Wilmer v. Thomas
| Decision Date | 17 June 1891 |
| Parties | WILMER v. THOMAS ET AL. |
| Court | Maryland Court of Appeals |
Appeal from circuit court of Baltimore city.
Douglas H. Thomas, Christian Devries, Charles C. Homer, and others as a committee for creditors of the Druid Mills Manufacturing Company, purchased the entire plant at sale by its assignee in insolvency, Skipwith Wilmer. They objected to a confirmation of his report of sale, and the court set it aside. The assignee appeals. Reversed.
Randolph Barton and Skipwith Wilmer, for appellant.
R D. Morrison, H. Munniknuysen, and N. P. Bond for appellees.
The only question presented on this appeal is whether the purchasers of the Druid Mills manufacturing property, at the sale thereof by the trustee, under and by virtue of a deed of assignment made by the manufacturing company for the benefit of creditors, will acquire, with the property purchased by them, the right to the good-will and business of the insolvent corporation, including the brand or trade-mark used by the company to mark the goods manufactured by it before the assignment. By the deed of assignment dated the 12th of December, 1890, the Druid Mills Manufacturing Company, an insolvent corporation, assigned and conveyed to the appellant, as trustee, "all its estate and property, of whatever kind and wherever situated," in trust for the benefit of creditors, with power to the trustee to sell either at public or private sale, and on such terms as might seem best for the interest of the creditors. The trustee advertised the property for sale at public auction, and in the advertisement he described the property as the old-established and valuable cotton-duck mills, at Woodberry, well known as "Druid Mills," containing about 12,000 spindles and 200 looms, in full operation, and adding, after full description of the particulars of the plant, "that the machinery is of the most modern, and is constructed for the manufacture of all numbers, widths, and weights of cotton duck, awnings, stripes, yarns, twines, etc.,--all the well-known 'Druid Mills' brand." The trustee sold the property to the appellees under this advertisement, and according to the foregoing description; and in his amended report of the sale he states that he "offered at public sale the well-known Druid Mills, as then in full operation and a going concern, with all the real and leasehold property, machinery, and plant, together with the good-will and business of the said Druid Mills Manufacturing Company of Baltimore county, subject to the operation and effect of a certain mortgage described in the advertisement of sale; and that he then and there sold the same to Douglas H. Thomas, Christian Devries, and Charles C. Homer, as a committee, representing the creditors of the said company, at and for the sum of $120,000, that being the highest bid." These purchasers, upon the report being made, came into court, and, while admitting the facts stated in the trustee's amended report, objected to the ratification of the sale upon two grounds: (1) That the deed of trust or assignment did not assign or transfer to the trustee the right to sell and convey to the purchasers of the Druid Mills property the exclusive right to continue the business, and to the brand or trade-mark of the company; and (2) that the advertisement of sale did not distinctly state that the brand and trade-mark of the company would be offered for sale. Upon these exceptions, an order pro forma was passed setting aside the sale as reported, and the trustee has appealed.
That the good-will of an established business, as also the brands or the trade-marks used to distinguish and specially denote the product or manufacture of the establishment, are property, and form the subjects of contract and sale, is a principle too well settled to need the citation of authorities for its support. Indeed, it is often the case that a large portion of the intrinsic marketable or assessable value of a manufacturing establishment consists in the good-will maintained by it, and in the brands or trade-marks to which it has acquired an exclusive use, by which to denote the origin and make of its goods when placed upon the market. And so important a contribution to the value of the establishment are these elements or accessories of the business that in the sale or assignment of such manufactory or business establishment, to be continued as formerly, the sale or transfer of such an establishment ordinarily carries with it, by reasonable intendment or implication, the right to such good-will and trade-marks, as incidents to or accessories of the business carried on by the establishment. This would now seem to be settled by a great preponderance of authority, though after a considerable conflict of judicial opinion. This...
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