Wylie v. Wylie Permanent Camping Co.

• Court: Montana Supreme Court
• Writing for the Court: COOPER, J.
• Citation: Wylie v. Wylie Permanent Camping Co., 57 Mont. 115, 187 P. 279 (Mont. 1920)
• Decision Date: 14 January 1920
• Docket Number: 4047.
• Parties: WYLIE et al. v. WYLIE PERMANENT CAMPING CO.

187 P. 279

57 Mont. 115

WYLIE et al. v. WYLIE PERMANENT CAMPING CO.

No. 4047.

Supreme Court of Montana

January 14, 1920

Appeal from District Court, Gallatin County; Ben B. Saur, Judge.

Action by William W. Wylie and John M. Wylie against the Wylie Permanent Camping Company. From a judgment in favor of plaintiffs and a motion denying a new trial, defendant appeals. Judgment and order reversed, with directions to dismiss.

Day & Mapes, of Helena, for appellant.

Geo. Y Patten, of Bozeman, and Thos. McKee, of Los Angeles, Cal for respondents.

COOPER J.

This action arises out of the following agreement:

"The following agreement between W. W. Wylie and the Wylie Permanent Camping Company, successors to the Wylie Camping Company, witnesseth: That W. W. Wylie hereby agrees to transfer to the new company his entire good will of the business as formerly conducted by him and promises not to go into the Yellowstone Park in business for himself hereafter. He further agrees to assist the company as newly organized so long as the company's business is conducted after the same or like manner as he conducted it or while maintaining the Wylie spirit. In consideration for such services or any further service for the good of the company not herein mentioned, said Wylie is to receive ($1,500) fifteen hundred dollars per annum payable semiannually from January 1, 1906, as long as mutually agreeable to the parties hereto signing.

Witness our signatures to the above agreement, made at Helena, Montana, this 28th day of December, 1905.

W. W. Wylie.

Wylie Permanent Camping Company,

By A. L. Smith, Secy."

The allegations of the complaint are: That William W. Wylie, from the year 1883 down to and including 1905, was engaged in conducting tourists' parties through the Yellowstone National Park by virtue of a license issued to him, from time to time, by the Interior Department of the federal government; that in the year 1896 he caused to be organized a corporation named the Wylie Camping Company, sold to it all the equipment previously used by him in the conduct and maintenance of the business, and during all of the years from 1896 to and including the year 1905 "remained in actual and personal management of the business," as he had prior to its organization; that later, in the summer of 1905, he sold and disposed of all of his shares of stock in that company to Harry W. Child, of Helena, and Arthur W. Miles, of Livingston; that thereafter a new corporation called the Wylie Permanent Camping Company was organized by Child and Miles, and all of its equipment was turned over to the new corporation; that defendant, in violation of its agreement, has failed and refused to pay plaintiff the installment of $750 due on July 1, 1908, and every other installment due thereafter under its terms. The prayer is for judgment in the sum of $12,000, with interest at 8 per cent. per annum from the dates the several installments became due, and for costs.

The answer consists of general denials and the affirmative allegation that the agreement in so far as it purported to be a sale of the good will of the business was without consideration and void. The new matter was denied by the replication, and upon the issues thus framed a trial was had with the aid of a jury and evidence adduced on behalf of plaintiffs.

W. W. Wylie was sworn on behalf of plaintiffs; his testimony tending to prove his conduct of the tourist and transportation business in the Yellowstone National Park from 1883 down to the time of the sale of his contract with the Wylie Camping Company and all his shares of stock in that company. He testified that he, together with his wife, attended to correspondence received by him from the time of the making of the contract as late as 1916, and encouraged tourists to go with the new corporation. He further states that he was not called upon to perform any services for the defendant after August, 1907, by any of its officers. He testified also that there was nothing said at the time of the sale of his contract and his stock in the old company concerning the transfer of his good will nor his license, or "anything of the kind." He acknowledged receiving a letter of date August 29, 1907, from Mr. A. W. Miles, the president of the new company, in which it was stated that his services would no longer be needed, and inclosing check "for the months of July and August," and that on September 1, 1907, he replied thereto stating, "You will see by reading the contract for yearly salary that it was made for good will of business," and protesting that he could "not be cut off in this abrupt manner."

At the close of plaintiff's testimony a motion for a nonsuit was overruled. The defendant refused to offer any testimony, contending that only questions of law were left for determination and that a verdict should be directed for either the plaintiffs or the defendant. In response to the court's direction, a verdict in the sum of $16,480 was returned by the jury, and judgment entered for that amount with interest. A motion for a new trial was overruled, and the case is here on appeal from the judgment and from the order denying defendant's motion for a new trial.

It is asserted by appellant that the contract is in violation of sections 5057 and 5058 of the Revised Codes, and therefore void; that W. W. Wylie had no vendible interest to sell, and hence that the instrument sued on was void for lack of consideration; that, being terminable at the will of either party, it was, by the letter of August 27, 1907, from the president of defendant corporation to W. W. Wylie, ended; that the action is barred by the statute of limitations; and that the evidence is insufficient to sustain the judgment.

In the determination of this appeal our decision will be made to rest upon the principle that where a stockholder sells his stock the good will of the business goes with it, leaving nothing tangible or of substance upon which to found another consideration touching any part of the same subject-matter. If that be so, all the other questions of law and fact here presented are subordinate to, and controlled completely by, that issue.

It may be conceded, as respondent insists, that the good will of a business is the expectation of continued patronage (Rev Codes, § 4566); is property subject to ownership and capable of being transferred (section 4567); and that one who sells the good will of a business may agree with the buyer to refrain from carrying on a similar business within a specified territory, so long as the buyer, or any person deriving title to the good will from him, carries on a like business therein (section 5058); but still, the respondent having theretofore at the same time and in the same transaction sold "the contract" as well as his "shares of stock in the old corporation," he separated himself from and parted with the good will and delivered himself of all he had to transfer. Good will is not a thing apart, but an incident to and inherent in the thing itself-the business. That Mr. Wylie had but one thought concerning the disposal of the good will is cleared of doubt by the statement in his letter of September 1st, wherein he states, "You will see by reading the contract for...