Gordon v. Knott, 199 Mass. 173

Gordon v. Knott

199 Mass. 173 | Mass. | 1908

Sheldon, J.

The principal question argued in this case is whether the finding made by the single justice, “ that the plaintiff was the owner of something which the parties called a good will,” and that the Boston Rubber Shoe Company, hereinafter called the defendant, agreed to pay the plaintiff for this quasi good will, should be reversed. Under the recognized rule, it is to be sustained unless upon the evidence reported it was clearly wrong. Elliott v. Baker, 194 Mass. 518. Lindsey, v. Bird, 193 Mass. 200.

There is great force in the defendant’s contention that, as the business which the plaintiff was carrying on in London in October, 1896, was and for two years had been carried on by him merely as the agent of the defendant, and as the rubber boots *177and shoes which constituted the stock in trade had been merely consigned to him by the defendant for sale, and it was his duty only to sell them for the defendant, so the business was the defendant’s business, and the good will of that business was the defendant’s own property and did not belong to the plaintiff at all. So far as the good will of the business depended upon the reputation of the goods which had been sold, that belonged to the defendant. So far as it depended upon the possession of a valuable list of customers in various countries who would buy rubber boots and shoes, and the consequent ability to communicate readily with probable purchasers of such goods and thus to effect larger sales at a less expense and with less trouble than otherwise would be the case, full knowledge of all these particulars was already secured to the defendant by the agreements made between itself and the plaintiff on April 2, 1894, and August 1, 1895, respectively. So far as the good will depended upon the effect of the plaintiff’s personality in the business, the. defendant rightly says that this was not included in what the plaintiff turned over to Knott for its benefit.

But it could be found that these considerations do not cover the whole of the existent good will of this business. The plaintiff had built up a very large trade in England and other foreign countries; and, although this does not appear to have been profitable, yet so extensive a connection as he had formed might under a wiser management or more fortunate circumstances be capable of returning large gains. At any rate, the defendant regarded it as worth while to take a transfer not only of all the assets of the business and of the plaintiff’s leasehold estate in the premises in which it was carried on, but also of the good will, of which the plaintiff was called in the assignment the beneficial owner. The plaintiff himself, according to one part of the evidence, specified his good will as consisting of or situated in his file of letters from customers. It may be conceded that the plaintiff, before making the actual transfer and delivery to the defendant’s nominee of what the defendant was really entitled to receive, could not have copied for his own future benefit the accounts or the letters or the names of customers with whom he had dealt only as the defendant’s agent and for its benefit. Bowen, L. J., in Helmore v. Smith, 35 Ch. D. 449, 456. Lamb v. *178Evans, [1893] 1 Ch. 218, 226. Robb v. Green, [1895] 2 Q. B. 1. But the personal knowledge which the plaintiff had acquired of the business of selling rubber boots and shoes was great; his experience in it had been large; his acquaintance both with the travelling salesmen through whom apparently sales were generally made, and with probable purchasers of such goods, was extensive. It well might have been within the contemplation of both parties that he could secure an ample supply of such merchandise from other sources, and become so troublesome a competitor with the defendant in the business which it was taking up through Knott, as to make all the difference between a profit and a loss to the defendant in the prosecution of that business. Apparently there was nothing to prevent the plaintiff from taking that course; and this knowledge, experience, acquaintance and ability of his might well be found, as apparently it was found by the single justice, to constitute what the parties to this agreement called a good will.

So far as there was such a good will, it was transferred to the defendant. After the transfer, the plaintiff, under our decisions, could not derogate from his grant by engaging in a competing business of the same kind, selling the same goods, and endeavoring to deal with the same customers. Old Corner Book Store v. Upham, 194 Mass. 101. Munsey v. Butterfield, 133 Mass. 492. Dwight v. Hamilton, 113 Mass. 175. Angier v. Webber, 14 Allen, 211. Such a case as is now before us would be governed by the rule of these decisions, and would not come under the doctrine of Hoxie v. Chaney, 143 Mass. 592, and Bassett v. Percival, 5 Allen, 345. See the opinions in Old Corner Book Store v. Upham, and Hoxie v. Chaney, ubi supra, and Webster v. Webster, 180 Mass. 310, in which the distinction between these two classes of cases is stated. The case at bar is peculiarly one in which the plaintiff could not have set up a competing business without derogating from his grant of the good will of the old business.

But the defendant contends that whatever the rule might have been if this agreement had been made in Massachusetts, the rule adopted in the English courts is different; and that this, being an English contract drawn by English solicitors, who must be presumed to have had in mind the decisions of their own courts, must be governed by the English law. This may be conceded. *179And the defendant contends that under the law of England the plaintiff could not be restrained from setting up a competing business. He relies upon the language of Loring, J., in Hutchinson v. Nay, 187 Mass. 262, 264, in which it is shown that the rule of Labouchere v. Dawson, L. R. 13 Eq. 322, to the effect already stated, although since doubted or denied in other cases, has been finally confirmed by the House of Lords in Trego v. Hunt, [1896] A. 0. 7. But to this contention there are two answers.

In. the first place, even if this rule were applied to the contract before us, the plaintiff, under the agreement which he has made, would not be allowed to solicit orders from his former customers, even though he might set up a competing business. Accordingly the extent and value of the good will which he had transferred to Knott, though much diminished, would not be wholly destroyed. But, in the second place, the real answer to this contention is that when, in a contest in our own courts, the rights of the parties depend upon any foreign law, what that law is is purely a question of fact, to be determined by such evidence as may be offered thereof. R. L. c. 175, §§ 71, 75, 76. Demelman v. Brazier, 193 Mass. 588. We do not find that there was any evidence of the law of England as to this matter before the single justice; and we cannot ourselves consider evidence which was not introduced before him. But in the absence of evidence, it cannot be presumed that the common or the commercial law of England differs from ours. Callender, McAuslan & Troup Co. v. Flint, 187 Mass. 104. Cherry v. Sprague, 187 Mass. 113. Mittenthal v. Mascagni, 183 Mass. 19, 23. Chase v. Alliance Ins. Co. 9 Allen, 311. Upon this question of fact, we can no more consider statements made in the reasoning adopted in the opinions of our own court than decisions in the English courts not put in evidence at the hearing. Accordingly this contention of the defendant must fail.

It may be added that the words of the agreement in question in which the plaintiff is called the beneficial owner of the property assigned are not without weight upon the question, though their probative value is of course much lessened, both by the fact that he was in no sense the beneficial owner of much of the property assigned, and by the further fact that Leland, who rep*180resented the defendant in the negotiations that preceded the making of the assignment, had refused in those negotiations to admit that the plaintiff owned any good will in the business. On the whole, we are satisfied that the finding of the single justice upon this question was warranted by the evidence and cannot be set aside; and it is conceded that in that event the further finding that the defendant had agreed to pay for this something in the nature of a good will was also warranted.

It is very difficult, to be sure, to see how such a qualified and limited good will could have any considerable pecuniary value; but that question is not before us. After the decree that the plaintiff is entitled to an accounting shall have been entered, the value of this good will, as well as of the leasehold premises and his office furniture and of any commissions to which the plaintiff may have become entitled, and of any part of the deposit in the Bank of England that may be found to have been his private property, as well as the amount of the Albert L. Gordon note, and the amount of the plaintiff’s indebtedness to the defendant, will all be open for investigation either before a single justice or before a master.

As to the testimony, the admission of which was excepted to, we are of opinion that, so far as it has not turned out to be immaterial, it was admissible to prove the promise of the defendant to pay the plaintiff for his good will and to show the meaning put by the parties upon that term, and the conditions which existed while the contract was under consideration. Smith v. Vose & Sons Piano Co. 194 Mass. 193, and cases there cited.

Accordingly, a decree will be entered declaring that the plaintiff is entitled to an accounting with the defendant as already stated.

So ordered.