No. 79-117 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1980 

TERRY BALDWIN, 

Plaintiff and Appellant, 

VS . 

ALAN STUBER, 

Defendant and Respondent. 

Appeal from: District Court of the Eighth Judicial District, 

In and for the County of Cascade. 

Honorable John McCarvel, Judge presiding. 

Counsel of Record: 

For Appellant: 

Cameron Ferguson, Great Falls, Montana 

For Respondent: 

Thomas Baiz, Great Falls, Montana 

Submitted on briefs: February 27, 1980 

9eciSed: APR 2 g -1980 

Filed: APR 2 :J 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

Terry Baldwin appeals from a judgment entered in his 

favor and against Allan Stuber. A judgment for the value of 

goodwill associated with a barbershop sale was entered by 

the District Court, Eighth Judicial District, Cascade County. 

The facts giving rise to this cause are set forth in 

Baldwin v. Stuber (1979), Mont . , 597 P.2d 1135, 36 

St.Rep. 1170, and need not be exhaustively repeated here. 

Baldwin brought this cause against Stuber for breach of 

contract resulting from a contract of sale and purchase of 

Baldwin's barbershop business. Following judgment for 

Stuber, Baldwin appealed to this Court. We vacated the 

District Court's judgment and remanded the cause back to the 

District Court for a determination of the reasonable value 

of the goodwi:l.l: associated with the shop's location. Baldwin 

v. Stuber, supra. 

Upon remand, the District Court averaged Baldwin's net 

income from the barbershop for the years 1974, 1975 and 1976 

arriving at a figure of $10,258.33. Since Baldwin rented 

the shop on a month to month tenancy at the time this cause 

arose, the District Court divided the average net annual 

income figure by twelve to arrive at a net income average 

for one month of $854.86. In addition, the only evidence of 

the amount of goodwill associated with the shop's location 

was Baldwin's testimony he lost thirty to forty per cent of 

his business when he changed locations. Consequently, the 

District Court multiplied the average net income figure for 

one month by forty per cent to arrive at a sum of $341.94 as 

the reasonable value of goodwill associated with the shop's 

location. Judgment for this amount was then entered in 

favor of Baldwin, and he filed a timely notice of appeal 

from the judgment. 

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The sole issue upon appeal is whether the District 

Court erred in determining the value of goodwill attributable 

to the shop's location. We hold that it did. 

The goodwill of a business is the expectation of continued 

public patronage. Section 30-13-121, MCA. There is no 

immutable rule for determining the value 'of goodwill. 

Consequently each goodwill case must be determined on its 

own facts and circumstances, and the determination of the 

value of goodwill is a question for the trier of fact, the 

District Court here. Spheeris v. Spheeris (1967), 37 Wis.2d 

497, 155 N.W.2d 130, 135. 

Here, the District Court placed too much emphasis on 

the fact Baldwin held his shop under a month-to-month tenancy 

at the time this cause arose. Unquestionably, Baldwin's 

enjoyment of the shop under such an arrangement was subject 

to interruption at any time in the future, provided the 

proper statutory procedures were followed. However, from 

March 1974 until July 1, 1979, when Stuber surreptitiously 

procured a five year lease of the shop from the lessor, 

Baldwin held the shop under various rental arrangements. 

There is no indication in the record that the lessor was 

dissatisfied with Baldwin as a tenant. Similarly, there is 

no indication the lessor would not have been willing to give 

Baldwin a five-year lease of the shop. Accordingly, the 

District Court improperly restricted the reasonable value of 

goodwill associated with the shop's location to a one month 

period. 

While there is no rigid rule for determining the value 

of goodwill, the best indicator is the purchase price agreed 

upon in a voluntary arm's length transaction. Spheeris v. 

Spheeris, supra. Here, Baldwin and Stuber executed a selling 

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agreement on March 8, 1977. As we noted in Baldwin's first 

appeal, an implied contract was created between Baldwin and 

Stuber. Baldwin v. Stuber, supra, 36 St.Rep. at 1175. 

Under this contract, Baldwin agreed to sell his barbershop 

business to Stuber for $7,000. The three elements comprising 

this purchase price were the goodwill associated with the 

shop's location, Baldwin's furniture and fixtures and the 

shop's telephone connection. 

After learning that Stuber surreptitiously signed a new 

lease of the shop's location with the lessor, Baldwin went 

to the shop, removed all of his fixtures and furniture and 

disconnected the telephone. The value of these items was 

$3,000. Thus, Baldwin's recovery should be limited to a base 

contract price of $4,000. Moreover, the only evidence of 

the amount of goodwill associated with the shop's location 

was Baldwin's testimony concerning a loss of thirty to forty 

percent of his customers due to the change in location. 

Therefore, we hold Baldwin should have judgment against 

Stuber in the amount of'$1,600 which represents the value of 

goodwi.11 attached to the shop's location. 

The judgment of the District Court is reversed, and the 

cause is remanded to the District Court with the directions 

to make findings and enter judgment consonant with this 

opinion. Costs to appellant. 

Justice 

We Concur: