Appeal from the Order of the Court of Common Pleas, Allegheny County, Civil Division, at No. GD 87-11177.
Meghan F. Wise, Pittsburgh, for appellants.
Bernard J. Sweer, Pittsburgh, for Barent, appellee.
Harvey A. Miller, Jr., Pittsburgh, for Threlfall, appellee.
Brosky, Johnson*fn* and Melinson, JJ. Johnson, J., did not participate in the disposition of this case.
[ 378 Pa. Super. Page 399]
This is an appeal from the order of December 2, 1987, which granted appellees' preliminary objections, and dismissed appellants' complaint without leave to amend.
Appellants are Sadye Ress and Sanford Ress, the widow and son, respectively, of the late Bernard Ress. For forty years, Bernard Ress owned and operated a restaurant supply and equipment business in the Pittsburgh area, known as the Bernard Ress Company. On December 31, 1971, Ress made an agreement with three long-time employees, Esther Barent, Bernard Zvirman, and Edward Threlfall, three of four appellees herein. The agreement transferred to these appellees all of the inventory and stock in trade of Ress's business, as well as all obligations and liabilities associated with it, for the continuation of the business by appellees' new corporation, the Bernard Ress Company, Inc.
[ 378 Pa. Super. Page 400]
With respect to the trade name "Bernard Ress Company", however, the agreement of sale contained the following restrictive covenant upon its use:
6. Buyer may use the name "Bernard Ress Company" as the name of any restaurant, bar supply and kitchen equipment business that it may hereafter conduct; provided, however, that Buyer may not transfer or assign this right to any other party and that in the event that at any time after the date of this Agreement ESTHER BARENT, BERNARD ZVIRMAN, or EDWARD THRELFALL, JR., either individually or collectively, do not own at least 51% of the then issued and outstanding capital stock of Buyer, Buyer shall immediately cease using the name Bernard Ress Company or any similar name unless Buyer shall have secured Seller's permission for such continued use. (Emphasis supplied.)
Ress died in 1983, and named his widow, Sadye, as his personal representative. Shortly after Ress's death, appellants Sadye and Sanford Ress learned that appellees Barent, Zvirman, and Threlfall had transferred the assets of their corporation, the Bernard Ress Company, Inc., to a new corporation, the B.J. Ress Company, Inc., in which they no longer owned 51% of the outstanding stock. Appellants also learned that the new corporation was continuing to use the trade name "Bernard Ress Company".
On May 8, 1987, counsel for appellants wrote to the B.J. Ress Company, Inc., demanding that it immediately cease the use of the "Bernard Ress Company" trade name. That demand was ignored, and, on June 26, 1987, appellants filed a complaint against Barent, Zvirman, Threlfall, and the B.J. Ress Company, Inc. (the fourth appellee herein), requesting declaratory and injunctive relief based on the use of the trade name "Bernard Ress Company" in alleged violation of the restrictive covenant contained within the original agreement of sale. All four appellees filed preliminary objections, in the nature of a demurrer, arguing: (1) that the restrictive covenant was not intended to survive the death of Bernard Ress, and that any cause of action pursuant to
[ 378 Pa. Super. Page 401]
the covenant was thereby precluded; and (2) that appellants had no capacity to sue under the facts alleged. By order of December 2, 1987, the trial court sustained the preliminary objections of all appellees, without opinion, and dismissed appellants' complaint without leave to amend. This timely appeal followed.
Appellants now contend that the trial court erred in dismissing their complaint, and raise the following four questions: (1) whether a contract provision restricting the use of a trade name is enforceable after the death of one of the parties to the contract; (2) whether the personal representative of the deceased owner of a trade name has standing to sue to enjoin the unlawful use of the trade name; (3) whether the heirs of the owner of a trade name have standing to sue to enjoin the unlawful use of the trade name; ...