Bagby & Rivers Co. v. Rivers

Briscoe, J., delivered the opinion of the Court. This was a bill in equity, filed on the 22d of April, 1897, in the Circuit Court of Baltimore City, by the plaintiff, Arthur D. Rivers, for an injunction to enjoin the defendant, the Bagby and Rivers Company, of Baltimore City (a corporation), from using the name “Rivers” as a part of its corporate title. Subsequently, on the 13th of August, 1897, a cross-bill was filed by the defendant corporation against the plaintiff, Rivers and the Rivers Furniture Company, to restrain Rivers from conducting the furniture business in the city of Baltimore, either in his own name or in the name of the Rivers Furniture Company, and further, to enjoin the Rivers Furniture Company from using the name of Rivers, as a part of its title, in the conduct of the furniture manufacturing business. The facts of the case are substantially as follows.: The plaintiff Rivers and Charles T. Bagby had been for many years engaged in the manufacture and sale of furniture in Baltimore City, under the firm name and style of Bagby and Rivers. On the first of January, 1894, the copartnership existing between the members of this firm was dissolved by mutual agreement. The articles of dissolution were evidenced by a written agreement and a memorandum of sale. By the express terms of the agreement, it is provided that Bagby shall have and own in his own right, free and clear of any interest or claim of Rivers, all the stock, furniture, &c., in the factory and warehouse owned by the firm : and in addition thereto the good will of the firm and all business rights thereto belonging. And it further provides, that “ the said Rivers hereby agrees and covenants that he will permit the said Bagby to continue the use of his name, in the style of said firm ; provided, however, it be so used, after such necessary legal notice to be given by the said Bagby, as not to make the said Rivers liable for or chargeable with any of the debts or contracts of said business as hereafter to be conducted by said Bagby.” * * “ And the said Rivers agrees and covenants that he will not engage in the manu — 420 — facture of furniture in the city of Baltimore, so long as the said Bagby shall continue said business.” And in the memorandum of sale, which was executed by Rivers on the same day of the agreement of dissolution, it is further provided that in addition to the assignment of the stock of goods, &c., “the good will of the firm and all business rights thereto belonging or anywise appertaining shall be sold to Charles T. Bagby. It being the intention of said Rivers to sell to Bagby his entire interest in the business as now conducted by said firm.” It further appears that Bagby continued to carry on the furniture business under the firm name of Bagby and Rivers, until March 16th, 1897, when he and others formed a corporation under the general laws of this State, called “ The Bagby and Rivers Company of Baltimore.” He then assigned and transferred the business of Bagby and Rivers to this new company, and continued to carry on- the furniture business under the name and style of the Bagby and Rivers Company. On July 7th, 1897, the plaintiff, Arthur D. Rivers, formed a corporation called the Rivers Furniture Company of Baltimore City, and has been since that date conducting the furniture business. And from a decree enjoining the defendant, Bagby and Rivers Co., from using the name Rivers and dismissing the appellant’s cross-bill, this appeal has been taken. There can be no question, it seems to us, that under a proper construction of the articles of dissolution between the parties and the memoranda of sale, signed in execution of this agreement, that the right to use the name Bagby and Rivers was conferred upon Bagby so long as he continued the business in the style of the old firm. This was clearly the intention of the parties as will appear from the language of the agreement itself, which is, ‘ ‘ and the said Rivers hereby agrees and covenants that he will permit the said Bagby to continue the use of his name in the style of said firm; provided, however, it be so used, after such necessary legal notice to be given by said Bagby, as not to make the said — 421 — Rivers liable for or chargeable with any of the debts or contracts of said business, as hereafter to be conducted by said Bagby.” But the appellants contend they not only had a right to the use of the name Bagby and Rivers so long as the old firm existed, but they had the right to legally assign the name Rivers to the corporation Bagby and Rivers Company. This brings us to the main question in the case, and that is as was stated by the Court below; has a continuing partner who has acquired the right to use the name of a retiring partner, either by a grant in express terms or by legal inference arising from the purchase of the good will of the old firm, the right to assign the use of the retiring partner’s name to a corporation formed for the purpose of continuing the same business ? We are of the opinion, after a careful examination, that the contention of the appellant in respect to the assignability of the rights under this contract cannot be sustained, either from the intention of the parties, as manifested by the agreement itself, or by the law applicable to the case. In the case of Arkansas Smelting Co. v. Belden Co., 127 U. S. 387, Mr. Justice Gray, in delivering the opinion of the Supreme Court, says : “ Every one has a right to select and determine with whom he will contract and cannot have another thrust upon him without his consent. In the familiar phrase of Lord Denman, 'You have the right to the benefit you anticipate from the character, credit and substance of the party with whom you contract’ ” And in that case, the Court adopts the rule laid down by Pollock on Contracts, 425. “ Rights arising out of contract cannot be transferred if they are coupled with liabilities, or if they involve a relation of personal confidence such that the party whose agreement conferred those rights must have intended them to be exercised only by him in whom he actually confided. ” In the case of Horton Mfg. Co. v. Horton Mfg. Co., 18 Fed. Rep. 817, ,a case involving the same question as is here presented, the Court said : “ There is certainly no — 422 — authority for the proposition that a partnership whose name consists in whole or in part of the name of a person who is not a member of the firm, can, without the consent of the owner, transfer the right to another company or corporation to make a like use of such name. A man might willingly forego the use of his name in favor of an ordinary partnership, which, whether limited or not to a definite term of existence, is liable upon many contingencies to come to an end, but from such a ground there could not reasonably be inferred an intention to authorize a transfer or assignment to other companies or corporations, whereby the owner might be perpetually deprived of the control of his own name.” We will not stop to distinguish the many cases upon this question, because it would extend this opinion to an unusual length, but will simply state the conclusion reached by the Courts on the subject. It is this : Where the contract is for the sale of or the right to use a fictitious name, or a trade-name or a trade-mark, or a corporate name, though composed of individual names, or where the good will of a business includes the right to use names of that character, then such right is assignable by the purchaser and follows the business. But where the contract merely gives to one person the right to use the name of another, as in this case, such right is personal, and in the absence of an express stipulation, cannot be assigned or transferred by the purchaser to a third party. In this case it was stipulated that Bagby should have the right to continue the business under the old name of Bagby & Rivers. It was not agreed that Bagby and his executors, administrators or assigns or a corporation, but in the language of the contract, “ he will permit the said Bagby to continue the use of his name in the style of the firm.” If more had been desired it should have been agreed upon and expressed in the contract. This Court cannot infer from the language used, that Bagby was entitled to transfer to a corporation the right which Rivers had conferred upon him personally. On the — 423 — contrary, we think, the meaning of the contract between the parties is, that so long as Bagby continued to conduct the business in the firm name of Bagby & Rivers he had the right to use the name Rivers, but when this stopped the right to use the name of Rivers also ceased. We come, then, to the second proposition relied upon by the appellants, and that is the right of the appellees to an injunction. This is resisted upon the ground that no damage has been alleged and no injunction will lie unless injury has been shown. In the case of Plant Seed Co. v. Michel Plant and Seed Co. 37 Mo. App. 313, it is said that when a person or business corporation has assumed the name of some other firm or corporation in the same line of business or has adopted a name which so closely 1‘esembles that of a business rival previously established that the business of the latter is liable to be diverted and the public deceived on account of it, it has always been recognized as within the power or jurisdiction of a Court of Equity to restrain such person or new company from conducting business under the name assumed to the detriment of the older company. And in Du Boulay v. Du Boulay, 2 L. R. P. C. 441, this question is thus determined : '• In this country we do not recognize the absolute right of a person to a particular name to the extent of entitling him to prevent the assumption of that name by a stranger. The right to the exclusive use of a name in connection with a trade, or business is familiar to our law, and any person using that name after a relative right of this description has been acquired by another is considered to have been guilty of a fraud, or at least, an invasion of another’s right, and l'enders himself liable to an action, or he may be l'estrained from the use of the name by injunction.” And to the like effect are the cases of McGowan v. McGowan, 2 Cinn. Rep. 320; Williams v. Farnand, 88 Mich. 473; Holmes v. Gratz, 52 Fed. Rep. 871; Landreth v. Landreth, 22 Fed. Rep. 41; Holmes v. Holmes, 37 Conn. 295; Beach on Injunction, sec. 760; Brown Chemical Co. v. Meyer, 139 U. S. 544. There was — 424 — no error then in the decree enjoining the Bagby and Rivers Company from using the name Rivers as part of the corporate name of the corporation. (Decided April 1st, 1898). The remaining contention urged by the appellants arises under the cross-bill, which was dismissed by the Court below, and involves a construction of that part of the'agreement which reads, “ and the said Rivers agrees and covenants that he will not engage in the manufacture of furniture so long as said Bagby shall continue said business.” It is clear, we think, according to the meaning of this part of the contract, that when Bagby formed a corporation, assigned to it all the rights of the old firm and ceased to do business as Bagby and Rivers, he was not conducting and continuing the old business, and that Rivers was entitled to resume the furniture business himself. We fully agree with the learned Court below, when it says, “that under the provisions of the contract Rivers has a full right to engage in the business, if Bagby quits it, and I do not see how it can well be contended, that if Bagby abandons the business himself as an individual and transfers all his rights to the defendant corporation, assuming to assign to it also the late firm name, that Bagby can still be considered as conducting a business which is absolutely that of the corporation to which he has.transferred it. It is no longer Bagby who is doing the business but the corporation, no matter if he does have an interest in the latter.” For these reasons the decree will be affirmed. Decree affirmed with costs.