Caswell v. Hazard

From 1867 to 1872, Rowland N. Hazard* Philip Caswell, Jr., and John R. Caswell were; co-partners* carrying on business as druggists and apothecaries in the-city of New* York and at Newport, R. L, under- the firm; name of: Caswell, Hazard.&.Co, Philip Caswell, J?r., owned, an interest, of one-half in the. business, Rowland N. Hazard: one-quarter, and John R.. Caswell one-quarter, Oil July 1, 1872,'Philip* Caswell, Jr., retired from, the firm and sold, to Rowland. N. Hazard all “his aforesaid, right, title and. interest in and. to* the business stock, fixtures; book debts, notes,, laroprietary articles-,, bills prescriptions, private, formulas, manufactures;, things, in action, account books, papers,, vouchers, leases, real estate; and good, will.and. other’ property and assets whatsoever of and. belonging to- the. said firm of Caswell,., Hazard.&.Co,”

In the.- same agreement by which he made, this sale he; transferred his interest in the.lease of the stores of the firm in New York, and. in the real property belonging- to; it at; Newport, and.agpeteddhat he would, not within- the spaee.of twenty years from the date of th©agreement go. into.business as a druggist or apothecary in New York or Newport, and would not manufacture or cause- to be manufactured any of his private prescriptions or proprietary articles; theretofore the property of the firm.

John C. Hazard, was thereupon admitted to the firm, in, the place of Philip Caswell, Jr., and the business was continued under the name of Caswell, Hazard & Co. until 1876, when the-co-partnership was dissolved by the withdrawal of John R. Caswell, who went into the* drug-business with William M. Massey, under the firm name of Caswell & Massey. Meantime the defendants Hazard, continued business- as* Caswell, Hazard & Co. until 188-6, when- the present action was brought to restrain them from using the name Caswell in any manner in their firm name or business: designation. There is in feet no person by the name of Caswell* in the defendants firm. To justify themselves in the use-of that name, however, the defendants rely chiefly upon the aforesaid purchase in. 1872 by Rowland N. Hazard from Philip Caswell, Jr., of his half interest in the.- business,. including the good wilL

They make no claim of any right to continue to: employ the-name of JohnR. Caswell, but urge that their right to* use. the name Caswell is derived from. Philip Caswell, Jr., under the- written agreement from which 1. have already quoted, and that therefore John B. Caswell cannot interfere with it; The legal proposition, put forward, in support of this?part of their case is, that the. sale, or other- transfer- of the good will' of a partnership carries with it- the right to use. the firm name..

The broad rule laid down in this English decision, however, has not been sanctioned to its full extent by the courts of this state. Lathrop v. Lathrop, 47 How. Pr., 532 ; Morgan v. Schuyler, 79 N. Y., 490 , 494. In the case last cited the parties were, partners in the business of dentistry. On the dissolution of the firm the defendant purchased a portion of its property and assumed payment of the rent of the premises previously occupied by both partners. It was mutually understood that the plaintiff was to continue business as a dentist in the same city, and there was nothing in the agreement of dissolution which transferred the good will of the firm to either of the parties. Upon these facts the court of appeals held that the defendant had not become entitled to continue the use of the firm name, or to hold him- . self out as the successor of the firm. In the course of the opinion, Danforth, J., after citing three of the cases referred to by the counsel for the appellant, says: that the good will in question “was only that which pertained to the place of business, and no case holds that the good will included the right to the continued use of the name of the firm.” On the present appeal the respondent relies strongly upon this language as decisive, to the effect that no sale or transfer of the good will of a co-partnership, even though it comprise that which pertains to the business itself as well as to the place of business, can convey a right to employ the firm name.

I am inclined to think, however, that this is too broad a construction of the words used by the learned judge and that his meaning was only that such good will as attaches merely to the place of business has never been held to include the right to use the firm name. For as we have seen in Banks v. Gibson (supra), the master of the rolls expressly decided that where both the whole concern and the good will were sold, the name as a trade mark went with it.

But I do not think it is at all necessary to go as far as this English decision goes in order to maintain the right of

In my opinion authority to use such name may fairly be •implied from' the terms of the instrument and its manifest purpose.. Under the statute which provides for the continued use of a copartnership name after the retirement of .the copartner (Laws of 1854, chap. 400), the defendant Rowland N. Hazard by filing and publishing the proper certificate could have continued to employ the name Caswell without imposing any risk or liability upon Philip Caswell, Jr., and in fact it appears that immediately after Philip Caswell, Jr., went out and John C. 'Hazard was taken in his place, the three partners who went on with the business, that is to say, Rowland N. Hazard, John R. Caswell and .John C. Plazard did make, file and caused to be published, a certificate under this act. It is impossible to perceive what-purpose there was in making this certificate unless it was to continue to use the name “ Caswell,” as belonging to Philip Caswell, Jr., inasmuch as the names of the three .persons constituting the new firm were such as to entitle •them to call themselves Caswell, Hazard & Co., without filing any certificate whatever.

This act therefore must be regarded as to some extent an acknowledgment on the part of John R. Caswell, that Rowland N. Hazard had acquired under his agreement with Philip Caswell, Jr., the right to use his name.

But it may be said that these views are in conflict with the intimation of the court of appeals in the trade mark case of Hazard v. Caswell ( 93 N. Y., 259 , 268), wherein it was said there was no evidence to justify the' Hazards in Sutting certain cologne water upon the market under the rm name of Caswell, Hazard & Co. “Upon the evidence and findings now before us,” said the court, “it might be described as manufactured by them as the successor of that firm, but nothing more.”

There is nothing to show however that the right of the Hazards to use the name Caswell was the subject of discussion by counsel before the court in that. case or that any particular attention was therein directed to the agreement between Philip Caswell Jr., and Rowland N. Hazard upon which so much depends in the present litigation.

I am unwilling therefore to treat this intimation as at all -conclusive-upon the principal issue in the present suit.

It is not disputed that when the plaintiff Caswell left the firm in 1876, he sold to the Hazards a considerable quantity of bottle moulds and labels bearing the partnership name of Caswell, Hazard & Co., and the trial court has found that these articles were of no substantial value except to persons using said firm name. This fact tends to sustain the conclusion that the continued use of such name by the Hazards was with the assent of the plaintiff. It seems pretty harsh to hold that a man can sell' to another, goods bearing his name and which would be rendered valueless by the removal of his name therefrom, and to hold at the same time, that the vendor can restrain the vendee by injunction from using such goods so long as the seller’s name remains thereon.

The laches of the plaintiff John R. Caswell in bringing this suit is also a circumstance of much significance. He knew that the defendants were carrying on business under the name of Caswell, Hazard & Co., and yet nearly ten years elapsed _ before he took any legal steps- to restrain them. Meantime they expended large sums of money in advertisements of their business using therein the name of Caswell, Hazard & Co. It is true that John R. Caswell testifies that he often told Rowland N. Hazard he had no right to the name Caswell. He fixes the last interview he had on the subject as having occurred in 1878, and says “I told him I should proceed against him in law if I could not get any settlement in my matters, and one thing led on to another, and finally I told him that he had no right to use the name Caswell. He was using my name and my money to do the business.” Mr. Hazard denies that any such conversation took place or that Mr. Caswell ever objected to the continued use of the name Caswell by the defendants, before the institution of the present suit. Upon this conflict of testimony, the trial court found in favor of Mr. Caswell. Nevertheless the fact remains that he permitted the defendants to go calling themselves Caswell, Hazard & Co., and to spend large sums in advertising under that designation, from the time of the interview in 1878, to the time of the commencemeet of this action in 1886, without further protest or interference on his part; a course of conduct hardly consistent with the existence of any serious claim that they were violating his rights in making use of the name Caswell.

For the reasons which have been given, the judgment

Van Brunt, Ch. J., and Macomber, J., concur.