Collas v. Brown

Decision Date12 June 1924
Docket Number8 Div. 654.
Citation100 So. 769,211 Ala. 443
PartiesCOLLAS v. BROWN ET AL.
CourtAlabama Supreme Court

Appeal from Circuit Court, Morgan County; Jas. E. Horton, Jr. Judge.

Bill for injunction by Jack Collas against N. P. Brown and another. From a decree dissolving a temporary injunction complainant appeals. Affirmed.

Almon &amp Almon, of Albany, Brown & Griffith, of Cullman, and Arthur B Chilton, of Montgomery, for appellant.

W. W. Callahan, of Decatur, for appellees.

BOULDIN J.

The case here presented is substantially this:

On January 2, 1924, the respondents sold to complainant by bill of sale in writing:

"The American Café on Railroad street in Decatur, Alabama, and all leases, goods, wares, merchandise, good will and paraphernalia therewith connected."

The bill avers:

"That, as an inducement to said purchase, the defendants represented to the complainant that they desired to and would remove away from Decatur into some foreign territory, and would not enter into a competitive business in Decatur during the term of said lease on said café, which expired on December 31, 1925;" that the greater portion of the consideration for the purchase was "the good will of defendants in said business and their agreement not to enter into a competitive business in the same vicinity during the life of said lease contract as hereinabove set forth;" that defendants, in disregard of their agreement, have entered into a competitive café business in the same vicinity, to the great injury of complainant's business.

The prayer is for an injunction restraining the operation of the new café, and for an accounting for damages sustained by complainant.

The answer denies the equity of the bill, and sets up the written contract.

The appeal is from a decree dissolving a temporary injunction on answer and affidavits.

The following inquiries arise:

First. Can the agreement not to engage in a competitive business be treated as a collateral agreement supplemental to the written contract evidenced by the bill of sale?

Second. Does the sale of the "good will" of he business carry an implied covenant not to engage in a competitive business?

Third. Is parol evidence admissible to prove the alleged agreement as an element of "good will" within the contemplation of the parties, or as a circumstance defining "good will" as used in the written contract?

Treated as a collateral contract resting wholly in parol, it imports a continuing obligation for a period of two years. For this reason it was subject to the statute of frauds. This is conceded by appellant, and that phase of the case need not be further considered. Code 1907, § 4289, subd. 1.

"Good will" as a property right, passing with the sale of a going concern, was considered in Howard v. Taylor, 90 Ala. 241, 8 So. 36, wherein this court quoted approvingly the definition in Story on Part. § 99, as follows:

"This 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 received from constant and habitual customers, on account of its local position or common celebrity, or reputation for skill, or affluence, or punctuality, or from other accidental circumstances or necessities, or even from ancient partialities or prejudices."

This comprehensive definition has been generally adopted and approved by courts and text-writers. 28 C.J. 729, and notes; 12 R. C. L. Good Will, § 2.

In Howard v. Taylor, supra, our court proceeded to say:

"It has been held in many cases, that a sale or lease of the premises with the stock of merchandise, accompanied by the good will, does not, of itself, imply a promise not to engage in business of the same kind in the locality, nor preclude the seller from soliciting the custom of the public by the usual modes of advertisement, or solicitation."

The question is there left undecided.

In Didlake v. Roden Grocery Co., 160 Ala. 484, 49 So. 384, 22 L. R. A. (N. S.) 907, 18 Ann. Cas. 430, it is said:

"It is not to be understood that by the good will going with the sale the seller would be precluded from re-engaging in the same business in the same locality. That result does not follow without a special agreement to that effect."

The question was not, perhaps, directly involved in the case, but the whole question of good will as applied in partnerships had been exhaustively studied and treated.

We take our cases as a recognition and approval of the prevailing rule, and strongly persuasive here. Hilton v Hilton, 89 N. J. Eq. 182, 104 A. 375, L. R. A. 1918F, 1174 et seq.; Wessell v. Havens, 91 Neb. 426, 136 N.W. 70, Ann. Cas. 1913C, 1377; Ranft v. Reimers, 200 Ill. 386...

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18 cases
  • Bankers' Fire & Marine Ins. Co. v. Sloss, 6 Div. 511.
    • United States
    • Alabama Supreme Court
    • 7 Junio 1934
    ... ... 14 ... Alabama and Southern Digest, Good Will, pp. 268-270; 22 Cyc ... 771; 28 C.J. 738, 747; Collas v. Brown, 211 Ala ... 443, 100 So. 769, prayed for injunction to protect; 82 A. L ... R. 1031; Maxwell v. Sherman, 172 Ala. 626, 55 So ... ...
  • Buck v. Mueller
    • United States
    • Oregon Supreme Court
    • 13 Abril 1960
    ...establishment attractive to those seeking that type of service and for that reason gives promise of continued patronage. Collas v. Brown, 1924, 211 Ala. 443, 100 So. 769; Murray v. Bateman, 1943, 315 Mass. 113, 51 N.E.2d 954; Levene v. City of Salem, 1951, 191 Or. 182, 229 P.2d 255; Texas &......
  • Carson v. Harris
    • United States
    • Texas Court of Appeals
    • 5 Septiembre 1951
    ...in gross to another after she had no business, nor good will of a business, to convey in connection with the trade name. Collas v. Brown, 211 Ala. 443, 100 So. 769. In Mayer v. Flanagan, 34 S.W. 785, 786, the Court said: 'But the primary function of a trade-mark is to indicate ownership and......
  • Percoff v. Solomon
    • United States
    • Alabama Supreme Court
    • 11 Agosto 1953
    ...Lumber Co. v. Chickasaw Wood Prod. Co., 244 Ala. 345, 13 So.2d 770; Jones v. Lanier, 198 Ala. 363, 73 So. 535. In Collas v. Brown, 211 Ala. 443, 110 So. 769, we held that a covenant not to engage in competing business is not implied from a sale of the 'good will' of a business, and cannot b......
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