Weisman v. Kuschewski

• Citation: 219 N.W. 937,243 Mich. 223
• Decision Date: 22 June 1928
• Docket Number: No. 25.,25.
• Parties: WEISMAN et al. v. KUSCHEWSKI et al.
• Court: Supreme Court of Michigan

243 Mich. 223

219 N.W. 937

WEISMAN et al.

v.KUSCHEWSKI et al.

No. 25.

Supreme Court of Michigan.

June 22, 1928.

Appeal from Circuit Court, Wayne County, in Chancery; Clayton C. Johnson, Judge.

Suit by William Weisman and another against John Kuschewski and others. Decree for plaintiffs, and defendants appeal. Decree modified, and, as modified, affirmed.

Argued before the Entire Bench.F. J. B. Sevald and D. P. Cassidy, both of Detroit, for appellants.

Retan, Benjamin & Quay, of Detroit, for appellees.

FEAD, C. J.

For about 25 years, John Kuschewski successfully conducted a coal and coke business in the city of Detroit. He won a high standing of credit and personal reputation. The name ‘Kuschewski’ was locally valuable in the coal and coke business. Some years ago, he retired from the business, turned it over to his children, and has since been engaged in real estate activities and in looking after his personal investments. The children formed a family corporation under the name of Kuschewski Bros., Inc. The sons, defendants Otto and Hugo, were the active managers. The corporation conducted a yard at 6013 Buchanan street. It owned another yard at 5970 West Warren avenue which it rented to the Mac's Coal Company, of Which defendant McQueen was the manager. On July 1, 1925, the corporation sold its Buchanan street yard and business to plaintiffs for $55,000. The sale included the good will of the business, the right to use the name ‘Kuschewski Bros.,’ an agreement that the corporation should not engage in the business in or within 50 miles of the city of Detroit, and an undertaking to procure a similar agreement from all its stockholders. All the stockholders, including Otto and Hugo, executed an agreement ‘not to enter into or carry on any coal or coke business, wholesale or retail, either directly or indirectly in the city of Detroit, Mich., or within a radius of 50 miles of the city limits of said city of Detroit.’ John Kuschewski and McQueen were not stockholders nor parties to the contract. On July 2, 1925, plaintiffs filed an assumed name certificate to do business as Kuschewski Bros., and since then have been conducting the Buchanan street yard under that name and as Kuschewski Bros. Coal Company.

On November 4, 1925, the Mac's Coal Company failed, owing Kuschewski Bros., Inc., $2,100 for coal and $300 for rent. Its total debts were $6,000 or $7,000, and it had coal on hand worth about $600 or $700. On December 8, 1925, McQueen started a coal and coke business at the Warren avenue yard under the name of John Kuschewski.

This bill was filed March 11, 1926, to restrain the defendants, and each of them, from conducting the present ‘John Kuschewski’ or any other coal and coke business under the Kuschewski name within the city of Detroit and a 50-mile radius, on the claim that Otto and Hugo were interested in the Warren avenue yard and the theory of conspiracy by all the defendants to aid Otto and Hugo breach their agreement with plaintiffs, and also on the ground of unfair competition. Plaintiffs had decree as prayed with award of $1,000 damages.

Defendant John Kuschewski knew the conditions of the sale of the Buchanan street yard to plaintiffs. He had known McQueen since his connection with the Mac's Coal Company in December, 1924, knew he was manager of that concern and that it had failed. He testified that he made no inquiries as to McQueen's standing or resources, took no bond or security against loss, did not consult Otto or Hugo, gave McQueen permission to conduct a coal and coke business under his name in consideration of McQueen's furnishing coal to one of his houses, and had no interest in the business. McQueen said he was to furnish coal to two houses and it was worth $500 per year. No written agreement was made. John authorized McQueen to open a bank account in his name and empowered him to draw checks against it. McQueen drew all the checks. A few weeks before the hearing, John told one of the plaintiffs that the business was his own.

When the Mac's Coal Company failed on November 4, 1925, Otto and Hugo impounded its stock of coal. They had gone into the real estate business and had an office with one Speyer a few blocks from the Warren avenue yard, where they kept the books of their corporation and made collections on the old coal accounts. On November 25, 1925, Otto wrote the post office directing that all mail for Kuschewski Bros., Inc., himself, Hugo, Kuschewski Bros., and ‘all mail addressed other than Juschewski Bros. Coal Co.’ be sent to the real estate office. Otto and Hugo testified that they wanted to sell the Warren avenue yard, would not give a lease, rented it to McQueen from day to day at $8 per day, collected the rent each day, did not know he was to use their father's name until he took possession, and they were not interested in the business. McQueen sold the Mac's Coal Company stock of coal and paid the money to Kuschewski Bros., Inc. Before or after McQueen took charge Otto and Hugo moved the corporation books to the Warren avenue yard and, after he began operations, they spent considerable time at the yard, using it as headquarters for collection of the coal bills, and transacting some real estate matters there while still maintaining the other office. McQueen knew that plaintiffs had purchased the coal business of Kuschewski Bros., Inc., and were using the name. It is a fair inference that he knew of the restrictive agreement.

McQueen did not file an assumed name certificate to do business as John Kuschewski until March 30, 1926, after this suit was commenced.

The situation is not opaque. A man with the acumen and standing of John Kuschewski, who had great pride in his reputation, would hardly permit the use of his name, in a day to day business, by a virtual stranger who recently failed in the same vocation at the same place, without retaining any control over operations, without written agreement or security, and subject himself to the risk of serious financial liability and loss of personal prestige, for $500 per year. He might do it in his sons' affairs. Otto and Hugo were interested in maintaining the yard in operation, at least until they could sell. Their conduct and the facts plainly indicate that the yard was reopened under plan and control of Otto and Hugo, whatever may...