Norris & Cochran v. Howard, 41 Iowa 508

Norris & Cochran v. Howard

41 Iowa 508 | Iowa | 1875

Day, J. —

The court in rendering his decision made the fob lowing findings and conclusions:

“That said notes and. mortgage .to''secure the. same-.were given in consideration.,of the sale, by said Howard to plain*511tiff, of an elevator and fixtures, and the further consideration that said Howard would not afterward engage in the business at said place.

. That defendant did thereafter .engage' in such business from about the last of April, 1872, to the first of August, 1872, by being a silent partner of one Elliott, and furnishing him money with which to buy grain, and sharing in the profits thereof. And the court finds that by reason of his violation of his contract in this respect, the plaintiff has been damaged in the sura of two hundred dollars.

That on the 1st day of August, the plaintiff, C. M. Norris, having purchased the interest of his partner, Wm, Cochran, in the concern, formed a co-partnership with the defendant, IT. M. Howard, and one James H. Elliott, for- the purpose of buying and dealing ingrain and produce in Prairie City; and, by such arrangement the defendant, Howard, was released from his obligation not to again engage in the business of buying and selling grain in Prairie City.”

The court thereupon-allowed the plaintiffs a set-off of $200 against the said note and mortgage, and rendered judgment against them for the balance of the notes, and for a foreclosure of the mortgage. No objection is made to the facts found by the court, but it is claimed that the legal deductions are erroneous.

The agreement not to buy grain in Prairie City, nor there-' after to engage in such business at that place, is a thing dis-' tinct from the transfer of the mere good will; The legal meaning of good will, as defined by Lord Eldon, “ is nothing more than the probability that the old customers will resort to the old place.” “ It is nothing more than a hope, grounded upon a probability.” Parsons on Partnership, second edition, page 273. “The sale of a good will, in the absence of any express stipulation, does not preclude the seller from setting up the same kind of business in the -same neighborhood, if he do not describe himself as setting up the identical business that has been purchased.” Smith’s Mercantile Law, page 252, and cases cited.

*512l. contract : good will: partnership. The agreement to take in defendant as a partner in the transacting of a general grain and produce business at ° . . Frame City is altogether inconsistent with the undertaking which plaintiff had exacted of defendant not to engage in such business at that place. The formation of a partnership is regarded in law as mutually beneficial to all the parties. If one of the parties, in virtue of a contract with another, rests under any obligation which forms an impediment to his becoming a partner, his agreement to become such partner constitutes a sufficient consideration for releasing him from his agreement. If the article of co-partnership had expressly provided that, “in consideration of II. M. Howard’s becoming a partner with O. M. Norris and James H. Elliott in a general grain and produce business at Prairie City, C. M. Norris releases H. M. Howard from his agreement not to engage in the grain and produce business at Prairie City,” it could not be doubted that such discharge and release would be effectual and absolute. It ivould be a release supported by a sufficient consideration, and the expiration of the term of the co-partnership would not revive or restore an undertaking which had been finally abrogated by a valid agreement. Now when this co-partnership was formed, the objects of which could be carried out only by permitting Howard to engage in the grain and produce business, his agreement not to do so was just as fully and as effectually ended as if the articles of co-partnership had contained such a stipulation. It is true the parties might have agreed that the formation of the partnership should merely suspend Howard’s, undertaking, and enable him to engage in the interdicted business only during the continuation of the co-partnership. But as the contract of co-partnership contains no such provision, the discharge must be regarded as absolute, upon the sufficient consideration of his' agreeing to become a member of the firm.

Amfirmed.