Sulmonetti v. Hayes

• Decision Date: 30 April 1964
• Citation: 198 N.E.2d 297,347 Mass. 390
• Parties: Ralph SULMONETTI et al. 1 v. Frank HAYES et al. 2
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 297

198 N.E.2d 297

347 Mass. 390

Ralph SULMONETTI et al. ¹ v. Frank HAYES et al. ²

Supreme Judicial Court of Massachusetts, Worcester.

Argued Jan. 6, 1964.

Decided April 30, 1964.

Dominic A. Caronna, Worcester (Ernes S. Hayeck, Worcester, with him), for defendants.

Edward J. McCabe, Worcester, for plaintiffs.

Before WILKINS, C. J., and CUTTER, KIRK, SPIEGEL and REARDON, JJ.

KIRK, Justice.

This is an appeal by the defendants Frank Hayes (Frank) and Emily Hayes (Emily), and Grafton Oil Company, Inc. (Grafton Oil), from a final decree which (a) enjoined Frank and Emily from engaging in the oil business in Worcester County for ten years from February 2, 1960, and from in any way soliciting oil customers of any of the plaintiffs, and (b) enjoined Grafton Oil, its officers, servants, and agents from soliciting in any way the oil customers of the plaintiffs.

The judge was not requested to file a report of the material facts under G.L. c. 214, § 23, as appearing in St.1947, c. 365, § 2. He did, however, file a voluntary statement of findings of fact. We have a report of the evidence pursuant to designations made under Rule 2 of the Rules for the Regulation of Practice before the Full Court (1952), 328 Mass. 693, which is to be treated as a report of all the evidence. Hanrihan v. Hanrihan, 342 Mass. 559, 564, 174 N.E.2d 449, and cases cited. So treated, it is our duty to examine the evidence and decide the case according to our own judgment, accepting as true the findings of the trial judge, whether based wholly or partly upon oral evidence, unless they are shown to be plainly wrong, and finding for ourselves such other and additional facts as we deem to be justified by the evidence. Carroll v. Markey, 321 Mass. 87, 88, 71 N.E.2d 756. Hanrihan v. Hanrihan, 342 Mass. 559, 564, 174 N.E.2d 449, and cases cited. We accordingly summarize the findings made by the judge and by us, augmented by admitted or undisputed facts in the report of the evidence, in order to pass upon the propriety of the relief granted in the decree.

In 1950, upon the death of his father, Frank, then twenty-six years old and married, took over the operation of S. J. Hayes & Son, the name under which his father had been engaged for many years in the retail fuel oil business in North Grafton. Frank had been identified with his father in the business since 1945. The business at all times was conducted from the Hayes residence which was owned by Frank's mother. The property consisted of a large house and yard. The business office was on the first floor of the dwelling. In the yard were five fuel oil storage tanks, two of 12,000 gallon capacity, one of 10,000 gallon capacity, and two of 5,000 gallon capacity. Frank's wife, Emily, who had participated in the business to a limited extent prior to the father's death, actively assisted her husband after 1950, particularly in receiving and processing telephone orders for oil and in collecting bills. Emily's business aptitude, interest, and capabilities were greater than those of her husband. The business employed two truck drivers and a part time bookkeeper. Fifty per cent of the Hayes customers lived in North Grafton; the remainder lived in Shrewsbury, Grafton Center, Worcester, and Millbury.

Under Frank's management the business was not a success. By 1960 the liabilities were nearly $43,000; the tangible assets consisted of three or four used trucks, some fuel oil, and office equipment. The accounts receivable were estimated at $19,000. One of the principal creditors was the plaintiff Central Oil of which the plaintiff Sulmonetti was an officer.

On February 3, 1960, Frank by a writing sold the business to Sulmonetti (the buyer). The agreement expressly recognized that the Hayes oil business was in financial difficulty. The buyer bought the assets and the good will, including the right to use the name Hayes in any reasonable variation, and agreed to pay off the scheduled liabilities of the business, to exonerate Frank from liability, and to employ Frank on mutually agreeable terms. Frank agreed not to 'reenter the business of selling fuel oil in any capacity, directly or indirectly, or compete with Buyer in the fuel oil business in any way in Worcester County for a period of ten (10) years' after the date of the agreement, or after he ceased working for the buyer, whichever event occurred later. As separate compensation for the agreement not to compete the buyer paid Frank $10,000 with the understanding that if Frank broke the agreement not to compete the buyer could recover the entire $10,000 or, at his option, specifically enforce the agreement. The agreement recognized Frank's right, on his own, to sell, install and service heating systems, but, in so doing, he was not to solicit customers of the buyer.

The buyer thereafter organized the plaintiff Hayes Oil Corporation, employed Frank as manager at $100 a week plus a flat weekly expense allowance, paid $80 a month for the use of the office and yard on the Hayes premises, hired the two truck drivers and part time bookkeeper, and paid for two of the telephones on the premises including the business office telephone.

Although Emily did not sign the agreement with the buyer on February 3, 1960, she was then, or shortly thereafter, aware of it. As the winter of 1961 approached, and probably much earlier, following consultations with a lawyer known to both Frank and his wife, a decision was made and a plan devised by them to resume the business of selling fuel oil at the Hayes premises commencing January 1, 1962. To this end in December, 1961, Grafton Oil was organized, with Emily as the sole stockholder and as president and treasurer. The part time bookkeeper was temporary clerk. Toward the close of December, 1961, and during the days immediately thereafter, the following took place: fliers were sent to all householders in Grafton and to householders elsewhere, including the buyer's customers, announcing, over Emily's name as proprietor, the opening for business of Grafton Oil at the Hayes premises, with telephone number, on January 1, 1962; an advertisement to the same effect was published in the local newspaper; notice was sent by Frank's mother to Hayes Oil to vacate the premises on January 31, 1962; the two truck drivers and the part time bookkeeper who had been working for the buyer were hired by Grafton Oil; on the order of Grafton Oil on December 31, 1961, a 6,000 gallon trailer tank from another wholesaler was parked in the yard to dispense oil to smaller tank trucks operated by the two drivers who commenced on January 1, 1962, the delivery of oil on behalf of Grafton Oil to the buyer's customers; telephone calls to the Hayes residential line were answered 'Grafton Oil'; the extension line from the residence to the office on January 2, 1962, was severed to Frank's and Emily's knowledge but not reported to the telephone company or to the buyer. During the early days of January, 1962, Emily actively solicited the buyer's customers and others to buy from Grafton Oil. In soliciting the buyer's customers, she made use of the buyer's customer list. Thirty-seven customers of the buyer cancelled their orders to the buyer. Emily planned to take away from the buyer as many customers as she...