{ "id": 5150093, "name": "Jack Behn, Appellee, v. Solomon Shapiro, also Known as Sol Shapiro, Appellant", "name_abbreviation": "Behn v. Shapiro", "decision_date": "1955-11-16", "docket_number": "Gen. No. 46,692", "first_page": "25", "last_page": "36", "citations": [ { "type": "official", "cite": "8 Ill. App. 2d 25" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "314 Ill. App. 496", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3389721 ], "pin_cites": [ { "page": "525" } ], "opinion_index": 0, "case_paths": [ "/ill-app/314/0496-01" ] }, { "cite": "358 Ill. 155", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5278952 ], "pin_cites": [ { "page": "168" } ], "opinion_index": 0, "case_paths": [ "/ill/358/0155-01" ] }, { "cite": "290 Ill. 252", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2420059 ], "opinion_index": 0, "case_paths": [ "/ill/290/0252-01" ] }, { "cite": "351 Ill. 643", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5298839 ], "pin_cites": [ { "page": "647" } ], "opinion_index": 0, "case_paths": [ "/ill/351/0643-01" ] }, { "cite": "344 Ill. 563", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5258218 ], "opinion_index": 0, "case_paths": [ "/ill/344/0563-01" ] }, { "cite": "72 Ill. 360", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2712687 ], "opinion_index": 0, "case_paths": [ "/ill/72/0360-01" ] }, { "cite": "330 Ill. App. 89", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3411690 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/ill-app/330/0089-01" ] }, { "cite": "300 Ill. App. 156", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3236842 ], "opinion_index": 0, "case_paths": [ "/ill-app/300/0156-01" ] }, { "cite": "150 N. E. 581", "category": "reporters:state_regional", "reporter": "N.E.", "opinion_index": 0 }, { "cite": "242 N. Y. 1", "category": "reporters:state", "reporter": "N.Y.", "case_ids": [ 1974909 ], "opinion_index": 0, "case_paths": [ "/ny/242/0001-01" ] }, { "cite": "410 Ill. 169", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5310676 ], "opinion_index": 0, "case_paths": [ "/ill/410/0169-01" ] }, { "cite": "340 Ill. App. 220", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 4999804, 4996477 ], "opinion_index": 0, "case_paths": [ "/ill-app/340/0220-02", "/ill-app/340/0220-01" ] }, { "cite": "344 Ill. App. 301", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 2430728 ], "opinion_index": 0, "case_paths": [ "/ill-app/344/0301-01" ] }, { "cite": "3 Ill.2d 531", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2695655 ], "pin_cites": [ { "page": "538" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/3/0531-01" ] }, { "cite": "350 Ill. 538", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5303642 ], "weight": 2, "pin_cites": [ { "page": "541" } ], "opinion_index": 0, "case_paths": [ "/ill/350/0538-01" ] }, { "cite": "344 Ill. App. 54", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 2429152 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/ill-app/344/0054-01" ] }, { "cite": "200 Ill. 386", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5592818 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/ill/200/0386-01" ] } ], "analysis": { "cardinality": 875, "char_count": 19939, "ocr_confidence": 0.494, "pagerank": { "raw": 1.3542315239643442e-07, "percentile": 0.6341966269075919 }, "sha256": "1f9ad383d94b96d42f7d2cad823665e2acb9d593b9ef7338b26dbf9085c146a5", "simhash": "1:7b571d0cfa3fd85b", "word_count": 3329 }, "last_updated": "2023-07-14T20:19:38.117678+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "LEWE, P. J. and KILEY, J., concur." ], "parties": [ "Jack Behn, Appellee, v. Solomon Shapiro, also Known as Sol Shapiro, Appellant." ], "opinions": [ { "text": "JUDGE FEINBEBG\ndelivered the opinion of the court.\nPlaintiff\u2019s complaint is for injunction, accounting and reformation of a partnership dissolution agreement. After issues joined, a general reference was had to a master, who heard evidence and recommended the issuance of an injunction, reserving further hearings as to the accounting for damages. Neither the master\u2019s report nor the decree made any mention of the reformation of the contract. Obviously, plaintiff has abandoned that portion of the relief prayed for in the complaint. A decree was entered confirming the master\u2019s report and re-referring the cause to the master for the purpose of hearing evidence as to the accounting and damages, from which decree defendant appeals.\nThe decree provided: \u201cThat defendant, Solomon Shapiro, also known as Sol Shapiro, his agents, employees, and servants are hereby permanently restrained and enjoined, directly or indirectly from soliciting or attempting to solicit the produce business of or from any of the following persons, firms, partnerships, or corporations,\u201d following which is a list in the decree of sixty names of persons, firms, partnerships or corporations. The injunction is limited to the sixty named.\nThe record of testimony and exhibits is voluminous. In view of the contentions raised upon this appeal, it becomes necessary, for a better understanding of them, to outline briefly the facts appearing in the record, out of which the controversy arose.\nFor approximately seventeen years the parties were partners in the produce business, which was terminated by a partnership dissolution agreement, the one involved in this controversy. The agreement was drafted by attorney Seidenfeld, representing both parties, who had a personal interest in some of the real estate owned by the partnership and retained it with plaintiff since the dissolution. It is admitted that the first draft of the dissolution agreement, prepared by Seidenfeld, contained the provision that \u201cShapiro agrees that he will not interfere directly or indirectly in the operation of the said Skokie Produce Co.\u201d When this draft was presented for execution, defendant, not represented by other counsel, objected to the above quoted provision, and declined to sign it. Plaintiff\u2019s witness, Seidenfeld, testified that he redrafted the agreement, deleting the provision objected to. The agreement, as redrafted, was executed by the parties on July 10,1953, though the agreement was dated back to June 1,1953.\nAttorney Seidenfeld did not suggest to the defendant that the deletion of the noninterference provision from the agreement would not permit him to solicit previous customers of the partnership, nor did he explain to the defendant or to plaintiff that the sale of \u201cgood will\u201d in itself would bar defendant from soliciting previous customers. However, he did tell defendant that he was free to go into a competitive produce business.\nThe agreement provided, among other things, that \u201cShapiro sells, transfers and sets over to Behn all of Shapiro\u2019s right, title and interest in and to the property, assets, business and \u2018good will\u2019 of said partnership, subject to all partnership debts outstanding and unpaid,\u201d which Behn assumed and agreed to pay, and that \u201cBehn shall have the sole right to use the name, style and description of \u2018Skokie Produce Co.\u2019 in all future business dealings and Shapiro shall not use or carry on a business under said name directly or indirectly.\u201d Except as to the obligations imposed by the dissolution agreement, the parties executed mutual releases. The agreement provided for the payment of $10,000 in cash and the balance of $40,000 in installments of $500 or more per month, beginning August 1, 1953, evidenced by a promissory note signed by plaintiff and secured by a mortgage on real estate owned by the partnership.\nThe partnership books and records, as well as financial statements furnished by the partnership to the banks and others, contained no entry or valuation of \u201cgood will.\u201d The master found that the partnership did not carry good will as an asset upon its records or books of account.\nShortly after signing the dissolution agreement, defendant, together with Lirtzman, a former employee of the partnership, who was discharged by plaintiff on July 17, 1953, engaged in the produce business on the South Water Market under the name of Courtesy Produce Company, and was selling produce in the open market to some of the customers of the former partnership. Plaintiff was aware of defendant\u2019s competition as early as July 22, 1953. He testified:\n\u201cThe next time I seen Mr. Shapiro was a week after July 15th, on a Saturday morning, about seven o\u2019clock at the potato track. I walked up to him and I says, \u2018Sol, you are wrong.\u2019 I says, \u2018You sold- \u2014 Julius sold Campbell\u2019s some potatoes. They called me first \u2014 that is Campbell\u2019s Soup Company, and I told them to buy three cars of potatoes from you, because it was way below market price.\u2019 I told the buyer of Campbell\u2019s Soup to buy from them, from Mr. Lirtzman, if they want to buy below cost. I told that to Sol; and he was on the track.\u201d\nIt further appears from the evidence that substantially all of the items sold by the partnership, and by plaintiff following the dissolution, were cabbages, onions, potatoes, bananas, whatever of these items they could buy and sell. They were brought in on trains in Chicago at 27th Street and Ashland Avenue, where the open market was located. If they could not make a sale at that price they would leave them on the track and abandon them to the railroad for the freight charges, or else lower the price at which to sell. Plaintiff many times abandoned produce to the railroad for freight charges, when he could not get a buyer. During that period there were more than one hundred sellers of produce in that market.\nIt is clear to us in reading this record, and there is no substantial evidence to the contrary, that the fresh produce of the partnership business was either bought or sold at the track; was what is termed \u201cspot\u201d business; that the sale would depend upon quality, quantity and price; and it was generally not known in advance who the buyers would be, even though former buyers of the produce sold by the partnership would have representatives at the track to examine what was offered for sale. In other words, unlike the sale of nationally known brands, or sales of merchandise made by description or sample, as is present in so much of our commerce, fresh produce dealt in by the partnership was nearly always bought and sold upon inspection at the tracks in the market. We find no showing by plaintiff in the record as to how much business the partnership did with any of the sixty names listed in the decree, or to what extent, if any, sales were made to them in any other way except by inspection and purchase at the tracks. It was stipulated by the parties upon the hearing that none of those listed among the sixty names in the decree bought exclusively from the partnership.\nThe master concluded, among other things, that there is no evidence of any kind in the record to show that the parties intended to eliminate from the meaning of the phrase \u201cgood will\u201d the right to solicitation of partnership accounts. Thus it will be seen that the master recognized it was important to determine what was intended by \u201cgood will.\u201d He also concluded:\n\u201cThis good will included the probability that persons, firms and corporations who had purchased merchandise from said partnership would continue their patronage.\u201d\nThe master also stated:\n\u201cIn the opinion of the Master, the legal conclusions above set forth are clearly justified by the case of Ranft v. Reimers, 200 Ill. 386.\u201d\nTo sustain the decree, plaintiff argues that the sale of \u201cgood will\u201d contained in the dissolution agreement imposes upon defendant the duty not to solicit in any competing business the former customers of the partnership, and that this duty exists, though there is no restrictive covenant in the dissolution agreement not to engage in any competitive business or not to solicit the customers of the partnership. Plaintiff relies chiefly upon Ranft v. Reimers, 200 Ill. 386, as controlling, and Unique Watch Crystal Co. v. Kotler, 344 Ill. App. 54. These cases and other cases cited by plaintiff from other jurisdictions, which approved the view expressed in Ranft v. Reimers, supra, will be presently discussed.\nDefendant\u2019s principal contentions are that since the dissolution agreement contains no negative covenant against solicitation of customers of the partnership, or against engaging in competitive business, the mere inclusion of the sale of \u201cgood will\u201d does not, in and of itself, bar the right of the retiring partner to solicit the customers in a competing business; that there is no evidence in the record that the partnership had any \u201cgood will,\u201d and none was carried on the books and records of the partnership as an asset; and that the deletion from the final draft of the dissolution agreement of the \u201cnoninterference clause\u201d clearly established that the parties understood and intended that defendant could engage in a competing business and would not be barred from soliciting the former customers of the partnership. We shall discuss these contentions in the order stated.\nThe extraordinary remedy of injunction will not be entertained by equity unless substantial damage to a property right is clearly shown. Elder v. Mall, 350 Ill. 538, 541; Nichols v. City of Rock Island, 3 Ill.2d 531, 538; Parkin v. Damen-Eidge Apts., Inc., 344 Ill. App. 301.\n\u201cGood will,\u201d in the instant case, must be shown to have a substantial value, an asset to the partnership and therefore a property right which requires protection by injunctive relief.\nAs was said by this court in Altschuler v. Altschuler, 340 Ill. App. 220 (Abst.), reversed (upon other grounds) in 410 Ill. 169:\n\u201cGood will is not a tangible asset and not all businesses possess good will. (In re Brown, 242 N. Y. 1, 150 N. E. 581; Securities Realization Co. v. Peabody & Co., 300 Ill. App. 156.)\u201d\nThe business, in the case cited, had a small office and junk yard. Its product was iron and scrap metal, which was bought and sold. There, too, as in the instant case, good will was not carried upon the books and records of the partnership as an asset and was not included in the partnership statement of account rendered. It was there further said:\n\u201cThere was nothing in the trade name of the dissolved partnership, the site of its business, or its product which could be said to represent good will.\u201d\nWe cannot agree with plaintiff\u2019s position that the mere inclusion of \u201cgood will\u201d in the sale of the partnership interest, without any further showing, ipso facto bars the retiring partner from soliciting former customers of the partnership in a'competing business.\nWe think that Ranft v. Reimers and Unique Watch Crystal Co. v. Kotler, supra, chiefly relied upon by plaintiff, do not support plaintiff\u2019s position and are distinguishable from the instant case.\nIn the Ranft case, it appears that the partnership was engaged in bottling and selling soft drinks. One of the partners sold his interest and good will of the business to the other. The vendor \u201ccovenanted to warrant and defend the property sold to complainants, together with this good will.\u201d The vendor immediately set up a competing business and began canvassing old customers of the firm, and endeavored to persuade them from continuing to deal with the business of the partnership, and attempted to appropriate the telephone number of the partnership, which had been used in the business and by which \u201ca large part of the orders had been accustomed to come,\u201d all for the purpose of destroying and preventing complainants from having the benefit and advantage of what was sold.\nIt will thus be seen that there was an express covenant to warrant and defend the good will sold. Such a covenant recognizes and presupposes \u201cgood will\u201d to exist as part of the partnership assets, and imposes a duty to defend it against any damage, all of which is absent in the instant case. The court held that the breach of such a warranty could be properly enjoined.\nOn the other hand, it would be difficult to find a more parallel case than Ginsburg v. Warczak, 330 Ill. App. 89. There the parties were partners for sixteen years in the planograph business. This partnership was incorporated with the same partnership interests represented by stock. A dispute arose, and an agreement was entered into for the sale of defendant\u2019s stock to plaintiff. The original draft was prepared by the attorney for the vendee. The vendor was not represented by counsel. It provided for the sale by defendant of his stock interest in the business together with the \u201cgood will.\u201d It further provided that the vendor \u201cwould not interfere with the good will of the corporation, and would not, for one year, solicit the business of customers of the corporation; . . . and that defendant would not employ any of the present employees of the corporation, or engage in business competitive to that of the corporation.\u201d The vendor refused to sign the agreement with the quoted provisions, and on the face of the agreement the quoted provision was marked \u201cdeleted\u201d and initialed by both parties. The vendor, shortly thereafter, engaged in a competing business, hired some former employees of the corporation and solicited its customers and those of the former partnership. It was there sought by injunction to restrain the vendor from soliciting these customers or engaging in a competitive business, and further to reform the dissolution agreement so as to include the deleted provisions, as well as an accounting for damages. There, too, \u201cgood will\u201d was not carried on the books and records of the business as an asset. That cause was referred to a master, who recommended the issuance of an injunction, and upon exceptions to the master\u2019s report the chancellor overruled the master\u2019s conclusions and dismissed the complaint for want of equity. This court, in affirming, said:\n\u201cThe record shows that the two paragraphs deleted from the written agreement were intended by them to be deleted. To restore these paragraphs would not be a reformation, but the making of a new contract. On the record presented plaintiff did not show any right to a reformation of the contract. ... We agree with defendant that the record shows no relationship of trust and confidence between the parties. In making the agreement they dealt at arm\u2019s length. Plaintiff was represented by an attorney. There was a full and frank discussion of the transaction. The parties knew what they were doing. The fact that defendant insisted on deleting the two paragraphs and that they were deleted, shows that he did not wish to be bound by such paragraphs.\u201d\nIt will thus be seen that in the cited case the mere sale of \u201cgood will\u201d did not of itself bar the vendor\u2019s right to solicit the customers.\nIn the instant case had the deletion not been made and the deleted provision that defendant \u201cwill not interfere directly or indirectly in the operation of the said Skokie Produce Co.\u201d remained in the agreement, it would have had a very material bearing upon the intention of the parties as to soliciting customers of the partnership. It occurs to us that the solicitation of customers by a former partner would certainly constitute important interference with a going business, within the meaning of the deleted clause. If the deletion in Grinsburg v. Warczak, supra, would permit such solicitation, then the broader deleted language in the instant case should be attended with the same result.\nIn this connection, plaintiff\u2019s witness Seidenfeld testified that during the course of the meeting with reference to the signing of the contract with the interference language out of it, plaintiff said that \u201che was not worried about any competition, at least from Shapiro. ... He said, T am not afraid of competition from Sol Shapiro.\u2019 \u201d\nUnique Watch Crystal Co. v. Kotler, supra, relied upon by plaintiff, involved the sale of a watch crystal business. The sale included \u201cgood will.\u201d The court there held that the principal question was what was meant by \u201cgood will.\u201d It followed tbe reasoning in Ginsburg v. Warczak, supra.\nThe construction urged by plaintiff upon the term \u201cgood will\u201d of necessity involves a form of restraint of trade. The law does not favor restraint of trade, and when a covenant not to solicit customers or not to engage in a competing business is included in a contract, the courts will only sustain it if it is reasonable with respect to time and territory. Wiggins Ferry Co. v. Ohio & M. Ry. Co., 72 Ill. 360; Parish v. Schwartz, 344 Ill. 563, followed with approval in Storer v. Brock, 351 Ill. 643, 647.\nWe are therefore confronted with the ultimate question: Was there, in the instant case, good will attached to the partnership business, and was this good will an asset and a property right, which should be protected by injunctive relief?\nThe burden of proving that the \u201cgood will\u201d in question was an asset and a valuable property right, and that the business was reasonably profitable, was upon the plaintiff.\nIn William E. Dee Co. v. Proviso Coal Co., 290 Ill. 252, the court, in considering what constituted \u201cgood will,\u201d held:\n\u201cAlthough the good will of a business may be of very great value in the probability that old customers of a firm will continue their custom and recommend it to others, the good will has no value merely because the partnership is a going concern unless the business is operated at a profit.\u201d\nTo the same effect, Ahlenius v. Bunn & Humphreys, Inc., 358 Ill. 155, 168; McIlvaine v. City Nat. Bank & Trust Co., 314 Ill. App. 496, 525.\nSince the decree lists sixty names whom the defendant is restrained from soliciting, it was incumbent upon plaintiff to prove how many sales, if any, were made to the customers listed, in what amount, over what period of time, and whether they were constant customers, frequent customers or merely promiscuous, so that a court could determine whether good will represented a substantial asset and property right. Plaintiff has not met this burden of proof.\nIn Elder v. Mall, supra, where injunctive relief was sought, the court said (p. 541) :\n\u201cThe subject matter of the jurisdiction of the court of chancery is civil property. The court is conversant only with questions of property and the maintenance of civil rights. Injury to property, whether actual or prospective, is the foundation on which the jurisdiction rests.\u201d\nIn Parkin v. Damen-Ridge Apts., Inc., supra, we held (p. 305):\n\u201cThere is no such showing of a substantial property right as would entitle a court of equity to interfere by injunction.\u201d\nIt further appears in the record that the court entered an order directing that plaintiff deposit with the clerk of the court, to be held by him until the final disposition of the cause, the installment payments due to defendant upon the note of plaintiff secured by the mortgage. The fund is still held by the clerk. Defendant\u2019s petition for an order on the clerk to turn over the fund to defendant was denied.\nIt follows from what we have said the court erred in entering the decree appealed from. The decree is reversed and the cause remanded with directions to enter an order directing the clerk to turn over to defendant the fund in his possession in this cause, and to dismiss the complaint for want of equity at plaintiff\u2019s costs.\nReversed and remanded with directions.\nLEWE, P. J. and KILEY, J., concur.", "type": "majority", "author": "JUDGE FEINBEBG" } ], "attorneys": [ "Hirsch. E. Soble, and Maurice A. Barancik, both of Chicago, for defendant-appellant.", "Mural J. Wihstin, of Chicago, and Sidney Usow, of Milwaukee, Wisconsin, for appellee." ], "corrections": "", "head_matter": "Jack Behn, Appellee, v. Solomon Shapiro, also Known as Sol Shapiro, Appellant.\nGen. No. 46,692.\nFirst District, Third Division.\nNovember 16, 1955.\nReleased for publication December 19, 1955.\nHirsch. E. Soble, and Maurice A. Barancik, both of Chicago, for defendant-appellant.\nMural J. Wihstin, of Chicago, and Sidney Usow, of Milwaukee, Wisconsin, for appellee." }, "file_name": "0025-01", "first_page_order": 41, "last_page_order": 52 }