Snyder Pasteurized Milk Co. v. Burton

• Decision Date: 20 June 1912
• Citation: 83 A. 907,80 N.J.E. 185
• Parties: SNYDER PASTEURIZED MILK CO. v. BURTON.
• Court: New Jersey Supreme Court

83 A. 907

80 N.J.E. 185

SNYDER PASTEURIZED MILK CO.

v. BURTON.

Court of Errors and Appeals of New Jersey.

June 20, 1912.

(Syllabus by the Court.)

Appeal from Court of Chancery.

Bill in equity by the Snyder Pasteurized Milk Company against John W. Burton. From an order directing the issuance of an injunction, defendant appeals. Affirmed.

John A. Hartpence, of Trenton, and Vredenburgh, Wall & Carey, of Jersey City, for appellants.

William J. Backes, of Trenton, for respondent.

GARRISON, J. This is an appeal from an order of the Court of Chancery directing the issuance of an injunction to restrain "the defendant from soliciting any of the customers of the complainant, who had prior to the sale of the property and good will of the milk business of the said defendant to the complainant been his customers, to deal with or to purchase milk and cream from him and not to purchase their milk and cream from the complainant; also from selling or delivering milk and cream to any of the customers of the said complainant who had, prior to the sale of the property and good will of the milk business of the defendant to the complainant, been his customers and who had been (i. e., prior to the filing of this bill) solicited by him to purchase their milk and cream of him."

This order indicates the scope of the litigation and the nature of the transaction out of which it arose. In brief the defendant, John W. Burton, having sold to the complainant the personal property used by him in carrying on his milk business, together with the good will, engaged in a competing business, owned either by himself or by his wife, and solicited his former customers to deal with him, and at the time of the filing of the bill the defendant was serving a large number of his former customers whose custom he had secured by such solicitation.

The defendant having made no express covenant may engage in a competing business. This, which is the recognized rule, is admitted by the complainant.

The controverted question is whether the defendant, having sold the good will of his business and engaged in a competing business, may be enjoined from soliciting his former customers to deal with him.

Upon this question judicial opinion in this country is not in entire unanimity, and in England, after a period of vacillation, the question was set at rest by the House of Lords only as recently as 1896.

In this state the trend of decision in the Court of Chancery and of dictum in this court favors the rule that was applied in the present case.

Thus in Althen v. Vreeland (N. J. Ch.) 36 Atl. 479 (not yet officially reported), in which there was a covenant that was unreasonable because of its territorial extent, the Court of Chancery enjoined the vendor from soliciting his old customers not by force of his covenant, but on general principles deemed applicable to the circumstances of the case.

In Newark Coal Co. v. Spangler, 54 N. J. Eq. 354, 34 Atl. 932, which was not a soliciting case, but one in which the defendant had advertised his former connection with the business he had sold, Vice Chancellor Emery rehearses the English decisions on the subject of soliciting as part of the argument of his opinion, without adverse comment as to the rule...