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Farmers' Loan & Trust Co. v. Farmers' Loan & Trust Co. of Kansas

21 Abb. N. Cas. 104 Court N. Y. Supreme Court, First District, Chambers; English

Delivered by O’Brien, J.

Contents

Majority

p. 104
FARMERS’ LOAN AND TRUST COMPANY v. FARMERS’ LOAN AND TRUST COMPANY OF KANSAS.
N. Y. Supreme Court, First District, Chambers;
May, 1888.

Headnote

The omission of a junior corporation under the name of the F. L. & T. Co. of Kansas, to use the word “ Kansas ’’ in its advertisements and circulars in a line of business rivaling a senior corporation, well known as the F. L. & T. Co., is an indication of intent to infringe the previously appropriated name of the latter, which will support an injunction.
.It is no objection to the granting of such an injunction, that the defendant is a foreign corporation.
Motion to enjoin defendant from infringement of plaintaff’s corporate name. 0
The facts appear fully in the opinion.
p. 105
Turner, McClure & Rolston, for plaintiff, for the motion.
The courts are unanimous in holding that a corporate .name deserves -the same consideration as a trademark, and in many cases they say plainly that it is a trademark, and will be protected as such (Bell v. Locke, 8 Paige, 75; Taylor v. Carpenter, 11 Id. 292; Millington v. Fox, 3 Mylne & Craig, 338; Partridge v. Menck, 2 Barb. Ch. 101 ).
The right to maintain an action for violation of a trademark or for use of corporate name depends in no way upon the intent with which the act was done, it is enough if •actual violation be shown (Dale v. Smithson, 12 Abb. Pr. 237 ; Millington v. Fox [supra] ; Stephens v. Deconto, 4 Abb. Pr. N. S. 47; Reeves v. Denicke, 12 Abb. Pr. N. S. 92).
In Howard v. Henriques, 3 Sandf. 725 ; McCardel v. Peck, 28 How. Pr. 120 ; Deiz v. Lamb, 6 Robt. 537, the right to use a hotel name was in question, the defendants in ■each case being restrained from using a particular name. See also Woodward v. Lazar, 21 Cal. 448 ; Knott v. Morgan, 2 Keen, 213; Christy v. Murphy, 12 How. Pr. 77 ; Hegeman v. Hegeman, 8 Daly, 1 ; Devlin v. Devlin, 69 N. Y. 212 ; Colman v. Crump, 70 Id. 573; Hier v. Abrhams, 82 Id. 519; McLean v. Fleming, 96 U. S. 245 , as •cases in equity depending upon an appropriation by one person of the reputation of another, sometimes actually fraudulent, sometimes only constructively so, when artificial trademarks are absolutely protected without inquiry into the motives. The same principle applies to corporate names (Rogers Mfg. Co. v. Spurr Mfg. Co., 11 Fed. Rep. 495 ; Newby v. Oregon Central Ry. Co., 1 Deady, 609 ; Celluloid Mfg. Co. v. Cellonite Mfg. Co., 32 Fed. Rep. 94 ; Messerole v. Tynberg, 4 Abb. Pr. N. S. 410).
The following cases show briefly instances in which appropriation by one of a name previously adopted by another has been held to constitute an infringement, and injunction allowed :
p. 106
“ The Wonderful Magazine, New Series, Improved;” as-infringing, “ The Wonderful Magazine ” (Hogg v. Kirby, 8 Vesey, 215).
“ The Old Real John Bull,” as infringing “ The Real-John Bull”' (Edmonds v. Benbow, Seaton [3d ed.], 905).
“ New Series of the Edinburgh Philosophical Journal,” as infringing “ The Edinburgh Philosophical Journal”' (Constable v. Brewster, 3 Ct. of Sess. Cas. (1 Ser.) 215 [new ed.], 152).
“ Minnie Dale,” and “ Minnie, Dear Minnie,” ' as infringing “ Minnie ” (Chappell v. Davidson, 2 K. & J. 123).
“ The United States Police Gazette,” as infringing “ The National Police Gazette” (Matsell v. Flanagan, 2 Abb. Pr. N. S. 459).
“ Irving House,” as infringing “ Irving Hotel ” (Howard v. Henriques, 3 Sandf. 725 ).
“ Conveyance Co.” as infringing “ London Conveyance Co.” (Knott v. Morgan, 2 Keen, 213).
“Cocino” hair oil as infringing “ Cocaine” hair oil (Burnett v. Phalon, 12 Abb. Pr. 186 ).
A fortiori does “ Farmers’ Loan and Trust Company of Kansas” infringe “ The Farmers’ Loan and Trust Company.”
The addition of the words “ of Kansas ” is insufficient to-distinguish defendant from plaintiff; of the use of a word or phrase appropriated as a trademark, not being-justified, although used in connection with different words than as originally used (Hier v. Abrahams, 82 N. Y. 519 ). See also U. S. Merc. Rep. Co. v. U. S. Merc. Rep. and Coll. Assoc., Daily Reg., February 10, 1888.[1]
The following cases in which injunction against using name had been denied are to be distinguished : Snowden v. Noah, Hopk. 347: Bell v. Locke, 8 Paige, 75; Taylor v. Carpenter, 11 Id. 292; Tallcot v. Moore, 6 Hun, 106 ; Amer
p. 107
ican Grocer Publishing Co. v. Grocer Publishing Co., 51 How. Pr. 402 .
Hamilton Wallis (Henry S. White, attorney) for defendant, opposed.
The sole ground upon which an injunction can be granted in this case is whether a corporation of this State by the adoption of a corporate name can preclude corporations in every other part of the world from adopting the same or a similar name. In the first instance-a corporate name, unless attached to some article of merchandise, is not a trademark, but if the use of the name in question comes within the analogy of the law of trademarks there might be some ground to invoke the jurisdiction of the court in this case. What, then, are the grounds upon which infringements of trademarks are enjoined ? They are two : (1.) Injury to the public by leading them -to buy something which they did not intend to buy. (2.) Injury to the owner of the trademark ■ by diversion of his trade-into other channels. Neither of these requirements is fulfilled by the Case at bar. The business of the two corporations are distinct. In all cases where an injunction has-been issued restraining use of corporate name, it has been upon the ground that the corporations were engaged in the-same business, and that therefore the rights of the one must be invaded by the use of its name by the other (Newby v. Oregon Central R. R. Co., 1 Deady, 609 ; Holmes v. Holmes, 37 Cal. 278 ). The basis of the injunction then • being deceit, whether intentional or not, practised upon the community, that ground does not exist here, there having been no deceit1 and no one having been deceived or injured. This case is therefore governed by Meneely v. Meneely, 62 N. Y. 427 , which held that when the only confusion created, is that which results from similarity of names the court will not interfere (Croft v. Day, 7 Beav. 84; Holloway v. Holloway, 13 Id. 209; Clark v. Clark, 25 Barb. 76 ; Faber v. Faber, 49 Id. 357.) And the rules that apply to the names of individuals apply also to corporate names.
p. 108
The injunction asked for would prohibit the defendant, -incorporated under the laws of Kansas, from carrying on its business, and this the court has no power to do, as it would be nullifying an act of the legislature of another ¡State. Plaintiff has mistaken its remedy. If there has been unwarrantable interference with its business, it should ¡seek tor redress in the State of Kansas.

This motion is made for an injunction .enjoining the defendant from the use of the plaintiff’s corporate name upon the following state of facts:

The plaintiff is a well known corporation for more than "fifty years located and carrying on a large business, mostly ■fiduciary, in William street, in the City of New York, as a ‘trust.company. It has a splendid reputation for solvency ■and is probably as well known in this section and throughout the country as any institution in the City of New York. The defendant was incorporated by the State of Kansas in 1885, and its principal office is in the City of Anthony, zSouth Western Kansas. Its business is confined to the sale of" its own securities, called debentures. It is, besides, .authorized by its charter to buy and sell real estate and to loan money. Some two months ago the defendant established an office on Broadway, in this city. It does not ■appear that the plaintiff has ever engaged in the business in which the defendant is engaged, or that the defendant has -ever assumed to engage in a business at all similar to that of the plaintiff, nor can I from the papers find that when the -defendant was incorporated, the name and extensive business ■of the plaintiff were known to its incorporators, or that the name was adopted with the object of depriving the plaintiff •of its business and rights or that it might be mistaken for the plaintiff, or that it is defendant’s intention to use this .name in the transaction of business similar to the business fin- which plaintiff is engaged.

Whatever may be the right of the defendant to have its ■.powers increased, so as to embrace the kind of business, now

p. 109
conducted by the plaintiff, it is evident that at the present time the business of the two corporations are entirely distinct—the one, the plaintiff as a trust company acting as-trustee of estates, of mortgages and other securities, etc.; the other, the defendant, being engaged in the business off selling its own securities, bonds and mortgages and municipal securities of the far West. • The affidavits, however, go-far towards showing that after opening their office for business in this city, that by means of circulars and advertisements issued by the defendant, it was intended to produce-upon the public mind the impression that both corporations-were one and the same. This is shown by the failure to add the word “ Kansas ” in its title to such circulars, cards and advertisements, which omission would have an undoubted" tendency to have ■ persons mistake the defendant for the-plaintiff, and it is therefore clear that the court has the right and should enjoin this manner of using the name-Farmers’ Loan and Trust Co.

The remaining question, as to whether or not a corporation of this State, by being the first to adopt a name of tliischaracter, can preclude corporations in this or any other city of the United States from adopting the same or a similar-name in cases where both corporations are engaged in business in different States, is a much more difficult question.. This difficulty is increased by the apparent conflict in the-decisions as to how far and in what instances the use off corporate names may be enjoined. Although not technically a trademark, the authorities are in favor of holding that a corporate name deserves the same consideration as a trademark, some even going so far as to hold that it is a trademark and will be protected as such. In most of these cases, however, it will be found that the use of a name was connected with some article of merchandise, and was adopted" and used by a manufacturer, merchant or corporation in order to designate the goods that they manufactured or sold and to distinguish them "from those manufactured or sold by others, to the end that they might be known in the market,

p. 110
as liis. Where a person, firm or corporation, therefore, in the same or similar business, endeavors to appropriate the name or the good-will connected therewith, which has been • rendered valuable, the courts have enjoined such use. But it will be noticed that the principle underlying these decisions is based upon two elements—first, the injury to the public by leading them to suppose that the goods of one are the goods of the other; and, second, the injury to the owner of the trademark or name by the diversion of his trade into other channels, by the belief of the public that they are obtaining his goods.

In Colman v. Crump ( 70 N. Y. 573 , 578), Judge Alleií says : “ A party may have a property in—that is, an exclusive right to use—a ‘ name, symbol, figure, letter, form or device,’ to distinguish goods manufactured and sold by him, from those manufactured and sold by others, or to indicate when or by whom or at what manufactory the article to which it is affixed is manufactured.”

In Reeves v. Denicke (12 Abb. Pr. N. Y. 92, 99), which was a case involving the right to use a firm name, the court said: “ Indeed, the general principles which control in cases of trademark are analogous and entirely applicable .to the species of property which is the subject of this action.”

The question as to the riglit.to use names has arisen very frequently in the cases of hotels. In the Irving Hotel case it was held, that the proprietor had the right to the use of this name to the exclusion of other persons in the same city (Howard v. Henriques, 3 Sandf. 725 ).

In McCardel v. Peck ( 28 How. Pr. 120 ,124), the defendants were restrained from the use of the name of the Mc-Ardle House. The court says: “ The use of names and trademarks in business when made valuable, always has been protected by the courts, and any improper appropriation of them without the authority of the owner will' be restrained by injunction.”

In an English case (Levy v. Walker, L. R. 10 Ch. Div. 436, 447), it is said: “ It should never be forgotten in these

p. 111
■cases, that the sole right to restrain anybody from using any name that he likes in the course of ' any business that he chooses to carry on is a right in the nature of a trademark.” ' In Newby v. Oregon Central R. R. Co. (supra), the facts were, the defendant corporation was organized under the general laws of the State of Oregon, for the purpose of constructing and operating a railway. Prior thereto, however, another company had been incorporated under the same name, and by authority of law of the same State. The judge in granting the injunction said : “ The corporate name of a corporation is a trademark, and from the necessity of the thing and from considerations of private justice and public policy, ■deserves the same consideration and protection from a court of equity. Under the law the corporate name is a necessary element of the corporation’s existence. Without it a corporation cannot exist. Any act which produces confusion or uncertainty concerning the name is calculated to injuriously affect the identity and business of the corporation.”

The case of The Celluloid Manufacturing Co. v. The Cellonite Manufacturing Co. (32 Federal Rep. 94), is an authority for the position that in dealing with corporations, an imitation of a name is subject to the same rules of law which apply where the parties are unincorporated firms or companies.

While, therefore, the obligations imposed upon corporations not to use the same name, is similar to the case of individuals or incorporated firms or companies, their right to do business in any manner in which an individual or firm could do, it seems to me, should be governed by the same principles. There can be no real difference in principle between the name of an individual and the name of a corporation, both being persons, and the name the necessary attribute of both. In one case the name may be conferred by parents, assumed by the person or imposed by law. The name of a corporation is adopted by its founders or imposed by the State. The right of each to its name is of the same char

p. 112
acter, and the name of eacli is used for the same purpose,, and the same principle must, therefore, govern both.

It is stated by Rapallo, J., in Meneely v. Meneely, 62 N. Y. 427 , 431: “ Every man has the absolute right to use his-own name in his own business, even though he may thereby interfere with or injure the business of another person bearing the same name, provided he does not resort to any artifice.. - or do any act calculated to mislead the public as to the identity of the establishments, and produce injury to the other beyond that which results from the similarity of names.”

In the case of Croft v. Day (7 Beav. 84), where filename of Day & Martin was enjoined, the Master of the Rolls expressly said : “ My decision does not depend upon any particular or exclusive right the plaintiffs have to use the names-Day & Martin, but upon the fact of the defendant using those names in connection with certain circumstances, and in a manner calculated to mislead the public, and 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.....He has a right to carry on the business of a blacking manufacturer honestly and fairly; he has a right to the use of his own name.”

The cases, of Sykes v. Sykes (3 B. & Cr. C. 541), Holloway v. Holloway (13 Beav. 209), Clark v. Clark ( 25 Barb. 76 ), Faber v. Faber (49 Id. 357), were decided upon the same-principle, namely, that a person cannot make a trademark of his own name and thus obtain a monopoly which will-prevent all others of the same name from using their names in their own business, provided they do not resort to any artifice calculated to mislead the public as to the identity of the establishments or to produce injury to the other beyond' that which results from the similarity of names.

One of the earliest cases, Snowden v. Noah (Hopkins, 347), which was a suit by The Rational Advocate against The Hew York Rational Advocate, another newspaper, for an infringement, an injunction to restrain the use of file-name was denied.

p. 113
In another newspaper case, the question was whether “Democratic-Republican New Era” infringed the name-“New Era;” an injunction was refused (Bell v. Locke, 8 Paige, 75).

In Tallcot v. Moore ( 6 Hun, 106 ), the injunction was? refused.

In the case of The American Grocer Publishing Co. against The Grocer Publishing Co. ( 25 Hun, 398 ), another newspaper case, it was decided that the use of a name would be protected.

This last case and those of Coleman y. Crump ( 70 N. Y. 578 ), Hier v. Abrahams ( 82 N. Y. 521 ), are authorities for the position that it is not necessary to establish guilty.' knowledge or fraudulent intent. “It is sufficient that the? proprietary right of the party and its actual infringement iy shown.”

All the cases cited, as well as all those referred to upon the argument, were decided upon the facts peculiar to each case. It is difficult, if not impossible, to formulate any general principle which will be equally applicable to all or by which all can be rendered consistent or reconcilable. Nor is it necessary, as the conflict between them is apparent only and not real. A name, whether of an individual or corporation, as well as any other mark or symbol, will be protected in a proper case, and that irrespective of whether such name, is an arbitrary one or not, if the other considerations entitling it to such protection arc present. It is evident, on.the; the other hand, that the use of the same name would not be; en joined where the parties were doing a business thereunder.entirely dissimilar and distinct, as for instance, where one? represented a banking business and another a locomotive works. Nor could the first national bank established enjoin, every other bank from using the name “ First National Bank.” Nor could the Mechanics’National Bank of New~ York enjoin the Mechanics’ National Bank of New Jersey. Nor the Fulton Bank of New York, the Fulton Bank of Brooklyn. And yet, if a bank like the. Chemical Bank oE

p. 114
New York, or any other bank which had .acquired in the particular city a valuable interest or proprietary right in the name, the court would not hesitate to enjoin another bank of the same name from, doing business in the same city, to Its detriment and the confusion of the public.

The name “ Loan and Trust Company ” is not an uncomrnion one as applied to certain monetary institutions. And ¡it would seem that the prefix “ Farmers’ ” has been applied do designate companies engaged in similar business in differ•ent States, there being, according to the affidavits, no less «than seven “Farmers’ Loan and Trust Co.’s” in the United ¡States. It is not, therefore, such an arbitrary, and exclusive «designation of a particular corporation (as distinguished tfrom a class), as would entitle it jper se to be protected- from ¡infringement.

The defendant denies any intention of copying the mame, and states that in its organization the existence of the •plaintiff was not once adverted to, and that such name was -chosen solely because it was an appropriate name for a -corporation of this character, whose business was confined to a ‘farming community.

Should the evidence, however, upon the trial demonstrate that the adoption by the defendant was done for the purpose of gaining any advantage from the reputation and ¡business standing established by the plaintiff, or had it with knowledge of plaintiff’s reputation and solvency, procured in the State of Kansas a charter for the purpose of coming to New York and engaging in a similar business, or should the arbitrary character of the name, or such an exclusive .and proprietary interest of plaintiff therein be shown, then >the elements necessary to require the intervention of a' «court of equity- would be present.

The defendant corporation received its franchises from «the Legislature of Kansas, and the effect of granting the Injunction prayed for in this case will be to absolutely prohibit the defendant from performing its functions or do any

p. 115
business whatever, because if can do no business except under its corporate na'me.

I confess that the question here involved is not free from doubt, and therefore, in a case in which the matter in issue is the subject of fair discussion, induces me, in view of the fact that much of the evil complained of can be removed by an injunction restraining the manner of the use of the name pending the trial, to grant the motion to the extent of restraining the defendant pendente lite from using the name -of the - Farmers’ Loan & Trust Company on any pamphlets or written documents or signs, or in any way other than with the words “ of Kansas ” connected therewith as part of its corporate name or title, thus leaving the question as to the permanent injunction to await the result of the trial of the action, when all the facts and arguments can be more fully presented.

Ordered accordingly. No costs.

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