Case Name: John L. Treat and others vs. The Shoninger Melodeon Company
Court: Connecticut Supreme Court
Jurisdiction: Connecticut
Decision Date: 1869-02
Citations: 35 Conn. 543
Docket Number: 
Parties: John L. Treat and others vs. The Shoninger Melodeon Company.
Judges: 
Reporter: Connecticut Reports
Volume: 35
Pages: 543–546

Head Matter:
John L. Treat and others vs. The Shoninger Melodeon Company.
T. L. & Co., a manufacturing firm, sold to the S. M. Co. their factory and the goodwill of their business, the latter being a large part of the consideration for the price paid, and gave them a bond that no member of their firm should engage in the same manufacture any where in this country for twenty-five years without the consént of the 8. M. Co., reserving the right of being employed by other parties on a salary, provided they should not be interested nor their names used in the business. Six months afterwards a new company was organized for the purpose of carrying on the same manufacture in the same town, T, one of the firm of T. L. S' Co., entering into their employment on a salary, superintending the construction of their factory, ordering their machinery, purchasing stock, and rendering various other services, including the carrying on of a portion of their correspondence. The new company soon became competitors in business with the 8. M. Co., who suffered damage by the loss of skilled workmen who left their employment for that of the new company, and by the loss of customers, who were induced by the new company to purchase their goods in preference to those of the S. M. Co.; but it did not appear that these results were attributable to any act of T. L. S' Co., or of T., or that the S. M. Co. had suffered damage from any thing that T had done in the service of the new company. Held, On a bill brought by T. L. S Go. to foreclose a mortgage given to secure the price of the factory and business sold by them, that the 8. M. Co. was not entitled to an allowance of damages for a breach of the bond.
Bill for a foreclosure, brought to the Superior Court in New Haven county and tried before (Granger, J. The facts were found by a committee. .Decree for petitioners, and motion in error by the respondents. The case is sufficiently stated in the opinion.
J. S. Beach and Wright, for the plaintiffs in error.
Doolittle and Bronson, for the defendants in error.

Opinion:
Park, J.
On the seventh day of October, 1866, the petitioners were engaged in the manufacture of melodeons in the city of New Haven. On that day they sold to the respondents their manufacturing establishment, together with their tools, furniture, stock on hand, melodeons finished and unfinished, and the good will of the business, for the sum- of $80,-000, and executed to the respondents a bond in the sum of $10,000, conditioned that neither of the members of the firm of Treat, Linsley & Co. should engage in the manufacture of melodeons, either directly or indirectly, any where in the United States, for the term of twenty-five years, without the consent of the respondents, but that the bond should not be so construed as to prevent either of the members of the petitioners' firm from being employed by the day or oil a salary by other parties, provided they should not be interested in the business of manufacturing melodeons, nor their names used in connection therewith.
The remaining fasts of the case in reference to the questions at issue reported by the committee, are as follows :—
" The good will of the melodeon business constituted a large part of the consideration for which the respondents agreed to pay the s.um of eighty thousand dollars. In April, 1867, the New Haven Melodeon Company, a joint-stock corporation, was organized for the purpose of conducting in New Haven the business of manufacturing melodeons, and soon became, and has ever since been, a competitor in business with the respondents. Soon after the corporation was organized, the petitioner Treat entered into its employment, upon an agreement that he was to be paid at the rate of $1,-500 per year for his services ; and since that time he has devoted from one-half to two-thirds of his time to the service of the corporation. He superintended the construction of the new factory of the corporation in the spring of 1867, that service being the first service rendered by him to the corpora tion ; and he has ordered machinery, purchased stock, and rendered various other services in behalf of the corporation, including the carrying on of its correspondence to a small extent. All of these services have been so rendered by said Treat without the consent of the respondents. The respondents have suffered embarrassment and damage by the loss of skilled workmen, who, of their own accord and without the procurement or solicitation of the petitioners, left the employment of the respondents and entered into the employment of the new corporation. The respondénts have also suffered damage by the loss of customers, whom they would have retained or had, but for the fact that the new corporation induced many such customers to buy their goods instead of buying them of the , respondents. ' But the petitioners have not aided, and it has not been a part of the service of said Treat with said new corporation to aid, in inducing customers to purchase goods of said new corporation, in preference to purchasing the same of the respondents; and it does not appear, and is not found, that the respondents have suffered damage from anything which said Treat has done in the service of said new corporation."
Tiie respondents insist that all the damage they have sustained in the loss of customers and skilled workmen was owing to the employment of Treat--in the New Haven Melodeon Co., and that the damages should be therefore applied in reduction or extinction, as the case may be, of the indebtedness due from the respondents to the petitioners. But the court below has found that all the loss the respondents have- sustained in the particulars named was in consequence of the competition of the New Haven Melodeon Co., and was notin any respect due to the action of the petitioners, or of Treat in the employment of the new corporation. '
This must be a sufficient answer to the claim of the respondents ; for although there may have been a breach of the contract between the petitioners and the respondents in the sale of the good will of the petitioners' business, still, if the respondents have suffered no loss in consequence of the breach, there is nothing to deduct from the petitioners' claim.
The respondents strenuously endeavor to make it appear that the injury accrued in consequence of the acts of Treat in the employment of the new corporation. They say that the new corporation was merely the means by which he -inflicted the injury ; that he created the corporation, inspired it with life, managed its affairs, and rendered it capable of destroying to a great extent the respondents' business, as it did. If this is true then the finding of the court below is wrong. But we must take the facts as they come to- us ; and we think it clearly appears that there are no damages that can be deducted from the petitioners' claim.
There is no error in the judgment complained of.
In this opinion the other judges concurred.