Knoedler v. Glaenzer

• Decision Date: 05 May 1893
• Citation: 55 F. 895
• Parties: KNOEDLER et al. v. GLAENZER et al.
• Court: U.S. Court of Appeals — Second Circuit

55 F. 895

KNOEDLER et al. v. GLAENZER et al.

United States Court of Appeals, Second Circuit.

May 5, 1893

F. R Coudert, for appellants.

Eugene H. Lewis, for appellee.

Before SHIPMAN, Circuit Judge, and TOWNSEND, District Judge.

TOWNSEND District Judge.

For some years prior to 1857, Adolph Goupil and Leon Boussod had carried on a general business as dealers in works of art and artists' materials in Paris and New York under the firm name of Goupil & Co. On March 26, 1857, they sold to Michael Knoedler, the manager of their New York house, the business of said house, including the furniture, fixtures, supplies lease of premises, and the good will attached thereto including the right to designate the business house as 'Formerly Goupil & Co. M. Knoedler, Successor. ' Goupil & Co. reserved to themselves certain debts, money, and securities, and the ownership of certain prints and paintings. They agreed that until December 31, 1862, they would continue to consign to Knoedler a complete assortment of such of their prints and pictures as should be suitable for the American trade. The firm of Goupil & Co. continued to do business in Paris under said name until 1884, when Albert Goupil having died, and Adolph Goupil having become a special partner, the remaining partners, Leon Boussod and Rene Valadon, succeeded to the business, and acquired the right to the use of the name 'Goupil & Co. Boussod, Valadon & Co. Successors,' and said business has ever since been conducted under said name. In 1886 said firm purchased all the interest of the Goupils in said business. In the spring of 1887, they established, and still maintain, a branch of their business, at No. 303 Fifth avenue, New York, under the name 'Goupil & Co., of Paris., Boussod, Valadon & Co., Successors.'

Said Michael Knoedler and his sons have, up to the present time, continued to carry on, in New York, the business bought in 1857. They have not only used the name 'Goupil & Co. M. Knoedler, Successor,' but have adopted a seal for the use of the firm, consisting 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 purchased from Goupil & Co. or not. Furthermore, by 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 as to produce the impression that their place of business was that of the old house of Goupil & Co., not of Knoedler, Successor to Goupil & Co. 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 an 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 through Knoedler. 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 either perpetual or exclusive. 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 & Co. 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 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...