Court Opinion

ID: 7897909
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:53:37.479334+00
Date Added: 2024-06-11T16:32:08.520608
License: Public Domain

Bryan, J.,
filed the following dissenting opinion, in which Judges Robinson and McSiierry concurred.
There has been a good deal of discussion in the Courts on the questions which were debated at the bar. And the conflict in the decisions has been very great. Yery opposite opinions have been declared from the Bench as to the rights acquired by the purchase of the good-will of a business, and even as to the meaning of the term. Attempts have been made to formulate rules and definitions, which should measure, as by a geometrical scale, the transactions occurring in the different departments of business, although they are marked in their details and in the mode of their management by such a vast variety of features.
It is more to the present purpose to ascertain the just construction of the contract from which this controversy lias arisen. In this instrument, Armstrong and Bitner describe themselves as “partners in the selling and buy*126ing of real estate, and in the general insurance business;” and Bitner sells to Armstrong “all his interest in the firm of Armstrong & Bitner, together with the goodwill of said firm in so far as the same relates to, and is connected with, the business of insurance;” and he also covenanted that he would not engage in, be connected with, or interested in, the business of such, fire insurance, or in the establishment of any fire insurance agencies in Washington County, Maryland, for the period of two years from the first day of April, eighteen hundred and eighty-six, and that he would not for said period of time within Washington County, solicit business for any fire insurance company, or any agent thereof. It was also covenanted that all books and papers belonging to the firm of Armstrong and Bitner, in so far as they related to the business of fire insurance, should belong to and be the absolute property of Armstrong, with the right reserved to Bitner of free access to the books at any time for the purpose of settlement of the business of Armstrong and Bitner, or to enable Bitner to close any account due to him which might be contained in them. It must be evident that the purpose of the contract was to denude Bitner of all interest in the business, and to invest Armstrong with it as fully as it had formerly belonged to the partnership. Armstrong was to have the business with every incident and advantage belonging to it; all the means and apjiliances for conducting it successfully; every benefit which' had accrued to the old firm from the reputation which it had established, and from every other circumstance which enabled it to attract and retain the patronage of cus fcomers. According to the terms of the contract he was to pay Bitner fifteen hundred dollars, and he did pay this sum. No part of it was paid for the amounts due to the firm; for in a subsequent portion of the contract it was provided that the money due to the firm, when collected, should, after payment of its debts, he equally divided be*127tween tlie two partners. To secure Armstrong for a while from the effects of competition, Bitner stipulated that he would not, for the period of two years, engage in the same kind of business within the limits of Washington County. But it is not to be inferred from this stipulation that after the expiration of this time Bitner was at liberty to take from Armstrong that which he had sold to him. To what avail did Armstrong pay Bitner fifteen hundred dollars for the business, if the latter might take it from him. The modes of obtaining business are so many and so various that it may not be always practicable to detect and prevent the means used to seduce customers from those on whom they are in the habit of bestowing their patronage. Where a person, who has sold the good-will of his business, is entitled by the terms of the contract to carry on the same business in the same locality, it is difficult to mark the line which separates that which may lawfully be done from that which is in a violation of his contract. Good faith requires that he should not nullify his grant, or derogate from it; that he should not resume that which he has sold; and yet by contract he has a right to pursue his business; and the legitimate pursuit of his business may result in attracting the customers of the old firm. In this case Bitner is charged with making personal solicitations to the customers of the old firm and with using extracts from their books, which show the- names of policy holders insured by them, so as to facilitate these personal applications. Such conduct surely tends to destroy the value of the good-will. It appears to me that Armstrong is entitled toan injunction to protect him in the enjoyment of rights which he bought and paid for.
The bill of complaint in this case prayed for such an injunction, and to the extent indicated it ought to have been decreed. The opinions in Ginesi vs. Cooper, 14 Chancery Division, 596, and Angier vs. Webber, 14 Allen, *128214, are founded on principles of reason and justice, which command my full approval.
(Filed 12th November, 1889.)