Howe v. Searing — 19 N.Y. Super. Ct. 354

Majority

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Benjamin F. Howe, Plaintiff and Respondent, v. John H. Searing, Defendant and Appellant.

Headnote

1. The sale and assignment of a lease of a bakery with the tools, fixtures, furniture, &c., &c., together with the good-will of the business of baking then or theretofore carried on by the vendor, with a covenant not to carry on the business in the same city himself, does not confer on the purchaser the right to use the name of the vendor in the conduct of the business at the same place, nor to designate or describe the bakery (by signs placed tbereon or otherwise,) by the name of such vendor. (M'oncrief, J., dissented.)

2. If it be conceded that, by removing from the place and delivering possession leaving his name conspicuously placed on the building describing the bakery as his, and afterwards seeing and knowing- that the vendee has put up the name in other places, and uses it on cards, bread tickets, &c., and acquiescing therein for several years while himself engaged in other business, he practically confers a license to use such name, or even if he does after the sale give express parol permission, still the vendor may revoke such license whenever he sees fit. And such license will not pass to ari assignee of his vendee under the designation of good-will so as to be irrevocable. (Moncrief, X., dissented.)

3. When by permission of such vendee, the vendor resumes the business of baking in another part of the city, he may maintain an action to restrain such use of his name, and an injunction will be decreed. (Moncrief, X, dissented.)

(Before Hoffman, Pierrepont and Moncrief, J. J.)

Heard, November 3d, 1859;

decided, March 24th, 1860.

This is an appeal from a judgment rendered at Special Term before Mr. Justice Hoffman. The action was tried on the 14th of June, 1859.

The action was brought to restrain the defendant, who is a baker, from using the name of the plaintiff in connection with the business of baking carried on by him, either by advertising or otherwise, printing the said name or otherwise, and to compel him to remove from the premises occupied by him and from the wagons owned and used by him, all signs having the words “ Howe’s Celebrated Bakery,” or “ Howe’s Bakery.”

There was little or no controversy about the facts. The plaintiff, Howe, is a baker; he had carried on the business of baking for twenty-five years at the store or building No. 432 in Broad

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way in the city of Hew York, giving it his personal attention and had acquired a valuable reputation therein; was doing a large and successful business, and had, by the excellence of his bread, cakes, &c., &c., drawn to his said bakery a large number of customers. On the front of the building were the words “B. F. Howe,” and on the side of the building and on his bread tickets, cards and circulars, “ Howe’s Bakery.”

On the 27th of January, 1852, he, for the consideration of $7,300, sold and assigned to one Josiah W. Baker the lease of the said premises, “ and all the fixtures, tools and furniture upon the demised premises, or in use by me, [him,] in and about the business of baking, together with the black horse and wagon now used by me, [him,] in the business aforesaid, together with the good-will of the business of baking, now or heretofore carried on by me, [him,] in the city and county of Hew York.” The possession to be retained by him until the 1st day of May then next, and he covenanted to permit such person as Baker might select to work with him in the business until that day, and to' give such person all the information and instruction in his power relating to the art and mystery of the business aforesaid.

And the said Howe farther covenanted as follows, viz.: “ that I will not, after the 1st day of May next, carry on, or engage in or be in any means interested in the business of baking, which has heretofore been carried on by me, at any place, or in any form or manner within the limits of the city and county of Hew York without the consent of the said Baker.”

After the sale to Baker, all the signs were painted out or taken off the premises by Baker. But new signs were made and put on, such as “B. F. Howe’s Bread Bakery,” “Howe’s Bakery,” “Howe’s Celebrated Cakes, Pies, &c.,” “Excelsior B. F. Howe’s Bread, Cakes, Pies;” they were put up in the windows, or corners, and on a cornice, some of the letters being two feet long.

The plaintiff went into other business in the country (at East Chester.) When he first went into the country, he told Baker he was using his name as he had no right to do, although after the sale he “ suggested to Baker, you had better use the name that is up there until you get your own established,” and, as was testified, Baker thanked him for the privilege.

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Learning that Baker was using a circular, signed “B. F. Howe,” the plaintiff remonstrated with him, and “ from time to ' time requested him to take down his, (Howe’s) name, and put up his own,” so that he could get up a reputation for himself.” This the plaintiff testified he did out of friendship for Baker, and told him it would be better to use Ms own name. Baker appears to have disregarded the plaintiff’s request, and not only continued to use the signs, but caused similar words to be painted on his wagons, and printed and used the name “ B. F. Howe,” on his circulars, bill-heads, bread tickets, &o. The plaintiff was frequently in the* city and at the premises for the purpose of buying bread, cake, &c.

On the 28th of April, 1858, the plaintiff wishrng to resume the business of baking in the city of Hew York, Baker, in consideration of $1,250, consented that he might do so, restricting him to that part of the city which is in or above Bleecker street, and in Broadway not below Ho. 850, and Howe covenanted to confine his business and sales to and above the street and number so designated, and that he would not “in any manner, directly or indirectly, interfere with the baking business now carried on at 432 Broadway, by J. H. Baker & Company, known as ‘Howe’s Bakery,’ except in an honorable competition.” .

On the 26th of January, 1859, Baker and his firm sold out to the defendant James H. Searing, and, in consideration of $4,500, .assigned and transferred to him “their lease, businéss and goodwill in the business at 432 Broadway, and premises now occupied by them known as ‘Howe’s Bakery,’ together with three horses, wagons, * * furniture, tools of trade and store fixtures, and furniture in the house, store and bakery.”

The defendant found the signs aforesaid on the building, and the said names on the wagons, bread tickets, &c., and continued to use them, the plaintiff called on him two or three times and requested Mm to take down Ms name, the defendant did not do so, and this action was commenced.

It was admitted on the trial, “ that by the use of the plaintiff’s name by the defendant as alleged and admitted in the pleadings, persons are led to trade and deal with the defendant, who would not otherwise do so.”

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Upon proof of these facts, the Judge, at Special Term, adjudged or decreed a perpetual injunction restraining the defendant from using the word “ Howe ” or “ Howe’s,” in connection with the business of baking, either as descriptive of the baking establishment or upon the signs, or wagons, or tickets or bills. And he ordered and adjudged that the word “Howe” and “Howe’s,” be stricken out and erased from the signs and from the wagons used by the defendant.

From this judgment the defendant appealed to the General Term.

Luther R. Marsh, for the defendant (appellant).

I. The good-will and name of “Howe's Bakery,'' was expressly sold and assigned by the plaintiff. This is what he was paid $7,300 for, mainly.

The conveyance of the whole establishment, lease, horses, furniture, fixtures, &c., and good-will, not only manifested an intent that Baker should be substituted in plaintiff’s place, with the right to use the establishment just as plaintiff had used it, name inclusive, but that the conveyance of the same actually carried that right.

The good-will thus sold, it is submitted, includes the name, includes every thing calculated to show that the same trade continued to be carried on in the same way there, and that there had been no substantial variation. I do not mean by this, the name of an individual, as such, or that the successor is entitled to say that the retiring proprietor yet continues in the business, but what I mean is, that if a name is stamped upon the business, characterizing the trade, or which has become associated with it, and under which it -has become known, even though that name be the name of an individual, it is a part of the goodwill. (Cr uttwell v. Lye, 17 Vesey, 346; Crawshay v. Collins, 15 id., 224.)

If the departing proprietor may say, after having sold the good-will, you shall not use the name and title and style in which the old trade has been carried on, he breaks up the probability that the old customers will resort to the old place—he encourages the idea that the old trade does not stay, but goes off with him; and he may set up next door, put up the same old

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signs, hold, out that the same old trade should come there, and thus his sale to his successor, of the good-will, would dwindle down into nothing but the assignment of the lease.

But it was held in 2 Maddock, 198, that where one sold the good-will without any restriction, (as in the case at bar,) he could not set up the old business near the old place.

In England, we know that the same name and sign stay up over the door from generation to generation, and that firms are now conducted under signs whose letters are dim with the wear of more than a century, and where the original name is not attached to any tenant of the store at the present time.

In our own nomadic country, a good-will has hardly time to become established before the party pulls up his stakes and pitches his tent elsewhere.

Yet there is such a thing, even here, recognized in law, and protected by it. (Dougherty v. Van Nostrand, 1 Hoff. Ch. R., 68; Williams v. Wilson, 4 Sand. Ch. R., 379; Bell v. Locke, 8 Paige, 75.)

Whatever, in this case, Mr. Baker bought, or by acquiescence or otherwise has obtained, he sold and conveyed to defendant, who now owns the same.

But the defendant has really sought to dissipate the idea, if any there was, that the individual B. F. Howe was carrying on the trade, by obliterating the initial letters of his name, and adopting the more general name of “ Howe's Bakery," merely as a title, which, as we shall soon see, has been expressly recognized by Howe himself, as applicable to the business at the old stand.

II. The acquiescence of the plaintiff in Baker’s use of the name, in its various forms, under the assignment, for the long period of seven years, is a practical construction of the agreement by the plaintiff, and a ratification by him of this view.

During all this time, seven years, Baker carried on the baking-business, at the same place, and in the same way, and under the same name; using, in various modifications, the name of “ Howe’s Bakery,” and sometimes even the initials of B. F. Howe.

All this was done with plaintiff’s knowledge, for he swears that he was in the habit of visiting the bakery daily during this time, and that he bought bread and cake there. The signs are mainly conspicuous signs, which could not have escaped the

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plaintiff’s observation; indeed he proves his knowledge of them during all the time of Baker’s administration.

The plaintiff, in fact, left the premises just as they were. His whole conduct at the time places a concurrent construction upon the contract, shows his understanding of it at the time. When he vacated the premises, he left his bill-heads there just the same —did not take down or paint out a single sign. Did he think or expect that Baker was going to do it ? If plaintiff wanted his name taken down, it was for him to do it, himself, not for Baker to do it. Plaintiff could not impose this labor and expense on Baker.

When Baker came, not long afterwards, to repair, renovate, and repaint the building, he painted over the signs, obliterating them, and then renewed them—the plaintiff, meanwhile, visiting there daily, and seeing the letters of his name reappear in fresher colors on the wall. Yet he did not object or remonstrate, for, he says, that the first time he remonstrated with Baker for the use of his name was when he saw it appearing on the circular. Baker, also, it would seem, from plaintiff’s testimony, put on some additional signs, varying in their literature, adding to the list of the products of his oven, writing the plaintiff's name with the motto of the State, and stamping both upon his walls and on his pies. Yet the plaintiff did not object, but for many years acquiesced in it.

The plaintiff, it seems, retiring to a neighboring county, was not unwilling that his name should be kept before the people, at his old stand, emblazoned on the wall. The public was thus kept informed that Howe was not dead yet. He still lived on the walls of his old stand.

Indeed, Mr. Howe tells us, that after the lease was assigned to Baker, he suggested to Baker that he had better use plaintiff’s name, and keep it up there until he could get one established for himself, though the plaintiff does not explain how he expected that Baker would ever establish his own name, as long as he continued the exclusive use of the plaintiff’s.

The idea appears to have struck the plaintiff as somewhat inconsistent, for he immediately after says: “From time to time I requested him to put his own name up and take mine down, so that he could get up a reputation for himself—I did it out of

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pure friendship. I said it would be better for him to use his own name.”

In other words, the plaintiff first suggests to Baker that he use the plaintiff’s name exclusively, and not put up his own name till he should get it established, and afterwards advises him to put up his own name and not use the plaintiff’s, so that he ' might get his own established. One of these pieces of advice must have been bad.

This evidence was introduced by plaintiff’s counsel, and will be cited, to show that plaintiff did in fact, remonstrate against the use of his name. But the plaintiff shows that it was not a remonstrance, for he did it, as he says as a matter of pure friendship to Baker, and by way of advice.

• This advice, Howe says, he continued to give, from time to time, during the continuance of the lease, and that the lease ran three years, which would bring it to January, 1855; so this advice or remonstrance, or whatever it may be called, ceased in January, 1855, and during the four years of Baker’s administration that ensued, he, the plaintiff, had not a word of objection to utter, though he visited the premises daily.

Indeed, it is apparent, that no objection was made by Howe, till he thought of starting the baking business again for himself.

III. The subsequent agreement of 28th of January, 1858, six years after, between plaintiff and Baker, is conclusive on the subject. It is demonstration itself.

Baker’s agreement is proved by plaintiff, by which plaintiff pays him $1,250, for the privilege of carrying on the business of baking, in Hew York, above Bleecker street, and not below Ho. 850 Broadway.

Plaintiff thereupon refers to the previous restriction against engaging in the business in Hew York City, at all, as still existing and valid, and agrees to confine hinself to said line of Bleecker street, and said number; and not to interfere in any manner, directly or indirectly, with the baking business then carried on at Ho. 432 Broadway, by Baker & Company known as “Howe’s Bakery,” except in an honorable competition.

This agreement adopts the name of “Howe’s Bakery,” as properly-applicable to No. 432. Admits the right to use it, admits

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that plaintiff has no right to use it, except as Baker might consent.

Moses Ely, for the plaintiff (respondent).

I. Consideration of agreements between plaintiff and defendant’s grantor aside, plaintiff is clearly entitled to the use of his name in business to the exclusion of defendant.

II. Ho pretense that defendant can set up will justify him in use of this name.

I. The conveyance of the good-will of a concern does not give the grantee the right to use the grantor’s name. “ Good will,” according to Lord Eldoh, “is but the probability that the old customers will resort to the old stand."

This definition is accepted by all the authorities upon the subject, and runs through all the books. The conveyance of good-will can consequently have no further operation than as an agreement not directly to interfere with the prejudices of old patrons for the old place, as by running it down, &c.

A person’s name over the shop he keeps indicates only the person who keeps it. When he leaves it the name ceases to be thus indicative, and his successor can have no more right to use it, by right of title to the good-will, than by the same right he could impress into his service the identical talents and energy which first established the business and made the good-will worth having. (Coslake v. Till, 1 Russ., 376; Dougherty v. Van Nostrand, 1 Hoff. Ch. R., 68; 3 Kent’s Com., 64.)

The mere conveyance of good-will does not preclude grantor of it from setting up the same business in any other situation. (Shackle v. Baker, 14 Ves., 468.)

The cases above cited justify a conclusion that the duration of the title of the defendant’s grantor in the good-will was measured by the duration of the lease conveyed to him at the same time.

The proofs show that this lease expired years ago.

2. Plaintiff cannot be held to have precluded himself by acquiescence.

(a.) The proofs show the negative of acquiescence.

(b.) Failure to take legal measures to prevent the use of his name cannot be construed an acquiescence, for while he was out of the business he could not have maintained the suit; or, at any rate,

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he had no object for bringing it. He commenced the suit as soon as, by returning to the business, he was either in a position to remonstrate or to maintain an action.

(c.) It will be borne in mind that this suit is not against Baker, but is against his assignee, and was commenced soon after the assignment was made to him. It cannot be pretended that a mere license by Howe to Baker to use this name would authorize defendant to use it against Howe’s will. This license depended upon considerations of personal confidence in Baker which can easily be appreciated, and is not assignable at the will of the grantee.

The proofs show, at most, but a license to Baker.

3. The description of the stand as “ Howe’s Bakery,” in the recent agreement, should not prejudice the present claim of plaintiff.

(a.) It is not a contract.

(b.) It is not in a material part of the agreement.

It was inserted as an accidental matter of description, and for the purpose only of more perfect identification.

(c.) This latter agreement was also with Baker, who, (as above stated,) might possibly have claimed the right thus to distinguish the premises, but who held this right only by license, revocable at any time at the will of plaintiff.

(d.) This description does not appear to have been brought to the knowledge of defendant before his purchase of Baker, or to have in the least influenced him in making the purchase.

The first and the most important question in the cause is what right passed to Baker under the sale and transfer to him in January, 1852, of the leasehold premises, stock and trade, with “the good-will of the business of baking, now or heretofore carried on by me in the city of ¡New York.”

The authorities referred to, do in general describe the goodwill of a trade “as a probability that the old customers will resort to the old place.” Judge Story describes it as “the advantage or benefit which is acquired by an establishment beyond the mere value of the capital, stock, funds or property employed therein, in consequence of the general public patronage

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which, it receives from constant or habitual customers, on account of its local position; or common celebrity, or reputation for sldll, or affluence, or punctuality, or from accidental circumstances, or even from ancient partialities or prejudices.” (Story, § 99.)

It is, I apprehend, a well settled rule, that the good-will of a partnership business does not survive to a continuing partner. It belongs to the firm as much as the ordinary stock in trade, and must be disposed of in some manner for the benefit of the firm. The case of Lewis v. Langdon, (7 Sim., 421,) which seems to assert a different rule, is not the law of the Court to this point, for which it is frequently cited. (Story on Partnership, § 99.) But the decision turns upon the right to use the name of the old firm with a modification, and it is hereafter more particularly noticed.

Hammond, v. Douglas, (5 Ves., 539,) does indeed explicitly decide that the good-will, speaking of it generally, does survive to the remaining partner; that a sale of it cannot be compelled by the representative of the deceased partner; that it is not partnership stock of which the executor may compel a division, but belongs of right to the survivor.

In the case of Dougherty v. Van Nostrand, (1 Hoff. Ch. R., 68,) before me, as Assistant Vice-Chancellor, I thought that this case could not be supported.

I have acted at Special Term in this Court in two cases, after a reconsideration of the point, upon the same principle as in Dougherty v. Van Nostrand.

Vice-Chancellor Sandford, in Williams v. Wilson, (4 Sandf. Ch. R., 379,) decided in the same manner, recognizing Dougherty v. Van Nostrand.

Good-will resolves itself into reputation. That, in the absence of proof to the contrary or express agreement, must be presumed to have been the result of joint skill, capital and industry, when built up by the parties themselves, or by a joint purchase, when it has been reared by a predecessor. As the acquisition was joint, the value must be shared.

Mr. Bell, in his Commentaries, observes, (vol. 2, p. 645,) that the good-will of a mercantile or literary establishment seems to form a part of the common stock.

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He cites Crawshay v. Collins, (15 Ves., 227; Cruttwell v. Lye, 17 id., 335; McCormick v. McCubben, 4 July, 1822, 1 Shaw & Ballantine R., 540.)

Lord Eldon concurred in Sir Samuel Romilly’s doubt as to the decision in Hammond v. Douglass, and that is equivalent to an express overruling it. It was Lord Eldon’s manner of doing so.

In the late case of McDonald v. Richardson, (1 Geffard’s R., 81,) before Vice-Chancellor Stewart, this point seems to be taken for granted. A surviving partner had carried on the same business, for some time after the death of his associate, and was called upon in the suit to account. The chief clerk was directed to ascertain the value of the testator’s share of the good-will of the partnership business, among other things. The survivor was also executor, but it is plain this could not be the ground of a charge.

Chissum v. Dewes, (5 Russell R., 29,) settled that the mortgagee of a lease, under which the business was carried on, was entitled to receive the avails of the sale of lease and good-will. The latter constituted the chief part of the value.

The good-will of a trade says Tindal, Ch. J., in Hitchcock v. Coker, (6 Adolph. & Ellis, 438, 446,) “is a subject of value and price. It may be sold, bequeathed or become assets in the hands of the personal representative of a trader. If the restriction as to time is held to be illegal, because extended beyond the period of the party carrying on the trade himself, the value of such good-will, _ considered in these various points of view, is altogether destroyed.”

In Elves v. Crofts, (10 Com. Bench R., 241,) [1 J. Scott,] a butcher assigned for the residue of his term, premises in which he had carried on business, together with the fixtures and goodwill of the trade. He covenanted that he would not at any time thereafter, either by himself, or as agent or journeyman for another, set up or be employed in the trade or business of a butcher, within five miles from the premises assigned. It was held not an unreasonable restraint in respect either of time or distance, and that the covenant did not cease on the expiration of the term, or on the covenantees ceasing, by himself or his assigns, to carry on the business assigned.

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The Court referred to Hitchcock v. Coker, (ut supra,) as decided in the exchequer chamber, and as settling that a restriction, reasonably limited as to space, but enduring for the life of the party restrained, was valid, as the only effectual mode of securing to the covenantee the full benefit of the good-will of his trade. “ Cases may be conceived in which, notwithstanding the facts found by the jury, that the covenantee had ceased, either on the premises or elsewhere, or by any assignee or licensee, to carry on •the business, the good-will assigned might not be at once extinguished ; and if consideration of time or degree be permitted to effect the right to enforce such a covenant, its value would be diminished, and the saleable quality of the good-will, which, according to all the recent authorities, is deserving protection, would be affected.”

It seems also to be well settled that, when a partnership is dissolved, and there is no express stipulation upon the subject, the remaining partners are not under any obligation to refrain from setting up the same trade or business, and forming a new establishment for carrying on the same, after the sale of the late business. The Master of the Rolls stated this rule in Davies v. Hodgson, (25 Beav., 177,) referring to Cook v. Collingridge, as reported by Mr. Collyer. (§ 322.)

The first decree in that case is found in Jacob’s Report, 623; and Mr. Collyer gives the directions of Lord Eld ox, drawn by himself upon a petition for further carrying out the decree.

These points may be deduced from the minute provisions of this decree:

A partnership having terminated by lapse of time, there was nothing to prevent some of the members from forming a new establishment to carry on the same business: that the good-will, treated as the value of the chance of customers continuing to deal, could not be estimated upon the same principle as when a retiring partner sold his whole interest to continuing partners, and retired from the trade altogether. A buyer of the premises, the leasehold, shop, &c., would purchase something which could not be. treated as of no speculative value, or not to be regarded in the sale. He would get the chance of retaining the old customers, getting.them to come to the old place; but this chance, and therefore the value, would be materially affected by the p;roba

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bility of the customers following the former members to their new establishment.

Hothing is found, in this case, as to the former name, by continuing partners in any form, whether modified or not.

In Lewis v. Langdon, before noticed, Stephen Brookman and Joshua Langdon carried on business under the firm of Brookman & Langdon. Brookman died, and then Langdon died, the latter appointing William Langdon his executor and residuary legatee. He died, and administration was granted to Fruzan Langdon, his widow. The business was carried on at the same place, and under the same firm name, by Joshua Langdon, William Lang-don, and Fruzan Langdon, in succession. Fruzan Langdon took the plaintiff (Lewis) into partnership.

Fruzan Langdon then died, having appointed Augustus Lang-don and two others her executors. James Lewis then took the plaintiff (Warren) into partnership, and they carried on the business at a different place from the original location, under the firm of James Lewis & Company, successors to Brookman & Langdon. The bill was to restrain them from using that name in the business. There was no agreement in the case, which does not seem to me of much importance on the main question.

The Vice-Chancellor said: “I cannot but think, when two partners carry on a business together, under a given name, that during the partnership it is the joint right of them both to carry on the business under that name, and that upon the death of one of them, the right which they before had jointly becomes the separate right of the survivor.”

It is to be observed, upon this case, that the defendant had not a shadow of right to the use of the firm name. The plaintiff had the right, so far as any existed in Joshua Langdon, as survivor of Brookman and Langdon. Had a representative of Brook-man been defendant, the question would have distinctly arisen.

In Clinton and others v. Douglass, (1 H. R. V. John. R., 176,) before Vice-Chancellor Wood, 1859, the business had been carried on for some time under the firm name of John Douglass & Company. By a written instrument the defendant sold to the plaintiff “ all his shares, rights and interests in the trade or business, carried on by him, and the plaintiffs at Bradford, in copartnership, and under the firm name of John Douglass &

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Company, and the good-will thereof”; other and comprehensive words were used to transfer the whole of the partnership goods and property, and the assignor’s title therein. The defendant also leased to the plaintiff for seven years, the premises at which the business had been carried on.

Ho tice of the dissolution of the old firm was given, and the style of the new firm was Clinton, Bankhart & Huet. (Late John Douglass & Co.)

The location of the old business was at Hall Jugs, Bradford. The defendant subsequently opened a store for the same business, next door to that of the- plaintiff, leased by him, and placarded it with the name of John Douglass & Company. An injunction was granted, restraining the defendant until the hearing of the cause, “ from resuming or carrying on the business of stuff merchant, at or about the immediate neighborhood of Bradford, either alone or in partnership with any other person, under the style or firm of John Douglass & Company, or in any other manner holding out that he is carrying on the business of stuff merchant, in continuation of, or in succession to, the business carried on by the late firm of John Douglass & Company.”

“ The Vice-Chancellor enters into a very elaborate argument in the case. He holds expressly that the authorities are conclusive to the point, that the sale of the good-will of a business without more, does not imply a contract on the part of the vendor not to set up a similar business himself. Upon a sale of the good-will, the vendor is not precluded from carrying on a precisely similar business, with all' the advantages from his own labor and industry, and from the regard people may have for him; and that, in a place next door, for example, to the very place where his former business was carried on.

But he also held that the name of a firm—that style under which its business has been carried on—is part of the good-will, and passes with a sale. “ The name of a firm is a very important part of the good-will of the business carried on by the firm. A person says, 11 have always bought good articles at such a place of business: I know it by that name, and I send to the house of business identified by that name for that purpose.’ That the name is an important part of the good-will of a business is obvious when we consider that there are, at this moment, large banking

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houses and brewing firms and others in this metropolis which do not contain a single member of the individual name exposed in the firm.”

The defendant “ parted with the right to the plaintiff of representing themselves to be carrying on the identical business which had been carried on by the firm of John Douglass & Company. But they did not get the right to call themselves by that name sirrypliciter. This they had not claimed, but only to use the words ‘late John Douglass & Co.,’ in other words the right to identify their house of business, formerly carried on by John Douglass & Company. That name had become well known. The business was identified by that name. It is not as if he were calling himself John Douglass alone, and carrying on a similar business under that name.”

The judgment in Cruttwell v. Lye, (supra,) distinctly admits that, although you may set up a similar business, you are not entitled, when you have sold the good-will of the business, to represent that you are continuing the identical business; not to say that you are the owner of that which you have sold. The defendant has not contracted against setting up business in opposition to the business sold by him to the plaintiff; but he must set it up fairly and distinctly as a separate business, and not as the old established business which he has sold.

I have quoted largely from this case, as none other that I am aware of has entered so fully into the subject.

In Cruttwell v. Lye, referred to, Lord Eldon said: “ The question is, whether, upon a fair understanding or representation, agreeably to the fact, this person is carrying on the plaintiff’s trade; and in this view of the case I refer to Hogg v. Kirby, (8 Ves., 215,) where the defendant had. a clear right to publish a similar work, under the same title, as the plaintiffs, represented as distinct and original, but was prevented from publishing his book as the work of the plaintiff, which had been partly published. So there can be no doubt that this Court would interpose against that sort of fraud which is attempted by setting up the same trade, in the same place, under the same sign or name, the party giving himself out as the same person.”

The law of France, in relation at least to commercial partnerships, is very explicit upon this subject.

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The 21st article of the Code of Commerce is: “The name of the associates can alone constitute the firm name (la raison sociale). This is intended to forbid persons who succeed to the business of a deceased merchant from continuing it under his name. Credit is altogether personal. It does not transmit itself by cession or inheritance. It is won by actions and capacity. It is not right, then, that a successor should avail himself of a fallacious credit in appropriating a firm’s name extinguished by the death of one of those who gave it the value. (Troplong, le Droit Civil, tome 12, n. 372; Loi sur 1’Article 21 of the Code of Commerce.)

M. Troplong, adds: “One is astonished that such a contrary practice prevailed formerly in France, and exists in England. It is a source of fraud upon a confiding public. The retirement or decease of one of the associates effaces the firm’s name. Another must be created.”

Thus does the case stand upon all the authorities that I have found bearing upon it; and it would leave it without any direct authority or even dictum in favor of the defendant, except that late and important one before Vice-Chancellor Wood.

But it is to be noticed that by a statute of our State, entitled “An act to prevent persons from transacting business under fictitious names,” passed April 29th, 1833. (Session Laws, ch. 281,) it enacts that “ Ho person shall hereafter transact business in the name of a partner,” (query person,) “ not interested in his firm,” and where the designation ‘ and Company’ or ‘ Co.’ is used, it shall represent an actual partner or partners.” By section 2, the violation of this provision is made a misdemeanor.

By a statute passed April 17th, 1854, (Session Laws, ch. 400,) a copartnership name may be continued by some, or any of the copartners their assignees or appointees, provided a certificate, as prescribed by the act, is filed in the County Clerk’s office and published as directed. But by section 4, the provisions are only to apply to firms having business relations with foreign countries. A bill to extend this provision is now before the Legislature.

It seems to me that the principle and object of this statute extends to such a case as the one before us. It recognizes the principle as one of public policy, that the business must be transacted under the name of the actual parties doing it, and not

Dissent

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under other names. It applies to persons in existence, as well as when a partner has retired or is dead. It accords with the French laws, and involves or warrants the proposition that the naked sale of the good-will of a business does not transfer a right to the use of the vendor’s name of trade.

We do not think that there is anything in Howe’s inaction, or the employment of the term of Howe’s Bakery in the instrument of the 28th day of April, 1858, which can entitle the defendants to use the name.

The judgment should be affirmed.

Pierrepont, J., concurred.

Whether or not the term “goodwill,” under all circumstances, includes the name under which the business originated or was continued, or became a thing of specific value, it is not, in the present instance, necessary to determine.

A person, not a lawyer, would not imagine that when the “good-will” and trade of a retail shop were sold, the vendor might the next day set up a shop within a few doors and draw off all the customers. The “ good-will ” of such a shop in good faith and honest understanding must mean all the benefit of the trade, and not merely a benefit of which the vendor might the next day deprive the vendee. This was the language used by the Vice-Chancellor in Harrison v. Gardner, (2 Madd. Ch. R., 198, 219,) in which the decision of Lord Eldon, (17 Ves., 346,) was cited, and in reply to the proposition there laid down, “that good-will was the probability that the old customers will resort to the old place.”

This clearly will not be applicable to the present case, as the transfer of the lease without the additional permission in the agreement for the sale of the “ good-will,” fully and practically secured the old stand with whatever probabilities were incident to it.

Story defines “good-will” to be the advantage or benefit acquired by an establishment beyond'the mere value of its capital or stock, in consequence of the general public patronage and encouragement which it receives from constant or habitual customers on account of its local position, or common celebrity, or reputation for skill, or affluence, or punctuality, or from other

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accidental circumstances, or necessities, or even from ancient partialities or prejudices. (Story on Part., § 99; Coll., 149; 3 Mer., 441; 1 Sim. & Stu., 74; 5 Russ., 29.) Courts of equity are frequently called upon to interpose and prevent a person from using the name of another in a business or concern, for the fraudulent purpose of imposing on the public and supplanting that other in the good will of his concern. (3 Kent’s Com., 5th ed., 64, note; 2 Kern., 213; 6 Beav., 72; 8 Paige, 75; 4 id., 479; Partridge v. Menck, 2 Barb. Ch. R., 101; 2 Sandf. Ch. R., 617; affirming, Taylor v. Carpenter, per Spencer, Senator.)

The plaintiff adopted, appropriated and used the words or name “Howe’s Bakery,” and, by that name, his establishment became known and was extensively patronized, and was a thing having specific value. The plaintiff so avers in his complaint.

If the plaintiff, previous to the transfer in 1852 to Baker the assignor of the defendant, had sought the aid of equity to restrain a person of the same surname engaged in the same business in the city of New York from using the words “Howe’s Bakery,” the claim would have rested not upon any exclusive right of the plaintiff to appropriate and monopolize those words, the one being peculiar to neither, truthful as to both, and the other a generic term not capable of appropriation, but that the words had been long used by him, and had become known as indicating articles manufactured or made at or vended from his establishment or place of business. The ground of interposition is, that a name having been taken for the purpose of distinguishing property, the defendant is not permitted on the false representation that articles, really the defendant’s, belong to or were made, or sold under the management of the plaintiff, or came from his place of business, thereby depriving the plaintiff of the fair profits of his business.

The name or words “Howe’s Bakery” was nothing but a trade-mark, and, as such, is now sought to be protected by the plaintiff.

The name or trade-mark passed by the assignment and transfer of the “ good-will,” and if it was not the thing itself, it was an integral part of it.

The contract of the parties leaves no room for conjecture as to their intention.

p. 372

The stock in trade, fixtures, &c., were specifically mentioned; the leases were distinctly set forth; the art and mystery of the business was provided for by an express covenant to teach whomsoever the vendee might select, and lastly, not least, after agreeing for the sale of the “ good-will,” it was stipulated that the vendor (plaintiff) should not, directly or indirectly, engage or be concerned in the same business in the city of New York without the consent of the vendee. (Baker.)

Again, this clear understanding of the parties, and of this construction of their agreement, is definitively fixed by the long acquiescence of the vendor, and by his requesting and obtaining leave to commence the business at a particular place and use the name within certain bounds.

It seems to me the statute has no application to the case under consideration. The title clearly indicates the intent to prevent mischief by the use of a fraudulent, because entirely fictitious, designation—the word “ Go.,” with no physical existence to represent it.

The name “ Howe” had a living physical existence to support it. It was not, therefore, fictitious.

The name “ Howe ” required nothing to sustain it. As a trademark, it is immaterial whether it was the name of animate or inanimate creation, or the purest effort of fancy on the part of its originator. Possibly the more original in its character, the better would be the protection afforded to it—the nearer its approach to the right to be patented. The plaintiff cannot avail himself of the statute, even if it did apply. Having agreed to dispose, and actually conveyed, the thing alleged to be prohibited, it does not lie with him to complain of his own violation of law or a fraudulent representation to his vendee.

No such point was taken by the plaintiff upon the argument of the appeal.

The plaintiff might dispose of his credit. That is nothing more than a reputable name, or character, and its influence.

The injunction should have been refused and the complaint dismissed. The judgment of the Special Term, I think, should be reversed, &c.

Judgment affirmed.