Name. Trade Name. Equity Jurisdiction, To enjoin unlawful use of name. Equity Pleading and Practice, Bill, Parties.
Two partners, engaged in the manufacture and sale of fine candies under a firm name composed of their surnames joined by "," made an agreement dissolving the partnership, conveying to one of them, "his heirs, executors, administrators, and assigns," the assets of the business including the good will and the "right to use the" firm name as above described "as the trade name or trade-mark in the business of the manufacture or sale of candy," and providing that the purchasing partner should "incorporate his business of manufacturing candy and confectionery" and give to the retiring partner certain shares of stock and pay him an annuity. The purchasing partner organized a corporation under a name, which was the former firm name with the word "Incorporated" added, for the purpose, as stated in its charter, of engaging in and carrying on "the business of manufacturing and selling candy and confectionery at wholesale and retail," and conveyed to it the assets formerly of the firm "together with the good-will, trade-marks, trade names, and copyrights belonging to or appertaining to said business." A third party, having secured control of the corporation and of its officers, organized a second corporation for the purpose of the manufacture and sale of chocolate and cocoa in various forms, the manufacture and sale of candy and confectionery not being included in the stated corporate purpose. The name of the new corporation was composed of the old firm name preceded by "The" and followed by the words "Chocolate Company." By his control of both corporations the third party then undertook to convey to the second corporation the right to use the old firm name, transferring to the first corporation a valuable consideration for such right. The permission of the original partners to such use of their names not having been procured, they joined as individuals in a bill in equity seeking either an accounting or an injunction against the use of their names. Upon demurrer to the bill, it was held, that
(1) It was doubtful whether the original agreement of dissolution between the partners authorized the use of the former firm name by any other than the contemplated original corporation;
(2) That agreement did not authorize the first corporation to transfer the use of that name to the second corporation, organized to carry on a different business;
(3) The plaintiffs had a joint and concurrent interest entitling them to join in the seeking of relief;
(4) The third party, who controlled both corporations, was not improperly joined as a defendant;
(5) The bill was not multifarious;
(6) Whether the plaintiffs were entitled to damages or profits, it was not necessary to determine upon the demurrer;
(7) The provisions of G.L.c. 110, § 7, entitled the plaintiffs to relief by injunction.
De COURCY, J.
The dominant facts alleged, and to be taken as true for the purpose of the demurrer, are these: Prior to 1912 the plaintiffs were engaged in the manufacture and sale of fine candies, as copartners under the firm name of Page Shaw. In the dissolution agreement of March 11, 1912, Page released to Shaw his interest in the property and good will of the business, and also "the right to use the name 'Page' accompanied by the name 'Shaw' as the trade name or trade-mark in the business of the manufacture or sale of candy." In accordance with the terms of said agreement, Shaw, early in 1912, caused to be organized a corporation with the name Page Shaw, Incorporated, to carry on the business of manufacturing and selling candy and confectionery at wholesale and retail; and he became the holder of the greater part of the capital stock of said company. To that corporation Shaw transferred the assets of the former partnership, with certain reservations.
In November, 1918, the defendant Otis E. Dunham acquired substantially all the capital stock of Page Shaw, Incorporated, and became its president and general manager. Early in 1919, these two defendants, acting together, organized a new corporation with the name The Page Shaw Chocolate Company, for carrying on the business of the manufacture and sale of chocolate and cocoa in various forms. On February 20, 1920, the chocolate company, by its directors, undertook to purchase from Page Shaw, Incorporated, the right to use "Page Shaw" as part of the corporate name of the new company, together with the good will attaching thereto, giving shares of the capital stock of the chocolate company as consideration therefor. The plaintiffs seek by this bill in equity, among other things, to enjoin the new corporation from using in its business or as a trade name or trademark the names of either of them or the name Page Shaw.
It is provided by G.L.c. 110, § 4: "A person who conducts business in the Commonwealth shall not assume or continue to use in his business . . . the name of any other person, either alone or in connection with his own or with any other name or designation, without the consent in writing of such person or of his legal representatives." As matter of construction it is doubtful, to say the least, whether the dissolution agreement between Page and Shaw authorized the use of the name "Page Shaw" by any other than the contemplated original corporation Page Shaw, Incorporated. It certainly did not authorize that corporation to transfer the use of the name Page Shaw to another company, organized for carrying on an entirely different kind of business. Lodge v. Weld, 139 Mass. 499. Fairfield v. Lowry, 207 Mass. 352. C. H. Batchelder Co. Inc. v. Batchelder, 220 Mass. 42, 46.
The plaintiffs have a joint and concurrent interest in preventing the use of the names Page and Shaw by the defendant chocolate company. Their consent in writing is required in order to justify that use. Morse v. Hall, 109 Mass. 409. Lodge v. Weld, supra. See Cadigan v. Brown, 120 Mass. 493, 494. We cannot say that the defendant Dunham is improperly joined, in view of the allegations of the bill. The objection of multifariousness is not tenable. Lovejoy v. Bailey, 214 Mass. 134, 151. It is not necessary at this stage of the case to consider whether the plaintiffs are entitled to damages or profits. See Lawrence v. Hull, 169 Mass. 250; Kaufman v. Kaufman, 223 Mass. 104. The plaintiffs state a case entitling them to an injunction, under the statute. G.L.c. 110, § 7. Bowman v. Floyd, 3 Allen, 76. C. H. Batchelder Co. Inc. v. Batchelder, supra. That requires the overruling of the demurrer. In accordance with the report, the defendants are to answer to the bill as amended.
Ordered accordingly.