Hazard v. Caswell (93 N.Y. 259, 1883)

Danforth, J.

The trial court found in substance that prior to July 31, 1876, the plaintiffs and the defendant Caswell were copartners, doing business as druggists at Newport, R. I,, and in the city of New Yorb, under the firm name of Caswell, Hazard & Co., using therein as owner, the trade-mark in question ; that on the day above named the copartnership expired by limitation, and the plaintiffs continued the business under the old firm name at its former location in both places, and prepared and sold cologne put up as before under the label used by the old firm, while the defendant, with one Massey, under the firm name of “ Caswell & Massey,” at once engaged in business as druggists in the city of New York, and also prepared and sold cologne-water in bottles similar to those before used, and bearing a label in all respects like the one above referred to, except the firm name and place of manufacture, in lieu of which was substituted their own name of “ Caswell & Massey,” with the inscription, “ Distilled by Caswell & Massey, Chemists, 1117 Broadway, New York;” whereas the plaintiffs’ label read, “ Distilled by Caswell, Hazard & Co., Chemists, 132 Thames street, Newport, R. I., and New York.”

There can be no doubt that upon the dissolution of the old firm either partner might continue to use the trade-mark in question, unless he conferred upon the other an exclusive right to do so (Robbins v. Fuller, 24 N. Y. 570; Huwer v. Dannenhoffer, 82 id. 500; Hall v. Barrows, 4 DeG., J. & S. 150; Bury v. Bedford, id. 352), and as to that the finding is “ that the defendant Caswell, on retiring from the said firm, received his share of the assets thereof, partly in stock, in trade, and partly in money, and for a valuable consideration sold in terms to the plaintiffs all his right, title and interest in the land and building where the business of the said firm had been conducted at Newport, and in the stock in trade and property there of every kind, excepting book accounts outstanding at the date of the said dissolution, which property included the signs hearing the firm name of. Caswell, Hazard & Co., and the said trade-mark and label which were then in use at such place of business,” and the trial court refused to find as requested by the defendants; “ that the same trade-mark and label * * * were in use by said firm of Caswell, Hazard & Co. prior to July 31, 1876, in all their three stores, two in New York and one in Newport.”

The appellants upon this finding and refusal raise the only questions which are material to consider in this case. “ First: I find no evidence upon Avhicli the refusal can stand. Hazard, one of the plaintiffs, testifies that the proprietary articles made and sold by Caswell, Hazard & Co. were prepared at the Fifth avenue store (with which alone a wholesale department >vas connected), and sent to the other two stores.” It was proven that the cologne in question was one of those proprietary articles, and referring to labels used upon packages of it, he says: “ The labels were divided among the three stores; ” “each had its stock of labels,” and adds : “I do not know, of myoAvn knoAvledge, that this cologne was ever made at NeAvport.” Philip Caswell, Jr., who prepared the formula under which the cologne was made, and Avas in business as a member of the firm preceding Caswell, Hazard & Co. at Newport, till 1872, says: “ Up to that time none was made there.” The circumstances of the case also indicate that the trade-mark and label must have been used in New York as Avell as in Newport. Assuming that to be the case, the finding above cited does not sustain the conclusion of Irav that the defendant sold to the plaintiff the exclusive right to use the trade-mark. It is to be noted that there is nowhere to be found a sale or transfer of Has-well’s interest or right in the trade-mark; it is supposed to be included in the “ stock in trade and property of every kind of the copartnership in Newport.” The trade-mark was of course the property of the firm, but not property situated in Newport, and while it-might follow a general transfer of Caswell’s interest in the entire property of the firm, it is excluded by the qualifying words which describe the location of property actually intended to be conveyed. The written transfer does not necessarily, nor, as I think, by any fair constrnctiou include the trade-mark in question, and as the trial court gave to it a different interpretation, there should be a new trial, unless the judgment of that court can be sustained upon the further finding that the plaintiffs are “ the sole successors of the firm and to the business of the former copartnership of Caswell, Hazard & Co., with the right to trade under that firm name.” This is stated as a conclusion of law, but even if we assume it to be warranted by the findings of fact, it would not follow that the plaintiffs thereby acquired exclusive property rights in the trade-mark. The firm expired by limitafion, and the plaintiffs rightfully continued to carry on the business at the old place, and so far as the good-will of that business attached thereto, they must be deemed to have acquired all the benefit of it. But in the absence of an agreement to that effect, the exclusive right to use the trade-mark would not go with it. (Howe v. Searing, 6 Bosw. 354; Robbins v. Fuller, 24 N. Y. 570; Huwer v. Dannenhoffer, 82 id. 499.) Each party might use the devices which constituted the trade-mark, although neither, except by agreement, could use the name of the other. The sale, therefore, of bottles and labels, or the moulds and stamps from which they were made by the defendants to the plaint-' iffs, indicates nothing in their aid. These things bore the name of the old firm, and articles reproduced from the moulds or stamps would continue to bear them. Upon the assumption that the plaintiffs were to continue the business as successors to that firm, they were of value to them as articles for use, but of no value to the defendant, except as merchandise. So far, therefore, from regarding the sale of those labels to the suecessors of the firm a sale of the exclusive right to use the trademark, the omission to mention the trade-mark m any bill of sale or assignment of the labels, or elsewhere, is very persuasive evidence that there was no intention on the part of Caswell to part with his interest in it, or expectation on the part of the remaining partners to acquire it. The trade-mark was a valuable property of „the partnership in connection with its proprietary articles, and might very properly, therefore, have been treated as a distinct subject of value to the continuing partners. In Hall v. Barrows (supra) it was held that the exclusive right to use the trade-mark of a partnership was part of the property of the partnership and ought to be included in the valuation. Indeed, it seems to be clearly settled that a partnership trade-mark is an asset of the firm, salable on a dissolution like any other asset. (Lindley on Partnership, vol. 2, 863, 4th ed.) It is so treated in Huwer v. Dannenhoffer (supra), and that case is so much in point that it remains only to look at the transaction between the parties for the purpose of seeing whether Caswell did in fact sell to the plaintiffs his interest in the trade-mark. The business of the firm was transacted in two stores in New York, one in Newport and in an instrument factory, and the firm were also owners of certain proprietary articles, and among others the cologne in question There was also the trade-mark, which, in connection with that article, is to be deemed of value, certain real estate in Newport, and an interest as lessees of the stores in New York. The adjustment of the interest of the partners in all these things was the subject of negotiation before the termination of the partnership, but no conclusion reached or writing executed until October 7,1876. They then entered into an agreement by which Caswell was to receive upon actual division one-quarter of the stock in the Thirty-ninth street store, as shown on the inventory of July 31, 1876. The value of the fixtures was to be determined by appraisers and taken by the Hazards, they paying to Caswell his proporti on of the ap praised value. So with the stock both in the retail and wholesale department of the store in Twenty-fourth street, and the fixtures. The Hazards alone were to sign in liquidation, collect without charge the outstanding accounts, and pay over to Caswell his proportion thereof. They were to assume the lease of the instrument factory and pay him for his interest in the instrument stock by their note to his order. The agreement provides that the bottle-moulds theretofore used by the copartnership are to become the property of the Hazards for use in their business, and they are to pay Caswell for his interest therein a certain proportion of their value as the same shall be determined “ by the several bottle-makers in whose custody such moulds now are.” It specifies a sum of money which Caswell shall receive for his interest in the prescription books held by the copartnership, and in regard to the