44 N.H. 335 | N.H. | 1860
In some of the books there is an apparent confusion in the use of the term “ good-will.” It is said to bear two significations ; first, the “ advantage arising from the mere fact of sole ownership of the premises, stock, or establishment, without reference to other persons as rivals ;” and second, the “ advantage arising from the fact of excluding the retiring partner from the same trade or business as a rival.” Story Part., sec. 99. But we think there is no good ground for such a distinction in law. Indeed, it seems hardly consistent with the definition given by Story in the first part of the section cited. He says, “ good-will may be properly enough described to be the advantage or benefit which is acquired by an establishment, beyond the mere value of the capital stock, funds, or property employed therein, in consequence of the general public patronage and encouragement which it receives from constant or habitual customers, on account of its local position, or common celebrity, or reputation for skill or affluence, or punctuality, or from accidental circumstances or necessities, or even from ancient partialities or prejudices. Thus an inn, a nursery of trees and shrubs, a fashionable stand, or a newspaper establishment may, and often does enjoy a reputation and command a price beyond the intrinsic value of the property invested therein, from the custom which it has obtained and secured for a long time ; and" this is commonly called the good-will of the establishment.” If good-will is merely the advantage from the sole ownership of property, it adds nothing in a legal view to such ownership, and is ordinarily meaningless in conveyances. Cases may be conceived where the goodwill of a business is of no practical value, unless accompanied by the ownership or possession of certain property, and where the ownership or possession of such property might enable a party in effect to enjoy all the substantial benefits of the good-will; as where the good-will of the public to thé business is due solely to certain qualities or characteristics peculiar to the property employed in it, or to the special advantages of a particular locality. In Such instances the attraction for the public patronage may be entirely in the particular property or locality, and the possessor of such property or locality may have the exclusive possession of all the means of attracting patronage, that belonged to the business. The vendor of such property has not sold the good-will of his business, though he may have parted with all that in fact gave value to that good-will. He has still in law the right to cany on his own business, for he did not give up that by his contract, but he may have disabled himself in fact from exercising that right, and from enjoying the popularity his business had attained, because he has ceased to possess the particular property which was essential to the business and
In Kennedy v. Lee, 3 Meriv. 451, Lord Eldon said that “ where two persons are jointly interested in trade, and one, by purchase, becomes sole owner of the partnership property, the very circumstance of sole ownership gives him an advantage beyond the actual value of the properly, and which may be pointed out as a distinct benefit essentially connected with the sole ownership. In the case of the trade of a nurseryman, for instance, the mere knowledge of the fact that he is the sole owner of the property and in the sole and exclusive management of the concern, gives him an advantage which the other partner, supposing him to carry on the same trade with other property, not the partnership property, would not possess. In that sense, therefore, the good-will of a trade follows from and is connected with the fact of sole ownership.” The business in question in Kennedy v. Lee was that of nurserymen, and from what has already been said it is apparent that the remarks of Lord Eldon may have been correct when applied to that case. However, they probably were not intended as a general legal definition of “ good-will,” the case calling for no construction of that term, and they can not be received as such. He adds, “ there is another way in which the good-will of a trade may be rendered still more valuable ; as by certain stipulations entered into between the parties at the time of the one relinquishing his share in the business; as by inserting a condition that the withdrawing partner shall not
In Cruttwell v. Lye, 17 Ves. 346, Lord Eldon says: “ The goodwill, which has been the subject of' sale, is nothing more than the probability that the old customers will resort to the old place.” The same or similar language has been used in other cases. Harrison v. Gardner, 3 Mad. 455 ; Chissum v. Dewes, 5 Russ. 29. This remark of Lord Eldon may be generally correct in certain cases, where the good-will is dependent for its value solely upon locality, but it would be too narrow a construction of an expression made in reference to particular instances, to regard it as a general definition. Churton v. Douglass, 1 H. R. V. Johns. 174. There are kinds of business in which the good-will is substantially independent of any precise locality, and where it may be valuable not only from the likelihood of retaining old custom, but also because of the probability of attracting new by its established reputation, or other acquired advantages. An established business often obtains a value beyond the actual amount of tangible property employed, from the ability with which it has been conducted, the reputation it has attained, the advantageous site it has secured, or other circumstances which have gained it popularity, or given it the power of attracting patronage. The owner of such a business obviously may have great advantages over one who sets up a new business of the same kind, in competition with the old and well known establishment. The intention of the parties to a sale of such an establishment with its good-will is to transfer those advantages to the purchaser. It is the object of the contract to place him, so far as may be, in possession of the business with these advantages, so that he may continue it as the seller might have done. The seller has parted with his right to this established business, and may not lawfully continue it, while the purchaser has acquired that right. By the sale, every thing transferable, necessary to effect such a result, passes. The contract does not include the popularity and personal qualities of the seller, which are not transferable, but the good-will they have gained for the business. It has never been understood that such a sale binds the seller to exercise his ability or industry for the purchaser; for he has merely sold the business with the advantages, which they with other circumstances have established; and we think such a contract does not restrain him from their general exercise. The policy of the common law would not justify any unnecessary implication of such restraint; and we think the somewhat indefinite character and practical limits of an exclusion from competing business would not recommend it to any special favor. Before the sale the vendor had no immunity from competition, though in some cases he has been protected from rivals who fraudulently held themselves out as conducting the business he had established. Bell
By the sale of the good-will of an established business we understand that the seller parts with and the purchaser acquires the right to continue that established business, with all the advantages belonging to it as such. This, as we understand it, is the view of the Vice-Chancellor in Churton v. Douglass. He says, “ good-will, we apprehend, must mean every advantage — every positive advantage, if I may so express it, as contrasted with the negative advantage of the late partner not carrying on the business himself — that has been acquired by the old firm in carrying on its business whether connected with the premises in which the business was previously carried on, or with the name of the late firm, or with any other matter carrying with it the benefit of the business.” The sale of the good-will of a business will take from the seller the right to continue, or in any way hold himself out as continuing the identical business, the good-will of which he has sold, but will not necessarily prevent him from engaging in a similar business, that is not and does not purport to be a continuation of the old one. Churton v. Douglass, Cruttwell v. Lye, Shackle v. Baker (14 Ves. 468), Harrison v. Gardner, Kennedy v. Lee; Lindley on Part. 705, et seq.; Snowdon v. Noah (Hopk. 533). Possibly cases may arise where the questions, what is a continuance of the old business, and when a party is to be considered holding himself out as continuing it, may prove difficult, but perhaps the difficulty will quite as often be found one of fact, arising from the nature of the business, or the circumstances on which its good-will is founded, as of law.
If we assume, as the plaintiffs claim, that it was the intention of the parties in their contract that the sale should be of the whole establishment, including the newspaper, with its good-will; that is, of all the material property, with the right to continue the newspaper, and the printing office, with all the advantages that popularity, reputation, or other circumstances had given them ; still we see no good reason to hold that the special mention of the subscription list among the other property sold excludes the defendant from the right to publish a new and different newspaper. We understand the subscription list to be a catalogue of the subscribers to the newspaper, with their residences. It in fact contains a list of existing customers for the journal, and in providing for an appraisal of its existing value the parties seem to have intended in substance an
If these views are correct, the plaintiffs’ argument founded upon the two significations which they suppose attach to the term “ goodwill,” must fail. There is no occasion to inquire in which sense the term was used, or to resort to the aid of parol evidence; nor can such evidence be received to show that at the time of the sale, or during the prior negotiations, a verbal agreement was made by the defendant that he would not establish a competing business, if such be the fact; for the contract is not silent upon this point, but contains in effect an agreement by the defendant not to continue the particular business sold to the plaintiffs; and to allow such proof would be to receive parol evidence to change a written agreement not to continue a particular newspaper and a designated printing business into a general contract not to set up any rival newspaper or engage in any competing business. 2 Phill. Ev. 358; 1 Greenl. Ev., sec. 275; Pillsbury v. Locke, 33 N. H. 102; Churton v. Douglass. Of course the declarations alleged to have been made by the defendant since the written agreement was entered into can not be received to vary its effect. Fitts v. Brown, 20 N. H. 398.
The plaintiffs have attempted to show that by the usage.among the publishers and conductors of similar journals and printing establishments a sale of the good-will and subscription list takes from the seller the right to establish a competing journal and printing office; but we think their evidence fails to show a usage of that description “so well settled, so uniformly acted upon, and of so long a continuance, as to raise a fair- presumption that it was known
The plaintiffs claim that the conduct and declarations of the defendant have been such that it would be against good conscience for him to set up a rival business; in short, that the defendant is equitably estopped to deny an agreement on his part not to set up such a business, by his representations made during the negotiations, and by the facts that the appraisers, with the knowledge of the parties, fixed the value of the good-will upon the supposition that the defendant was excluded from any competing business, and that the plaintiffs made and the defendant received payment for the good-will as thus appraised. This suit is brought not to obtain relief from fraud or mistake in making the writings, and the bill seeks not to set aside the award or the contract, or to reform the latter, but to enforce it; and in this case the “cotemporary or prior parol stipulations between the parties are to be regarded as merged in the written contract;” 2 C. & II. Notes to Phill. Ev. 519; Nutting v. Herbert, 35 N. H. 126; Hunt v. Rousmanier, 8 Wheat. 174; they can not be received to vary it, and to allow them in this case the effect by way of estoppel, which the plaintiffs claim, would be a mere evasion of the rule.
Lord Eldon says, in Cruttwell v. Lye, “ with regard to conduct, a man might stand by, and give encouragement, generating a confidence that he would not engage in such a trade, inducing other persons to involve themselves; on the ground of which this court might interfere.” The sale in question in that case was made by the assignees of a bankrupt, and the suit was brought to restrain the bankrupt from engaging in a similar business. We understand the remark of the chancellor to be but an intimation that the court might in the case supposed apply the ordinary rules of estoppel in pais, and we find nothing in it or in the case to indicate that in such application, if made, the settled rules of the law as to parol evidence were to be violated or evaded in any case where the rights of the parties were founded upon their written contracts.
In the present case the agreement for sale did not authorize the appraisers to fix the value of the good-will and subscription list upon the supposition that the defendant was not to have the right to engage in any business of the same kind, or bind the defendant to part with that right, and he did not attempt to do so by his bill of sale. The award itself does not show that the appraisal was made as the plaintiffs claim, and whether in the present case we can look beyond that and receive the evidence of the appraisers to learn what was appraised (see Furber v. Chamberlain, 29 N. H. 405; Aldrich v. Jessiman, 8 N. H. 520, and Harrison v. Gardner), we need not inquire, for the evidence does not show that the defendant knew that the appraisement was thus made, or received payment for surrendering any such right. The papers do not show such an
Looking at these contracts we find that the plaintiffs have obtained all that the defendant agreed to sell or did sell to them. ¥e think that the case of Harrison v. Gardner, on which the plaintiffs seem to rely, is distinguishable from the present. There, by written, articles, reciting, among other things, that the plaintiff and defendant had agreed not to renew or- continue their copartnership for any further term, “ but had not fully agreed which of them should
Nor do we think that the intimation in Shackle v. Baker can aid the plaintiffs here. The report of that case does not set out the bill, but it appears that before answer a motion was made for an injunction, to restrain the defendant from proceeding under a judgment for the consideration of a sale by the defendant to the plaintiff of the good-will of a millinery business. The affidavits stated an agreement for the sale in consideration of £2,000; that the plaintiff proposed that a covenant should be given that the defendant and his wife would not for ten years carry on the same business in Liverpool, &c., and that they would use their best endeavors to assist the plaintiff and procure customers, &c.; that this covenant being objected to by the defendant and his wife, upon the ground that it was an impeachment of their honor and unnecessary, was waived by the plaintiff, upon the mere undertaking of the defendant and his wife. They also stated acts of the defendant and his wife in violation of this undertaking. The chancellor denied the motion, but gave the plaintiff leave to move again upon the coming in of the answer, and said, “ considering the covenant which the plaintiff proposed to have, as having been kept out by bad faith, yet if I now enjoin, before answer or any default of appearance, I must give the same effect to the agreement as I should give at the heai’ing, if the covenant had been contained in it, upon the ground of fraud.” Whatever weight may be due to the intimation contained in this case, it is manifestly predicated upon an essentially different state of facts from that existing in the present case, and is not applicable here.
If in this case we adopt the broader construction of the contract, yet the defendant has not continued or held himself out as continuing the business, of which he had sold the good-will to the plaintiffs. The newspaper which he commenced was not and did not purport to be the Dover Gazette, and was not held out as published in continuation of or succession to that journal. It was different in name and fact, and was, as it claimed to be, a new journal. It was called the Dover Sentinel, and differed sufficiently in appearance from the Gazette to avoid liability to mistake. Although both newspapers claim to support the principles of “the democratic party,” they in fact advocated quite different views upon several questions of public policy which were then regarded by many as grave and important, and therefore were likely to obtain their chief patronage from different sources, as each would naturally depend mainly upon the supporters of its peculiar views for subscribers. Their advertising business would probably be affected to a considerable extent by these differences ; subscribers would generally be likely to prefer for this purpose the journal for which they subscribed, and others would ordinarily be influenced by the character and extent of the circulation. However, patronage in the way of subscription, and to a considerable extent of advertising, of the one was not necessarily
The bill also asks a decree for the delivery of the subscription list of the Dover Gazette to the plaintiffs by the defendant. It appears that the directing books, containing the names and residences of the subscribers to that newspaper, were delivered to the plaintiffs at the time of the sale, and were copied by them; that afterward the plaintiffs permitted the defendant to take these books for use in the settlement of his accounts; and the evidence, we think, shows that the plaintiffs had free access to and full possession of them whenever they chose, but fails to prove any refusal by the defendant to return the books, or any request upon him to deliver them to the plaintiffs. As no improper detention of the books by
The bill must be dismissed.
Doe, J., did not sit.