Court Opinion

ID: 6990320
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:23:46.612138+00
Date Added: 2024-06-11T16:09:35.498882
License: Public Domain

Bailey, J. The complainant is a corporation under the laws of this State. In forming its corporate organization it was required by law to select a corporate name, and having selected such name it is entitled to be protected in its use upon the same principle and at least to the same extent that individuals are protected in the use of trade-marks. Holmes, Booth & Hayden v. Holmes, Booth & Atwood Manufacturing Co., 37 Conn. 278: Newby v. Oregon Central R. R. Co., Deady, 609. Considering the complainant’s corporate name, then, merely as its trade-mark, the question arises whether, under the cir. с. imstances alleged in the bill, the complainant is entitled to protection against infringement, or against any of the fraudulent acts alleged in the bill. The bill, of which a substantial epitome is set forth in the foregoing statement, is somewhat inartificially drawn, but it appears with sufficient certainty from its averments that the complainant, in December, 1884, after having existed as an unincorporated association for thirteen years under the name of “ The Merchants’ Detective Association,” became incorporated under that name, and since that time, as well as during said thirteen years, by methods peculiarly its own, has been and is doing a large and lucrative business in the way of collecting debts due to merchants, traders and others carrying on lawful occupations; that in February, 1887, the defendants, with the fraudulent purpose and design of deceiving the complainant’s patrons and the public, and of fraudulently usurping the business and patronage which the complainant was enjoying, formed a new organization under the name of “The Detective Mercantile Agency,” and embarked in the same line of business in which the complainant was engaged; that in prosecution of their fraudulent design, the defendants have not only adopted said name, but after having surreptitiously become acquainted with the complainant’s system and methods and the instrumentalities by which its business was being carried on, adopted the same in carrying on the business of their new organization, and to complete the deception, made use of stationery, as closely as possible resembling that used by the complainant, and issued circulars framed and expressed in the same language as those issued by the complainant, and in all their methods of doing business so closely copied the methods used by the complainant, that business men, using ordinary prudence and caution, were induced to deal with said new organization under the supposition that they were dealing with the complainant; that in further prosecution of their fraudulent designs, the defendants have recently removed the office and place of business of their new organization to the same street, the same side of the street, and within a few doors of the place where the complainant’s office and place of business is situated; that as a result the complainant’s patrons and customers have been and are being deceived and the complainant’s business has been and is being greatly injured. It is doubtless the rules that generic terms or mere descriptive words are not ordinarily susceptible of appropriation by an individual as a trade-mark, such words being the common property of the public. Thompson v. Winchester, 19 Pick. 214; Fulton v. Sellers, 4 Brewster, 42; Chavin v. Walker, L. R., 5 Cli. Div. 850; Dunbar v. Glenn, 42 Wis. 118; Gilman v. Hunnewell, 122 Mass. 139; Candee v. Deere, 54 Ill. 439. It may be doubted whether the foregoing rule should be held to apply to the name of a corporation when treated as a trade-mark. Under the law the corporate name is a necessary element in the existence of the corporation, and the necessary consequence of the wrongful appropriation of such name is to injure the business and rights of the corporation by destroying or confusing its identity. The corporate name is, therefore, a trade-mark from the necessity of the case, and there is consequently much reason for holding that a corporation should be protected in the use of its name as a trade-mark, irrespective of whether the words composing such name are generic or descriptive or not. See Newby v. Oregon Central R. R. Co., swpra. But waiving the point last suggested, and applying to the complainant’s name only those rules which are applicable to ordinary trade-marks, it must be conceded that, while the general rule debars a party from protection in the use of descriptive words as a trade-mark, the tendency of the more recent decisions seems to be to hold that the fact that the words are descriptive will not prevent the issuance of an injunction where there is conclusive evidence of a fraudulent design and sufficient reason to presume that the public will be misled. In Knott v. Morgan, 3 Keen, 215, this view seems to have been first adopted. In that case the London Conveyance Company, having their omnibuses painted and their servants clothed in a special and distinctive manner, the defendant began' to run omnibuses similarly painted, with servants similarly clothed. An injunction having been issued restraining the defendant from imitating the plaintiffs’ line of omnibuses, the court said: 68It is not to be said that the plaintiffs have any exclusive right to the words 6 Conveyance Company,’ or 8 London Conveyance Company,’ or any other words, but they have a right to call upon this court to restrain the defendant from fraudulently using precisely the same words and devices which they have taken for the purpose of distinguishing their property and thereby depriving them of the fair profits of their business by attracting custom on false representation that carriages, really the defendant’s, belong to and are under the management of the plaintiffs.” In Wollam v. Ratcliff, 1 H. & M. 259, Vice-Chancellor Wood, commenting on the foregoing case, said that there “the words ‘Conveyance Company,’ the green omnibus, etc., were held sufficient together to entitle the plaintiffs to an injunction. The defendant might have had those words painted on a yellow omnibus without objection, and so of the other resemblances; the wrong lay in their accumulation, not in any one of them alone.” In Croft v. Day, 7 Beavan, 84, the plaintiffs, being the executors of the surviving partner of the firm of “Day & Martin,” at 97 High Holburn, London, the blacking manufacturers, who sold their blacking in bottles labeled with the name and address of the firm, the defendant obtained the authority of a man named Martin to use his name, and began to sell blacking in bottles labeled with the name and address of “Day & Martin, 90J Holburn Hill,” in imitation of the genuine labels. On motion of the plaintiffs an injunction was granted to restrain the defendant from using labels or show-cards calculated to produce deception. Lord Langdale, in rendering the decision, reiterated the principle laid down in Knott v. Morgan, and concluded his opinion as follows: “My decision does not depend on any peculiar or exclusive right the plaintiffs have to use the name of Day & Martin, but upon the fact of the defendant’s using those names in connection with certain circumstances arid in a manner calculated to mislead the public, and to enable the defendant to obtain, at the expense of Day’s estate, a benefit for himself, to which he is not in fair and honest dealing entitled.” In Lee v. Halley, L. R. 5 Ch. App. Cas. 155, the complainants being coal merchants carrying on business at 22 Pall Mall, London, as “ The Guinea Coal Company,” the defendant, their former manager, set up for himself in Beaufort Buildings, Strand, as “ The Pall Mall Guinea Coal Company,” and afterward removed to 46 Pall Mall. An injunction having been granted restraining the defendant from trading in that name in Pall Mall, it was held by the Court .of Appeal in Chancery that the injunction was properly issued. In announcing the decision Lord Justice Giffard said: “I quite agree that they (the plaintiffs) have no property in the name, but the principle upon which the cases on this subject proceed is, not that there is property in the word, but that it is a fraud on a person who has an established trade and carries it on under a given name, that some other person should assume the same name, or the same name, with a slight alteration, in such a way as to induce persons to deal with him in the belief that they are dealing with the person who has given a reputation to the name. * * * I think this injunction has been properly granted upon the well known principles of this court, which are applicable to all cases of this description, viz., that it is a fraud on the part of a defendant to set up business under such a designation as is calculated to lead and does lead other people to suppose that his business is the business of another person.” . In McLean v. Fleming, 96 U. S. 245, it is held that it is not necessary to entitle a party to an injunction that a specific trade-mark has been infringed, but that it is sufficient that the court is satisfied that there was an intent on the part of the defendant to palm off his goods as the goods of the complainant. See also Williams v. Johnson, 2 Bosw. 1. In this case the allegations of the bill being admitted by the demurrer, the fraudulent design alleged as well as the fraudulent means employed by the defendants for its accomplishment, stand admitted of record. The fraud being thus conceded, we think it clear", in the light of the authorities above cited, that the complainant has shown itself entitled to relief. The complainant has a right to protection against a usurpation' of its patronage, its business, its credit and reputation by false, fraudulent and improper means. Honest and open competition is not forbidden by law, and furnishes no ground for complaint. But a simulation of the name, character, system and methods of another, for the purpose of deceiving the public and leading persons dealing with the usurper to suppose that they are really dealing with the party whose rights are thus usurped, constitutes an offense against the rules of honesty and fair dealing which should invoke the aid of a court of equity. We think the demurrer should be overruled and the defendants required to answer the bill, and if, upon final hearing the allegations of fraud a:e sustained, the court should apply such remedy as will protect the complainant against a continuation of the fraud. The decree will be reversed and the cause remanded with directions to the court below to overrule the demurrer, with leave to the defendants to answer, or for further proceedings. Decree reversed.