Ludwig & Co. v. Claviola Co.

McLaughlin, J.: ' The plaintiff, a manufacturer of pianos and other musical instruments, brought this action to procúre a judgment enjoining and restraining the defendants and each of them from making or selling pianos by or under the name of Ludwig, or — 389 — any name of designation of which the word “Ludwig ” forms a . principal part, whether or not the same have an interior, playing attachment; from putting such name upon any part of pianos manufactured or sold by them, and for an accounting. The defendants answered separately, and a trial of the issues thus raised resulted in a judgment in favor of the plaintiff, by which the defendants and each of them “ are permanently enjoined and restrained from manufacturing, selling, offering for sale or placing upon the market pianos by or under- the name ‘ Ludwig,’ or any name or designation of which the word ‘Ludwig’ forms a part, whether such pianos have an interior playing mechanism or not * * *; ” and also enjoining and restraining them .from “placing or applying the said name or any name» of which the word ‘ Ludwig ’ forms a part upon any part of such pianos or upon any visible portion of such instruments; and * * * from using such name or any name of which it forms a part in advertising such pianos, or on their letter heads, bill heads, or other printed matter; but this injunction shall not extend to advertisements or other printed matter which announce the fact that a playing mechanism made by the defendant John H. Ludwig is contained in a particular piano, nor to the designation of such playing mechanism as the Ludwig Player; provided the name ‘ Ludwig ’ or any name of which the word ‘ Ludwig ’ forms a part, does not appear upon any visible part of such piano.” The defendants appeal from the whole of said judgment, and the plaintiff appeals from so much as permits defendants to advertise or designate the playing mechanism made by them as the Ludwig Player. At the trial it appeared that in 1889 the defendant John H. Ludwig and one Charles A. Ericsson entered into a partnership under the name of- Ludwig & Go. for the purpose of manufacturing and selling pianos. The business of the firm was very successful and between its formation and April, 1902, several thousand pianos had been manufactured and'sold by it. Such pianos had upon the fallboard the name Ludwig & Co., but were known to the trade as the Ludwig piano. In April, 1902, the plaintiff, a domestic corporation, was formed with a capital stock of $400,000, Ludwig and Ericsson assigning and transferring to it-all the business — 390 — • and assets of the firm in return- for the bulk of the stock. For, some time prior to. the formation of the corporation the partnership had been endeavoring to perfect some mechanism or device which could be put inside of a piano and auto-, matically play it. Up to this - time -its efforts had. been unsuccessful. It had, however, perfected a device called “The Claviola,” which was in a separate cáse and when used had to be attached to the outside of a piano. In the bill of sale to the corporation the business Of making an' automatic piano player was reserved by the' firm. So much of the bill of sale as is material to the determination of the question here under review is as follows: “We, John H. Ludwig and-Charles A. Ericsson, copartners in business under the firm name and , style of Ludwig & Co., in consideration of * * * 1 hereby do bargain, sell, grant, convey, transfer and deliver unto Ludwig & Company, a corporation , organized under the laws of the State of New York, its successors and assigns, all the personal assets, including good-will, of every nature and kind of the copartnership of Ludwig & Co. wherever the same may be, and in whatsoever form or condition, and all rights of the parties of the first part in and to the same,.saving and excepting therefrom, however, all patents relating to automatic piano players, all machinery specially used for that purpose, material on hand, manufactured players, as -well as names, trade marks, or any property of any nature or kind relating specially to the department, of the business of the parties of the first part in connection with the manufacture and sale of said automatic piano players.” Within a few days after the corporation was formed, Ludwig and Ericsson entered into a written agreement by which the firm of Ludwig & Co. was •continued for' the purpose of manufacturing and selling automatic piano players; or for acquiring and exploiting or disposing of patents relating thereto; and at-the same time they obtained the written consent of the corporation to apply the name Ludwig and*use the same as the name of'such mechanism. The firm continued to manufacture the Claviola-and also to endeavor to perfect a device that could be put on the inside of a piano until 1904, when Ericsson withdrew from the firm, transferring to Ludwig all his interest therein, and- there: — 391 — after Ludwig continued the same business until January, 1906, at which time he had succeeded in perfecting an automatic piano player which could be placed on the inside of a piano. From the organization of the plaintiff until January, 1906, Ludwig was its president and a director, but at the annual meeting of stockholders held that month he failed of re-election to either office. Having failed of re-election, he organized the defendant, The Olaviola Company, a domestic corporation, taking the larger part of the capital stock, at once became its president,, and since has acted as such. Immediately upon the organization of The Olaviola Company it commenced- the manufacture and sale of pianos, on the inside of which was placed the automatic player perfected by Ludwig. Upon the fallboard of such pianos it ptit the word “Ludwig” in large capital type, directly above which in small letters was the word “the” and below in small letters the words “piano player.” It also commenced to use numbers on.its. pianos corresponding substantially to. those then used by the plaintiff. The plaintiff contends that the defendants have no right to use the word Ludwig on pianos made by them, since Ludwig parted with such right when he and Ericsson transferred to the corporation the partnership business so far as it related to the sale and manufacture of pianos, together with the good will, trade name, etc. The defendants contend that Ludwig has the right, under the exception contained in the bill of sale, to use the word Ludwig in connection with any automatic piano player and as it is now being used on its pianos. I am of the opinion the plaintiff’s contention is correct. When Ludwig and Ericsson transferred to the plaintiff the right to make and sell pianos, including the good will of the firm, that carried with it the exclusive right to use the name by which pianos theretofore sold by the firm were generally known, i. <?., Ludwig Piano, or The Ludwig & Company Piano. This fact was recognized by Ludwig himself, because' after the organization of the plaintiff, and while acting as its president, he dropped the words “ & Co.” and put upon the fallboard * the words “Ludwig, New York.” He also recognized the fact that he had no right to use the word Ludwig even upon his •automatic player or at least there Was sufficient doubt in his — 392 — mind on that subject to induce him or his firm to obtain from the corporation its consent to such use. The word Ludwig,, at the time .the bill of sale was made, was and now is, in effect, a trade name by which the particular type of piano manufac; tured by the plaintiff is known. That trade name was part of the good will sold to this plaintiff. (Slater v. Slater, 175 N. Y. 143.) To permit the defendants to use that-name in the manner in which they are using it, or upon the outside of a piano, is to deprive the'plaintiff of something it purchased as well as to permit the defendants to resort to unfair competition in trade. To call the instrument which the defendants are selling a piano player is a misnomer. It is nothing more or less than a piano with an interior automatic playing attachment. This the defendants recognized themselves, because in a circular issued by them the statement is made that “manufacturers who retail can make special arrangements with John H. Ludwig for the name ‘ Ludwig ’ for Automatic Piano Player purposes for territory unoccupied.” Ludwig has a right to use his name on the automatic device and this the judgment permits him to do,, but he cannot use it on a piano equipped with the device, because such use would lead the public to believe the piano itself was a Ludwig piano. (Croft v. Day, 7 Beav. 84; Russia Cement Co. v. Le Page, 147 Mass. 206; Higgins Co. v. H. S. Co., 144 N. Y. 462.) “It is well settled,” says Chief Judge Andrews in Higgins Co. v. H. S. Co. (supra), “ that an exclusive right may be acquired in the name in which a business has been carried on, whether the name of a partnership or of an individual, and it Will be protected against infringement by another who assumes it for the purposes of deception, or even when innocently used without right, to the detriment of another, and this right, which is in the nature of a right to a trade mark, may be sold or assigned.” ' There are numerous authorities to .the effect that an individual may be restrained from using bis own name where such name constitutes a trade name and has passed under a sale of good will. ... ■ t In Russia Cement Co. v. Le Page (supra), Le Page and ■ another formed a partnership under the name of the ¡Russia — 393 — Cement Company, and it for some time manufactured and sold glue by the name of Le Page’s Glue. A corporation was thereafter formed to which the partnership transferred its assets and good will, Le Page becoming one of its officers. Sometime thereafter he sold all of his stock in the corporation and severed his relations with it, and then commenced to manufacture and sell glue under the name of Le Page Improved Liquid Glue. It was held that the cement company was entitled to a judgment permanently enjoining and restraining his doing so. The court, after referring to the rule that a person has a right to use his own name, said: “Whilethis is the general rule, it is also true that one may so sell or part with the right to use his own name as a description or designation of a manufactured article, as to deprive, himself of the right to use it as such and confer this right upon another. A name used as an adjective of description is not necessarily understood by the public as any assertion that the person whose name is used is the maker of the article. One who has carried on a business under a trade name, and sold a particular article in such a manner by the use of his name as a trade mark or a trade name as to cause the business or the article to become known or established in favor under such name, may sell or assign such trade name or trade mark when he sells the business or manufacture, and by such sale or assignment conclude himself from the further use of it in a similar way. * * * A person may be enjoined, therefore, from using his own name as a description of an article of his own manufacture and from selling the article under that particular name when he has parted with the right thus to apply it.” Le Page being enjoined from selling the glue under his own name, then caused to be incorporated The Le Page Company—he or his wife and counsel taking substantially all of the capital stock, and the corporation then commenced to manufacture glue, which it sold by the name of “ Glue made by the Le Page Company.” It was held this was a violation of the rights acquired by the original corporation to the use of the name Le Page, and an injunction was granted. (Le Page Co. v. Russia Cement Co., 51 Fed. Rep. 941.), During the course of the opinion, which was delivered by Judge Putnam, he said: “It does not appear that either — 394 — the shape of the packages, the color of the labels, or the peculiar adornments put upon them, or any arbitrary designations,-form essential parts of what was left behind him by- Le Page when he withdrew from the plaintiff corporation, or of what was transferred to it by the partnership, and as to all . these the Russia Cement Company, so far as the case shows, reserved the right to modify and change, as the tastes of the public, or the supposed attractiveness of its packages, may from time to time require. The essential thing is its right to inform the public that it is in the exclusive possession of all the advantages coming to it as the legitimate successor of the original formulator of ‘Le Page’s Glue,’ and is alone entitled to put on the market that product supposed to be composed Or manufactured with special skill, and known to come from, the original and long-established concern.” (See, also, Lamb Knit Goods Co. v. Lamb G. & M. Co., 120 Mich. 491; Brass & Iron Works Co. v. Payne, 50 Ohio St. 115; Symonds v. Jones, 82 Maine, 302; Brown Chemical Co. v. Meyer, 139 U. S. 540, and Shaver v. Shaver, 54 Iowa, 208.) But the judgment does not prevent Ludwig using his own name except in such a way as to deprive the plaintiff of something it purchased. He is permitted to use it in advertising the fact that he hás an automatic piano player which is contained in a ■ particular piano, or to designate such playing mechanism as the Ludwig player. • He must not use. the word Ludwig,, or any name of which it forms a part, upon a piano, because the plaintiff has the right to inform the public that it is .the exclusive manufacturer of the Ludwig -piano. This right it purchased from Ludwig and Ericsson, and defendants cannot be permitted to destroy or impair the same in any respect.' ■ . . « • It follows that the judgment appealed from should be affirmed; with costs to plaintiff and against defendants. Soott and Dowling, JJ., concurred; Ingraham, P. J., and Miller, J., dissented.