Case Name: Morgan v. Perhamus
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1881-01
Citations: 36 Ohio St. 517
Docket Number: 
Parties: Morgan v. Perhamus.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 36
Pages: 517–524

Head Matter:
Morgan v. Perhamus.
M., a married, woman, engaged in carrying on the business of millinery and dress-making with her separate property, and on her own account, in the town of ft, sold her stock of goods, together with the good-will of the business, and engaged not to carry on the business at any time in the future at the town of F., or at any place within such distance of said town as would interfere with such business, whether the same was carried on by the purchasers, or their successors.
■Held, That such agreement in equity is binding, and that, in an action brought by the successors of the purchasers, M. will be enjoined from carrying on such business in violation of the agreement.
Error to the District Court of Clermont County.
The original action was brought by Emma J. Perhamus, the defendant in error, against the plaintiff in ' error, Maggie Morgan, to enjoin the latter from carrying on the millinery or dress-making business in the town of Felicity, Ohio, or at any place so near thereto as to interfere with like business being carried on by the defendant in error.
The petition alleged that the plaintiff below was a married woman, the wife of J ohn Perhamus, and the owner of a separate estate, which was under her sole control; and that the defendant, Maggie Morgan, a married woman, on April 9, '1874, was the owner of a stock of millinery goods, as her separate property, and was then engaged in carrying on the millinery and dress-making business in the town of Felicity, Clermont county, Ohio. That on that day she entered into a contract with May K. Parrott, Sallie Kennedy, and Lyde Kennedy, of which the following is a copy :
“ This memorandum, made this 9th day of April, 1874, witnesses ; that Mrs. Maggie Morgan has this day sold to Sallie Kennedy, Lyde Kennedy and May K. Parrott all of her stock of goods now in her store-room at No. 4 Walnut street, Felicity, Ohio, and all other articles contained in an invoice made by Mrs. Sallie Iddings and A. J. Barr, a copy of which is hereby made a part of this agreement. The said Maggie Morgan, in addition to the foregoing, hereby sells her good-will, and agrees that she will not at any time in the future carry on, either directly or indirectly, the millinery or dress-making business in the town of Felicity, Clermont county, Ohio, or at any place within such distance of said town as will interfere with said business, whether carried on by said Lyde Kennedy, Sallie Kennedy and May K. Parrott or their successors.
“In consideration of the above recited promises, tlie said Sallie Kennedy, Lyde Kennedy and May K. Parrott agree to1 pay the said Maggie Morgan the sum of $659; said sum of $659 is to be paid as follows, to wit: Three hundred dollars on the 15th day of April, 1874, and for the balance of said sum of three hundred and fifty-nine dollars the said Sallie Kennedy, Lyde Kennedy and May K. Parrott agree to give their firm note with approved security, bearing the date of day of delivery of the goods aforesaid; said note to draw eight per cent, interest per annum. In witness whereof we have hereunto set our hands and subscribed our names this 9th day of April, 1874.
“Mat K. Parrott,
Sallie Kennedy,
Lyde Kennedy,
Maggie Morgan.”
Under tbU contract the purchasers of said stock of goods and business took possession, and continued to carry on said business until August .31, 1875, when they sold the stock of goods and business to the plaintiff, and assigned to her all rights acquired under said contract. The plaintiff at once assumed control of said business of millinery and dress-making, and was conducting the same in said town of Felicity when this action was commenced. The concluding allegation of the petition was as follows:
“ The plaintiff says that the said Maggie Morgan, who is still a married woman, had established a good and profitable millinery business in said town of Felicity at the time she sold out to the said Sallie Kennedy, Lyde Kennedy, and May K. Parrott; that same has been ever since a lucrative and profitable business in said town.
“ The plaintiff says that the said defendant, on the 1st day of October, 1876, commenced and is still carrying on the millinery and dress-making business in said town of Felicity in violation of the terms of her said written agreement, and the plaintiff says she has sustained damages, by reason of the premises, in the sum of $1,200; and the plaintiff says that said Maggie Morgan lias and does threaten still to carry on said millinery and dress-making business in said town of Felicity.’ ’
Prayer for a perpetual injunction and damages.
The court of common pleas sustained a demurrer to the petition for want of facts sufficient to constitute a cause of action, and dismissed the petition. The district court reversed the judgment and remanded the cause. To reverse the judgment of reversal is the object of the present petition in error.
Nichols c& Lewis, for plaintiff in error:
The contract was void for: 1st. It interferes with, and is in derogation of the marital rights of the husband of said Maggie Morgan. Railroad v. Keary, 3 Ohio St. 201; Linsey v. Coat, 1 Ohio, 245; Bloom v. Richards, 2 Ohio St. 387; Benjamin on Sales, 33, 36, §§ 31, 37 ; Tyler on Inf. & Cov. 316, and cases cited; Quigley v. Graham, 18 Ohio St. 42; Miller v. Hine, 13 Ohio St. 368.
2d. There is no such separate property of a married woman known in law, or in equity, as “ good-will.” The very words “ separate property” would imply something tangible, a reality, that which on execution,-or under order of a court of equity, may be reached, and in some way or manner subjected to the payment of charges or debts contracted upon the faith and credit of the separate property. Act of March, 1871 (68 Ohio L. 48); Swasey v. Antram, 24 Ohio St. 87. To entitle one to the benefit of section 28 of the code as amended (71 Ohio L. 47), we apprehend, would require that the ¡aetition show affirmatively that the action concerns her separate property, as recognized by the statute, or is brought upon a written obligation, contract or agreement signed by her, &c., such as in equity would constitute a charge upon her separate property; because made and entered into, or the goods sold, upon the faith and credit of such separate estate ; and this separate estate, to charge and against which the judgment rendered maybe enforced by ordinary process of law, must be shown to exist before section 28, as amended, can have any force. That is, this amendment was and is intended to do away with the necessity of asking a court of equity to enforce the charge against the separate estate of a married woman, in the manner pointed out in the case of Phillips v. Graves & wife (20 Ohio St. 390). The petition is to disclose the existence of a married woman’s separate estate, then judgment and execution follow as in other cases. See Tyler on Inf. & Cov. 664, § 477. This section (28) gave a form of remedy not existing before, but did not vary or enlarge the liabilities of a married woman, Jenz v. Gugel, 26 Ohio St. 527; Allison v. Porter, 26 Ohio St. 136.
3d. As the statutes governing a married woman’s separate estate cannot bo held to support such a contract as is set out in the petition, can “ good-will ” be in equity considered “ separate property,” and the aid of equity invoked to enforce this contract? t Equity will not enforce a void contract, and unless Maggie Morgan had the power to make this contract, the aid of equity cannot be invoked to enforce it. Phillips v. Graves, 20 Ohio St. 371; 30 Ohio St. 147. Contracts in restraint of trade are not favored. Callahan v. Donolly, 45 Call, 152; 2 Ohio St. 520.
Frazier, Griffith da Griffith, for defendant in error.

Opinion:
Boynton, O. J.
The principal question arising in the case is, whether the good-will of the business in which the plaintiff in error was engaged at the date of the contract sued on, constituted a part of her separate estate. That she, in terms, and for an entire consideration, sold her business and the good-will thereof, including her stock in trade, and of which business and stock she was sole owner, and engaged not to carry on the millinery and dress-making business in or near the town of Felicity, are both distinctly averred.
That she has engaged in said business in violation of said agreement is admitted. And it is not doubted that, had she been sole and unmarried when the contract was entered into, the stipulation not to re-engage in the business in the town of Felicity, or so near thereto as to interfere with the business, would have been perfectly valid. Lange v. Werk, 2 Ohio St. 519. But it is contended, that while she was the separate owner of the goods and business sold, that the good-will of such business constituted no part of lier separate estate. The statute provides that, " any personal property, including rights in action, belonging to any woman at her marriage, or which may have came to her during coverture, by gift, bequest or inheritance, or by purchase with her separate money or means, or be due as the wages of her separate labor, or have grown out of any violation of her personal rights, shall, together with all income, increase and profits thereof, be and remain her separate property, and under her sole control." 68 Ohio L. 48. This provision is very comprehensive. Its object was to cut ofE the common law rights of the husband to the personal estate of the wife, whether dioses in action or choses in possession, unless reduced to his possession with the express assent of t^e wife. 'That the good-will of a business is a species of personal property is well settled. In Wedderburn v. Wedderburn, 22 Beav. 84, it was said by the master of rolls, that " The good-will of a trade, although inseparable from business, is an appreciable part of the assets of a concern, both in fact and in the estimation of a. court of equity." Judge Story defines it as " an advantage or benefit which is acquired by an establishment, beyond the mere value of the capital, stock, funds or property employed therein, in consequence of the general public patronage and encouragement which it receives from constant or habitual customers, on account of its local position, or common celebrity, or reputation for skill or affluence, or punctuality, or from other accidental circumstances or necessities, or even from ancient partialities or prejudices." Story on Part. § 99. In Bindley on Partnership, 842, the author, commenting on the meaning of the term good-will, says, that " it is generally used to denote the benefit arising from connection and reputation, and its value is what can be got for the chance of being able to keep that connection and improve it. Upon the sale of an established business its good-will has a marketable value, whether the business is that of a professional man or of any other person." In Smith v. Everett, 27 Beav. 446, Sir John Romilly says, " I entertain no doubt that if persons carry on business and one of them dies, a share in the good-will, where it is of any value at all, forms part of the estate of the deceased part nei\" These citations are sufficient to show that the good-will of a trade or business, when connected with it, is property. As was said in Wedderburn v. Wedderburn, supra, " it is a portion of the subject-matter which produces profits." It follows, therefore, that the good-will of the business sold by the plaintiff in error was as fully owned by her as a part of her separate ¡property, and as much the subject of sale, as was the stock of goods. This being so, the law gives the same remedy against her for the enforcement of the agreement as if she were unmarried. Section 28 of the code, as amended March 30, 1874, provides, that if a married woman be engaged as owner or partner in any mercantile or other business, and the cause of action grows out of, or concerns such business, she may sue and be sued alone ; and that in all cases where she may sue or be sued alone, the like proceedings shall be had, and the like judgment rendered and enforced, in all respects, as if she were an unmarried woman. Here the plaintiff in error was engaged in business as owner, and business of a mercantile character, and the cause of action grew out of such business. The rule of the statute therefore applies, that requires the same judgment to be given as if she were sole and unmarried. Patrick v. Littell, ante. That an injunction is the proper remedy in such case is settled by a uniform current of authority. Millington v. Foy, 3 Myl. & Cr. 338 ; Catt v. Tourle, L. R. 4 Ch. App. Cas. 654; Whittaker v. Howe, 3 Beav. 383 ; Hall v. Barrows, 33 L. J. Ch. 204; Harrison v. Gardner, 2 Mad. 198; Patridge v. Menck, 2 Barb. Ch. 101; Leake's Digest of Law of Contracts, 1133. The consideration paid for the stock of goods and the good-will of the business was entire and indivisible, and the difficulty of ascertaining the extent of the injury, or the value of the goodwill of the business, has led courts of equity to interfere by injunction for the protection of this description of property, from a very early day. As was said in Leather Cloth Company, Limited, v. American Leather Cloth Company, Limited, 4 De G., J. & S. 136, "the court interferes by injunction, because that is the only mode by which property of this description can be effectually protected." The right to relief in equity rests upon the inadequacy of the law to afford the remedy necessary to protect the party in the enjoyment of the right about to be violated. The defendant in error having succeeded to the rights of the purchasers under the contract in suit, is, by the express terms of the contract, entitled to the benefit of the plaintiffs promise not to engage in the business, and is consequently entitled to the same relief that a court of equity would have afforded to those from whom her rights were acquired.
Judgment affirmed. t