Facts: Herein plaintiff Ollendorf and defendant Abrahamson made and entered into Contract of Agreement. The first part hereby agrees to employ the defendant and the party of the second obliges himself to work for the plaintiff within the period of two years. Defendant obligates and binds himself to devote his entire time, attention, energies and industry on the promotion of the furtherance of the business and interest of the party. Failure on the said duty shall entitle the plaintiff to discharge and dismiss the defendant. The second part of the contract further binds the party that he will not enter whether directly or indirectly to engage in a similar or competitive business. Under the term of this agreement, the plaintiff left the employment due to illness and went to U.S. After his departure, the defendant returns to Manila as the Manager of the Philippine Underwear Company. Defendant admits that both firms turn out the same class of goods and those they are exported to the same market. However, he alleged that the said contract with the plaintiff was void for it violates the right for free trade.
Issue: Whether or not the contract is void due to the violation of the rights of trade.
Held: No, the contract was not void as constituting an unreasonable restraint of trade. The rule is that the obligations created by contracts have the force of law between the contracting parties and must be enforce in accordance with their tenor. The only limitation upon the freedom of contractual agreement is that the facts established shall not contrary to law, morals or public order. The industry of counsel failed to discover direct expression of the legislative which will prohibits such.
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