Gordon v. Knott

85 N.E. 184, 199 Mass. 173, 1908 Mass. LEXIS 805
CourtMassachusetts Supreme Judicial Court
DecidedMay 22, 1908
StatusPublished
Cited by15 cases

This text of 85 N.E. 184 (Gordon v. Knott) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gordon v. Knott, 85 N.E. 184, 199 Mass. 173, 1908 Mass. LEXIS 805 (Mass. 1908).

Opinion

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 [177]*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. [178]*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. [179]*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.

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Bluebook (online)
85 N.E. 184, 199 Mass. 173, 1908 Mass. LEXIS 805, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gordon-v-knott-mass-1908.