Adams v. Adams

Trial by the court.

This action was brought by Robert Adams against Henry Adams, for an injunction restraining the defendant from using the firm name.

For more than five years prior to March 4, 1879, the plaintiff and defendant were partners in business in New York city and elsewhere, under the firm name of R. & H. Adams.

On that date the partnership was dissolved by an agreement in writing, duly executed by plaintiff and defendant, which agreement, among other things, provided that Henry Adams should have the right to continue the business for his own advantage solely, and that the plaintiff should transfer and convey to the defendant all the property of the firm, both real, personal and mixed, in the States of New Jersey and elsewhere, together with all choses in action and rights of every kind, and also all book accounts, profits and bills receivable, and assets of every kind, except a certain patent therein excepted ; and also the good-will and business of the firm, so that it should belong to the defendant exclusively. After the dissolution of the partnership the defendant continued the business under the firm name, pursuant to 2 R. S. 6 ed. p. 1158, allowing the continued use of copartnership names.

The good-will of a firm is a part of the assets, and to be considered on a sale of the partnership business, and passes by such sale

(Story on Part. §§ 99, 100, 211 and 212 ; Parsons on Part. 262, 444; Glen & Hall Manuf. Co. v. Hall, 61 N. Y. 226 ; Churton v. Douglass, 1 H. R. & Johns. Ch. 174 ; Banks v. Gibson, 34 Beav. 566 ; Bininger v. Clark, 10 Abb. Pr. N. S. 264; S. C., 60 Barb. 113 ). For the purpose of maintaining the business and carrying it on successfully, it is necessary for the defendant to have all the labels, trademarks, and other property incident to the business of the firm as it had been established, and as it existed at the time of the sale. They are a valuable part of the business assets, and pass by a sale thereof (Hall v. Barrows, 4 De Gex, J. & S. 150; Carmichel v. Latimer, 11 R. I. 395 ; 2 Pars. on Contr. 257; Witthaus v. Mattfeldt, 44 Md. 303 ). Defendant has a right to use the firm name under the statute (L. 1854, p. 1084, c. 400 ; L. 1863, p. 227, c. 144). Where there is a dissolution and no agreement as to the good-will, an injunction cannot be maintained by either partner against the other, for using the partnership name, where the name of the partner so using it forms a part of the name used (Lathrop v. Lathrop, 47 How. Pr. 532 ).