Case ID: misc_37/html/0737-01.html
Source: Caselaw Access Project
Author: {"author": "Scott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Almira G. Fisk, et al., as Administrators, etc., Plaintiffs, v. Fisk, Clark & Flagg, et al., Defendants.
    (Supreme Court, New York Special Term,
    April, 1902.)
    Partnership — Use of firm name — Injunction.
    Where all the partners, entitled to use the firm name, die or retire and none of them has made any assignment. or appointment of it, the right to such use dies with the last survivor and does not pass to his personal representatives.
    Accordingly, the court refused them an injunction to prevent the defendants from using the firm name, as a designation for a corporation about to engage in a similar business, where no rights were thereby infringed and where the corporation would not compete in any way with the liquidation of the estate of the last survivor.
    Motion for an injunction.
    George Wilcox, for plaintiffs.
    Mortimer Kennedy Flagg, for defendants.
   Scott, J.

In the year 1867, Henry G. Fisk, Thomas R. Clark and Thomas J. Flagg formed a copartnership under the name or style of “ Fisk, dark & Flagg ” for the purpose of manufacturing and selling gloves, neckwear and other articles of men’s attire. They carried on business until the year 1891, during which time the firm name became well-known in the trade in which, they were engaged. In 1891 Clark retired from the firm and Fisk and Flagg continued the business under the original firm name. In July, 1900, Flagg died and Fisk having made some arrangement with Flagg’s personal representatives which obviated the necessity of winding up the business, ánd having made and filed the certificate required by statute, continued the business under the original firm name. Fisk, the sole surviving member of the original firm, and the only person carrying on business under the name or style of Fisk, Clark & Flagg, died in March, 1902, intestate. He had never assigned to any one the right to use the said firm name, nor had he ever appointed any person, a copartner or otherwise, as the one to continue the use of that name. The plaintiffs, as his administrators, are engaged in winding up his-estate. Immediately after the death of Fisk, the individual defendants proceeded to organize a corporation under the corporate name of Fisk, Clark & Flagg, for the declared purpose of carrying on a similar business to that formerly carried on by the co-partnership of the same title. Hone of the defendants had been in any way connected with the business of the copartnership except that one of them was a son of the Flagg who had formerly-been a member of the firm. The corporation thereupon issued a printed circular addressed to the customers of the late firm of Fisk, Clark & Flagg, stating that the purpose of its incorporation, was to acquire by purchase the goodwill, patents, trade-marks,, copyrights, stock-in-trade, and fixtures of the late copartnership. The usual promises were made as to the maintenance of the-standard of excellence achieved by the late firm, and the patronage of thd addressees of the circular was solicited. It does not appear that the corporation has as yet engaged in business, and' it is most positively stated in its behalf that whether or not it will undertake to actively engage in business depends upon its-success in acquiring the goodwill and stock-in-trade of the former-firm. It appears that the corporation has made overtures to the plaintiffs looking to such a purchase, to which however no response seems to have been made, and there is some evidence in the papers tending to show that the plaintiffs cherish the purpose-of continuing the business themselves. While it is alleged generally in the moving papers that, owing to the identity in name of' the new corporation with the old firm, confusion has arisen as to the delivery of mail- matter, it does not appear that there has been any serious interference with mail intended for the plaintiffs, and! the defendant corporation has talcen steps, by means of a notification to the postmaster, to minimize such confusion. It is quite clear that down to the date of his death Henry G. Fisk possessed the sole and exclusive right to use the name of Fisk, Clark ¿s Flagg, as a business name. The plaintiffs insist that that right was a part of his estate, which descended to them as his administrators as a part of the assets of his estate, and that they can sell the right to the use of the firm name as an adjunct or part of the goodwill of the business. The statute law, and the trend of judicial decisions seem to make against this contention. That the goodwill of the business is an asset of the estate is not to be questioned, but it seems to be well settled that the right to use the firm name does not go with the goodwill. The question has not infrequently arisen between the representatives of a deceased partner and the survivors of the copartnership and the rule appears to be well established in such cases that while the goodwill is property in which the representatives of a deceased partner are entitled to participate, the right to use the firm name belongs to the surviving partners. Dougherty v. Van Nostrand, 1 Hoff. Ch. 68; Kirkman v. Kirkman, 20 Misc. Rep. 211; Mason v. Dawson, 15-id. 595; Blake v. Barnes, 12 N. Y. Supp. 69. As was pointed out in the two cases last above cited the right to continue the use-of a firm name, after the death of a partner is, in this State,, purely a matter of statutory permission. The general rule is that a firm name cannot be so continued, if it includes the name of the deceased partner. In order to justify the continued use of the name the case must be shown to fall within one of the exceptions prescribed by statute, which are now contained in § 20> of the Partnership Law (Laws of 1897, chap. 420; General Laws, chap. 51). Subdivision one of that section authorizes the continued use of the name: “ Where the business * * * continues to be conducted by some or any of the partners, their assignees or appointees.” This subdivision would not permit the purchase of the goodwill of the business to continue to use the name of Fisk, Clark & Flagg, because such purchaser would not be one of the partners of the firm, all of them having now retired or died, and would not be an assignee or appointee, because Fisk, the last person who had the right to use the name, never made any assignment or appointment. The third subdivision of the section provides that where a person has carried on business for five years in his sole name, the right to use his name shall survive and pass and be accounted for as part of his personal estate, and such business may be continued and carried- on under such name by any person who comes into the legal possession thereof. This is the 'Only provision of the statute which contemplates the survival of 'the use of a business name as an asset of the estate of a deceased •trader, and it is not applicable to the case at bar because it is ■strictly limited to the case of a person who has transacted business in his sole name. I see no escape therefore from the conclusion that the right to use the firm name of Fisk, Clark & Flagg died with Henry G. Fisk, and that his administrators cannot lawfully sell to or confer upon any one the right to continue the pse of that name. As was said by Mr. Justice Barrett in Blake v. Barnes, supra;Such a purchaser would buy nothing but the right to commit a misdemeanor.” By using the name of “ Fisk, Clark & Flagg ” as its corporate name the defendant corporation has not therefore undertaken to appropriate an asset of the estate of Henry G. Fisk, for the right to use the name does not constitute one of the assets. Unless some right of another corporation or of an individual is infringed, a corporation has the- right to adopt any name it sees fit, and if the right to use the name as a copartnership name died with the last survivor of the firm, there is no one whose rights are infringed by the appropriation of the name by the defendants. Uor can the use of the name be restrained upon the ground that the defendants are engaged in unfair competition with the plaintiffs. ■ As administrators the plaintiffs have no authority to carry on the business except to the very limited extent that may be necessary to liquidate it advantageously. It is their duty to wind it up at the earliest possible moment. The defendants are not engaging in business and it does not appear that they have any present intention of so engaging as to compete in any way with the liquidation of the estate. Indeed' an injunction pendente lite might well be refused because it does not appear that the defendants threaten or intend to do any of the acts against which an injunction is sought. I see no reason to doubt that they desire in good1 faith to acquire, by legitimate purchase the goodwill, trade-marks, assets and fixtures of the late copartnership and that their incorporation under the firm name was effected in the hope and anticipation of such purchase. It is possible that upon the trial a different state of facts may develop, but upou tbe present papers I am unable to see that any rights of tbe plaintiffs are being infringed, or that any necessity is shown for present injunctive relief.

Motion denied with ten dollars costs.