Mason v. Dawson

Beekman, J. This action is brought by the executors of a ■deceased partner against the surviving members of the firm of J. W. Mason & Co., for an accounting and the appointment of a receiver to wind up the affairs of the copartnership. A motion is now made for the appointment of a receiver joendente Ute. It is provided by the articles.of copartnership that “in the •event of the death of either of the' partners the business shall be closed by the surviving partners as soon as possible, but without prejudice to its interest, of which the surviving partner or partners shall be the judges, but the executors, administrators and assigns of the deceased members shall have .access to all the books and papers of the concern, and shall have the right to require and receive written statements every three months as to the condition of the business, but the time ■of closing the business shall not extend beyond one year from ■.the death of the partner without the written consent of all [596] of the surviving partners, together with the consent of the executors, administrators. and assigns of the deceased partner.”' It will thus’ be seen that the defendants were entitled, not only as matter of law independent of any agreement, but also by virtue of an express provision contained in tile articles, to - wind up the affairs • of the copartnership.- Unless, "therefore, it clearly appears- that.the surviving partners are not properly performing their duties in this regard, the court will not inteiv fere and deprive them of their right by appointing a receiver'. . The remedy is a .drastic one,, and experience seems also to show that the administration- of business affairs through such an agency is frequently attended by large expense and unfa- . vorable results. I do not. think that the facts on which the application is. made are sufficient to justify me in granting the. application: There' is -no charge of fraud against the surviw ing partners, nor is there any specific proof that they are wast- ■ ing the assets of the concern; nor is there any allegation that they are insolvent or would be ■ unable to respond for. any liability incurred by them- in-respect to their management of the- copartnership affairs. While there is some suggestion of a lack of readiness to comply with the requirements of the copartnership- articles in rendering accounts fo the executors ' of the deceased partner, the proof is not - sufficient to justify me in- finding' that there has been a violation of that ' duty.. -It is also true that more than one. year has. expired ' since the death of Mr.' Mason, and the business- has not-yet been closed as required . by the articles.. But the proofs tend to show that the • defendants in this respect acted in good ■ faith, believing that • the interests of all concerned would be; greatly' prejudiced by a close observ-. . anee of this requirement. . In this- respect the defendants may have béen remiss, but as they have si’ncé expressed their intention to- close out the . business -forthwith,, and to rgajize. upon its assets, I do no't think that"this circiunstanee of itself calls for the -appointment -of a receiver. - In fact, an examination of the affidavits :presented by both sides clearly shows "that the only substantial dispute . between [597] the plaintiffs and the defendants arises- out of a claim made by the plaintiffs, which the defendants deny, that in selling the assets and good will of the partnership the right to a con-' tinned use of the copartnership name should he transferred with the good will. The defendants insist that, as surviving partners,, they alone are entitled to continue the use of the old copartnership name. If the plaintiffs are right in their contention, I think a sufficient reason for the appointment of a receiver would exist, but 1 find myself unable to adopt the view which they have taken. The firm name of J. W. Mason & Co. was not a trade mark, and the cases dealing with • the transferability of names when used for such a purpose are, therefore, inapplicable. The weight of authority seems to support the view that the. right to continue the use of the copartnership name is one which vests exclusively in the surviving partners. Caswell v. Hazard, 121 N. Y. 484; Blake v. Barnes, 12 N. Y. Supp. 69. The statute authorizing the continued use of the copartnership name was rendered necessary by the. pre-existing statutory provision forbidding the use of a name in a copartnership title which tyas not that of one of the partners. The prohibition, therefore, continues in force except. in so far as it has been so modified, and that modification extends only to cases of firms having business relations with foreign countries, or which have transacted business in the state for a period of three years or upwards, where the business shall be continued by some or any of the partners, their assigns or appointees.In cases of a dissolution by the - death of one of the-partners, I think it is quite plain that it was the legislative intent that the right to the continued use of the old firm name should pass to and be controlled by the survivors. In the case of Blake v. Barnes, supra, this same question was. quite elaborately discussed by Mr. Justice Babbett, who came to the conclusion “ that while the good will is concededly an asset, the right to continue the business under the old firm name belongs to the surviving partners.” While I am of the opinion, as I have said, that the facts [598] upon which this application is based are not sufficient to justify the áppointment of a receiver, I think that the.. plaintiffs are' entitled to have the affairs of the partnership .immediately wound up, its assets disposed of and a distribution made. I am, therefore, disposed, in denying the motion, to grant leave to renew the same upon additional proofs should, there be any unreasonable delav in the matter. Ordered accordingly.