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Manley v. Geng

JULY 29, 1955.

LYLE T. MANLEY, PLAINTIFF-APPELLANT,

v.

KARL O. GENG ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Winnebago county; the Hon. ALBERT S. O'SULLIVAN, Judge, presiding. Decree affirmed.

MR. JUSTICE EOVALDI DELIVERED THE OPINION OF THE COURT.

Rehearing denied September 13, 1955.

Plaintiff-appellant brought suit in equity seeking injunctive relief against the continuing use of the name "Manley Sand Company" by the defendants, and seeking damages.

The trial court found that there was no fraudulent conduct or wrongful acts by any of the defendants in the use of the name "Manley Sand Company" or "Manley Sand Corporation" and ordered and decreed that the complaint be dismissed for want of equity, plaintiff to pay costs.

The case is the outgrowth of a contract of sale between plaintiff and his brother, Dwight E. Manley, who was a defendant in the original suit, and on the suggestion of his death, the case was continued against the executor, Lois E. Manley. In the contract, dated October 13, 1952, plaintiff sold to his brother, Dwight E. Manley, the plaintiff's interest in a partnership business operated by plaintiff, his brother and assignee, Dwight E. Manley, and his mother, May B. Manley.

Lois E. Manley, as executor of the will of Dwight E. Manley, assignee of the interest of plaintiff in the partnership, was dismissed from the case at the end of the hearing. That left in the case the following: May B. Manley, the only person who was a partner at the time the plaintiff sold his interest; her associates in a new partnership formed after the plaintiff sold his interest; and the employees of such new partnership.

Plaintiff's theory is that he had a proprietary one-half interest, as one of the partners in Manley Sand Company, in the partnership property of the Manley Sand Company and that a part of such partnership property at the time he sold out in October 1952, was its good will, which included its name "Manley Sand Company" which he reserved when he sold the sales business, and which he never relinquished. He further claims that under Illinois statutory law neither he nor his ex-partners could use the partnership name "Manley Sand Company" after the sale in October 1952, without each other's consent. Also such partnership property right of use of the name "Manley Sand Company" could not be appropriated by anyone without adequate redress in equity inasmuch as plaintiff had no adequate remedy at law.

The name "Manley Sand Company" has been used by various partnerships for many years. On February 1, 1926 plaintiff and his father, Edward B. Manley, who died about a year later, formed a partnership under the above name, each having a one-half interest in the business. After the father died, his interest in the partnership became vested in his widow, the defendant, May B. Manley. Under date of January 1, 1944, the mother, May B. Manley, sold to the son, Dwight E. Manley, one-half of her interest in the partnership business.

Under date of August 7, 1945, plaintiff with his mother and said brother, Dwight E. Manley, entered into a new partnership agreement, with interests as follows: 50 per cent to plaintiff; 25 per cent to May B. Manley and 25 per cent to Dwight E. Manley. This agreement recognized the above name by providing: "Whereas May B. Manley, Lyle T. Manley and Dwight E. Manley have been doing business as co-partners under the name and style of Manley Sand Company of Rockton, Illinois, for the past several years." It further recited that it had become necessary and desirable to enter into a written agreement fixing the rights of the partners in the event of dissolution, either voluntary or by death; that said partnership should continue in effect for a period of ten years or as much longer as the partners may desire and can mutually agree upon. The agreement further provided that the management of the partnership business "shall continue in Lyle T. Manley and Dwight E. Manley as heretofore, but this contract shall replace and be substituted for any and all previous contracts made and entered into by and between the parties hereto, either oral or written." Under its terms plaintiff and Dwight E. Manley were entitled to a salary of 30 per cent each of the net profits of the partnership with the balance of profits divided one-half to plaintiff and one-fourth each to said May B. Manley and Dwight E. Manley.

The agreement further recited that as of January 1, 1944, the capital account of the partnership had been contributed as follows: "Lyle T. Manley, $30,000.00; May B. Manley, $15,000.00 and Dwight E. Manley, $15,000.00," which was changed at a later date to $60,000.00, $30,000.00 and $30,000.00 respectively.

In said 1945 agreement it was provided:

"For the purpose of this agreement in any transfer of partnership interests, either between the partners or after the death of a partner, the good will of this partnership is established at the sum of Twenty Thousand Dollars ($20,000.00), which, in the judgment of the partners, is the fair and reasonable worth of such partnership in addition to the present book value which does not include any good will.

"The ownership of such good will shall be the same as in the net property of the partnership. . . ."

Plaintiff and Dwight E. Manley, with their mother, as partners, operated the industrial sand sales business under the said name of "Manley Sand Company" under the August 7, 1945, agreement until October 1952, when plaintiff sold out to Dwight E. Manley under an agreement to sell dated October 13, 1952, and a supplementary sales agreement dated ...


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