KNOEDLER V. GLAENZER.
The facts as allegE'd in the bill were, in substance, as follows: The plaintiff bank sent to Maverick Bank a draft for collection and credit on general account. The draft was payable in Taunton, and the Maverick Bank sent it to the Taunton National Bank at Taunton for collection and credit; and on Octolwr 31, 1891, the Taunton Bank collected the draft, and credited its amount to the :Maverick Bank, and mailed a letter to the Maverick Bank stating that it had done so. October 31st was the last day that the Maverick B:Ulk did business, it being taken charge of the next day by a national bank examiner, and closed by the direction of the comptroller of the currency. The leiter written by the Taunton Bank did not, therefore, arrive until after the failure, and consequently no entry of credit on account of this draft was made by the :;\laverick Bank to the plaintiff. The Taunton Bank had nl) mutual account wHh the Maverick Bank, and was in the habit of remitting the proceeds of paper sent it by the Maverick Bank for collection every five days, and sent a check for the amount of the draft collected by it to the receiver. The usage between the plaintiff and the Maverick Bank was that the Maverick Bank credited the amounts of drafts sent it by the plaintiff for collection on the day the same were collected on general account, and did not keep the proceeds of such drafts separate, but mingled them with its funds; and this was done with the knowledge of the plaintiff.
Edward W. Hutchins and Henry Wheeler, for appellant. John C. Gray, for appellee. Before COLT, Circuit Judge, and NELSON and WEBB, District Judges. PER CURIAM. We are of opinion that this case is governed by the decision of the supreme court in Bank v. Armstrong, rendered March 6, 1893, (13 Sup. Ct. Rep. 533,) and it follows that the decree of the circuit court must be affirmed.
KNOEDLER et a1. v. GLAENZER et al.
(Circuit Court of Appeals, Second Circuit. May 5, 1893.)
RIGTIT TO :FIRM NAME-INJUNCTION-EvIDENCE.
The firm of Goupil & Co., Paris and New York, sold to complainant M. K. the New York stock, good will, etc., together with the right to, designate his business as "Formerly Goupil & Co. 11. K" Successor;" agreeing to supply M. K. with a stock of prints and paintings for six yem's as agent, but refusing to allow him to use the name Goupil or Goupil & Co., without words to indicate succession, allowing him, however, to state that he was sale agent for Goupil & Co. in America. In 1887 the Paris firm, which, by legal succession had become "Goupil & Co., of Paris. B., V. & Co., Successors," established a branch of their business in New York under that name. that they were entitled so to do in the absence of any express contract to the contrary. 47 Fed. Rep. 465, affirmed. There being no evidence of any attempt on the part of defendants B., V. & Co. to injure or impair the good feeling of the customers of complainant M. K., or deprive him of the advantages of the good will of the American business purchased by him, he was not entitled to an injunction against defendants. The sale of t.he good will of Goupil & Co. in :New York to M. K. did not include the good will or rights of Goupil & Co., of Paris. including the rights of succession, and the right of the successor to do business wher-. ever they saw fit, provided that theY did not represent their business as
2. SAME-GOOD WILL.
SAME-CONSTRUCTION OF CONTRACT.
the business of complainant. and therefore M. K. was not entitled to an Injunction on the ground that defendants attached to their name the words "of Paris." 4.
Complainant. having illpgally and wrongfnlly represented himself lUI Goupil & Co. by advertisements, letter heads, flags. and other devices, and not as "K.. Successor to Goupil & Co.... was not entitled to relief, and the fact that Goupil & Co.· of Paris. being foreigners. made no objection thereto. was no waiver of objection to such misuse.
Appeal from the Circuit Court ot the United States tor the Southprn District of New York. In Equity. Bill by Michael Knoedler and others again\;t Eugene W. Glaenzer, impleaded with other defendants. The bill was dismissed below, (47 Fed. Rep. 465,) and complainants appeal. .Ai. firmed. F. R. Coudert, for appellants. Eugene II. Lewis, fur appellee. Bpfore SIlLPl\1.tlli, Circuit Judge, and TOWNSEND, District Judge. TOWNREND, District Jndge. For some years prior to 1857, Adolph Oonpil and Lpon H01lssod had earried on a gpnernl business as dealprs in works of art and artists' materials in Paris and New York under the llrlll name of Gonpil & 00. On March 2(i, 1857, tht'y sold to Michapl Knoedler, the manager of thpir New York bOllse. the businpss of said house, including the furniture. fixtures, Sllpp!iPS, lease of premises, and the good will attached thereto, iucluding the rig-h t to designa te the bnsiness house as "Formprly Goupil & Co. 1\1. Knoedler, Successor." Goullil & Co. reserved to themspln's certain debts, money, and securities, and the ownl'rship of ceMnin prints and pnintings. TbPy ag-reed thai until December 31, 18(;2, they would continue to cons'g-n to Knoedler a complete assortment of such of their prints and pietures as should be suitable for the American trade. The firm of Goupil & Co. continnpd to do busine-ss in Paris under said name until when, iutJert Goupil having died, and Adolph Goupil having become a !'IHeeinl partnpl'. the remaining partners, Leon ROIJf'lsod nnd Rene Va Indon, succeedf'd to the business, and acquired the right to tIle nse of the MIDe "Goupil & Co. Roussod, V nladon & Co., Sucees!'lors." and said business has ever since bepn conducted un·, dt'r snid name. In 1886 said firm purchased all the interest of the GouJllls in said business. In the spring of 1887, they est:1 hlishC'd, and still maintain, a branch of their bnsiness, at No. 303 Fifth avenue. York. under the name "Goupil & Co., of Paris., Bous80d, Vllladon & Co., 8ul'cessors." Sai'd MichapI Knoedler and his sons have, up to the present timp, continnpd to cal'ry on, in Npw York, the bllsinpss boug-ht in 1857. TIIPY have not only used the name "Goupil & Co. M. Knoedler, 8u('('l'ssor," but have adopted a seal for the use of the firm, comdsting of a peculiar device, with the words, "Goupil's Fifth Avenue & Twenty-Second Street," thereon. They have also placed
upon all articles of merchandise sold by them a label containing no words other than "Goupil's Fifth Avenue & Twenty-Second Street," irrespective of the question whether they were manufactured or produced by or purcha.sed from Goupil & Go. or not. Furtherby large signs, and a flag exhibited at their place of business, by letter heads, by advertisements in the directory, and otherwise, they have held themselves out to the public as Goupil's, or the establishment of Goupil & Co., in such a way a.s to produce the impression that their place of business was that of the old house of Goupil & Co., not of Knoedler, SUCCPHSOl' to (ioupil & ('0. These complainants now seek to enjoin the defendants from directly or indirectly making use of the name Goupil & Co., or the name Goupil, or words indicating succession thereto, in New York or elsewhere in the United States. The grounds on which this injunction is prayed for are that the aforesaid acts of defendants in establishing a branch house in New York were "for the purpose and with the intent and result of diverting unto themselves the valuable patronage and custom enjoyed by the complainants in their business." The decision of the questions at issue between the parties depends upon the construction of the contract between Goupil & Co. and Knoedler in 1857. Counsel for complainants claim that thereby Goupil & Co. severed their business into a European part and au American part, and for a valuable consideration transferred the American part to Knoedler, and that, therefore, no other firm could be their successor in this country, except throllghKnoedlpr. Defendants claim that there is nothing in the contract of sale which expressly or impliedly suggests that the right to the use of the name Goupil & Co. was to be eithe'r peI1)E'tual or exdusive. The question, then, is whether Goupil & Co., by said contract, agreed that neither they nor their successors would thereafter do business in New York under the name Goupil & Co., or under the name of the vendee as their successor, or, in other words, what restriction, if any, was imposed upon Goupil & Co. by the terms of the sale to Knoedler. The counsel for complainants admits that, if the defendants were the successors in New York of a firm of Goupil & Co., which, down to the transfer to such successors, had been doing business in New York as Goupil & Co., there would be no ground for complaint. Goupil & Co., by said contract, sold to Knoedler the business and good will of their New York house, together with certain furniture, fixtures, and supplies. This sale carried with it the right to the use of the title "Goupil & C)o. M. Knoedler, Successor," irrespective of the express provisions of the contract to that effect. Goupil & Co. further agreed to establish and maintain, with Knoedler, as their agent, during six years, a deposit of certain classes of prints and paintings, provided he should make sales amounting to 100,000 francs per year, of their prints. They reserved the right, in case he failed to reach this amount, to withdraw their deposit of prints and paintings from his hands. So much appears from the contract itself. It further appears from the contemporaneous correspondence v .55F.l1v. 9-57
that Goupil wrote Knoedler, refusing to allow him to retain the name Goupil, or Goupil & Co., or to use it without words indicating his succession, but authorized him to state to the public that he was the only agent for the publications of Goupil & Co. in America. There is no express or implied covenant in the contract that Goupil & Co. will not again go into business in :New York. Assuming the contract to be uncertain, there is nothing in the correspondence between, or conduct of, the parties to indicate that they understood that such restriction, or any restriction, upon the future sale of the Paris business was implied in the New York sale. For aught that appears in the contract, Goupil & Co., or their vendees, could thereafter do business in New York, or, at the end of six years, or earlier, on breach of the contract, could transfer the exclusive agency for their prints and paintings to another agent. In the absence of an express covenant, or of fraud, there is nothing to prevent the vendor of a business and good will from establishing a like business in the same place, under his own name, provided he does nothing to injure the good disposition of the public towards the .old place of business, or impair any of the advantages which the purchaser has properly acquired by the purchase of the good will of the old customers. Churton v. Douglas, 1 Johns. Eng. Ch. 174, 28 Law J. Ch. 841; Hogg v. Kirby, 8 Ves. 215; Cruttwell v. Lye, 17 Ves. 335; Hall's Appeal, 60 Pa. St. 458; Leggott v. Barrett, 15 Ch. Div. 308; Cottrell v. Manufacturing Co., 54 Conn. 122, 6 Atl. Rep. 791; "Vm. Rogers Manuf'g Co. v. Rogers, 58 Conn. 356, 20 Atl. Rep. 467; Massam v. Food Co., 14 Ch. Div. 748; Gilman v. Hunnewell, 122 Mass. 139; Carmichel v. Latimer, 11 R. T. 395; Browne, Trade-Marks, § 420. There is, in this case, no evidence of an attempt on the part of Boussod, Valadon & Co. to injure or impair the good feeling of the customers of Knoedler & Co. towards them, or to take away the advantages which they derived 30 years ago from the purchase of the good will of the business of Goupil & Co. in New York, except the fact that the defendants call themselves successors of the Paris firm; but it is said that, as Goupil & Co. had parted with their right, so far as New York is concerned, their successors cannot enjoy it. If Goupil & Co., without attempting to interfere with the good will which belonged to Knoedler, could rightfully have opened a shop in New York for the sale of prints and engravings, the argument that the Paris firm, which, 30 years after the Koedler purchase, was the owner of a name which expresses its legal status in France, could not come to New York and simply announce themselves by their French name, is technical, rather than convincing. The defendants attach to their name the words "of Paris." Complainants strenuously urge that Goupil & Co., of Paris, was the very firm which sold its American business to Knoedler. The answer to this claim is that Goupil & Co. sold to Knoedler the branch house of Goupil, in New York, in 1857, and the good will attached thereto, but that it did not thereby sell the good will or rights attached to the house of Goupil & Co. of Paris, including the rights of succession, and the right of such successors to do business
wherever they saw fit, provided they did not represent their business as the business of the complainants. But complainants contend that defendants have been guilty of disloyal competition, or unfair trade, and that this question was not considered or passed upon by the court below. The learned judge, in his opinion, accurately stated what constitutes unfair competition. He said:
"The good will of a business comprises those advantages which may inure to the purchaser from holding himself out to the public as succeeding to an enterprise which had been irlentified in the past with the name and repute of his predecesso:,. Any conduct on the part of a vendor of a good will, calculated to impair the value of these advantages, is a breach of promise, implied in sales of every description, that the vendor will not disturb the vendee in the enjoyment of his purchase."
It does not appear that the defendants or their vendors have done anything which would tend to disturb the complainant in the enjoyment of the good will purchased by him in 1857. In Goodyear's India Rubber Glove Manuf'g Co. v. Goodyear Rubber Co., 128 U. S. 604, 9 Sup. Ct. Rep. 166, )Ir. Justice Field says:
"The case at bar cannot be sustained as one to restrain unfair trade. Relief, in such cases, is granted only where the defendant, by his marks, signs, labels, or in other ways, represents to the public that the goods sold by him are those manufactured or produced by the plaintiff."
Counsel for complainants has cited a number of cases in support of the rule that a person may be enjoined against an unfair or dishonest use of his own name, The law is well settled, as stated by Mr. Justice Brown in Chemical Co. v. Meyer, 139 U. S. 542, 11 Sup. Ct. Rep. 625, that "cases are not wanting of injunctions issued to restrain the use even of one's own name when a fraud is manifestlv intended, or when he has assi!,'1led or parted with his right to use it.;' But an examination of the cases indicates that they do not apply to a case like the present one. 'l'hey show that the use of one's own name has never been enjoined except where it has been accompanied by fraudulent misrepresentations, or imitation of trade-marks or labels, or where the person has, by some express contract, parted with the right to the use of such name; and that, in the absence of such express contract, no abandonment of such right will be presumed. In Meneely v. Meneely, 62 N. Y. 427, the referee found that the use of the name by the defendants was calculated to mislead, and did mislead, the public into the belief that they were the proprietors of the Meneely bell foundry, carried on by the plaintiffs, and that the defendants expected and intended to derive a profit and advantage by reason of the good reputation and celebrity of the plaintiffs' foundry. But the injunction against the use of the word Meneely was denied, the court saying that "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." The use of one's
own name by a vendee fraudulently or in violation of an express contract not to do so is what the law characterizes as unfair or disloyal competition. But, in the absence of such elements, the party using his own name is only exercising his legal rights. Qui jure suo utitur nullum damnum facit, and, if damage does result therefrom, it is damnum absque injuria. The defendants sharply criticise Knoedler's use, in advertisements and representations in various ways, that his store is Goupil & Co.'s, as conduct whilili a court of equity should regard as improper, while the complainants seek to show that their conduct was authorized, or at least assented to, by Goupil & Co., and from this assent derive an argument in support of the breadth of their claim to the use of Goupil & Co. But, if Knoedler & Co. had confined themselves to the authorized use of the words Goupil & Co., holding their firm out merely as its successors, during the past 30 years, there would have been no occasion for this suit. The reputation of the successors would gradually have become substituted for that of the predecessors; the transfer of the good will, or "probability that the old customers will resort to the old place," would have been complete; and the new body of customers would have had no interest, except in the new firm. lt is because the public have been misled, by Knoedler's announcement that his house is the "Maison Goupil," by the statement signed "Goupil & Co.," that "the central house at Paris has branches at I.Jondon, Berlin, Vienna, and La Haye, with which the New York branch is in constant connection," and by other unlawful appropriations of said name, that the name "Goupil" has become a valuable element in their business. vv1mt the complainants now seek to secure is not the probability that the old customers of 1857 will resort to the old place, but the probability that the new customers of 1889 will resort to the establishment of Knoedler in the belief that they are thereby dealing with Goupil & Co. They are not claiming merely the rights under the contract of 1857, the full benefit of which they have presumably enjoyed during the past 30 years, but they are also trying to deprive these defendants of the constantly increasing reputation which the defendants have acquired since said sale in connection with the }Iessrs. Goupil, and under the name of Goupil & Co. lt is claimed that by the failure of Goupil & Co. of Paris to object to the continued unlawful use by Knoedler of the name Goupil & Co. they have waived the right to now found any claim upon such misuse thereof; but, in order to constitute a waiver, there must be an intentional relinquishment of a known right. ·Wnen there is no occasion for its exercise. such intention will not readily be presumed. Especially is this so when, as in this case, the party whose rights were invaded was in a foreign jurisdiction, and was not apparently aware of the extent of the use of the name. 'fo sanction the breadth of the complainant's claim would be to enable the infringer to found a right upon his own wrong. Here the complainants have unlawfully misrepresented themselves as Goupil & Co. If they might have been originally enjoined against such misrepresentation, I see no reason why the fact that they have per-
WOOD V. OREGON DEVELOPlIfENT CO.
sisted therein should affect the rights of Goupil & Co., or their successors, whenever they should see fit to exercise those rights. There can be no estoppel, or even waiver, by silence, escept under circumstances where it becomes the duty of the party to speak. The decree of the circuit court is affirmed, with costs.
WOOD v. OREGON DEVELOPMENT' CO. et al (Circuit Court, D. Oregon. May 20, 1893.) No. 2,005.
RECEIVERS COURT. ApPOIl'TMENT OF WITH REFERENCE TO PROCEEDINGS IN STATE
A receiver was appointed by the United States circuit court, for the Oregon Development Compr.ny, upon the representation that the appointment was concurred in by the officers of that corporation, and all parties in interest. It afterwards appeared that the development company was auxiliary to the operation of the road of the Oregon Pacific Company, and was indirectly involved in a controversy going on in a state court over the latter company; that hITo factions wei'e contending fOl' the control of the Pacific Company, one of which had succeeded in ousting the other, and proposed to apply to the state court for the 3ppointment of a receiver for the development company, the defendnnt company herein. The dispossessed faction secured the resignation of the tnlstee of the bondholders of the development company, who was a citizen of the state, and the snb,;titution of another, who was not, so ns to give the federal court jurisdiction, and thereupon secured the appointment of a receiver before the state court could act. Hdd, thnt a receiver would not be appointed with a view to controversy with a receiver in the state court, or with reference to proceedings in such court; that the receiver appointed WOuld be removed, and another appointed, who would stand indifferent between the contending fadions.
In Equity. On motion to remove a receiver appointed in the cause of George S. Wood, trustee, against the Oregon Development Company and the Manhattan Trust Company. Motion granted. E. H. Peery, for complainant. JohnP. Fay, for interveners Brown & Blair. E. C. Bronaugh, for receiver, R. A. BenseIl. Wallis Nash, for bondholders. BELLINGER, District Judge. The receiver was appointed at chambers on May 1, 1893, upon the filing of the bill of complaint herein. It was done upon an application in behalf of what is claimed to be all but a small proportion of the creditors of the Oregon Development Company, acquiesced in by the attorney of the Manhattan Trust Company, the other defendant, and by the defendant as well. Mr. ·William M. Hoag, the then manager of the company, was also present, apparently co-operating in the movement to secure the appointment of such receiver. The ap" pointment was made by the judge of this court, under the belief that substantially all interests to be affected by what was done were united in such application. Mr. R. A. Bensell was appointed