Brown v. Benzinger
| Decision Date | 27 March 1912 |
| Citation | 84 A. 79,118 Md. 29 |
| Parties | BROWN v. BENZINGER. |
| Court | Maryland Court of Appeals |
Appeal from Circuit Court of Baltimore City; Walter I. Dawkins Judge.
Bill by Mary C. Benzinger against Teresa E. Brown. Decree for complainant, and defendant appeals. Affirmed and remanded.
Stephen W. Leitch and Edward L. Ward, for appellant. Julius H. Wyman for appellee.
In this case Teresa E. Brown, the appellant, on the 5th day of April 1911, executed with the appellee, Mary C. Benzinger, a written agreement or contract by which she sold, transferred and assigned unto the said Mary C. Benzinger, at and for the sum of $500, the receipt of which is acknowledged in the agreement, the business conducted by her, as surgeon chiropodist, at 217 North Liberty street, in the city of Baltimore, " including the good will of the said business" and the personal effects therein named, consisting of office furniture, surgical instruments, etc. By the agreement it was understood that the vendor was to pay all the expenses, including charges for telephone, rent, and light, to May 1, 1911, and was to have the receipts of said business until said time, and the unexpired lease for the premises was to be assigned and transferred to the vendee. The vendee was to assume full charge of said business on May 1, 1911, and from and after which time she was to have the receipts from said business, and was to treat all former customers of the said vendor, who had paid in advance, for the time or period for which they had so paid, and the vendor was to teach the vendee and her daughter the business, without charge, and after the 1st day of May, 1911, was to render services to the vendee, without charge, for an indefinite period.
On August 7, 1911, the appellee filed her bill against the appellant, in which the written contract referred to was made a part thereof and filed therewith as an exhibit. In her bill she alleged that the defendant, for many years prior to April 5, 1911, was engaged, in Baltimore city, in the business of treating ailments of the hands and feet, under the name and style of "Dr. Teresa E. Brown, Surgeon Chiropodist," and had acquired and secured a large number of patients, whose custom constituted practically the whole value of said business. That the surgical instruments and remedies required in the business were inexpensive and easily obtainable. That That on or about May 1, 1911, the defendant moved from Baltimore city, and the plaintiff assumed full charge of said business, and has since conducted the same, paid all charges and expenses, and has complied with all the conditions and stipulations provided for in said agreement. That in the month of July, however, the defendant returned to Baltimore city, called upon the plaintiff, and declared her intention of re-engaging in said business, saying that she was without tangible assets, and a judgment at law against her, if secured by the plaintiff, would be worthless; and that said business intended to be established by her would ostensibly be owned and conducted by a corporation, in which said defendant would appear to have no interest, except that of servant and manager. And the bill alleges that such threatened corporation is intended to conceal the real ownership of said business; and that any such interference with "the good will of your complainant's business by said defendant, whether directly or indirectly, would be contrary to the terms and spirit of said agreement, and would constitute a fraud upon the rights of your complainant." That, pursuant to the declaration that she would re-engage in said business, as above stated, the defendant has opened an office in Baltimore city, and has exhibited a sign therefrom upon which appears, "Dr. Teresa E. Brown, Surgeon Chiropodist," "and has solicited, or caused to be solicited, the patronage of certain of your complainant's customers, and has otherwise sought to deprive your complainant of the benefits and advantages of said agreement of sale to which your complainant is in fair and honest dealing entitled."
The bill further alleges that a large part of said business depends upon appointments made by telephone; that the contract for the same was made by the defendant with the telephone company, and that the plaintiff has, since the purchase of the business from the defendant and the transfer and assignment of the assets thereof, regularly paid the rental for said telephone, but the "defendant, since her return, has demanded, or intends to demand, of the company to disconnect said telephone and cancel said contract, which would result in great injury to your complainant's said business;" that, unless the defendant be restrained from engaging in said business, the value of said agreement will be destroyed, and the benefit of the defendant's promise lost to the complainant, whereby she will suffer irreparable injury.
Upon these allegations the bill prays that the "defendant be restrained from directly or indirectly engaging in the business of treating ailments of the hands and feet, under the name and style of "Dr. Teresa E. Brown, Surgeon Chiropodist," or other similar name, in the city of Baltimore; and that said Teresa E. Brown and her agents and servants be enjoined and restrained from impairing the good will of the business of your complainant, and from soliciting or alluring customers from said business; and that said Teresa E. Brown be enjoined and restrained from interfering with the use of the telephone in your complainant's place of business, or with the contract for the rental thereof."
The circuit court of Baltimore city, on August 7, 1911, upon the bill, affidavit, and exhibit, ordered that "an injunction be issued as prayed in the bill, unless cause to the contrary be shown on or before August 22, 1911," etc. On August 17th the defendant demurred to the bill, and on October 30th following the court overruled the demurrer, and granted leave to the defendant to answer the bill. It is from this last order, overruling the demurrer, that this appeal is taken.
The contention is made by the appellant that, because there was no covenant or agreement in the written contract not to re-engage in business, no such covenant or agreement can be supplied by inference or implication upon the sale of the good will of the business.
The contract in this case, by which the defendant sold and transferred her business or practice as surgeon chiropodist to the plaintiff, contained no covenant by which the defendant, Dr. Teresa E. Brown, was not again to engage in said business or calling in the city of Baltimore. In this contract, however, the defendant not only conveyed certain tangible assets belonging to her, and used in her business or profession, consisting, as it is said, of office furniture, surgical instruments, etc., of little value, as alleged in the bill, but also her good will in the business or profession which she had successfully conducted for a number of years prior to such sale. The amount of the consideration paid by her was largely in excess of the value of such tangible assets and personal effects sold by the defendant to the plaintiff. The greater part of the amount paid to the vendor was for the good will of her business or practice.
It is necessary for us to determine what rights passed to the vendee under the transfer to her of the good will of such business or profession, and whether or not the defendant was thereby prevented from thereafter engaging in said business or the practice of her profession in the city of Baltimore.
The good will of a business or profession has often been defined both by English and American authorities. Of all such definitions, the narrowest is probably that of Lord Eldon, who, in 1810, defined good will as "the probability that the old customers will resort to the old place;" but by others and more recent authorities a much broader definition has been given, stating it 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 from celebrity or reputation for skill or affluence or punctuality, or from other accidental circumstances or necessities, or even from ancient partialities or prejudices." Words and Phrases, 3128; Haverly v. Elliott, 39 Neb. 201, 57 N.W. 1010; Munsey v. Butterfield, 133 Mass. 492; Howard v. Taylor, 90 Ala. 241, 9 So. 36; and others. Or, as defined in Knoedler v. Boussod (C. C.) 46 F. 465, 466: "The good will of a business comprises those advantages which may inure to the purchaser from holding himself out to the public as succeeding to an enterprise which has been conducted in the past, with the name and repute of his predecessor."
Our attention has been called by the counsel for the appellant to many authorities in support of his contention ...
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