Case Name: William C. Williams, Alanson Sheley, and Alanson Sheley Brooks v. Jacob S. Farrand, Richard P. Williams, Harvey C. Clark, and Jacob S. Farrand, Jr.
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1891-11-20
Citations: 88 Mich. 473
Docket Number: 
Parties: William C. Williams, Alanson Sheley, and Alanson Sheley Brooks v. Jacob S. Farrand, Richard P. Williams, Harvey C. Clark, and Jacob S. Farrand, Jr.
Judges: Morse and Grant, JJ., concurred with McGrath, J. Long, J., did not sit.
Reporter: Michigan Reports
Volume: 88
Pages: 473–549

Head Matter:
William C. Williams, Alanson Sheley, and Alanson Sheley Brooks v. Jacob S. Farrand, Richard P. Williams, Harvey C. Clark, and Jacob S. Farrand, Jr.
Partnership — Dissolution—Rights of retiring and continuing partners — Firm name — Good-will—Trade-marks.
.1. The following propositions must be regarded as established by the clear weight of authority:
a — Though- a retiring partner may have assigned his interest in the partnership business, including its good-will, to his co-partner, he may, in the absence of an express agreement to the contrary, engage in the same line of business in the same locality, and in his own name.
b — He may, by newspaper advertisements, cards, and general circulars, invite the general public to trade with him, and through the same mediums may advertise his long connection •with the old business, and his retirement therefrom.
c-r-He will not be allowed, however, to use his own name, or to advertise his business, in such a way as to lead the public to suppose that he is continuing the old business; hence he will not be allowed to advertise himself as its successor.
d — The purchaser will not, in the absence of an express agreement, be allowed to continue the business in the name of the old firm,
e — No man has a right to sell or advertise his own business or goods as those of another, and so mislead, the public, and injure the business of such other person.
/ — When an express contract has been made to remain out of business, or for the use by the purchaser of a fictitious name, or a trade-name, or a trade-mark, the courts will enjoin its continued violation; citing Beal v. Chase, 31 Mich. 490; Doty v. Martin, 32 Id. 462; Grow v. Seligman, 47 Id. 607.
g — An assignment of all the stock, property, and effects of a business, or the exclusive right to manufacture a. given article, carries with it 'the exclusive right to use a fictitious name in which such business has been carried on, and such trade-marks and trade-names as have been in use in such business. These incidents attach to the business or right of manufacture, and pass with it.
h — A corporate name is regarded as in the nature of a trademark, even though composed of individual names, and its. simulation may be restrained.
3. The doctrine that a retiring partner, who has conveyed his interest in an established business, whether the good-will be included or not, cannot personally solicit the customers of the old firm, has no support in principle.
8. The rule that upon the dissolution of a firm neither partner has ■ the right to use the old firm name, as well as the other rule that a retiring partner has no right to use it, are subject to the exception that a person has the right to use his own name-unless he has expressly covenanted otherwise.
4. Complainants have, under the authorities cited, an undoubted1 right to protection in the proprietary rights acquired by the old firm, and in the use of such trade-marks as were in use by the-old firm, and defendants have no right so to imitate the labels-in use by the old firm as to convey the belief that the goods-labeled are. from the old house. The use, however, of the-words, “Sold by Farrand, Williams & Co.,” or “Prepared by Farrand, Williams & Co.,” upon a label, will not be protected as a trade-mark or trade-name, and the right to use the name-in that connection did not pass under the bill of sale set forth in the opinion.
5. The following propositions are summarized from the opinion of" Mr. Justice McGrath:
a — Good-will may be said to be those intangible advantages- or incidents which are impersonal, so far as the grantor is concerned, and attach to the thing conveyed.
b — Where good-will consists of the advantages of location, it follows an assignment of the lease of that location. Again, it may not depend at all upon location, as in the case of a newspaper, and it would follow an assignment of all interest in the plant, property, effects, and business.
c — A partnership name may- become impersonal after the-death of the partners, and it is then treated like a fictitious or corporate name.
d — A surname may become impersonal when it is attached to an article of manufacture, and becomes the name by which such article is known in the market, and the right to use the-name may in consequence follow a grant of the right to manufacture that article, or a sale of the business of its manufacture; and when the right to manufacture is exclusive, the right to use the name as applied to the article becomes likewise exclusive.
Appeal from Wayne. (Reilly, J.)
Argued February 12, 1891.
Decided November 20, 1891.
Bill to restrain the defendants from using any combination of the names Farrand and Williams as part of' their firm name. Complainants appeal.
Decree dismissing bill affirmed.
The facts are stated in the opinions.
William H. Wells (Ashley Pond, Bowen, Douglas &■ Whiting, of counsel), for complainants.
Moore é Ganfield {F. H. Canfield and H. H. Swan, of" counsel), for defendants.
[The points and authorities of the respective counsel, are so fully stated and reviewed in the opinions that a. further statement is omitted. — Reporter,.]

Opinion:
McGrath, J.
Complainants and defendants had beem for some years engaged as wholesale druggists on Darned street east, in the city of Detroit, as copartners, under-the name and style of Farrand, Williams & Co. There were no articles of copartnership, and no term fixed lorwhich the partnership was to continue.
Prior to the taking of the annual inventory in January,.. 1890, defendant Jacob S. Farrand expressed to complainant Sheley a desire to dissolve the copartnership... Mr. Sheley declined to say anything until the annual, inventory should be taken, and the business of the year-settled up. On the 25th of January, 1890, after the completion of the inventory, defendants made a proposition in writing to—
"Pay Messrs.' Sheley & Brooks, for their interest in the-firm of Farrand, Williams & Co., the amount of their interest being fifty thousand dollars ($50,000), the sum of' sixty thousand dollars ($60,000), or they will take for-their interest, the amount being one hundred thousand dollars ($100,000), the sum of one hundred and twenty- thousand dollars ($120,000), the same to be paid in cash, or in notes acceptable to the parties who sell, one week from to-day, Saturday, the first day of February next; the store to be leased to the party purchasing for a term of five years at a rent of eight thousand dollars ($8,000) a year, and the warehouse to be rented to the party purchasing at a net rental of 6 per cent, a year on the cost of their interest therein."
On the following Monday Mr. Sheley accepted defendants' offer to sell, and on the 1st day of February following a bill of sale was prepared, reciting, among other things, that defendants, in consideration of the sum of $120,000, paid to them by Alanson Sheley, party of the second part,—
"Have bargained and sold unto the said party of the second part all our right, title, and interest to the within-mentioned resources of said firm, including the good-will attendant upon the business."
This bill of sale was not executed, objection .being made to the clause, "including the good-will attendant upon the business;" and a new instrument was prepared, reciting that defendants, parties of the first part,—
"For and in consideration of the sum of one hundred and twenty thousand dollars, to them paid by Alanson Sheley, of the second part, have bargained and sold, and by these presents do grant and convey, unto the said party of the second part, his executors, administrators, or assigns, all our right, title, and interest in the firm of Farrand, Williams & Company."
This instrument was executed, the insurance policies were assigned by Farrand, Williams & Co. to Williams, Sheley & Brooks, and an agreement to assume and pay-all the debts of the old firm was executed by Williams, Sheley & Brooks, and delivered to defendants.
Defendants afterwards formed a copartnership under the firm name of Farrand, Williams & Clark, and opened a wholesale drug establishment at No. 32 Woodward avenue. Complainants adopted the name and style of Williams, Sheley & Brooks; posted their firm name, as successors to Farrand, Williams & Co., over their place of business; had the words Williams, Sheley & Brooks, Successors to" printed in red ink over the words "Far-rand, Williams & Co." wherever tüe latter appeared upon letter-heads, bill-heads, labels, and other stationery; advertised themselves in the newspapers and trade journals as Williams, Sheley & Brooks, successors to Farrand, Williams & Co.; and sent out circulars to the trade containing not only their firm name, but the names of the individual members of the new firm. Defendants also extensively advertised the new enterprise through the same mediums, calling special attention to the names of the members of the new firm, their long connection with the drug business, and the dissolution of the old firm, and soliciting trade.
The complainants contend that the assignment by defendants of all interest in the business carried with it the good-will of the business, and, having purchased the good-will of that business, they are entitled to the exclusive use of the old firm name; that, while defendants have the right to engage in the same line of business, they have'not the right to such a collocation of their own ñames as will produce confusion, attract customers, and secure orders, letters, and goods intended for the old firm; that defendants have no right to simulate their labels, to solicit their customers, or entice away their employés.
"Good-will" has been defined by this Court to be—
"The favor which the management of a business has won from the public, and the probability that old customers will continue their patronage." Chittenden v. Wit-heck, 50 Mich. 401.
Lord Eldon, in Cruttwell v. Lye, 17 Ves. 335, defined jt as simply the probability that old customers will resort to the old place.
The following propositions must be regarded as established by the clear weight of authority:
1. Though a retiring partner may have assigned his interest in the partnership business, including the goodwill thereof, to his copartner, he may, in th'e absence of .an express agreement to the contrary, engage in the same line of business in the same locality, and in his own name.
2. He may, by newspaper advertisements, cards, and general circulars, invite the general public to trade with him, and through the same mediums advertise his long connection with the old business, and his retirement therefrom.
3. He will not be allowed, however, to use his own name, or to advertise his business, in such a way as to lead the public to suppose that he is continuing the old business; hence, will not be allowed to advertise himself ¡as its successor.
4. The purchaser will not, in the absence of an express ¡agreement, be allowed to continue the business in the name of the old firm.
5. That no man has a right to sell or advertise his own business or goods as those of another, and so mislead the public, and injure such other person.
In Myers v. Buggy Co., 54 Mich. 215, A., B., and C. had been carrying on business as copartners at Kalamazoo, under the name and style of "The Kalamazoo Wagon Company." A., B., and C. sold to complainant "all of their interest in the property, money, assets, and good-will," etc., in and to their business. After such sale complainant's assignors formed a corporation under the name of "The Kalamazoo Buggy Company;" pitched their plant in the same locality; commenced the manu ffacture of the same class of goods; issued circulars to the trade, with descriptive cuts of the same character and appearance as those contained in complainant's circulars, ¡and advertised their place of business as being in the .same locality. In that case the name of "The Kalamazoo Wagon Company" was an assumed name. The only -distinctive feature in the name adopted by defendants was the use of a word of similar meaning to that for which it had been substituted. The defendants were not using their own names. It was a pure case of piracy, .and the facts clearly indicated an intention to deceive .the public. As was said in Burgess v. Burgess, 3 DeGex, M. & G. 896:
"Where a person is selling goods under a particular mame, and another person, not having that name, is using •.it, it may be presumed that he so uses it to represent the goods sold by himself as the goods of the person whose name he uses; but' where the defendant sells goods under .his own name, and it happens that the plaintiff has the .same name, it does not follow that the defendant is selling his goods as the goods of the plaintiff."
In Lee v. Haley, L. R. 5 Ch. App. 155, plaintiffs had been doing business at No. 22 Pall Mall, under the artificial name of "Guinea Coal Company." Defendant, who had been their manager, set up a rival business under the name •of "Pall Mall Guinea Coal Company," at 46 Pall Mall. His -envelopes and business cards were printed in such a way -•as to resemble the plaintiffs'.
In Glenny v. Smith, 2 Drew. & S. 476, defendant had been in plaintiffs' employ, and started in business on his •own account. Over his shop he had his own name,' Frank P. Smith, printed in large, black letters on a white .ground, but on the brass plates under the windows of his shop he had engraved the word "from," in small letters, and the words "Thresher & Glenny" (the name of plaintiffs' firm) in large letters. He had an awning in front of his shop, which, when let down, would cover his own name, and expose only the name of plaintiffs* firm. The court held that defendant was deceiving the public, and an injunction was issued. Croft v. Day, 7 Beav. 84; Levy v. Walker, 10 Ch. Div. 436; Turton v. Turton, 42 Id. 128; Hookham v. Pottage, L. R. 8 Ch. App. 91; Meneely v. Meneely, 62 N. Y. 431; Fullwood v. Fullwood, 9 Ch. Div. 176.
6. That when an express contract has been made to-remain out of business, or for the use by a purchaser of a fictitious name, or a trade-name, or a trade-mark, the-courts will enjoin the continued violation of such agreement.
In Grow v. Seligman, 47 Mich. 607, defendant had carried on the clothing business at Bay City, under the-name and style of "Little Jake,** and sold out to 6om-plainant, and expressly conveyed the right to use the-name and style of "Little Jake,** and agreed that he-would not again engage in that business at Bay City, and defendant was enjoined from violating his agreement.
In Shackle v. Baker, 14 Ves. 468, defendant agreed that he would not, for the space of ten years, carry on or permit any other person to carry on the same business in. Middlesex, London, or Westminster, and that he would use his best endeavors to assist plaintiff, and procure customers for him. .
.In Hitchcock v. Coker, 6 Adol. & E. 438, Coker had: agreed to enter the services of plaintiff, and that he would not at any time thereafter engage in the business-•in which his employer was engaged. To the same effect are Beal v. Chase, 31 Mich. 490; Doty v. Martin, 32 Id. 462; Burckhardt v. Burckhardt, 36 Ohio St. 261; Vernon v. Hallam, 34 Ch. Div. 752; Tode v. Gross, 28 N. E. Rep. (N. Y. App.) 469.
7. That an assignment of all the stock, property, and. effects of a business, or the exclusive right to manufacture a given article, carries with it the exclusive right to use a fictitious name in which such business has been carried on, and such trade-marks and trade-names as have been in use in such business. These incidents attach to the business or right of manufacture, and pass with it.
Courts have uniformly held that a trade-mark has no separate existence; that there is no property in words, as detached from the thing to which they are applied; and that a conveyance of the thing to which it is attached carries with it the name. Dixon Crucible Co. v. Guggenheim, 2 Brewst. 321; Lockwood v. Bostwick, 2 Daly, 521; Derringer v. Plate, 29 Cal. 292.
In Gage v. Publishing Co., 11 Ont. App. 402, Cage and Beatty were copartners, and, among other things, were engaged in publishing " Beatty's Headline Copy-Book's." Beatty sold out to Cage all his interest in the business, and engaged in the drug business. Gage continued for some years the sale of the copy-books, when Beatty licensed defendant to publish "Beatty's New and Improved Headline Copy-Books."
In Hoxie v. Chaney, 143 Mass. 592 (10 N. E. Bep. 713), Hoxie and Chaney were copartners, engaged in the manufacture of soaps, two brands of which were known as "Iloxie's Mineral Soap" and "Hoxie's Pumice Soap." These were simply trade-names, by which the articles were known, and the right to use them passed with the right to manufacture the articles.
In Cement Co. v. Le Page, 147 Mass. 206 (17 N. E. Rep. 304), Brooks and Le Page, as' copartners, sold to plaintiff the good-will of their business, and the right to use their trade-marks. They were engaged in the manufacture of glues. Their light glues they named "Le Page's Liquid Glues." The court held that the right to use the name by which the articles were known to the trade passed with the right to manufacture the articles.
In Merry v. Hoopes, 111 N. Y. 415 (18 N. E. Rep. 714), the parties were formerly partners. Hoopes sold to Merry, but afterwards undertook to use certain trade-marks, viz., the "Lion Brand" and "Phoenix Brand," but the court held that these trade-marks passed to the assignee.
In Hall v. Barrows, 4 De Gex, J. & S. 150, the firm had marked the chief part of their output of iron with the initial letters of their partnership name, "B. B. H.," surmounted by a crown, and the court held the letters and crown had become a trade-mark, and, as such, should be included as a subject of value. Brown, Trade-Marks, 358; Millington v. Fox, 3 Mylne & C. 338, 352; Myers v. Buggy Co., 54 Mich. 215; Sohier v. Johnson, 111 Mass. 242; Shipwright v. Clements, 19 Wkly. Rep. 599; Rogers v. Taintor, 97 Mass. 291.
8. A corporate name is regarded in the nature of a trade-mark, even though composed of individual names, and its simulation may be restrained. After adoption it follows the corporation. Statutes jjroviding for the organization of corporations usually prohibit the adoption of the same name by two companies. Holmes v. Manufacturing Co., 37 Conn. 278.
These propositions are sustained by a long line of authorities, but in none of the cases cited does the question hinge upon a grant of good-will. Complainants insist, however, that a grant of good-will may be implied, and, when express or implied, it imposes certain restraints upon the vendors, viz.:
1. That they cannot afterwards personally solicit customers of the old firm.
2. That they are restricted in the use that may be made of their own names.
1. The doctrine that a .retiring partner, who has conveyed his interest in an established business, whether the good-will be included or not, cannot personally solicit the •customers of the old firm, has no support in principle. A retiring partner conveys, in addition to his interest in the tangible effects, simply the advantages that an established business possesses over a new enterprise. The old business is an assured success, the new an experiment. The old business is a going, business, and produces its accustomed profits on the day after the transfer. It is capital already invested, and earning profits. The continuing partner gets these advantages. The new business must be built up. The capital taken out of the old concern will earn nothing for months, and in all probability the first year's business will show loss instead of profit. For a time at least it is capital awaiting investment, or invested, but earning nothing. The retiring partner takes these chances, or disadvantages. He does not agree that the benefit derived from his connection with that business shall continue. He does not agree that the old business shall continue to have the benefit of his name, reputation, or service; nor does he guarantee the continuance of that patronage which may have been attracted by his name or reputation. He does not pledge a continuance of conditions. He takes put of .the business an element that has contributed to the success of that business. He sells only those advantages and incidents which attach to the property and location, rather than those which attach to the person of the vendor. T. Pars. Partn. 409. He sells only so much of the custom as will continue in spite of his retirement and activity. He sells 'probabilities, not assurances. It is urged that by the solicitation of the customers of the old firm he is endeavoring to impair the value of that which he has sold; but every act of his in the direction of the establishment of the new business tends to divert the customers of the old firm. The right to enter into the same line of business in the same locality, — next door, if you please, — to advertise his former connection with the old business, and to solicit generally the patronage of the public, is conceded by the clear weight of authority. The exercise of these rights necessarily involves the diversion of custom to the new firm. Does not the right to engage again in the same line of business include all of the incidents of that right? Upon what principle is the line arbitrarily drawn at the personal solicitation of the customers of the old firm? The right to engage in business in his own name attaches to the retiring partner, and, unless expressly so agreed, there is no restraint upon that right.
In the present case, Jacob S. Farrand had been at the head of the old house for half a century. His name could not be subsequently used in the same line of business without attracting the attention of the entire trade, nor without affecting the probabilities of a continuance of the patronage of the old house. He gave no hint that he did not intend to engage again in business. All of the circumstances pointed in the direction of a new business. The retirement was not of Jacob S. Farrand alone, but of his son-in-law and Mr. Clark also. The proposition made to complainants was not only to sell, but to buy.
In Ginesi v. Cooper, 14 Ch. Div. 596, the court went so far as to insist that a retiring partner had no right to deal with the customers of the old firm; but that rule would operate as a restriction upon the public, and the case is- without support in that respect.
In Labouchere v. Dawson, L. R. 13 Eq. 322, the court say that a retiring partner who sells the good-will of a business is entitled to engage in a similar business, may publish any advertisement he pleases in the papers, stat ing that he is carrying on such a business; he may publish circulars to all the world, and say that he is carrying on such a business; but he is not entitled, by private letter, or by visit by himself or agent* to solicit the customers of the old firm.
But in Pearson v. Pearson, 27 Ch. Div. 145, Labouchere v. Dawson is expressly, overruled. The court say:
"The case of the plaintiff is founded on contract, and the question is, what are his rights under the contract? There is no express covenant not to solicit the customers of the old business, but it is said that such a covenant is to be implied. I have a great objection to straining words so as to make them imply a contract as to a point upon which the parties have said nothing, particularly when it is a point which was in their contemplation. It is said that there was a sale of the good-will. I 'think that there was, taking good-will as defined by Lord Eldon in Cruttwell v. Lye, 17 Ves. 335. The purchaser has a right to the place and a right to get in the old bills; so the purchaser gets the good-will, as defined by Lord Eldon. But the term c good-will' is not used; and when a contract is sought to be implied we must not substitute one word for another. But suppose the word did occur, what is the effect of a sale of f goodwill.' It does not, per se, prevent the vendor from carrying on the same class of business."
Vernon v. Hallam, 34 Ch. Div. 752, held that a covenant by a vendor of a business, including the good-will thereof, that he would not for a term of years carry on the business of a manufacturer, either by himself or jointly with any other person, under the name or style of J. H. or EL Bros, (the name of the business which he had sold), is not a covenant that the vendor would not carry on business as a manufacturer, but against using a particular name or style in trade, and the injunction was granted to restrain a breach of that covenant.
"Where a vendor sold his business, and commenced a similar business in the same locality, and solicited customers of the old house to deal with him, the court. following the decision in Pearson v. Pearson, and being of opinion that the case of Labouchere v. Dawson had been overruled by the decision in that case, refused to-grant an injunction to restrain such solicitation."
Leggott v. Barrett, 15 Ch. Div. 306, Ginesi v. Cooper, 14 Id. 596, and a number of other cases cited, follow Labouchere v. Dawson.
The correct rule is, we think, laid down in Cottrell v. Manufacturing Co., 54 Conn. 138 (6 Atl. Rep. 791). The court say:
"Cottrell did not require Babcock to agree, and the latter did not agree, to abstain from the manufacture of printing-presses. By purchasing the good-will merely, Cottrell secured the right to conduct the old business at the old stand, with the probability in, his favor that old customers would continue to go there. If he desired more, he should have secured it by positive agreement. The matter of good-will was in his mind. Presumptively he obtained all that he desired. At any rate, the express contract is the measure of his right; and since that conveys a good-will in terms, but says no more, the court will not upon inference deny to the vendor the possibility of successful competition by all lawful means with the vendee in the same business. No restraint upon trade may rest upon inference. Therefore, in the absence of any express stipulation to the contrary, Babcock might lawfully establish a similar business at the next door, and by advertisement, circular, card, and personal solicitation invite all the world, including the old customers of Cottrell & Babcock, to come there and purchase of him; being very careful always when addressing individuals or the public, either through the eye or the ear, not to lead any one to believe that the presses which he offered for sale were manufactured by the plaintiffs, or that he was the successor to the business of Cottrell & Babcock, or that Cottrell was not carrying on the business formerly conducted by that firm. That he may do this by advertisements and general circulars courts are substantially agreed, we think. But some have drawn the line here and barred personal solicitation. They permit the vendor of a good-will to establish a like business at the next door, and, by the potential instrumentalities of the news paper and general circulars, ask the old customers to buy at the new place, and withhold from him only the instrumentality of highest power, namely, personal solicitation. To deny him the use of the newspaper and general circulars is to make successful business impossible, and therefore is to impose an absolute restraint upon the right to trade. This the courts could not do, except upon express agreement. But possibly the old customers might not see these; and in some cases the courts have, undertaken to preserve this possibility for the advantage of the vendor, and found a legal principle upon it. Other courts have been of the opinion that no legal principle can be made to rest upon this distinction; that to deny the vendor personal access to. old customers even would put him at such disadvantage in competition as to endanger his success; that they ought not upon inference to bar him from trade, either totally or partially; and that all restraint of that nature must come from his positive agreement. And such, we think, is the present tendency of the law."
G-ood-will may be said to be those intangible advantages or incidents which are impersonal, so far as the grantor is concerned, and attach to the thing conveyed. Where it consists of the advantages of location, it follows an assignment of the lease of that location. Again, it may not depend- at all upon location, as in the case of a newspaper, and it would follow an assignment of all interest in the plant, property, effects, and business. A partnership name may become impersonal after the death of the partners, and it is then treated like a fictitious or corporate name. A surname may become impersonal when it is attached to an article of manufacture, and becomes the name by which such article is known in the market, and the right to use the name may in consequence follow a grant of the right to manufacture that article, or a sale of the business of manufacturing such article; and where the right to manufacture is exclusive, the right to the use of the name as applied to that article becomes likewise exclusive.
It appears, however, that in the first bill of sale which was prepared the words, "including the good-will attendant upon the business," were inserted, but were objected to, stricken out, and a new bill of sale prepared, omitting any reference to good-will. But it is sa:d that this clause was objected to because, in the opinion of the objector, it might preclude him from engaging in the same business, whereas, under the law, he would have such a right had the clause remained. The only use, however, which complainants now propose to make of the clause, treated as a part of the instrument, is to restrict that right to engage in business by taking, away one of its incidents. Adopting the language used in Churton v. Douglas, Johns. Eng. Ch. 174, with reference to the right of plaintiff to continue the use of the old firm name, "I think the defendant is fully entitled to the benefit of the observation that it was proposed to him to insert such a provision, and that he refused it; I think, therefore, that this case goes a step higher than the authorities, and the defendant is entitled to put his case in the highest possible form with regard to his right" to engage in the same line of business.
II. The next question relates to the use by defendants of the firm name of Farrand, Williams & Clark. It is clear that complainants have no right to continue their business under the old firm faame. The rule that upon a dissolution of a firm neither partner has the right to use the firm name, as well as the other rule that a retiring partner has no right to use the old firm name, are both subject to the exception that a person has the right to use his own name unless he has expressly covenanted otherwise. In case A. B. should sell out his business to C. D., in the absence of a grant to C. D. of the right to use the name of A. B., or an agreement to the contrary, is there any doubt but that A. B. would have the right • to engage in the same line of business in his own name? In that ease, such a probability would naturally suggest itself to 0. D., and, if he desired to get the advantage of A. B/s abstinence from business, he would insist upon An agreement to that effect.
In the present case, Mr. Farrand's name had been at the head of the firm name for nearly half a century, And the name of another of the retiring members corresponded with the only other surname used in the old firm name. It must have been evident to complainants that in any event the name of the new firm would be similar to that of the old firm. If complainants desired any protection against such a use of the names of the retiring members, they should have inserted a provision to that effect in the bill of sale. The right to continue the use of a firm name, as well as a restriction upon the use by a retiring partner of his own name, are proper subjects of bargain, sale, and agreement. Here neither have 'been purchased. Complainants have purchased the business of the old firm. They have the right to advertise themselves as succeeding to and continuing that business. The exercise of such a right does not conflict with any right reserved by defendants. Complainants, by such a holding out, commit no fraud, misrepresentation, or deception. They publish the truth only. Defendants have the right to use their own names, or any collocation of their own names. They have not adopted the old firm name, although it would have been appropriate. They have adopted no fictitious name. . There is no deception in the use of the name adopted by them. The business of the old firm is a separate and distinct business. Defendants have no right to advertise their business as a •continuation of the old firm business. They are subject to the rule already laid down, that no man has the right to sell or advertise his own goods or business as that of another, and so mislead the public and injure such other person.
In Lathrop v. Lathrop, 47 How. Pr. 532, after dissolution J. Lathrop formed a copartnership with one Tisdale, and adopted the name of J. Lathrop & Co., which was the style of the old fii-m. Held that, in the absence of any covenant with his late partner, he might legally do so.
In Reeves v. Denicke, 12 Abb. Pr. (N. S.) 92, the court-say:
"In this case, the firm name was not sold or transferred to the defendants as constituting a part of the partnership property and effects; nor did the sale, in terms or by necessary implication, include the good-will of the business of the previous firm, and it is therefore unnecessary to determine whether the partnership name was a part of such good-will. There was no restraint upon the retiring partner holding him from engaging in a similar business, and he violated no obligation to the defendants by forming a new firm under his own name, and transacting a business in all respects like that which he had released to them. It is quite clear that the defendants-acquired no right to continue the use of the partnership-name of the old firm. If the good reputation of that firm was intended to pass into and become a part of the defendants" new firm, it should have been provided for in the conveyance. That it was not intended it should pass is evident from the omission to include it." Seed Co. v. Dorr, 70 Iowa, 481 (30 N. W. Rep. 866); Bassett v. Percival, 5 Allen, 345; Machine Co. v. McGowan, 22 Ohio St. 370.
In Turton v. Turton, 42 Ch. Div. 128, although there-were no contract relations between the parties, the court say:
"No man .can have the.right to represent his goods as the goods of another person. Therefore, if a man uses his own name, that is no prima facie case, but if, besides using his own name, he does other things which show that he is intending to represent, and is in point of fact making his goods represent, the goods of another person,, then he is to be prohibited; but not otherwise."
In Hookham v. Pottage, L. R. 8 Ch. App. 91, plaintiff and defendant had been copartners as Hookham & Pottage. Plaintiff succeeded to the business, and defendant afterwards set up a shop only a few doors away, and printed over the door the words, "Pottage, from Hook-ham & Pottage." The court held that—
"Defendant had a right to state that he was formerly manager, and afterwards.a partner, in the firm of Hook-ham & Pottage, and that he had a right to avail himself, by the statement of that fact, of the reputation which he had so acquired; but that he had no right to make-that statement, or to avail himself of that reputation, in such a way as was calculated to represent to the world that the business which he was .carrying on was the business of Hookham & Pottage, or that Hookham had any interest in it."
In Meneely v. Meneely, 62 N. Y. 431, the court say:
"If the defendants were using the name of Meneely with the intention of holding themselves out as the successors of Andrew Meneely, and as the proprietors and managers of the old established foundry which was being conducted by the plaintiffs, and thus enticing away the plaintiffs" customers; and if, with that intention, they used the name in such a way as to make it appear to be that of the plaintiffs' firm, or resorted to any artifice to induce the belief that the establishment of the defendants was the same as that of the plaintiffs; and perhaps if, without any fraudulent intent, they had done acts calculated to mislead the public as to the identity of the establishments, and produce injury to the plaintiffs beyond that which resulted from the similarity of name, then the court would enjoin them, not from the use of the name, but from using it in such a way as-would deceive the public. Every man has the absolute right to use his own name in his own business, even though he may thereby interfere with or injure the business of another' person bearing the same name, provided he does not resort to any artifice or contrivance for the purpose of producing the impression that. the establishments are identical, or do anything calculated to mislead."
In Fullwood v. Fullwood, 9 Ch. Div. 176, R. J. Full-wood carried on business as manufacturer of annatto at 24 Somerset place, Hoxton, from 1785 to 1832. Plaintiff and three brothers, one of whom was the defendant, succeeded to the business, but ultimately the right to carry on the business vested in the plaintiff. Defendant, Matthew Fullwood, and another brother formed a copartnership in the name of E. Fullwood & Co., and issued and distributed in various ways cards containing the following: "Established over 85 years. E. Fullwood & Co. (late of Somerset place, Hoxton), Original Manufacturers of Liquid and Cake Annatto." They also placed around the bottles containing the annatto a wrapper resembling that which plaintiff used. The court say:
"Defendants are entitled to carry on their business under the firm name which they have adopted, if they are so minded, provided that they do not represent themselves to be carrying on the business which has descended to plaintiff."
In Bininger v. Clark, 60 Barb. 113, the defendant wrongfully advertised himself as successor to the old firm, and made such a use of his own name as to indicate. a fraudulent intent. Hegeman v. Hegeman, 8 Daly, 1; Levy v. Walker, 10 Ch. Div. 436.
In Churton v. Douglas, Johns. Eng. Ch. 174, plaintiffs and defendant had carried on the business of stuff merchants at Bradford, in a building owned by defendant, and known,as "Hall Ings," under the name and style of John Douglas & Co. Defendant sold out to plaintiffs all his share, right, and title in the business, including the good-will, and executed to plaintiffs a seven-years lease of the premises occupied by the firm. Within a short period defendant set up in the same line of business, next door to plaintiffs, in a part of the same building known as "Hall Ings," adopting the old firm name of John Douglas & Co. The court held, that defendant, by the use of the old firm name, and the surroundings, would be obtaining the custom of the old firm, by inducing the belief that his was a continuation of the old establishment. The court say:
"The authorities, I think, are conclusive upon this point that the mere expression of parting with or selling the good-will does not imply a contract on the part of the person parting with that good-will not to set up again in a similar business; but I use the expression 'similar' to avoid including the case of the vendor seeking to carry on the identical business. He does not contract that he will not' carry on an exactly similar business, with all the advantage which he might acquire from his industry and labor, and from the regard people may have of him, and that in a place next door, if you like, to the very place where the former business was carried on. It is settled that it is th.e fault of those who wish any protection against such a class that they do not take care to insert the provision to that effect in the deed."
The same principle obtains with reference to trademarks. One may have a right in his own name as a trade-mark, but he cannot have such a right as against another person of the same name, unless the defendant use a form of stamp or label so like that used by the plaintiff as to represent that the defendant's goods are of the plaintiff's manufacture. Sykes v. Sykes, 3 Barn. & C. 541; Holloway v. Holloway, 13 Beav. 209; Rogers v. Taintor, 97 Mass. 291; Gilman v. Hunnewell, 122 Mass. 139; Manufacturing Co. v. Goodyear Rubber Co., 128 U. S. 598 (9 Sup. Ct. Rep. 166). The tests applied by all the authorities in this class of cases are: Is a corporate or trade or fictitious name simulated? Is the name assumed or adopted false in fact? Is it used in connection with locality or other representations so as to convey the impression that the business is a continuation of the old business?
Defendants are not responsible for the blunders made by clerks, postal clerks, mail carriers, telephone employés, or newspaper reporters.
In Meneely v. Meneely, the court say:
"Where the only confusion created is that which results irom the similarity of names, the courts will not interfere."
In Turton v. Turton it is said that—
"Defendants are not responsible for the blunders made by the business community in not distinguishing between •John Turton & Sons and Thomas Turton & Sons."
See, also, Richardson & Boynton Co. v. Richardson & Morgan Co., 8 N. Y. Supp. 52; Manufacturing Co. v. Goodyear Rubber Co., 128 U. S. 598.
Any collocation of the names of Farrand and Williams would create some confusion. Defendant Clark had been connected with the old business for 30 years, and Williams, the son-in-law of Mr. Farrand, for 21 years.
Defendants are using their own names only. They went into business on Woodward avenue, several blocks from the old stand. In every letter-head, bill-head, card, or advertisement in which their firm name appears they give the individual names of the members of the firm, the new place of business, and in no case have they represented that they are successors to the old firm. The bill-heads used by the old firm had a cut of the old stand on the left-hand upper corner, about three inches square. Those of the new firm contain no cut, and less than half the amount of matter. It would be exceedingly difficult to prepare two bill-heads more unlike. The letter-heads of the old firm contained two cuts,— one of the old stand, at the left hand, one of the Peninsular White Lead & Color Works, on the right. The •dissimilarity is marked. The envelopes used by the old firm contain eight printed lines on the upper left-hand •corner, occupying an inch and three-quarters of space. Those used by the new firm contain five lines, occupying about three-quarters of an inch in space. There has been no attempt at imitation in words or type. On March 15, 1890, they announced, through circulars distributed generally, that they had engaged in business at 32 and 34 Woodward avenue; that they expected to have their new store ready for occupancy in a few days; and that the work of getting a new stock of goods would be pushed as fast as possible. On April 7 they issued another circular, announcing that they were now prepared to fill orders, and hoping that the friendly acquaintance •of many years would be continued. An advertisement is produced, wherein defendants say:
"Though it may seem paradoxical, it is nevertheless true, that the wholesale drug-house of Farrand, Williams & •Olark is both the oldest and newest representative of this important commercial industry in Detroit."
But in the same advertisement they announce the •dissolution of the old firm, their retirement from said firm, and the formation and business location of the new firm. It is difficult to imagine how such an advertisement would mislead the public. It contains no false •colors.
Both parties advertised extensively in the city and State papers and in the trade journals;- complainants .giving the names of their individual members, and their new firm name, and advertising themselves as the successors to Farrand, Williams & Co.; and defendants giving the names of their individual members, and the name .and business location of the new firm. Complainants sent out circulars to the trade generally, informing it of the dissolution of the old firm, the fact that they were the successors, and giving their firm name; and defendants sent out circulars announcing their withdrawal and the formation of a new firm. There is no doubt but that the dissolution of this firm, the fact that complainants had bought out the interest of defendants, the name adopted by complainants, the formation of the new firm, the names of its members, and the defendants' firm name, have been most extensively advertised by both parties, not only in the- city, but throughout the State and Union.
Nearly 50 letters have been received by the old firm, since the dissolution, addressed to Farrand & Williams; Farrand & Williams Paint Oo.; Farrand & Williams Drug Oo.; Farrand, Sheley & Brooks; Farrand, Williams & Sheley; Farrand, Williams, Sheley & .Co.; Farrand, Williams & Brooks; Farrand & Co.; Williams, Farrand & Co.; Williams & Farrand; and Williams & Colt cannot be said that any act of defendants is responsible for these blunders. Confusion is inseparable from the dissolution of an old firm and the composition of two-firms from its membership, especially when the name of' but one of those who remain has appeared in the firm, name, and the new firm is composed of one whose name for nearly half a century has stood at the head of the-firm name, and the surname of another retiring member is the same as the only other-name used in the old firm, name.
It appears that at the outset defendant Clark by mistake opened two or three letters addressed "Farrand, Williams & Co.," but in every other instance defendants; refused to receive mail directed to Farrand, Williams & Co., unless directed to defendants' street and number; that in a single instance Clark inadvertently signed a-letter "Farrand, Williams & Co.;" that two cheeks were sent to defendants in payment for goods bought from them, which were payable to the order of Farrand, Williams & Co., and Mr. Farrand indorsed them Farrand, Williams & Co., and guaranteed the indorsements; that in four instances merchandise or articles not. marked but intended for defendants were delivered to-complainants, and afterwards taken away; that in two-instances complainants were notified by freight agents, that freight awaited delivery;, that in both the goods were-manifested to Farrand, Williams & Co., hut marked, and were afterwards delivered, to Farrand, Williams & Clark, for whom they were intended; that complainants were-notified that a sample box of glassware had been shipped to them, but they had not received it; that defendants-received a sample box of glassware from the same house, which was billed to Farrand, Williams & Clark, and the latter were notified of the shipment by the assignors; that similar boxes of samples had been sent to other drug-houses at Detroit; that in one or two instances merchandise had been delivered to defendants which was intended for complainants; that in a single- instance a customer at Port Huron, who knew of the dissolution, intending to call up the old house by telephone, asked for Farrand & Williams, was given Farrand, Williams & Clark, and told that it was Farrand, Williams & Clark, asked the price of oil, and ordered one barrel; that 112 letters, telegrams,, .receipts, or bills were received by complainants directed to Farrand, Williams & Co., which were intended for defendants; that of these 35 were directed on the inside to Farrand, Williams & Clark; that all of the letters so-received were from business houses from which defendants were buying goods, and none were from customer® of either house. These proofs do not tend to show any appropriation by defendants of the old firm name, or any attempt to secure the correspondence addressed to the old firm, or that the customers have been deceived or misled, or that defendants have practiced any fraud, concealment, or deception.
Complaint is made in the bill that defendants have enticed away certain of complainants' salesmen, but this charge is not made out by the proofs.
It is also charged that defendants have simulated certain trade-marks and labels used by the old firm, but no instance of piracy has been established. Complainants have, under the authorities cited, an undoubted right, to protection in the proprietary rights acquired by the old firm, and in the use of such trade-marks as were in use by the old firm, and defendants have no right so to imitate the labels in use by the old firm as to convey the belief that the goods labeled are from the old house. The use, however, of the words, "Sold by Farrand, Williams & Co.," orPrepared by Farrand, Williams & Co.," upon a label, will not be protected as a trade-mark or trade-name, and the right to use that name in that connection did not pass under the bill of sale.
- The decree of the court below must be affirmed as of February 27, 1891, and the bill dismissed, with costs to defendants.
Morse and Grant, JJ., concurred with McGrath, J. Long, J., did not sit.
See 11 Can. Sup. Ct. 306.