Gifford v. Goulding

27 Misc. 2d 912, 207 N.Y.S.2d 613, 127 U.S.P.Q. (BNA) 468, 1960 N.Y. Misc. LEXIS 2173
CourtNew York Supreme Court
DecidedNovember 22, 1960
StatusPublished

This text of 27 Misc. 2d 912 (Gifford v. Goulding) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gifford v. Goulding, 27 Misc. 2d 912, 207 N.Y.S.2d 613, 127 U.S.P.Q. (BNA) 468, 1960 N.Y. Misc. LEXIS 2173 (N.Y. Super. Ct. 1960).

Opinion

Samuel M. Gold, J.

The defendants move for dismissal of the entire complaint pursuant to section 241 of the Civil Practice Act, for relief with respect to the first and second causes of action pursuant to rules 106 (subd. 4), 103 and 90 of the Rules of Civil Practice, as to the third and fourth causes pursuant to rules 106 (subd. 4) and 103, and as to the fifth cause pursuant to rule 103.

In the first cause of actibn it is alleged that the plaintiff Gifford, a creator, director and producer of animated motion pictures, became associated with and was in charge of a division of a corporation in which the defendants Goulding, Elliott and Graham were the interested parties and whose business was the producing of animated motion pictures under the name ‘1 Gifford Animation ”, The business was thereafter transferred to a corporation organized for that purpose with the name Gifford Animation, Inc., upon the conditions, among others, that it would adopt and use its name and the name of Gifford to capitalize upon and to benefit from the prestige and good will attached to plaintiff’s name, that Gifford would be the president and director in full charge of the corporation so long as he continued as a stockholder, that the defendants Goulding, Elliott and Graham would cause all production work thereafter required by them to be performed by the corporation. Thereafter plaintiff Kim, also a creator, director and producer of animated motion pictures, was engaged by the corporation as a film director and later was [914]*914brought into Gifford Animation, Inc., as a stockholder, director and vice-president in charge of the corporation along with Gifford and the corporation name was then changed to Gifford-Kim Productions, Inc., the defendant.

It is then alleged that by reason of the described activities, plaintiffs attained prominence, are held in high esteem in the industry and that therein the name Gifford means the plaintiff Gifford and the name Kim means the plaintiff Kim and the use of the name Gifford or Kim in connection with any animated motion picture production imports honesty, integrity, originality, artistry and excellence. In like manner, by reason of the services rendered to the corporation, the latter acquired the prestige and good will theretofore possessed by the plaintiffs. The use of plaintiffs’ names in the corporate name and in connection with its business was conditioned upon the performance by the defendants of their agreements with the plaintiffs, that so long as they remained stockholders of the corporation the plaintiffs would be president and vice-president respectively and in full charge of the corporation. The right to the use of their names was not otherwise assigned. It is then alleged that the defendants endeavored in bad faith to exercise that provision of the existing agreements relating to a first offer of sale of stock and, by reason of the refusal of the plaintiffs to yield to unwarranted demands made in bad faith and in breach of the agreements, the defendants did cause the discharge of the plaintiff Gifford, whereupon the plaintiff Kim resigned. The corporation has continued to use the names of the plaintiffs in its corporate name and in connection with its business.

Defendants argue that no cause for violation of civil rights is set forth or, if it is, it is repetitious since the second cause is based on violation of the Civil Eights Law, that unfair competition is not sufficiently set forth since the parties are not engaged -in competing businesses, that there is no allegation that plaintiffs’ names are used by the defendants in any business, that the individual defendants do not use plaintiffs’ names in any business, that each plaintiff in a common cause cannot complain of the alleged wrongful use of the name of the other, and, finally, each plaintiff has a different basis for claimed right of relief in that Gifford was discharged and Kim resigned.

The action is in unfair competition and it is sufficient. It is obvious from the allegations which must be accepted that plaintiffs possessed talents which have been utilized in the industry and have won for them reputation and acceptance. This is an asset and a right which entitles them to protection against dilution (Fisher v. Star Co., 231 N. Y. 414; Metropolitan Opera [915]*915Assn. v. Wagner-Nichols Recorder Corp., 199 Misc. 786). Whether plaintiffs have surrendered any right to object to the use of the corporate name and to obtain relief with respect thereto need not now be determined for the cause is sufficient at least to the extent that it is charged that the corporation is using in its business and without right or consent the individual names of the plaintiffs and is trading upon their reputation. Both plaintiffs had the right to rely, as alleged, upon the continued use of their names only so long as the underlying agreements were performed, the plaintiffs remained stockholders and officers and in full charge of the corporation. Upon the basis of the pleading, plaintiffs may rely upon the contention that violation as to one was violation as to both and since it is alleged that all defendants conspired to produce the breach and to continue to use the names of the plaintiffs, the cause is good against all defendants. Only one cause is set forth and all of the allegations thereof are relevant as permissible background material.

The second cause is based upon claimed violation of the Civil Bights Law. It repeats the allegations of the first cause and alleges further that, without the consent of the plaintiffs, defendants have publicly and knowingly within the State of New York and elsewhere used the names of the plaintiffs for trade purposes and continue to do so despite plaintiffs’ protests. It is urged that the use of the corporate name was expressly authorized and that plaintiffs’ remedy lies in breach of contract. At the same time, it is argued that the allegations upon which the objection of consent is founded are irrelevant and should be eliminated. The numerous allegations of background material supporting the claim of unfair competition are wholly unnecessary to a statement of a cause of action relating solely to an alleged invasion of civil rights. As to that, the allegations charged violation in the use of the names of the plaintiffs and not of the corporation. A single cause is attempted. But it is not made to appear that such use is in connection with the business of any particular person or party. In the restatement of the second cause only those allegations pertaining to a cause for invasion of civil rights should be employed and it should be made clearly to appear which defendants are using plaintiffs’ names and in whose business. The defense of consent is not to be anticipated. For reasons indicated, the second cause is dismissed.

In the third cause, the allegations of the first and second are repeated and it is further alleged that, by reason of the wrongful acts of the defendants, the plaintiffs have been wrongfully deprived of the benefit and rights provided in the agreement set [916]*916forth in the first cause of action and that by reason thereof and of their dismissal and discharge as officers and employees of the corporation, each plaintiff has suffered injury and damage. It is urged that no contract is to be found within the allegations of the complaint and that in any event plaintiff Kim had voluntarily resigned and, finally, that there is no allegation in the complaint sufficient to support the conclusory allegation of damage.

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Related

Fisher v. . Star Co.
132 N.E. 133 (New York Court of Appeals, 1921)
Metropolitan Opera Ass'n, Inc. v. Wagner-Nichols Recorder Corp.
199 Misc. 786 (New York Supreme Court, 1950)

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Bluebook (online)
27 Misc. 2d 912, 207 N.Y.S.2d 613, 127 U.S.P.Q. (BNA) 468, 1960 N.Y. Misc. LEXIS 2173, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gifford-v-goulding-nysupct-1960.