Gordon v. Simson

CLEGG, District Judge. It appears from a study of this contract that it is a contract between Simson Bros., Abraham and Benjamin, and plaintiff, Gordon. Although there is included in the contract, as parties of the first part, Alex Simson and Lipman Simson, their inclusion, as it is said in the statement in the contract itself, is “for the purposes hereinafter stated.” In addition to this, throughout the contract, instead of referring to the party of the first part, reference is always made invariably to Simson Bros. It doesn’t ever refer to the parties of the first part, wherever any duty or obligation is placed on any party in the contract; reference is made to Simson Bros., and not to the party of the first part. And so the entire contract must be construed. In the concluding clause quoted, it recites that, in consideration of said purchase and the full performance of this agreement, the said Benjamin Simson and Abraham Simson, doing business as Simson Bros., and the said Alex Simson and Lip-man Simson, who are interested in the proceeds of said business, and not owners, do sell the good will of '“said business.” So that clearly Alex Simson and Lipman Simson are attempting under this clause of the contract to bind themselves to sell to Gordon the good will of “said business,” which has reference to the business of Simson Bros., and can have no other construction; but it is seen from the language used that they have no interest in the business of Simson Bros., and they have no interest at all, either as owners or otherwise [481] in the goods sold. All they have, if you give this language its proper construction, is a money interest, a financial interest, or pecuniary interest in the proceeds of the business of Simson Bros., outside of women’s and children’s .wear (except boys’ clothing). They have no .interest in women’s and children’s wear (except boys’ clothing) whatever, and the only interest that they have in the business of Simson Bros, is an interest in. the proceeds of that business. It might be that Simson Bros, have given them a mortgage upon some of the property of Simson Bros., or that they have some right to participation in the moneys received as a result of the sale of the goods, so that, if it be assumed that the good will of a business can be transferred as to a portion of it, as to a portion of the business (which is doubtful);' it certainly cannot be successfully maintained that a person who has no interest in any part of the business, and is merely entitled to a share in the proceeds over and above expenses, presumably, would have any right to convey the good will of that business. All the authorities are to the effect that the good will is. something that attaches to the ownership of the business, to its location, to its reputation which it has maintained in the past, and that a covenant to refrain from engaging in business is incident to ownership of the good will; so that if Alex Simson had no interest in the business, which would maintain the right to say he had an interest in the good will .of the business, it naturally follows that he has no interest to enable him to engage or bind himself to refrain from engaging in business, when he has no interest in the good will or in the business. So far as the contract discloses, he is just like a total stranger to the contract, that is called in the minute the contract is going'to be signed, and is asked to sign, and he does so; but there is absolutely no consideration moving from him to Gordon, and no consideration moving from Gordon to him. He does not agree to anything which he has "power to agree to, and Gordon does not agree to do anything with reference to him. You cannot read the contract and come to a conclusion that he received anything, even detrimental, not to say beneficial, from this contract. Although his name is Simson, he has no interest in the business or in the goods' sold, or in the good will. If the name was Jones, it would clearly appear; but, because the name is Simson, it looks at first blush, with [482] out study of the matter, that he naturally had some interest in the contract. ~ But the court is satisfied from a careful study of the evidence and authorities relating to it, that Alex Simson has nothing he can transfer with reference to the property transferred, and is not bound by the clause attempting to prohibit him from thereafter engaging in business in said town of Fairbanks. This decision is based upon the reasoning and authority of Judge Taft in the Addyston Pipe Case, 85 Fed. 282, 29 C. C. A. 151, 46 L. R. A. 122, and Clemons v. Meadows, 123 Ky. 178, 94 S. W. 13, 6 L. R. A. (N. S.) 847, 124 Am. St. Rep. 339. Judge Taft says “no conventional restraint of trade can be enforced, unless the covenant embodying it is merely ancillary to the main .purpose of a lawful contract,” and the contract in this case is not lawful as to Alex Simson. The demurrer will be sustained. Footnotes [1] <@¿»See same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes