manage, or be concerned or interested in, or act as the servant of any person concerned or interested in the business of the manufacture or sale of road reinforcements in any part of the United Kingdom." One of the firm, the defendant Sche'ff, entered the service of Brown and Tawse Limited as manager of their reinforced material department.

Held, that the reasonableness of the covenant depended on the extent and range of the business sold, and not on that of the purchaser's business, that the court would not sever a covenant expressed in indivisible terms, and that even when the court allowed a covenant to be severed the part that remained must be construed in the same sense as it would have been if no severance had been allowed.

WITNESS ACTION.

The facts are fully stated in the judgment.

Luxmoore, K.C. and R. Moritz for the plaintiffs. This covenant is not more than is required reasonably to protect the business of the plaintiffs for whose benefit it is given, and it is therefore good:

Morris Limited v. Saxelby, 114 L. T. Rep. 618; (1916) 1 A. C. 688;

Badische Anilin Fabrik v. Schott, Segner and

Co., 67 L. T. Rep. 281 ; (1892) 3 Ch. 447. The covenant is not too wide because the

plaintiff's business is not confined to a particular area, but extends over the United Kingdom, their customers being the various roadmaking authorities:

Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Company, 71 L. T. Rep. 489; (1894) A. C. 535.

The reasonableness of the covenant must be judged by what is required to protect the purchaser's business of which after sale the business bought is to form part:

Smedley's Limited v. Smedley, unreported,
Sargant, J., 14 June 1918.

This

Micklem, K.C. and A. Adams for Schelff. covenant extends to the manufacturers of road reinforcements and to any persons interested in the sale or manufacture of road reinforcements. The plaintiffs are not manufacturers, and therefore the restriction on manufacturing is not necessary to protect their interests. The covenant also purports to restrain the defendant from being the servant of a person interested in road reinforcements. That is obviously too wide, as, if enforceable, it would prevent him entering the service of a bank which was financing a firm supplying road reinforcements. The decision in Smedley's Limited v. Smedley should not be followed as it is opposed to decisions in the House of Lords from which it is clear that the vendor's business, and not the purchaser's, must be looked to when considering whether the covenant given by the vendor is reasonable or not:

Morris Limited v. Saxelby, 114 L. T. Rep. 618; (1916) 1 A. C. 688;

Nordenfelt v. Maxim Nordenfelt Guns znd

Ammunition Company, 71 L. T. Rep. 489; (1894) A. C. 535.

A covenant to protect a business with which the covenantor has never had any connection is no better than a covenant in gross, and is therefore void :

Henry Leetham and Sons Limited v. Johnstone

White, 96 L. T. Rep. 348; (1907) 1 Ch. 322. Hereward and Fanning for the second-named defendants.

Luxmoore, K.C. replied. This covenant is severable. It is clear that the defendant is liable on that part of it which says that a member of the firm shall not" carry on or manage or be concerned or interested in the business of the manufacture or sale of road reinforcements," and the court should enforce that part:

Attwood v. Lamont, 124 L. T. Rep. 108; (1920)
Cur. adv. vult.

3 K. B. 571.

July 26 1921.-Younger, L.J. read the following judgment: This is an action to enforce by injunction a restrictive clause with reference to trading, contained in an agreement for sale of a patent combined with the goodwill of the business established for working it.

The plaintiff company has for some years organised as a separate department of its general business, the application of steel reinforcements to the construction of concrete roads, and it introduced some years before the war, apparently from America, a form of steel fabric since manufactured by itself, which, although capable of being adapted, and although, in fact, used in every kind of concrete reinforcement work, has, particularly in certain sizes of mesh, been employed to a considerable extent in concrete road reinforcement. This form of road reinforcement has been extensively advertised by the plaintiff company amongst local authorities, road surveyors, and other persons interested in road construction throughout the United Kingdom, and the business of the department has become considerable if not yet, in the modern acceptation of the term, extensive. The plaintiff company claim to have done 90 per cent. of the reinforced concrete work executed up to the present, and, pioneer as it was in the industry, it has not yet in that branch of its work been called upon to face the competition of more than four or five rival organisations. There are certain features of this business that may be conveniently emphasised here. The work done by the plaintiff company, and other firms occupying themselves in this field, is merely to supply to the contractors, or to road-making authorities, the variety of steel reinforcement required. No concrete or road construction is done by firms undertaking this work. Moreover, the road reinforcements of the plaintiff company, as also those of the other firms concerned, can be and are used in every other form of concrete reinforcement work. Nor is the purpose for which on any occasion they are required, whether road purposes or other, necessarily stated when they are ordered, although it is true that advice to road authorities and others as to the mesh or strength of reinforcement most suitable for particular roads is one of the services which those engaged in supplying this reinforcement are expected if required to render

to their customers. Any firm of reinforced concrete engineers may at any time become suppliers of road reinforcements without difficulty, or even alteration, in their course of business. This circumstance is one which has to be borne in mind in considering the extent of the restriction imposed by the agreement here in question.

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The agreement we are concerned with was entered into in July 1918. Most of the circumstances leading up to it are to be found in the previous correspondence. It appears that in the year 1915 a patent was taken out by the defendant, Mr. Schelff, in association with a Mr. Allden, for improvements in or relating to ferro-concrete construction, and a partnership was constituted consisting of these two gentlemen, Mr. John Robinson, and Mr. Ralph Spencer, for the purpose of owning and working it. Such business as was done by the firm was carried on under the style of the Loop Road Reinforcement Company by, I gather, Mr Schelff, and Mr. Allden, now deceased, as the more active members of the firm. Their course of business was to obtain from manufacturers the wire and bars required for working the patent, the bars being obtained mainly from the Spiral Bond Bar Company, a company in which Mr. Schelff and Mr. Spencer were interested, and the wire from different manufacturers. These were then supplied for the purpose of road reinforcement to those who had need of them, the parts being assembled, not by the firm, but by the contractors on the job itself. This patented reinforcement system, under the name of Loop Road Reinforcement, had been described in the Municipal Directory of 1916 and 1918, referred to at the trial as the Surveyor's Bible"; and it was known as a system to the plaintiff company, but the entire operations of the firm with it had been on an exceedingly limited scale, 15,700 yards super. of the material only having been laid to fourteen different orders from different parts of England. The gross receipts of the firm from the 1st July 1915 to 30th July 1917, amounted to 1,3707. only, and its net profit for the same period was only 2561. In 1915, moreover, owing, I do not doubt, to the cessation of luxury roadmaking during the agony of the war, the firm had to stop trading altogether for eighteen months; and the position at that time was that it possessed some stock in hand which it had purchased for the sum of 1177., and it owed 5001. for materials to the Spiral Bond Bar Company, who were apparently asking for payment. It was in these circumstances that in Jan. 1918, Mr. Schelff approached Mr. Hall, the chairman both of the plaintiff company and of Hall and Pickles, the plaintiff company's selling agents, with a view to the plaintiff company taking over the Loop patent system. "There is a great future before the system," says Mr. Schelff in a letter of the 18th Jan., “if properly financed and organised and in the hands of an enterprising firm like Hall and Pickles, it would assuredly be a So regarding its prospects, Mr. Schelff pressed as a term of the plaintiff company's purchase, for an interest in the working rather than for a cash consideration. "In the event of your company deciding to purchase," he says on 25th Jan., "I would prefer to have a direct interest in any company formed in preference to any cash consideration." On the 29th Jan., however, in answer to that letter, Mr. Butler,

success.

who was then the secretary of the plaintiff company, replies, and after stating that he had to make a preliminary investigation, says: "I think you may take it we are interested and I shall be glad if you would state some definite terms and scheme of working. You mention for instance a direct interest in any company formed in preference to any cash consideration. I do not think this would be possible because if we were to buy up we should probably not form a new company for this purpose.' On 5th Feb. Mr. Schelff replied with a definite proposal in these terms: "In reply to your letter of the 29th Jan. I have consulted my colleagues on the matter of purchase of the Loop Road Company, and patents in connection with the same, and they, like myself, would prefer to accept about 1,500l. and 1d. per yard royalty, and have the patents and business worked, rather than accept a larger sum for purchase right out. The company could be worked under the same title and we should be pleased to co-operate in any way towards the success of the business." There, again, Mr. Schelff suggests a royalty as part of the consideration, and in a letter to Mr. Hall of the 4th March 1918, Mr. Butler states the situation thus, as it presented itself to those concerned in the plaintiff company. He says: "I think it would be a good thing to buy out these people and suggest the following offer; 5001. cash for goodwill and patents (clear of all existing liabilities which would be paid off by the vendors); 300l. a year for each of the three years after the war (reckoning from the 1st Jan., after peace is declared) if the net profits from sales are not less than 3007. in each year. None of the vendors to engage either directly or indirectly in the sale, or preparation for sale, of any other road reinforcement during the abovementioned three years, except by permission of the British Reinforced Concrete Engineering Company Limited. Before making this offer it would be understood the vendors are not negotiating with anybody else for the sale and will not so negotiate until our offer is definitely accepted or declined. We might decide to drop the sale of the Loop Reinforcement altogether. But I think it would be a good thing to keep it on from a small office in London." Then he states who the Loop people are, and asks for instructions from his chairman as to whether he will proceed on these lines. Now the point of that letter, which is of some relevance, is that the continuance of the business in the mind of Mr. Butler was its continuance as a separate thing in a small office in London. On the 26th March Mr. Butler, having no doubt in the meantime obtained authority from Mr. Hall, makes to the defendant a proposal which he foreshadowed in that letter to Mr. Hall, and he says in a letter to Mr. Schelff: "I am in receipt of your letter of the 13th inst., and am now able to advise you that I think we could make you a formal offer on something like the following lines: Payment to you of 5001. cash for the goodwill and patents (clear of all existing liabilities which would be paid off by the vendors). Payment to you of 300l. a year for each of the first three years after the war if the net profits from sales are not less than 3007. in each of such years; if they are less such lesser figure to be paid over to you. The vendors to recommend the reinforcement wherever possible and none of them to engage either directly or indirectly

in the sale or preparation for sale of any other road reinforcement during the above-mentioned three years except with our permission." Now there you find what appears in the correspondence generally the close inter-connection between the payment of 300l. a year in respect of profits, and the restrictive obligation imposed on the vendors. On the 27th March you find that same idea borne out in the reply of Mr. Schelff, who says: "Your offer for purchase of Loop Road patents and goodwill has been laid before my co-partners and they have decided your offer in its present form would not be acceptable to them. In the first place the sum of 8001. would not cover the liabilities, but they might consider an offer of 1000l. and 25 per cent. of the profits, or, if a limited company is formed, to be given 25 per cent. of the shares with the option of purchasing a further 25 per cent.' Then he encloses the balance-sheet, from which I have taken the figures I have already referred to, and says: "This should convince you of the great possibilities as soon as the business could be started again, also that the terms suggested in this letter are not extravagant. The present offer is all on your side as you give no guarantee to work the business and yet ask for an undertaking from ourselves not to engage either directly or indirectly in the sale or preparation for sale of any other road reinforcement for three years." Then he suggests a possible meeting with a view of arranging the transaction if the plaintiff company were still willing to go on with it. To that on the 4th April, Mr. Butler replies: "I have your letter of the 27th ult. and I am not sure there is any advantage in going on with the matter as I do not think we would consider any arrangement unless it provides for complete ownership by us either from the commencement or within three years. We could increase our offer of 500l. a little and also make it plus 25 per cent. of net profits, but that would only apply for a limited period." Then on the 9th April Mr. Schelff replies: "We do not contemplate working the company under the present proprietorship but to sell outright to you at a certain sum and a percentage of the profits to be agreed upon, you on your part undertaking to work the company. There are no expenses at the present time accruing, the company simply lying, as it were, dormant. Then on the 15th April we have an important letter from Mr. Butler in answer to that of the 9th.

says:

He "I think you may take it there are three points in regard to which our offer must be considered as quite definite-namely, (a) 1500l. is the maximum total payment we are able to offer which would be partly in cash down and partly in annual payment. A part cash payment and part annual payment was suggested in my letter of the 20th ult. but we would discuss a variation in the proportions of the amount provided the total amount is not more than 1500l. (b) We would not bind ourselves to work the company and this must be left to our choice, but it would be our intention to work it "-that is to say, intention to work it again, as I take it in the light of the correspondence, as a separate thing. "We should require that the vendors do not engage in the sale of any other road reinforcement for a period of three years, except with our permission, and should recommend loop reinforcement if they have the opportunity." Then he states that, if they are able to accept the terms, an appointVol. 126-3250.*

ment for the purpose of further discussion can be arranged. Now, on the 7th May, Mr. E. B. Hall writes to Mr. Schelff confirming that proposal, and he says: "With reference to my conversation with you last week about the loop road reinforcement I beg to confirm the offer I made to you on Friday last for the entire purchase of the loop road reinforcement patent for 1500l. in cash and for the goodwill and patents clear of all existiug liabilities, which will be paid off by the vendors, none of the vendors to engage either directly or indirectly in the sale, or preparation for sale, of any other road reinforcement during the period of three years "-again a definite period of three years" except by the permission of the British Reinforced Concrete Engineering Company Limited." Then, on the 13th May, that proposal is amended in one respect in regard to the three years mentioned in Mr. Hall's letter of the 7th: This is understood to mean three years after peace is declared," but again a definite period of three years beginning from a later date. "I think this will have been understood as it was mentioned in a previous letter." Then, on the 15th May, a proposal with regard to commission, which had been mentioned in earlier letters, was restored in this letter of Mr. Hall: "We shall be quite willing to pay you 5 per cent. commission on any business introduced by the four partners, provided we have not already been in touch with it." Then, on the 16th May, we have a letter from Mr. Allden to Mr. Schelff in which that juxtaposition, which I have already referred to, of commission with restriction is very strikingly set forth. "I further agree,' says Mr. Allden, and also on behalf of Mr. Ralph Spencer, not to engage in the sale of any road reinforcement for a period of three years after termination of the war, and to recommend same if the opportunity arises, in consideration of which the said British Reinforced Concrete Engineering Company Limited agree to pay a commission of 5 per cent. for any business introduced by the present partners constituting the Loop Road Reinforcement Company, such partners being" the four names mentioned.

66

The effect of the correspondence prior to the agreement is to emphasise two points. The first is that the period of restriction mentioned throughout was a definite period of three years, fixed at first from the date of the agreement, and later from the end of the war. The second is that there is a close connection betewen the 5 per cent. commission and the restriction on trade. The two are treated together throughout, and it must have been recognised that the offer of commission was of no value had there not been a manifested intention to work the Loop. This was, indeed, quite frankly admitted in the plaintiffs' evidence.

The agreement so adjusted in the correspondence was put in the solicitors' hands to be drawn up in formal shape, and it was executed on the 16th July 1918. That agreement was made between the four vendors therein described as carrying on business in co-partnership at 28, Victoria Street, in the City of Westminster, as reinforced concrete road engineers under the style or firm of the Loop Road Reinforcement Company, and thereinafter called the firm," of the one part, and the plaintiff company, thereinafter called "the company," of the other part. By clause 1 the firm agreed to sell, and the company agreed to purchase (1) the goodwill of the said business carried on by the

66