Williams v. Wilson — 4 Sarat. Ch. Sent. 379

Majority

p. 379

Williams v. Wilson and McClellan. Wilson and McClellan v. Williams.

Oct. 28 ;

Nov. 23, 1846.

Headnote

The good will of a business built up by a co-partnership, is an important and valuable interest, which the law recognizes and will protect.

Where a partnership in conducting an insane hospital and an immigrant lazaretto, was broken up by controversies between the partners, who commenced cross suits in equity, and could not agree which of them should continue the establishment ; the court appointed a receiver, with directions to sell immediately the lease of the premises occupied, the movables and the good will of the business, and restrained the parties (except those who might purchase at the sale,) from conducting the same business directly or indirectly, in the city where the partnership had been carried on.

The parties in these suits had been co-partners, in conducting an establishment in the suburban part of the city of New York, which was in part a private asylum for the insane, and in part a boarding house for immigrants while they remained in the charge of ship owners and consignees. Messrs. Wilson and McClellan, were physicians and surgeons, practicing in the city, but giving their professional attendance at the asylum. Mr. Williams resided at the establishment, and took the charge of its internal police and financial arrangements. The business

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so conducted, was successful and prosperous ; but angry controversies at length arose between Williams on the one side, and Wilson and McClellan on the other, which resulted in the former’s claiming exclusive possession of the establishment and attempting to exclude the other parties from any interest in it, as well as from visiting its inmates. They persisting in their visits and claims, Williams filed a bill and obtained an injunction, which was followed by a bill in their behalf, and an injunction against him.

Motions were now made in behalf of Wilson and McClellan, for a receiver, for the dissolution of the injunction against them, and for an attachment against Williams for violating their injunction. All the motions were resisted by Williams. The report of the case is confined to the motion for a receiver.

J. Cochran, for Wilson and McClellan.

A. Dickinson and S. B. H. Judah, for Williams.

Both parties concur in moving for a receiver, and the question arises, what shall the receiver take ? It is manifest that the principal "value of the establishment in which these gentlemen were partners, consisted in the good will attached to it. It is useless to trace the origin and growth of this good will. All the partners contributed to it, and whether in equal or very unequal proportions, is quite immaterial. It belongs equally to them all, and is an important and valuable interest, which the law recognizes and will protect. (See Harrison v. Gardner, 2 Madd. R. 198, which is a full and leading authority on the subject. Also Dougherty v. Van Nostrand, 1 Hoff. Ch. R. 68; Story on Part. § 99, and notes, 211, 212)

Unless this interest be protected and enforced between these parties, it is clear that there will be injustice done to one side or the other, and that the receiver will have but an insignificant -duty to perform.

Then as to the course to be pursued by the receiver, when vested with the good will of the concern. It is impossible for

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him to conduct an insane hospital, or a lazaretto for foreign immigrants. The only practicable course is for him to sell immediately, the lease of the premises where the business was conducted, with the goo.d will of the business and the movables which belonged to the institution. And in order to give efficacy to the sale of the good will, either of the parties may become the purchaser; and except they purchase, all of them must be restrained from conducting' the same business, directly or indirectly, in this city. In other respects the receiver will have the usual powers.