veals bearing upon the truth or untruth of their testimony, and as to such witnesses, as with all others, should credit what under all the circumstances appearing they believe, and reject what they disbelieve. Nothing here appears from which it may be inferred, or even suspected, that the jury did not so test these witnesses and this evidence, and we cannot conclude from the record that it discloses no substantial evidence upon which the jury might predicate the guilt of plaintiff in error.

[15] 11. Respecting the assignment of error challenging the sentence upon the ground that it is excessive, while it seems that a smaller fine and briefer term of imprisonment might sufficiently have penalized the transgression and vindicated the law, we may not substitute our own discretion for that of the District Court; and under all the circumstances we cannot find there was abuse of that court's discretion in this regard.

Finding no substantial error, the judgment is affirmed.

CROPPER et al. v. DAVIS.

(Circuit Court of Appeals, Eighth Circuit. April 14, 1917.)
No. 4498.

1. CONTRACTS ~117(2, 7)—Restraint of TRADE-LIMITATION AS TO TERRITORY. Plaintiff was engaged in a rating and collecting business, in which he solicited retail merchants, etc., as subscribers to a league, secured from such subscribers a list of unpaid accounts, and listed such debtors as did not pay when notified in a credit book or rating directory. In such business he used forms, the result of 17 years or more experience; the forms being changed from time to time. He employed defendant in such business for 5 years, under a contract by which defendant agreed to devote all of his time to such business, and during such time to work at no other employment and engage in no other business, except when plaintiff allowed him to withdraw for the purpose of entering a line of business or the employment of any individual, firm, or company not using the plan, forms, or plan and forms of plaintiff in competition thereof. Held that, it being possible to ascertain by evidence in what territory plaintiff did business, and whether another business of the same type would be in competition with him, the contract was limited as to territory, and moreover, in view of the peculiar character of the business, the contract would not be invalid, if unlimited as to territory.

2. EQUITY 65(2)—GROUNDS FOR DENIAL OF RELIEF UNCLEAN HANDS.

Though debtors who paid were not specially rated, where those who failed to pay were rated in accordance with a key whereby it was shown how many members had reported the debtor, whether the account was disputed or outlawed, whether the debtor was bankrupt, and whether letters to the debtor were returned, there was such a rating as, in the absence of fraud, complied with subscribers' contracts and prevented the denial of injunctive relief, on the ground that plaintiff did not come into court with clean hands, in that he had been guilty of false and fraudulent representations because his business was not collecting by rating, or a system of rating, and because there was no rating in connection with the plan. Appeal from the District Court of the United States for the District of Nebraska; Page Morris, Judge.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

Suit by Will M. Davis against Walter L. Cropper and another. Decree for plaintiff, and defendants appeal. Affirmed.

Hugh A. Myers and Carl T. Self, both of Omaha, Neb., for appellants.

Irving F. Baxter, of Omaha, Neb. (Brown, Baxter & Van Dusen, of Omaha, Neb., on the brief), for appellee.

Before SANBORN and SMITH, Circuit Judges, and AMIDON, District Judge.

SMITH, Circuit Judge. Will M. Davis, the appellee and plaintiff below, is and has been for many years a resident and citizen of the state of Illinois, and Walter L. Cropper and the Mutual Rating & Adjustment Association are the appellants and defendants below, and they for several years have been residents and citizens of the state of Nebraska. The plaintiff has for between 15 and 20 years been conducting, with Chicago as his headquarters, a collection and so-called rating business throughout the North Central states under the name of the National Rating League. In connection therewith the plaintiff secured a copyright upon a book called "Collecting by Rating" in 1910. On February 7, 1910, the defendant Walter L. Cropper entered into a contract with the National Rating League by which he agreed to devote all his time during the next five years to the business of the League under its instructions, and during said time to work at no other employment and engage in no other business

"except when the National Rating League allows me to withdraw for the purpose of entering a line of business, or the employment of any individual, firm, or company, neither of which uses the plan, forms, or plan and forms, used by the National Rating League, in competition therewith. The National Rating League, by allowing me to engage at such other employment or business, does not thereby forfeit its rights under this contract."

Cropper remained in the employment of the League until about March 18, 1912. Shortly after leaving their employ he, as owner and manager, started a substantially similar business to that conducted by the League at Omaha, Neb., under the name of the Mutual Rating & Adjustment Association. In his new business he used substantially all the forms devised by plaintiff, and embraced in his copyrighted book mentioned, and so far as can be told from the record copied the entire system of the plaintiffs. An agreed statement of facts was filed in the District Court, from which the following is taken:

(1) It is hereby stipulated and agreed that the allegations contained in complainant's bill of complaint, for the purpose of review, are to be taken and considered as true in all respects, and that the copy of the contract between complainant, Will M. Davis, and the defendant Walter L. Cropper, referred to therein as "Exhibit G" and attached to the said bill, is a true copy of the instrument signed by said parties upon the date it bears, and that all other exhibits attached to said bill of complaint are true copies thereof.

(2) Complainant transacted his business under the name and style. of "National Rating League." The defendant W. L. Cropper and Bessie M. Cropper transacted their business under the name and style

of "Mutual Rating & Adjustment Association." Neither the League nor the Association were incorporated. The character or method of complainant's business was known to the business world by the term "Collecting by Rating." The defendants also used this term as descriptive of their business.

(3) That the general nature and plan of the business of the parties to this action is to secure contracts from retail merchants, doctors, and dentists, throughout the country, agreeing to become members and subscribers to said league and association, respectively, and at the same time, to secure from such subscribers a list of their unpaid accounts and take these up with such members and subscribers through a system of correspondence. These unpaid accounts, after notices to debtors, were printed in a rating book which is furnished to said subscribers. The solicitors are paid the compensation provided for under their contract—“Exhibit G"-according to the number of accounts they secure, when 10 or more of said accounts are turned in, either by the solicitor or the merchants; frequently the solicitor was paid in advance by his employer. Complainant and defendant received their compensation out of collections made upon accounts sent in; they receiving, per agreement with subscriber, the first $10 collected. The accounts, when turned into the office, were taken up by means of regular correspondence for the purpose of preparing and getting data for the rating book. If the accounts were received at the office, the debtors are notified to settle the same at once, if correct, as otherwise their name would appear in the rating book as owing the account. The solicitors were furnished with the blank forms referred to in the bill of complaint, together with the rating book, which shows what business the man is in, and whether or not the account is past due or disputed; and upon the listing blank the subscriber is supposed to list all such accounts so turned into the office and he is furnished a rating notice, a personal notice sent out by the subscriber to his debtor, and with a rating statement, which the subscriber uses to make report to the office when the account has been adjusted. The debtor is supposed to adjust the account directly with the subscriber. Complainant relied upon members making reports to his office of collections made from debtors whose names and accounts had been sent it. (4) The forms used by complainant are the result of 17 years or more of experience and as the result of trying out different forms and changing them from time to time, but with few changes made during the past 6 years. Many of said forms were printed in the red book entitled "Collecting by Rating," attached to the bill as "Exhibit A." The book was duly copyrighted by complainant under the laws of the United States in the year 1910. No names were printed in the red guide credit book or rating directory, other than those sent in by the merchants to whom accounts or sums of money were due and owing by the parties therein designated. If, after sending notice to the debtor and his name was printed in the rating directory or credit book, he later paid the amount owing by him to the subscriber, the name was then omitted from such directory or record. The name of the book or directory used by the complainant, in which the names of delinquent debtors were listed, was "Red Guide and Credit Record";

the name of the book used by the defendants for the same purpose was "Rating Directory."

The District Court granted an injunction enjoining the defendants from carrying on the business in violation of the terms and conditions of the contract dated February 7, 1910, up to and including February 6, 1915, and enjoined the defendants

"from in any wise using, giving away, or distributing in any business conducted by them, or either of them, the said book entitled 'Collecting by Rating,' and the book entitled 'Red Guide and Credit Record,' and from in any wise using, giving away, and distributing the forms, notices, and printed matter contained in said book, 'Collecting by Rating,' and that said defendants, and each of them, * their agents and servants, and all persons acting by or under their authority, be and they are hereby perpetually enjoined and restrained from in any wise making use in their business of the term 'Collecting by Rating.'"

A proper assignment of errors was filed in the District Court, but rule 24 of this court contains the following provision:

"2. This brief shall * * contain in order here stated:

Second.

A specification of the errors relied upon which * * * in cases brought up by appeal the specification shall state, as particularly as may be, in what the decree is alleged to be erroneous."

In the appellants' brief there is nothing which is called a specification of errors, but there is a heading "Appellants' Contentions." The most liberal construction of the rule would reduce us to considering these "contentions" and no other. Under these headings the appellants set forth the following:

"(1) That the clause heretofore quoted in said contract is unreasonable, unenforceable, and void as against public policy, and in restraint of trade; that it is without limitation as to space; that it is unlimited not only to the United States, but as to the entire globe.

"(2) That the appellee should have no standing in a court of equity, for the reason, as is shown by the evidence in the exhibits, embodied within the abstract of the agreed statement of facts, that he was guilty of false representations in the conduct of his business."

It will be observed that there is no contention that plaintiffs did not copyright the book called "Collecting by Rating," that the same contained the forms used by the defendants and defendants thereby infringed the copyright, and that they were therefore rightfully enjoined from continuing to use the same, and these questions are not for consideration by us. It has been held, however, that a copying of any substantial part of a copyrighted book is an infringement. G. & C. Merriam Co. v. United Dictionary Co., 76 C. C. A. 470, 146 Fed. 354; Harper & Bros. v. M. A. Donohue & Co. (C. C.) 144 Fed. 491, affirmed by the Circuit Court of Appeals, 76 C. C. A. 678, 146 Fed. 1023; List Pub. Co. v. Keller (C. C.) 30 Fed. 772; Ford v. Charles E. Blaney Amusement Co. (C. C.) 148 Fed. 642; Brightley v. Littleton (C. C.) 37 Fed. 103.

[1] We will take up, then, first the plaintiffs' contention that the provision of the contract in question is invalid, because it is not limited in the territory to which it applies within the United States or the earth. The first defect in the contention made on this subject is that the facts alleged do not exist. The contract provides that, if the de

fendant is released from his agreement to devote five years to the business of the League under its instructions to enter another line of business, it must be with an individual, firm, or company "neither of which uses the plan, forms, or plan and forms, used by the National Rating League, in competition therewith." It being possible for the court to ascertain by evidence in what territory the plaintiff did business, and whether another business of the same type would be in competition with the plaintiff, the contract was clearly limited to the territory thus described, and defendant was precluded from engaging in the like business as the plaintiff as clearly as though it had done so by geographical description. There is therefore no basis in fact for this contention.

It appears from the bill and is admitted that the defendants were carrying on business in Nebraska, North and South Dakota, Iowa, Kansas, and Oklahoma, and this is a part of the territory in which according to the admitted allegations the plaintiff was doing business. It was first held in the fifteenth century that contracts of the character here referred to were invalid as in restraint of trade, but the lapse of five centuries has greatly modified the holding upon this subject. In Standard Oil Co. of New Jersey v. United States, 221 U. S. 1, 31 Sup. Ct. 502, 55 L. Ed. 619, 34 L. R. A. (N. S.) 834, Ann. Cas. 1912D, 734, and United States v. American Tobacco Co., 221 U. S. 106, 31 Sup. Ct. 632, 55 L. Ed. 663, the Supreme Court construed the Sherman Anti-trust Law (Act July 2, 1890, c. 647, 26 Stat. 209) in accordance with the common law to require that the restraint to make it illegal should amount to unreasonable or undue restraint of trade as it held the common law had done. This change from the holding of the fifteenth century had been gradual. The first departure from the old rule was to hold that such contracts were valid if reasonably limited as to time and place. The contract here in question was limited as to time to the life of the contract and fully complied with the holdings of that period. About 1830 a second change began to be apparent in the rulings of the courts upon the subject and now the rule is that a restrictive contract should be tested by determining on the facts of the particular case whether the restriction upon one party is greater than is reasonably necessary for the protection of the other party. Hall Mfg. Co. v. Western Steel & Iron Works, 142 C. C. A. 220, 227 Fed. 588, L. R. A. 1916C, 620. In Prame v. Ferrell, 92 C. C. A. 374, 166 Fed. 702, it was held that, though there was no specific limitation as to territory in the contract, it was valid at least throughout the United States. In Harrison v. Glucose Sugar Refining Co., 53 C. C. A. 484, 488, 116 Fed. 304, 308, 58 L. R. A. 915, it is said:

"It is urged that the contract in question is one in restraint of trade because of the covenant that during the stipulated time of service the appellant would not, directly or indirectly, become interested in the specified business within a radius of 1,500 miles from the city of Chicago otherwise than under his engagement with the appellee. The doctrine of restraint of trade had its birth in conditions anciently obtaining, and now greatly changed. Then the area of trade was confined within narrow territorial bounds. Intercommunication has become largely extended, and trades anciently limited to a small locality have become national in their extent. The rule is bottomed upon the consideration whether such a covenant was broader than the covenantee required for his protection. The restraint must not be arbitrary, but should be limited. It must be reasonable with respect to time and to the