Majority
p. 264BININGER against CLARK. Supreme Court, Second District; Special Term, 1870.
Headnote
Good Will.—Fibh Name.—Iv.jtjwctioh.—Receivership. —Bankruptcy.The good will of a business firm is regarded in equity as a part of the assets; and, after dissolution, a partner may be enjoined from appropriating it to the exclusion of the other partners.
Abraham Bininger Clark, who had been a partner in the firm of A. Bininger & Co., usually writing his name Abm. B. Clark, continued a similar business on his own account, after dissolution of that firm, and put up his name as A. Bininger Clark, successor of A. Bininger & Co.;—Held, that he might be restrained by injunction from the use of such a style.[1]
Even after a receiver of partnership property has been appointed, or an assignment in bankruptcy has been made by a firm, one "of the parties may bring an action to restrain another from a wrongful attempt to appropriate the good will and name of the former firm ; for he has an interest in protecting the property so. that his debts may be discharged and leave a surplus possible.
p. 265
Motion for an injunction.
This action was brought by Abraham Bininger against Abraham B. Clark and Melville B. Clark, to enjoin the latter from an alleged wrongful use or imitation of the firm name of the late firm of A. Bininger & Co., in which both parties had been partners. The firm had become insolvent, and had been dissolved; a receiver having been appointed in the New York superior court; and proceedings in bankruptcy, which had been taken in the United States courts, also having resulted in the appointment of an assignee, and the making of an assignment to him. These proceedings are stated in 38 How. Pr., 341 ; 39 Id., 363 .
The complaint alleged that plaintiff and the defendant, Abraham B. Clark, had for many years been doing business under the name of A. Bininger & Co.; that the business had been established for over ninety years, and during the whole of that time the firm had been either A. Bininger, or A. Bininger & Co.; that the good will of the firm was one of the most valuable items of the firm property; that the plaintiff had, since the proceedings in bankruptcy, been deprived by the defendants of the possession of the store, firm books, &c., and had been prevented from exercising acts of owner
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ship, &c.; that the defendants had hired a store adjoining the store of A. Bininger & Co., which was at Hos. 92. and 94 Liberty-street, and commenced business under the name of A. Bininger Clark & Co.; that they had put upon the store of A. Bininger & Co. a sign stating that “A. Bininger Clark & Son had removed to Ho. 96, next door below;” that they had distributed among the customers of the old firm, and printed in various newspapers, circulars to the effect that they were the successors to A. Bininger & Co.; that they had suspended a banner across Liberty-street with the words “A. Bininger Clark & Son, Successors to A. Bininger & Co.” thereon, and had put other signs upon their store to the same effect; that the defendant A. B. Clark had never been previously known as A. Bininger Clark, but as Abraham B. Clark, and had always so signed himself; that the defendants gave the impression to their customers and others that the plaintiff was a member of the firm of A. Bininger Clark & Son ; that this conduct was intended and calculated to divert the good will of the firm of A. Bininger & Co. to the firm of A. Bininger Clark & Son, and was fraudulent on the part of defendants, and tended to great and irremediable loss on the part of- plaintiff. The complaint closed with a prayer for a perpetual injunction from using the name “A. Bininger.”
The defendant, A. B. Clark, in his answer, set up the appointment of the receiver of the partnership property in the action in the superior court of the city of Hew York, and of the assignee in bankruptcy in the proceedings in the United States district court; and claimed that the cause of action, if any, belonged to the receiver or the assignee. The apswer also alleged that the defendant’s name was A. Bininger Clark, and that he had, some years prior to this action, so written his name and been so called ; that the good will of the firm had been greatly injured by plaintiff’s acts, and that
p. 267I. The good will of a commercial business or trade constitutes a part of the firm assets, which, upon dissolution, must be sold, being by nature' indivisible (Colly, on Part., §§ 162, note 3 ; 322, note 4; Story on Part., § 99 ; Dougherty v. Van Hostrand, 1 Hoffm. Ch., 68; Williams v. Wilson, 4 Sandf. Ch., 379 ; Fenn v. Bolles, 7 Abb. Pr., 202 ; Featherstonhaugh v. Fenwick, 17 Ves., 298; Gow on Part., 255). II. Upon the dissolution of a firm, each partner has a right in equity to have the partnership property preserved and applied to the firm debts (Smith v. Haviland, cited in Deveau v. Fowler, 2 Paige, 401; Story on Part., § 326). Equity will enjoin a partner from injuring or impairing the partnership property (Story on Part., § 329; 4 Sandf. Ch., 380 , 381; Story Eq. Jur., §§ 669, 672). III. Equity will enjoin these defendants from using plaintiff’s name, or the name of plaintiff’s firm, or any part of either (Story' s Eq., Jur., § 951; Story on Part., §§ 211, 212 ; Howard v. Henriques, 3 Sandf. Ch., 725 ; Woodward v. Lasar, 21 Cal., 448 ; Taylor v. Carpenter, 11 Paige, 292 ; Bell v. Locke, 8 Paige, 75 ; Clarke v. Clarke, 25 Barb., 76 ; Knott v. Morgan, 2 Keen, 213; Wellington V. Fox, 3 Mylne & C., 338; Croft v. Day, 7 Beav., 84; Edleston v. Vick, 23 Eng. Law & Eq., 51). IV. The receiver of the superior court held the firm property for the benefit of Bininger to the extent of his
the suspension of payment was the act of plaintiff to defraud defendant of his interest in the firm assets; that being, as well as the plaintiff, a grandson of the original A. Bininger, he was as much a Bininger as plaintiff; that he was at liberty to write his name A. Bininger, and ended with a denial of the fraud and collusion charged in the complaint.
Tompkins Westervelt, for the motion.
p. 268interest, pending the action to wind np the partnership. The assignee in bankruptcy holds any surplus in trust' for Bininger. In the preservation of that surplus Bininger has a personal interest for which he may, in equity, proceed in his own name, notwithstanding the assignment (Sedgwick v. Cleveland, 7 Paige, 390 ; Deveau v. Fowler, 2 Id., 400). I. Plaintiff is restrained from interfering with the assets of the firm of A. Bininger & Co., by the injunction of the superior court. II. The title to the property is vested in the assignee in bankruptcy (Bankrupt Act, § 14). III. The title to the property is in the receiver of the superior court. IV. The name .of “A. Bininger & Co.” is not a trademark, and plaintiff has no exclusive right to it. V. The name used by defendants was not the name of the firm of A. Bininger & Co. VI. The propriety of the action in the superior court is res judicata. VII. The equities of the bill are all denied, and in such case there must be strong supporting evidence to sustain the injunction (Hoffman v. Livingston, 1 Johns. Ch., 211 ; Roberts v. Anderson, 2 Id., 202; Skinner v. White, 17 Johns., 357 ). VIII. The bill itself shows no superior equity. IX. The damage is only apprehended. In such case, the case must be strong and free from doubt. X. One partner cannot sue his copartner respecting the copartnership, except on an accounting. XI. Where the injury complained of results from persons using their proper names, it is no ground for an injunction. The restraint is as great as the injury.
M. Compton, opposed.
The good will of a business firm is an
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important part of its property, and will be protected by a court of equity whenever a proper case arises. In this case it is alleged and not denied that it constituted the most valuable part of the firm assets. Any appropriation of it by one partner to the exclusion of the other, unless acquired upon a fair sale, is manifestly a wrong not to be tolerated.
The facts shown clearly sustain the plaintiff’s allegations that it has been so appropriated. The defendant closely imitates the name of the late firm, and not satisfied with that, describes himself as “Successor to A. Bininger & Co.”
He also placed signs in close proximity to the firm’s late place of business, with the plain intent of diverting any trade that followed the late firm to the place now occupied by him.
If this is allowed, the plaintiff’s interest in the good will of A. Bininger & Co.'will be destroyed.
The fact that defendant’s name is “A. Bininger Clark,” does not obscure the defendant’s wrongful design, nor in any manner change the case.
After having for forty years written his name “Abm. B. Clark,” his now writing “A. Bininger Clark,” cannot be considered an accident. If it is one, he should be admonished not to continue it in a manner so likely to mislead the public.
Our statutes provide for changing names, and it has. been held that at common law a person may change his name at will. But it by no means follows that after making such change a person may so use his new name as to attract business from another person whose name he has adopted.
The receivership does not affect the right of the plaintiff to bring this suit, nor does the assignment in bankruptcy. The plaintiff has an interest in protecting the property of the late firm, so that his debts may be
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discharged, and possibly a surplus realized for his own use. He is therefore a propér person to bring this suit. The injunction must be continued.