United Tool & Indus. Supply Co. v. Torrisi

• Decision Date: 02 June 1969
• Citation: 248 N.E.2d 266,356 Mass. 103
• Parties: UNITED TOOL AND INDUSTRIAL SUPPLY CO., Inc., et al. v. Anthony TORRISI et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 266

248 N.E.2d 266

356 Mass. 103

UNITED TOOL AND INDUSTRIAL SUPPLY CO., Inc., et al. v. Anthony TORRISI et al.

Supreme Judicial Court of Massachusetts, Essex.

Argued May 6, 1969.

Decided June 2, 1969.

Fredric S. O'Brien, Lawrence (Maurice Rappaport, Lawrence, with him), for respondents.

Raymond M. Sullivan, Boston, for petitioners.

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

WILKINS, Chief Justice.

United Tool and Industrial Supply Co., Inc. (United), and another Massachusetts corporation which owns all the United stock, R.P.S. Corporation (R.R.S.), ¹ on February 2, 1968, brought this petition in equity in the Probate Court, Essex County, to enjoin the respondents Anthony Torrisi, Peter Torrisi, and A. Line Tools, Inc. (A. Line), also a Massachusetts corporation, from engaging in selling tools and machinery in the areas in which United was engaged. On that date a prayer for a temporary order was granted restraining the respondents from engaging in the sale of tools and machinery in three counties in this Commonwealth and four counties in New Hampshire.

On May 1, 1968, a decree was entered permanently enjoining the respondents without limitation as to time or space from communicating with customers and suppliers of United for the purpose of engaging in the sale of tools and machinery. The petitioners and the respondents appealed.

There are no findings of fact, and the evidence is reported. G.L. c. 215 § 9. The entry of the decree implies a finding of every fact, permissible on the evidence, to support the conclusion of the judge. These will not be reversed unless plainly wrong. Hopkins v. Commissioner of Corps. & Taxn., 320 Mass. 168, 169--170, 68 N.E.2d 659, and cases cited. Colbert v. Hennessey, 351 Mass. 131, 134, 217 N.E.2d 914. And from the evidence we can find facts. Lowell Bar Assn. v. Loeb, 315 Mass. 176, 178, 52 N.E.2d 27. As we have previously stated, this is not a desirable procedure for presenting precise issues on appeal. See Roseman v. Day, 345 Mass. 93, 95--96, 185 N.E.2d 650, 100 A.L.R.2d 459. As is apparent from our opinion, we have been unable to agree with the petitioners' extravagant claims as to many findings to be implied from the decree.

United was organized by Joseph Torrisi in 1957, and had its principal place of business in Lawrence. It sold hardware, tools, and industrial supplies to customers by telephone, by personal calls of salesmen, and over the counter. Joseph Torrisi, president and treasurer, prior to November, 1967, owned 1,505 out of 2,932 authorized shares. Jackson Lumber Company, of which he is treasurer and principal stockholder, at that time owned 422 shares. The respondent Anthony Torrisi, brother-in-law of Joseph, owned 150 shares. The respondent Peter was Joseph's brother. Rose, Peter's wife, owned 125 shares. Joseph decided who would be chosen to office and employed. Anthony and Peter were directors, and had the honorary titles of vice-president. Anthony was purchasing agent, but six or seven others did some purchasing. Peter was sales manager with three other salesmen.

On October 26, 1967, Joseph signed a contract with Robert P. Sumberg, individually, owner of all shares in R.P.S., for the sale of all 2,932 shares of United at $85 a share. If Joseph could not deliver 2,932 shares, the buyer might at his option buy such shares as the seller could deliver at $85 a share. All shares except those held by Joseph were to be paid for in cash at the time of closing. Those of Joseph were to be paid for an stated dates not here material. No assets as such were acquired. In the contract there was no mention of the sale of good will nor of any promise by Joseph not to compete with United. In fact, the conclusion is inevitable that no value was placed on good will. United's accountant, who represented United in reaching the price of $85 a share, testified that at the discussions with Sumberg it was stated that 'there was no price, nothing included for good will.'

On November 9, 1967, R.P.S. was organized mainly to acquire the stock of United. Robert P. Sumberg was, and still is, president and treasurer of R.P.S. On that date R.P.S. purchased all the stock of United. Anthony and Rose received checks for $12,750 and $10,625, respectively.

The written resignation of every director and officer was to be delivered at the time of closing. Peter and Anthony each resigned as vice-president and director and from 'such other office' as they might hold on the corporate records, but not until January 22, 1968, after Sumberg had announced he did not intend to pay the individual respondents the portion of their annual bonus attributable to profits from the beginning of the fiscal year until November 9, 1967. ¹

After resigning, the individual respondents activiated A. Line, a dormant corporation organized by them in the early part of 1967.

The individual respondents had no information of a confidential nature respecting prices and customers. American Window Cleaning Co. v. Cohen, 343 Mass. 195, 178 N.E.2d 5; Slade Gorton & Co. Inc. v. O'Neil, Mass., 242 N.E.2d 551. Compare New England Overall Co. Inc. v. Woltmann, 343 Mass. 69, 75, 176 N.E.2d 193. Merchandising methods are not trade secrets. Associated Perfumers Inc. v. Andelman, 316 Mass. 176, 185, 55 N.E.2d 209. They could not be prevented from competing on this ground.

The substantial remaining question is whether the individual respondents in selling their stock implicitly promised not to compete.

Broadly speaking, when the entire assets of a...