an establishment, beyond the mere value of the capital, stock, funds, or property employed therein, in consequence of the general public patronage and encouragement which it receives. from constant or habitual customers, on account of its local position, or common celebrity, or reputation for skill or affluence, or punctuality, or from other accidental circumstances or necessities, or even from ancient partialities or prejudices. Thus, a nursery of trees and shrubs, a favorite fashionable stand, or a newspaper establishment, may and often does enjoy a reputation and command a price beyond the intrinsic value of the property invested therein from the custom which it has obtained and secured for a long time; and this is commonly called the good-will of an establishment. § 523. The extent to which a good-will is protected is fully illustrated in Crutwell v. Lye, as is also its nature. In that case, the good-will consisted in certain premises in Bath and in Bristol, which were sold by the assignees in bankruptcy of one of the defendants, Edward Lye, who had, for some years, together with his father, George Lye, carried on the business of a carrier from Bristol through Bath to London; the same parties having also a carrying business from Bristol through Salisbury and Warminster to London. At the sale, the whole of the premises of the Messrs. Lye, and their business as carriers from Bristol through Bath to London, and the good-will of that business, was sold in one lot to the plaintiffs; the carrying business from Bristol through Warminster and Salisbury being put up for sale separately, and eventually bought by friends of E. Lye, the defendant, who then set him up in that business. The question was, whether the defendant, according to the facts stated, was really carrying on his own trade, and not that of the plaintiff. A person having sold a house and stock in trade is, in the absence of any special covenant, at liberty to set up a similar business the very next door to his former shop or warehouse. That is merely a fair case of competition in 1 17 Ves. 335. trade; but he must not, under color of chalking out a different course of trading, really carry on, for his own benefit, the trade of others. Lord Eldon considered that the facts in that case were not sufficient to prove a fraudulent design on the part of the defendant. He said that they amount to no more than that the defendant asserts a right to set up this trade (the carrying business), and has set it up as the like, but not the same trade with that sold, taking only those means that he had a right to take to improve it. § 524. In Peterson v. Humphrey, it was held that an injunction will lie, at the suit of one against his former copartner, restraining the continuance of the use of the signs containing the old firm name, without sufficient alterations or additions to give distinct notice of a change in the firm. The parties were in business on Broadway, in the city of New York, and failed. Some arrangements were made with their creditors, by which they were enabled to enter into a new business, which each did on his own account, Humphrey at the former store in Broadway, and Peterson in Canal Street. Before the failure, there was a broad sign above the second story of the store on Broadway, in the name of the firm, "Peterson & Humphrey," and another over the entrance-door. Peterson requested Humphrey to remove those signs, and receiving a refusal, obtained an injunction to prevent the use of them. Before that, the sign on the door had above it the name of the old firm, and the word "formerly," so as to read “Humphrey & Co., formerly Peterson & Humphrey." The court said that this last sign was true, and nobody could be deceived by the last words; but the sign above the door might mislead, and the injunction against it should be sustained. - In Howe v. Searing, the plaintiff, a baker by trade, sought to restrain the defendant from designating the bakery establishment kept by him at No. 432 Broadway, in the city of New York, as 1 4 Abb. Pr. R. 394. 2 10 Abb. Pr. R. 264; 6 Bos. 354, and 19 How. Pr. R. 14. "Howe's Bakery," and from otherwise using the name of "Howe" in the business, so as to induce the public to believe that the business carried on at 432 Broadway was conducted by the plaintiff. Upon the trial at special term, it was proved that, eight years before, the plaintiff carried on a large and lucrative business at 432 Broadway, and during all the time he carried on the business the premises had been known as "Howe's Bakery," and had gained great celebrity by that name. Howe then sold out his lease of the premises, and all the stock, wagons, and fixtures used by him in the business, together with the "good-will" of the concern. After the sale of the business-stand and good-will, Howe, by agreement with his vendee, obtained the privilege of resuming the business at another stand, covenanting not in any manner to interfere with the business carried on at the former stand, known as "Howe's Bakery." Held, that this was no recognition of the vendee's claim to use the name of "Howe." On appeal from the judgment in plaintiff's favor, the decision was affirmed by a majority of the court. Hoffman, J., said that the case was decided upon all the authorities found bearing upon it. But it is to be noticed that, under a statute of the State of New York, passed April 29, 1833, "to prevent persons from transacting business under fictitious names," no person has power to transact business in the name of a person not interested in his firm; and that act would have been sufficient to warrant the decision made. By a statute passed April 17, 1854, a copartnership name may be continued by some or any of the copartners, their assignees or appointees, upon filing and publishing a certificate; but that provision applies only to firms having business relations with foreign countries. The court, independent of any regard to the statute, recognized the principle, as one of public policy, that business must be transacted under the name of the real parties doing it, and not under other names. § 525. This decision fully accords with the law of France in relation to commercial partnerships. By the 21st article of the Code of Commerce, the name of the associates can alone constitute the firm name (la raison sociale). This is intended to forbid persons who succeed to the business of a deceased merchant from continuing it under his name. "Credit," said Hoffman, J., in commenting upon said article, "is altogether personal. It does not transmit itself by cession or inheritance. It is won by actions and capacity. It is not right, then, that a successor should avail himself of a fallacious credit in appropriating a firm's name extinguished by the death of one of those who gave it the value." 1 § 526. It has been a question whether the right to use the firm name is a part of the good-will belonging to the partnership, or whether, in case of the dissolution thereof by the death of the partner, it belongs to the survivors. That the right to use the name of a known and celebrated firm in the case of manufactures is often a very valuable possession, is unquestionable; and, therefore, courts of equity will often interpose to protect the right against the abuse of third persons, in using it for their own advantage.2 But it has been thought that this right does not fall within the true character and nature of goodwill; but that it belongs to the surviving partner. The case of Lewis v. Langdon 3 illustrates the notion of property in a partnership-name, as a species of good-will attached, not to the place of business, but to the name of a firm, or of a trader. In this case, Vice-Chancellor Shadwell held that a surviving partner had, on the death of his copartner, a right to carry on the business under the designation of the original firm; for that the good-will arising from the use of a particular designation was, during the partnership, the joint property of the firm, and became on the death of one of the partners the sole 1 See the case of Compere v. Bajou et als., §§ 209-211, ante. 2 Story on Partnership, § 100; Story on Eq. Jur. vol. ii. § 951; Eden on Inj. ch. 14; Motley v. Downman, 3 Mylne & Craig, 1, 14, 15; Millington v. Fox, ibid. 338; Knott v. Morgan, 2 Keen, 213, 219; Webster v. Webster, 3 Swanst. 490, n. * 7 Sim. 421. property of the survivor. He, however, while granting the injunction, directed the plaintiff to bring his action at law. But this opinion does not seem to have been generally acquiesced in. Hoffman, J., in rendering the decision of the court in Howe v. Searing,1 intimates that it is a well-settled rule that the good-will of a partnership business does not survive to a continuing partner; and that it belongs to the firm as much as the ordinary stock in trade. He said that the case of Lewis v. Langdon, which seems to assert a different rule, is not the law of the court on this point. He referred to the decision in Hammond v. Douglass,2 which explicitly asserts a different doctrine, speaking of the good-will generally; and decides that a sale of it cannot be compelled by the representatives of the deceased partner; and that it is not partnership stock of which the executor may compel a division, but belongs of right to the survivor. But in the case of Dougherty v. Van Nostrand,3 before him as assistant Vice-Chancellor, he had thought that case could not be supported; and the opinion in the last-mentioned case had been acted on and approved in other cases.4Perhaps, says Lloyd, Churton v. Douglass approaches more nearly than any other of the numerous cases on good-will to the case of a trade-mark. There, the defendant had, in 1857, received a considerable sum from the plaintiff, upon a dissolution of partnership, for the purchase of "all his known rights and interests in the partnership business and the good-will thereof." The plaintiffs carried on the old business under the name of their new firm, "late John Douglass & Company." Four months afterwards, the defendant again set up his old business, in partnership with other persons, under the firm of "John Douglass & Company." The whole question, as in Crutwell v. Lye, before referred to, was whether, upon all the circumstances, this was an attempt to set up, not a business 1 See ante. 3 1 Hoffm. Ch. R. 68. 25 Ves. 539. 4 Williams v. Wilson, 4 Sand. Ch. R. 379. 5 Trade-marks, 35. 6 Johnson, 174, 7 W. R. 365. |