S. F. Myers Co. v. Tuttle

188 F. 532 | U.S. Circuit Court for the District of Southern New York | 1911

HORT, District Judge.

These are two motions. One is made by the S. F. Myers Company, in its suit against Arthur W. Tuttle, for an injunction restraining the defendant from doing business under the corporate name of the complainant, or, in the alternative, restraining the defendant from using the complainant’s name except in conjunction with his own name and the words “successor to,” or other words properly indicating that the defendant is the successor to the business of the complainant. The other is a motion in the suit of Tuttle against S. F. Myers Company for an injunction restraining the Myers Company from interfering with the good will of the bankrupt S. F. Myers Company, purchased by Tuttle, or from using its name in its business. The S. F. Myers Company became a bankrupt. A sale of its assets, including its good will and corporate name, was ordered by this court. Upon such sale, a large portion of such assets and the good will and corporate name were purchased by Arthur W. Tuttle for a large sum of money. Thereafter the sons of S. F. Myers, who had originally founded the business which was incorporated under the name of the S. F. Myers Company, formed a corporation called “S. F. Myers’ Sous’ Co.,” and undertook to carry on, at the same place, a similar business to that which had theretofore been carried on in the name of the S. F. Myers Company. This court enjoined S. F. Myers’ Sons’ Company from carrying on a similar business at the same place, and ordered that it either change its name, so as not to produce confusion, or change its place of doing business, and enjoined it from interfering with the business carried on by Mr. Tuttle under the name of the S. F. Alyers Company. Thereafter the S. F. Myers Company applied for and received a discharge in bankruptcy, and now makes a motion to enjoin Tuttle from doing business under its name, on the ground that, having received a discharge in bankruptcy, it has a right to resume business under its original name, and Mr. Tuttle moves to restrain it from interfering with the business which he is carrying on under the same name.

[1] It is well settled that an individual cannot be prevented from carrying on business in his own name, and that a purchase of the good will of a business carried on in the name of an individual will not, as a general rule, prevent that individual from carrying on business in his own name thereafter. But in such a case the courts usually require that the later business should be carried on in such a way as not to produce confusion with the business the good will of which has been sold.

[2] It is urged that the situation of this corporation is analogous to that of an individual bankrupt who has received a discharge; but in my opinion it is not. This is an ordinary business corporation, organized by filing a certificate. Its assets in bankruptcy are ,on!y enough to pay about 25 per cent, on its indebtedness. Although it has received its discharge in bankruptcy, it has no assets, and never will have any unless its stockholders contribute further cash. The instances are very rare in which corporations take the trouble to apply for a discharge under such circumstances. I have no doubt that the application was made in this case for the purpose of making this motion, and of endeavoring, by a sort of trick, to evade the injunction previously issued. In my opinion, the scheme should not be permitted to succeed. Mr. Tuttle bought the good will and the trade-name of this business, and gave for it a large amount of cash. It is the duty of this court to protect him in the ownership of his property. If the Myerses want to engage in the mail order business by means of a corporation, they can organize a new corporation under a different name by simply filing a certificate. They ought not to be permitted, by using the old corporate name, to interfere with the business being conducted by Mr. Tuttle.

The motion made by Tuttle is granted, and the motion made by S. F. Myers Co. is denied.