Court Opinion

ID: 5215778
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:22:45.706057+00
Date Added: 2024-06-11T08:27:26.110655
License: Public Domain

Ingraham, P. J.
(concurring in part) :
I concur with Mr. Justice Miller except in one respect. .-I think the injunction should also be extended so as to restrain the defendants from soliciting any of the customers of the old firm, and also from soliciting the agents or representatives of the old firm to enter into the employ of the defendants. The question as to what is included in the sale of the good will of a business and the obligation assumed by the vendor is so thoroughly discussed in Trego v. Hunt (L. R. [1896] App. Cas. 7), that it is unnecessary for me to say more than that I think the principle established, in that case should be adopted in this State. As was said by Lord Herschell, in his opinion in the House of Lords, “ It is the connection thus formed, together with the circumstances, whether of habit or otherwise, which tend to make it permanent, that constitutes the goodwill of a business. It is this which constitutes the difference between a business just started, which has no goodwill attached to it, and one which has acquired a goodwill. The former trader has to seek out his customers from among the community as best he can. The latter has a custom ready made. He knows what members of the community are purchasers of the articles in which he deals, and are not attached by custom to any other establishment.” Then, in discussing the obligation assumed by the vendor of the sale of the good will of a business, he said that for the vendor to invite the former customers of the firm, using the knowledge which he has acquired of what persons were such customers, by an appeal to them, to seek to weaken their habit of dealing where they have dealt before, or whatever else binds them to. the old business and to secure their custom, is a direct and intentional.dealing with the good will and an endeavor to destroy it. “ But when he specifically and directly appeals to those who were customers of the previous firm he seeks to take advantage of the connection previously formed by his old firm, arid of the knowledge of that connection which he has previously acquired, to take that which constitutes the goodwill *330away from the persons to whom it has been sold and to restore it to himself; ” and Lord Maonaghten says in this connection that “ He [vendor] may set- up where he will. He may push his wares as much as he pleases. He may thus interfere with the custom of. his neighbor as a stranger and an outsider might do; but he must not, I think, avail himself of his special knowledge of the old customers to regain, without consideration, that which he has parted with for value. He must not make his approaches from the vantage-ground of his former position, moving under cover of a connection which is no longer his. He may' not sell the custom and steal away the customers in that fashion.” This court has followed that case in affirming a judgment entered upon a decision made by Mr. Justice Bischoff in Goetz v. Ries (N. Y. L. J., March 12, 1907; affd., 127 App. Div. 940) and it has been followed .in several other States, notably in Massachusetts, and in the Federal courts and illustrates the gradual developments of the law by which equity steps in and prevents what, from the relation of the parties and the obligations which have been assumed, would be unfair and dishonest competition in business.
Judgment modified as directed in opinion of Miller, J;, and as modified affirmed, without costs.