Griffith v. Kirley

76 N.E. 201, 189 Mass. 522, 1905 Mass. LEXIS 925
CourtMassachusetts Supreme Judicial Court
DecidedNovember 29, 1905
StatusPublished
Cited by8 cases

This text of 76 N.E. 201 (Griffith v. Kirley) 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
Griffith v. Kirley, 76 N.E. 201, 189 Mass. 522, 1905 Mass. LEXIS 925 (Mass. 1905).

Opinion

Hammond, J.

1. The main question is whether the estate of Kirley who has died since the beginning of this suit should be charged with the value of the good will of the partnership business. The master has found that he should be thus charged unless by operation of law the good will passed to the receiver. It seems plain from the report of the master and the evidence of the receiver that the receiver did not undertake to do anything with the real estate. He simply took possession of some of the personal property. He does not seem to have had any [524]*524authority to deal with the real estate. He therefore could make no sale of the firm property as a going concern. The good will was apparently not attached to that portion of the personal property of which the receiver took possession.

Upon the question whether Kirley should be charged with the value of the good will the master finds the following facts:

“ It appeared that in 1895 the plaintiff, Frank E. Griffith, and his brother, the defendant Richard E. Griffith, agreed with the defendant Thomas Kirley, to enter into a partnership. The defendant Kirley then owned certain real estate in Chicopee, used as a farm and a fertilizer factory, and there he carried on also a butchering business and dealt in tallow, bones, grease, and hides. It was agreed that the said Frank E. Griffith and Richard E. Griffith should pay $5,000 to said Kirley for a half interest in the real and personal property used in the above mentioned business and the good will of the business. This five thousand dollars was payable, one thousand dollars in cash, and the balance ■ in annual instalments of one thousand dollars with interest. By the terms of this agreement, which was wholly oral, the defendant Kirley was to receive one half of the profits of the business, and the plaintiff, Frank E. Griffith, and the defendant, Richard E. Griffith, were each to receive one fourth. To make this division equitable, as the Griffiths were putting in the time of two men and Kirley only his own time, it was agreed that the Griffiths should be allowed wages for Frank E. Griffith’s services, and that the services of Richard E. Griffith should offset the services of Kirley. The business was to be carried on under the name of Thomas Kirley & Co.
“The one thousand dollars, as above agreed, was paid by the Griffiths, five hundred dollars in cash October 7, 1895, and the balance in a note, dated October 26, 1895, which was subsequently paid by them, with interest. Some six months after the beginning of the partnership, a bond for a deed was given by Kirley to Richard E. and Frank E. Griffith, in which he bound himself to convey to them one undivided half interest in the real estate, above mentioned, upon the payment of five thousand dollars, as above set forth, and at the same time R. E. Griffith and F. E. Griffith signed a promissory note for five thousand [525]*525dollars, ‘ payable one thousand dollars each and every year until the whole sum is paid, with interest, payable annually.’ A payment of one thousand dollars was indorsed upon the note as of the time of its date. . . .
“ I find that this bond for a deed and this note were parts of one transaction, but that they did not purport to state all the terms of the agreement between the parties, and that the consideration for the five thousand dollar note included a half interest in the personal property and the good will of the business, and that the bond and note were with this intention dated back to the time of the beginning of the partnership.
“ The partnership began September 1st, 1895, and continued until May 5th, 1902, when it was terminated by the acts of Kirley, who made a deed of the real estate and a bill of sale of the personal property of the firm to the defendant, Martin L. Barnes. Barnes immediately took possession of the real and personal property and ejected the Griffiths from the real estate. Thereupon the bill of complaint in this suit was brought, and a receiver was appointed, who took possession of the partnership property, as pointed out by the defendant Kirley. The receiver has sold this property, collected the bills due the partnership, and paid its debts, and has a balance in his hands to be divided between the partners in accordance with the decree of the court in this case. Saicl deed and bill of sale from Kirley to Barnes were without consideration. Said Barnes was merely a secret agent of Thomas Kirley, and Kirley kept on uninterruptedly with the business formerly of the firm, and the business was not interrupted by the receivership, as Kirley purchased the personal property of the firm from the receiver.”

In the final adjustment of the accounts the master has charged the Griffiths with the balance due upon the §5,000 note. Although the title to the real estate was in Kirley, yet the master rightly ruled that in equity it should be regarded as partnership property.

Here, then, is a case where the original proprietor of the business has sold one half of all the property used therein, including the good will, to two persons, as a part of an agreement to carry on the business as partners. The business is then carried on by them for several years, when the original proprietor dissolves the [526]*526partnership by a pretended sale of the real and personal estate belonging to the firm to a secret agent through whom without interruption he carries on the business for himself alone at the same place, excluding his former partners from any participation therein.

It is plain from the facts found by the master that a connection had been established between the firm and its customers, of such a nature as to lead to the probability that at least some of the old customers would continue to trade with the successor of the firm; and, the nature of the business being such as to render the procurement of a proper site a matter of some difficulty, it fairly may be inferred that the chance of maintaining, this connection, as well as of acqumng new customers, depended to a considerable extent upon the possession of the real estate and fixtures of the old firm. In other words, it is manifest that there was a good will, and that it was attached to the real estate and fixtures. See Moore v. Rawson, 185 Mass. 264.

It is unnecessary to cite authorities in support of the proposition that upon a bill"to wind up the affairs of a partnership it is the right of either of the partners to have the property sold so as to obtain the benefit of the sale of the good will. In the case before us the defendant, as before stated, has taken exclusive possession of the firm property to which the good will is attached, and is carrying on the business exactly as though he were the purchaser of it. Under these circumstances the court may regard the defendant, so far as respects the good will, as though he had purchased under an order of the court for the sale of the property and good will, and therefore that he should be charged with the value of the good will.

It is well, however, to see what is the nature of this good will. The law upon this subject has been recently discussed by this court in Hutchinson v. Nay, 183 Mass. 355, and 187 Mass. 262 ; and we do not deem it necessary to do much more than to refer to that case and the cases therein cited.

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Cite This Page — Counsel Stack

Bluebook (online)
76 N.E. 201, 189 Mass. 522, 1905 Mass. LEXIS 925, Counsel Stack Legal Research, https://law.counselstack.com/opinion/griffith-v-kirley-mass-1905.