Weinberg v. Wallace, 2150

• Citation: 314 S.C. 183,442 S.E.2d 211
• Decision Date: 08 February 1994
• Docket Number: No. 2150,2150
• Court: Court of Appeals of South Carolina
• Parties: Deborah R. WEINBERG, Individually and as Personal Representative of the Estate of Joe L. Weinberg, III, Appellant, v. Bobbie W. WALLACE and Carl R. Wallace, Individually and as Personal Representatives of the Estate of J.L. Weinberg, Jr., Respondents. . Heard

Page 211

442 S.E.2d 211

314 S.C. 183

Deborah R. WEINBERG, Individually and as Personal Representative of the Estate of Joe L. Weinberg, III, Appellant, v. Bobbie W. WALLACE and Carl R. Wallace, Individually and as

Personal Representatives of the Estate of J.L.

Weinberg, Jr., Respondents.

No. 2150.

Court of Appeals of South Carolina.

Heard Feb. 8, 1994.

Decided March 7, 1994.

Martin S. Driggers and W. Carole Holloway, Hartsville, for appellant.

Marshall U. Rogol, Darlington, for respondents.

GOOLSBY, Judge:

Deborah R. Weinberg, both individually and as personal representative of the estate of her husband, Joe L. Weinberg, III (the son), sought recovery against Bobbie W. Wallace and Carl R. Wallace, both individually and as personal representatives of the estate of J.L. Weinberg, Jr. (the father), for the alleged conversion of good will associated with a family business that was operated by Deborah and Joe Weinberg, III. The trial judge granted summary judgment to the defendants. We affirm.

In the 1950s, the father started the Weinberg Sausage Plant (the business) and operated it as a sole proprietorship. In 1980, the father "turned the business over" to the son. The son paid his father monthly "rent" for the use of the land, building, and equipment. The father, however, did not formally sell the business to the son, and the parties did not enter into a written, formal agreement regarding the rent and its duration.

Between 1980 and 1987, the son claimed all profits from the business on his tax returns as sole proprietorship income. Further, the business was licensed in the son's name. The father and his wife received salaries for their ongoing assistance to the business.

In October 1987, the son died. In his will, the son appointed his widow, Deborah Weinberg, as the personal representative of his estate and named Deborah Weinberg and his daughter as his sole heirs.

After the son's death, the father told his daughter-in-law, Deborah Weinberg, he would run the business or help her run the business until the end of the year, at which time he planned to rent it to someone else. The father offered Deborah Weinberg an employment position with the business, but she refused it.

On January 1, 1988, Bobbie W. Wallace and Carl R. Wallace, the daughter and son-in-law of the father, took control of the business. Subsequently, the father paid to Deborah Weinberg the value of all inventory on hand as of January 1, 1988, plus the balance of the business' bank account as of December 31, 1987.

The father died in August 1990. Shortly thereafter, Deborah Weinberg filed suit on behalf of her deceased husband's estate seeking compensation solely for the alleged conversion of the business' good will. The trial judge ruled the son's heirs failed to state a cause of action for conversion. This appeal followed.

"Conversion is the unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another, to the alteration of the condition or the exclusion of the owner's rights." Crane v. Citicorp. Nat'l Serv., Inc., --- S.C. ----, ----, 437 S.E.2d 50, 52 (1993) (citation omitted). To maintain an action for conversion, the party must establish either title to or right to possession of the personal property in issue. Id.

The property in issue here, good will, is defined as

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 common celebrity, or reputation for skill or affluence, or punctuality, or from other accidental circumstances or necessities, or even from ancient partialities or prejudices.

Donahue v. Donahue, 299 S.C. 353, 359, 384 S.E.2d 741, 745 (1989) (citations omitted).

The son's heirs argue they are entitled to the value of the business' good will independent of any physical assets that were owned by the father. We disagree.

"The owner of an asset or business is the owner of the good will generated through the asset or business." Karageorge v. Cole, 565 So.2d 502, 510 (La.Ct.App.1990) (citation omitted). Good will, however, "exists as property merely as an incident to other property rights and is not susceptible of being owned and disposed of separately and apart from the property right to which it is incident." 38 C.J.S. Good Will § 3, at 951 (1943); see Donahue, 299 S.C. at 359, 384 S.E.2d at 745 (citation omitted) (analyzing the nature of good will arising out of a professional practice, the supreme court stated good will does not possess value or constitute an asset separate and apart from the professional practice); 38 Am.Jur.2d Good Will § 9, at 917-18 (1968) ("[G]ood will may not be disposed of independently of the business or profession in which the good will inheres.").

Because good will inseparably adheres to a business and its assets, it cannot be the subject of...