John Davis & Co. v. Miller

• Decision Date: 18 December 1918
• Docket Number: 14605.
• Citation: 177 P. 323,104 Wash. 444
• Parties: JOHN DAVIS & CO. v. MILLER et al.
• Court: Washington Supreme Court

177 P. 323

104 Wash. 444

JOHN DAVIS & CO. v. MILLER et al.

No. 14605.

Supreme Court of Washington

December 18, 1918

Department 1.

Appeal from Superior Court, King County; Walter M. French, Judge.

Action by John Davis & Co. against Vincent D. Miller and another. Judgment of dismissal, and plaintiff appeals. Reversed and remanded, with directions.

Carkeek & McDonald, of Seattle, for appellant.

Kerr &amp McCord, of Seattle, for respondents.

MAIN C.J.

This action was brought for the purpose of securing an injunction against the defendants restraining them from soliciting the customers of the plaintiff. At the conclusion of the plaintiff's evidence, the trial court granted a nonsuit and entered a judgment dismissing the action. From this judgment the appeal is prosecuted.

The case has heretofore been before this court ( State ex rel. Davis v. Superior Court, 95 Wash. 258, 163 P. 765) and it is only necessary here to state the facts briefly.

John Davis & Co., a corporation, the appellant, for many years prior to the institution of this action was engaged in the real estate business in Seattle. This business consisted of four departments, rental, real estate, mortgage loan, and insurance. In the testimony the rental department is described as the 'Hub' of the business. The respondent Vincent D. Miller had been in the employ of John Davis & Co. since 1900, and from 1908 until November, 1916 (when he left that company), he had been manager of the rental department. In the absence of the two leading officers of the corporation, Miller acted as manager thereof. As manager of the rental department. Miller came in personal contact with many, if not all, of the principal customers of the business. Immediately after leaving John Davis & Co. Miller organized the Vincent D. Miller, Incorporated, a corporation, and engaged in a competitive business with his former employer. When leaving the employment of John Davis &amp Co., he induced two other employés, one of whom at least had a considerable acquaintance with the customers of John Davis & Co., to become employés of the Vincent D. Miller company. After the latter company had begun business, Miller and the two other employés referred to, under his direction, began a systematic solicitation of the customers of John Davis & Co. to leave that company and transfer their business to the Vincent D. Miller company. In the few weeks that elapsed before the institution of the present action, a large number of the customers of John Davis & Co. were induced to transfer their business. Miller had a personal acquaintance with these customers which he acquired while employed by John Davis & Co., and in soliciting them to leave that company he referred to the fact of his personal acquaintance with them and the knowledge that he had of their properties which was acquired during his employment. Miller, when testifying, stated that he would continue to solicit the customers of John Davis & Co. unless restrained. The solicitation was both oral and by means of letters or telegrams.

It was the practice of John Davis & Co., which was a large concern, to have a meeting of all of its employés every morning for a few minutes, at which meeting Miller presided. After this meeting there was a second meeting attended only by John Davis, Miller, and one other employé. At the second meeting any prospective business that was not thought best to be discussed around the office generally was considered. An attempt to inquire fully into what further took place at this second meeting was met with an objection which was sustained by the trial court.

The action as originally brought sought both an injunction and damages, but upon the oral argument to this court the question of damages was waived. It therefore becomes a question whether the appellant is entitled to injunctive relief.

Before proceeding further, it should be stated that the question here is, not whether Miller, being a former employé of the appellant, has a right to engage in a competitive business with that company in the same community, neither is it a question whether he has the right to transact any business for the former customers of John Davis & Co. which may come to him or his company voluntarily. The question is, however, whether Miller has a right to solicit the customers of John Davis & Co. to leave that company and transfer their business to him, using as a reason therefor his personal acquaintance with them which he acquired while employed by John Davis & Co. and the fact that he there looked after or managed their business.

There is no question but that equity will always protect against the unwarranted disclosure of trade secrets, confidential communications, and the like, and we do not understand this proposition to be controverted. There are a number of cases holding that the information which an employé upon a laundry milk, or tea route acquires of the names and addresses of his employer's customers, is confidential. In Stevens & Co. v. Stiles, 29 R.I. 399, 71 A. 802, 20 L. R. A. (N. S.) 933, 17 Ann. Cas. 140, the defendant had been employed by an optician to examine the eyes of patients and prescribe lenses. Before leaving this employment, he copied from the books or records of his employer the names and addresses of those customers for which he had prescribed while in that employment. After severing his connection with his employer, he sent circular letters to the persons whose names and addresses he had thus acquired, soliciting their patronage and business for a competitor of his former employer. It was there said: 'It is admitted that the respondent was in the employ of the complainant in its store, examining the eyes of patrons, prescribing glasses, and making records of the cases examined and treated, as also of prescriptions which came to the store from physicians outside. We do not see how such relations can be considered as other than confidential. As to the absence of an agreement not to enter into competition with the complainant, it is sufficient to say that the decree does not enjoin such action on the part of the...