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EASTERN-COLUMBIA, Inc., v. WALDMAN.
This is an appeal by plaintiff from a judgment in its favor after trial before the court without a jury in an unfair competition action in which plaintiff sought to restrain defendant from the use of the trade name, Western-Columbia.
So far as material here these are the essential facts:
Since August 17, 1939, plaintiff has been doing business in Los Angeles and other cities on the Pacific Coast under the name of ‘Eastern-Columbia, Inc.’ The business consisted in conducting a general department store selling furniture, household furnishings, rugs, upholstery, clothing and wearing apparel.
On April 14, 1944, defendant filed a certificate of business stating that he was doing an upholstering and interior decorating business under the name of ‘Western Columbia Decorators.’ On November 22, 1944, he filed a new certificate of business, dropping the word ‘Decorators' and stating that he was doing business as Western Columbia. In this new certificate he stated the nature of his business as follows:
‘Furniture, uph. and mfg. general furn. and appliances, household access. and draperies.’
He thereafter caused to be painted on the window of his store the words ‘Western Columbia.’ Some time later he had a large sign installed on his store front with the words ‘Western Columbia Fine Furniture.’ The first two words were in large printing and the last two words in small printing.
The trial court found in favor of plaintiff's contention that the use by defendant of ‘Western Columbia’ as a trade name was unfair, misleading and confusing in character in view of plaintiff's long continued use of the trade name ‘Eastern-Columbia.’ It further found that defendant had used the trade name ‘Western Columbia’ with the express design and purpose of defrauding plaintiff, its customers and the public, and also with the express design and purpose of appropriating plaintiff's good will, business and reputation.
The court then enjoined defendant from using the words ‘Western Columbia’ alone as the name or designation of his business, and from using the words ‘Western Columbia’ jointly with any other word or words unless the same should be of the same size type or lettering or of the same design or style.
This is the sole question presented for our determination:
In view of the foregoing facts should the trial court have permanently enjoined defendant from using the words ‘Western Columbia’ even in conjunction with other words?
This question must be answered in the negative. It is the general rule that where a word has acquired a secondary meaning the first appropriator cannot as a general rule prevent another from using such words in conjunction with other words. The first user is limited to a decree enjoining the second user from using the word or words in a descriptive way so as to pass off his goods as the goods of the complainant. (Academy of Motion Pictures, etc., v. Benson, 15 Cal.2d 685, 691, 104 P.2d 650; Modesto Creamery v. Stanislaus, etc., Co., 168 Cal. 289, 294, 142 P. 845; Dodge Stationery Co. v. Dodge, 145 Cal. 380, 392 et seq., 78 P. 879. See also, 1944, 150 A.L.R. 1129.)
In Academy of Motion Pictures, etc., v. Benson, supra [15 Cal.2d 685, 104 P. 652], the court said: ‘In all this class of cases where the word, name, or other mark or device is primarily publici juris the right to relief depends upon the proof.’ If the plaintiff proves that the words have been so exclusively identified with his business as to have acquired a secondary meaning in his business, he is entitled to protection against another's deceptive use. The court in the same passage declares the rule that ‘use by others may not be absolutely prevented, but only the misleading manner of using it will be enjoined, leaving defendant at liberty to use it in all honest ways not deceptive.’
Now, in view of all the facts, namely, the nature and extent of plaintiff's business, the time and expense consumed in building up the good will which the phrase ‘Eastern-Columbia’ now enjoys, the difficulty or facility to be encountered in using the words ‘Western Columbia’ to prevent its misleading the average consumer from acting upon the assumption that the phrase means ‘Eastern-Columbia’—if it is practicable so to limit the injunction as to shear defendant's use of the phrase of all of its deceptive implications, there is no reason why the appellate court should set aside the decision of the chancellor below. In Weinstock, etc., v. Marks, 109 Cal. 529, 42 P. 142, 30 L.R.A. 182, 50 Am.St.Rep. 57, in which defendant had not only appropriated a name practically identical with that used by plaintiff but also had constructed a front with the same architectural style, the injunction compelled defendant to place signs inside and outside of his establishment to show that its proprietor was not the same as that of plaintiff's store next door. In Standard Oil Co. of New Mexico v. Standard Oil Co. of California, 10 Cir., 56 F.2d 973, 975, the injunction restrained defendant from using ‘any * * * name containing the words ‘Standard,’ ‘Standard Oil,’ or any similar name, or any variation thereof * * * so * * * ‘as to lead to uncertainty and confusion.’' In L. E. Waterman Co. v. Modern Pen Co., 235 U.S. 88, 35 S.Ct. 91, 92, 59 L.Ed. 142, defendant was required to use Arthur A. Waterman instead of A. A. Waterman and to follow it with the phrase ‘not connected with the L. E. Waterman Co.’ in conspicuous letters. In Herring-Hall-Marvin Safe Co. v. Hall's Safe Co., 208 U.S. 554, 28 S.Ct. 350, 52 L.Ed. 616, defendant was forbidden to use ‘Hall’ on its safes unless accompanied by information that defendant was not the original Hall's Safe and Lock Company or its successor, or that the article was not the product of the original company. See note, 150 A.L.R. 1130.
From the foregoing it appears that the court below was not without judicial guidance in applying a remedy to the facts proved. Whether it should have decreed an absolute injunction or one restricting the prohibition to a denial of the use of the phrase ‘Western Columbia’ except where it is emphasized that such words must not be understood to refer to appellant's places of business was a question necessarily involving the court's judicial discretion. In each of the authorities cited by appellant as authorizing an absolute injunction (Hainque v. Cyclops Iron Works, 136 Cal. 351, 68 P. 1014; Jaynes v. Weickman, 55 Cal.App. 557, 203 P. 828; Benioff v. Benioff, 64 Cal.App. 745, 222 P. 835; Rosenthal v. Brasley-Krieger Shoe Co., 19 Cal.App.2d 257, 64 P.2d 1109), the trial court had found that not only was the appropriated name practically identical with that used as a trade name by the plaintiff, but in each instance the court had the advantage of all the proof and was thereby enabled to apply an intelligent discretion in determining the limitations of the injunction.
It appears that the trial judge herein had in mind prohibiting defendant from repeating the fraudulent practices theretofore committed. In order to express more definitely the court's apparent intention to accomplish this result the judgment should be modified.
It is therefore ordered that the judgment be modified as follows: Strike from the third paragraph the words ‘unless such other word or words shall be of the same size type or lettering, and of the same design or style, as the words ‘Western Columbia’ and substitute in lieu thereof ‘unless such words be accompanied by a word or words which will clearly indicate to any patron or consumer that defendant is not plaintiff’.
As so modified the judgment is affirmed.
I dissent. The injunction approved by the majority opinion is a mirage. The law demands realty. My disagreement with the opinion is that it has ignored well established and undisputed rules of the law of unfair competition that are applicable to the case, it has not given proper consideration to the facts as they appear in the findings of the trial court, and it has abandoned the theory of protection to the originator of a trade name and to the public that has been established by a long line of authorities. My objection to the original judgment and to the judgment as modified by the prevailing opinion is not directed to what is restrained but to what is sanctioned and permitted. The judgment does not go far enough in protecting appellant from unfair and unlawful competition and in preserving its good will, and it does not sufficiently safeguard the public from the fraud that the court expressly found to have been committed by respondent in adopting the trade name under which he has been transacting business.
The extent and character of the relief to be afforded in an action to restrain the piracy of a trade name must be determined with the aim (1) of protecting the originator of the name from injury occasioned to his business, good will, and reputation by its unauthorized use, and (2) of shielding the public from the fraud and deceit practiced by the offending party by acts that falsely lead the members of the public to believe that they are dealing with or purchasing merchandise manufactured by the first user of the name. Both of these elements of the foundation for a more efficacious injunction emerge from the findings in this action.
Since sufficient facts are not related in the majority opinion to furnish an understanding of the issues before the trial court and presented to this court by the appeal it is necessary to set them forth here. Among other things the court found:
(a) That appellant is and it and its predecessors in interest have been engaged in the retail merchandising business, selling a varied assortment of articles, including ‘household furniture, radios, records, household appliances, washing machines, men's and women's wearing apparel and kindred articles of merchandise, and in the upholstering and recovering of furniture, for upward of fifty years, under the distinctive trade names of ‘Eastern,’ ‘Columbia,’ and ‘Eastern-Columbia”; that under said names appellant has acquired a good will, and that the public generally throughout the County of Los Angeles and State of California have come to know and identify appellant as ‘Eastern’ or ‘Eastern Columbia’ and that it enjoys a reputation for honesty and integrity in its business.
(b) That in May, 1944, respondent commenced the operation of a retail store in Los Angeles under the name of Western Columbia Decorators, engaging in the business of recovering and upholstering furniture and decorating; that in November of the same year respondent abandoned the word ‘Decorators' and commenced the use of the words ‘Western Columbia’ alone, under which he has continued to advertise and hold himself out as engaging in the business of ‘selling furniture, radios, records, household accessories, draperies and appliances.’ (This is the same line of merchandising in which appellant has been and is engaged.)
(c) ‘That the use and appropriation by defendant of said trade name Western Columbia in connection with his said business has been and is and will continue to be misleading, confusing and deceptive to the public generally; that it has, does and will, lead the public into believing that in dealing with defendant at his said place of business it is and will be dealing with plaintiff and that plaintiff is conducting a branch store at defendant's said place of business; that the use and appropriation of said trade name by defendant in connection with his said business constitutes unfair competition and already has and will continue to result in irreparable damage to plaintiff.’
(d) ‘That defendant commenced the use and appropriation of said trade name Western Columbia and continues to use and appropriate the same with the express design and purpose of defrauding plaintiff, its customers and patrons, and the public generally, and with the express design and purpose of appropriating for his use and benefit the good will and business and reputation of the plaintiff and to divert the same from the plaintiff to the defendant; that the appropriation and use by the defendant of the word ‘Columbia’ in combination with the word ‘Western’ as his trade name is similar and identical to the use of the word ‘Columbia’ in combination with the word ‘Eastern’; that in visual appearance and sound the appropriation and use of the combination of words ‘Western Columbia’ suggests the words ‘Eastern Columbia’ and constitutes unfair competition and that the same is inequitable and unjust and constitutes a fraud upon the public and will cause injury to the plaintiff's business and good will.'
The judgment enjoins respondent from doing two things: (1) ‘from using, in any manner, the words Western Columbia alone as the name or designation of his business;’ (2) ‘from using, in any manner, the words Western Columbia as the name or designation of his business, jointly or in conjunction with any other word or words, unless such other word or words shall be of the same size type or lettering, and of the same design or style, as the words Western Columbia.’ The majority opinion orders the emphasized portion stricken and the insertion of a condition in different language, but the amendment does not sufficiently protect either appellant or the public.
The findings furnish cogent reasons for the further enlargement of the injunction to the extent of preventing respondent from pretending to be what he is not, and from defrauding appellant and deceiving the public with a name appropriated for the purpose of decoying unwary and unsuspecting purchasers.
There are certain well established rules of law that must be taken into consideration in the decision of cases involving the alleged appropriation of a previously adopted and used corporate or trade name under which its user has acquired a reputation for honesty and fair dealing. These principles are ignored in the majority opinion.
A corporate name is in the nature of a property right, and the exclusive privilege of using it will be protected by the courts. Standard Oil Co. of New Mexico v. Standard Oil Co. of California, 10 Cir., 56 F.2d 973, 977; American Steel Foundries v. Robertson, 269 U.S. 372, 380, 46 S.Ct. 160, 70 L.Ed. 317, 321; Iowa Auto Market v. Auto Market & Exchange, 197 Iowa 420, 197 N.W. 321, 323. A trade name that has become of a pecuniary value or a business advantage likewise becomes a property right, and it, too, is entitled to protection from infringement. Standard Oil Co. of New York v. Standard Oil Co. of Maine, D.C.Me., 38 F.2d 677, 679; Peninsular Chemical Co. v. Levinson, 6 Cir., 247 F. 658, 661. An injunction will lie to prevent not only the use by another of the identical corporate name, but the use of any name which, by reason of similarity, will tend to create confusion and enable the later user to obtain the business of the first. Iowa Auto Market v. Auto Market & Exchange, supra.
Two cases are referred to in the majority opinion in which family names of members of the companies have been permitted, by reason of existing circumstances in each case, to be used by corporations that were in competition with other corporations that had previously appropriated and used the same family name in the same kind of business, provided the second user conveyed the information to the public that it was not connected with the first user of the name. See L. E. Waterman Co. v. Modern Pen Co., 235 U.S. 88, 35 S.Ct. 91, 59 L.Ed. 142; Herring-Hall-Marvin Safe Co. v. Hall's Safe Co., 208 U.S. 554, 28 S.Ct. 350, 52 L.Ed. 616. The name chosen by respondent does not possess the virtue of being a family name but was chosen by him, as found by the trial court, ‘with the express design and purpose of defrauding plaintiff, its customers and patrons, and the public generally,’ and of appropriating to his own use and benefit the good will, business and reputation of plaintiff and of diverting the same from plaintiff to himself. The majority opinion, by its amendment of the judgment, follows the line of the family name cases.
Uniformity as well as accuracy is desirable in judicial opinions. The majority of this court have not always been of the opinion that an innocuous injunction, such as they have annexed to the judgment, is a sufficient protection against fraud when the defendant is using, not a fictitious name, but his own. In the opinion in Hoyt Heater Co. v. Hoyt, 68 Cal.App.2d 523, 157 P.2d 657, 659, which was joined in by the signers of the majority opinion in this action, the trial court had restrained the defendant from operating and advertising his business under his own name. In affirming the judgment this court said that ‘one must use his own name honestly and not as a means of pirating the good will and reputation of a business rival; and where he cannot use his own name without inevitably representing his goods as those of another he may be enjoined from using his name in connection with his business,’ and ‘that defendant could not use his own name in advertising his business without confusing and misleading the public to the detriment of plaintiff.’ The trial court found in the instant case that the use of the name ‘Western Columbia’ is ‘misleading, confusing and deceptive to the public,’ and ‘constitutes a fraud on the public.’
No authorities are cited in the opinion or in respondent's brief, and none have been called to my attention otherwise, except the family name cases referred to, that sanction the use of a previously appropriated name with an accompanying explanation that the business is not connected with that of the original user of the name. That such a theory of protection, which in fact safeguards but little, if any, of the good will and property right of the senior user of a name, has not been followed is exemplified by numerous cases in which the employment of a family name has been enjoined, only a few of which are hereinafter cited.
The inhibition on the usurpation of an established name is extended to the use of one's own name if such use is calculated to cause confusion or to deceive. A corporation is not entitled to use in its name or for its products the name of an individual, though the latter is interested in the corporation and consents to the use of his name, if the name has been selected in order to aid the corporation in competing with an established concern engaged in a similar business and if the name is calculated and intended to mislead the public in respect to the origin of the goods, and has the effect of promoting unfair competition. Dodge Stationery Co. v. Dodge, 145 Cal. 380, 388–390, 78 P. 879; De Nobili Cigar Co. v. Nobile Cigar Co., 1 Cir., 56 F.2d 324, 328; Vick Medicine Co. v. Vick Chemical Co., 5 Cir., 11 F.2d 33, 35; R. W. Rogers Co. v. Wm. Rogers Mfg. Co., 2 Cir., 70 F. 1017, 1018; G. B. McVay & Son Seed Co., Inc., v. McVay Seed & Floral Co., Inc., 201 Ala. 644, 79 So. 116, 118; L. Martin Co. v. L. Martin & Wilckes Co., 75 N.J.Eq. 39, 71 A. 409, 414; David E. Foutz Co. v. S. A. Foutz Stock Food Co., C.C.Md., 163 F. 408, 411; Nestor Johnson Mfg. Co. v. Alfred Johnson Skate Co., 313 Ill. 106, 144 N.E. 787, 791.
The extent to which the courts will go in safeguarding the property right in a name and in shielding it from despoliation by a rival user, even though not engaged in a competitive business, whether it be a corporate name or a trade name and whether used by a corporation or by an individual, is illustrated by cases in which injunctions have been issued to restrain a newcomer from appropriating an established name in connection with an article wholly dissimilar to that manufactured or sold by the original user and which does not come into competition with the latter's merchandise. Injunctions are not limited to cases in which there is actual market competition. It is sufficient if the unfair practices of one will injure the other and if the reputation of the first user of the name for goods of a high quality and standard will be damaged by the representation of the second, that the first user produces merchandise that it does not in fact produce.
In the following examples the first and second users are indicated by numerals in connection with the goods which they respectively produced: (1) Food products, (2) oleomargarine, an item not produced nor intended to be produced by the first user: Del Monte Special Food Co. v. California Packing Corp., 9 Cir., 34 F.2d 774, 775. (1) Automobiles, (2) automobile tires: Akron-Overland Tire Co. v. Willys-Overland Co., 3 Cir., 273 F. 674. (1) Automobiles and aeroplanes, (2) radio tubes: Wall v. Rolls-Royce of America, Inc., 3 Cir., 4 F.2d 333, 334. (1) Electrical apparatus, switchboards, pumps and small internal combustion engines, (2) spark plugs: Duro Co. v. Duro Co., 3 Cir., 27 F.2d 339. (1) Hardware, locks and keys, (2) flashlights: Yale Electric Corp. v. Robertson, 2 Cir., 26 F.2d 972, 974. (1) Drug store supplies but not cigars, (2) cigars: Peninsular Chemical Co. v. Levinson, 6 Cir., 247 F. 658, 661. (1) Publisher of style magazine, (2) manufacturer of hats: Vogue Co. v. Thompson-Hudson Co., 6 Cir., 300 F. 509, 512. (1) Self-rising flour, (2) syrups and sugar creams: Aunt Jemima Mills Co. v. Rigney & Co., 2 Cir., 247 F. 407, 409, L.R.A.1918C, 1039. (1) Electric motors, hair driers, drink mixers, etc., (2) washing machines: Wisconsin Electric Co. v. Dumore Co., 6 Cir., 35 F.2d 555, 557. (1) Diamonds, jewelry and silverware, (2) production and distribution of motion pictures: Tiffany & Co. v. Tiffany Productions, Inc., 147 Misc. 679, 264 N.Y.S. 459, affirmed 237 App.Div. 801, 260 N.Y.S. 821, affirmed 262 N.Y. 482, 188 N.E. 30. The same rule applies when the businesses of the parties are not directly competitive, although both are connected with the same industry, and where the defendant does not deprive the plaintiff of business that the latter would otherwise receive. Academy of Motion Pictures, etc., v. Benson, 15 Cal.2d 685, 688, 692, 104 P.2d 650.
In some of the cases hereinbefore cited the originator of the name had registered it as a trade-mark and that fact and the similarity of the names, either a corporate name or a trade name, are interwoven in the discussion. However, the presence or absence of a trademark is not the turning point of the cases. If the name has acquired a secondary meaning such registration is not a necessary condition to the granting of an injunction restraining the use of the name by the newcomer. Nestor Johnson Mfg. Co. v. Alfred Johnson Skate Co., 313 Ill. 106, 144 N.E. 787, 789; Herring-Hall-Marvin Safe Co. v. Hall's Safe Co., 208 U.S. 554, 559, 28 S.Ct. 350, 52 L.Ed. 616, 620.
The rules deduced from the decisions may be thus summed up: (1) If the resemblance of the names is such that purchasers who are acting with reasonable caution will be misled, or if the similarity is calculated to deceive the ordinary buyer under ordinary conditions, the junior user will be enjoined from continuing the use of the name. (2) An established corporate name or trade name is a property right and will be protected against infringement. (3) Registration as a trade-mark is not necessary. (4) The use of one's own name may be prohibited if so used as to confuse or deceive. (5) The names need not be identical, but if so similar as to cause confusion or deception the newcomer will be enjoined. (6) The products identified by the names may be wholly dissimilar and need not be competitive.
The fictitious name adopted by respondent has been assumed by choice. There were thousands of other names at his disposal under which he could have established his own reputation and good will without attempting, by means of a sham and fraudulent device, to palm off his wares as those of appellant. A corporate name identifies not only the corporation but its business and the goods it sells and the services it performs. Similarity, not identity, is the usual recourse when one party seeks to benefit himself by the good name of another. The court found that similarity was the means adopted by respondent for deception and that the name was selected ‘with the express design and purpose of defrauding plaintiff, its customers and patrons, and the public generally.’
The important fact is that the business in which respondent is engaged, to wit, that of selling furniture, radios, records, household accessories, draperies and appliances, and recovering and upholstering furniture, is identical with that in which appellant and its predecessors have been engaged for many years and which appellant has carried on under the name of ‘Eastern Columbia’ since 1939, five years before respondent adopted ‘Western Columbia.’ Appellant's name has been used so long and has been so exclusively identified with its business that it has acquired a secondary meaning, that is to say it indicates appellant's business and merchandise and nothing else. Greater protection from the deceptive use of a similar name by another person or corporation should be accorded than is given in the judgment approved by the prevailing opinion.
Without violating the injunction now in force respondent may establish a store immediately adjacent to appellant's place of business and use the name ‘Western Columbia Upholstery,’ ‘Western Columbia Department Store,’ ‘Western Columbia Furniture,’ or any other words in connection with ‘Western Columbia’ that will indicate to the public that they are purchasing the same character of merchandise as that sold by appellant, provided only that words be added indicating that ‘defendant is not plaintiff.’ The deception lies in the similarity of ‘Eastern Columbia’ and ‘Western Columbia,’ and in the identity of the type of goods dealt in by the parties, the vice of which is not eliminated by the required additional words on the store window and in advertisements. It is common knowledge that the name attached to a business is the catchword and that customers will not tarry to read the explanatory statement. Notwithstanding the finding of the trial court that respondent's use of ‘Western Columbia’ as his trade name is and has been ‘misleading, confusing and deceptive to the public generally,’ and that it will lead the public into believing that ‘in dealing with defendant at his said place of business it is and will be dealing with plaintiff,’ the effect of the judgment as modified is to allow respondent to continue in his deception.
The majority decision evades the plain duty of an appellate court to correct an error of the trial court whether the judgment enjoins too little or the relief granted is excessive. A court of equity must exercise its power and perform its full duty in arriving at a solution of the questions presented, and to the end that complete justice be done it should either enlarge or abridge the relief awarded by the trial court to the extent warranted by the facts. The order modifying the judgment does not expand the injunction sufficiently to give the protection to appellant and to the public that is required by the facts and the applicable law.
This court has the benefit not only of the findings but of a transcript of the evidence that sustains them and that clearly demonstrates the fraudulent purpose of respondent in adopting his trade name. This court therefore is in the same position as the trial court to apply discretion in determining the terms of the injunction warranted by the law and the facts.
The majority opinion declares, erroneously, that it is the general rule that where a word has acquired a secondary meaning the first appropriator cannot prevent another from using such word in conjunction with other words, and that the relief to which the first user is entitled is limited to enjoining the second user from employing the word or words in a descriptive way so as to pass off his goods as those of the complainant. This statement is in complete disaccord with the principles repeatedly declared in the decisions to which reference has been hereinbefore made.
That the purported ‘general rule’ stated by the majority is not a rule is demonstrated by the cases which I have cited wherein it is announced as virtually a unanimously approved precept that the senior user of a name is entitled to an injunction restraining the junior user from appropriating the same word or words whether the parties are engaged in the same kind of business or in noncompetitive pursuits.
The sterility of the amendment to the judgment is shown by the absence of authorities supporting or suggesting such an indulgent injunction. The text of the opinion is not sustained by the three cases cited in its support: (1) In Academy of Motion Picture, etc., v. Benson, 15 Cal.2d 685, 104 P.2d 650, Mr. Justice Shenk, speaking for the court, points out that the business of the parties was not directly competitive although both were connected with the motion picture industry, and that by the use of the name adopted by the defendant the latter did not take from the plaintiff and draw to herself any business which the plaintiff otherwise would receive; nevertheless, said the court, the plaintiff was entitled to have the defendant enjoined ‘from any deceptive use of words which in the public mind will confuse the plaintiff's and the defendant's businesses.’ At page 688 of 15 Cal.2d, at page 652 of 104 P.2d. The court further said that it was not necessary that the parties be in competitive businesses but it was enough if the names, although not identical, were sufficiently similar to cause confusion and injury. At page 692 of 15 Cal.2d, at page 652 of 104 P.2d. Contrasting the facts in that case with those in the instant action, the businesses of the parties here are ‘directly competitive’ and respondent takes ‘from the plaintiff and draws to [himself] business which the plaintiff otherwise would receive.’ In the Academy case the court declared that the defendant should be enjoined from ‘any deceptive use of words' that would confuse the public, but such approved relief is denied to appellant here. (2) The case of Dodge Stationery Co. v. Dodge, 145 Cal. 380, 78 P. 879, 882, comes within the group of cases relating to the incorporation of an individual's name in the name of a corporation. The court said that Dodge could not confer the right to use his name upon the corporation for the purpose of enabling it to engage in a business that had been conducted by another corporation under a similar name; that the incorporators of the second company had no right ‘to fraudulently adopt a name similar to plaintiff's name for the purpose of palming off the business to be conducted by the new corporation as plaintiff's business, and thus invade the rights of the prior corporation;’ that the court should take into consideration the fact that the business conducted by the defendant corporation was the same as that conducted by the plaintiff and that the court had a right to restrain the defendant from using a name so similar to plaintiff's name as to mislead the public into believing that the defendant's business was the same establishment as that which had been maintained by the plaintiff under that name. At pages 388–390 of 145 Cal., at page 882 of 78 P. (3) There is nothing in the case of Modesto Creamery v. Stanislaus Creamery Co., 168 Cal. 289, 142 P. 845, that supports the text of the majority opinion. That was an action to restrain unfair competition in which an injunction was sustained restraining the defendants from imitating a label consisting of the word ‘Modesto’ in connection with a symbol or device on butter wrappers. The restraint went not to the use of the word alone but to its use with a symbol in such manner as to deceive the public into purchasing the defendant's product in the belief that the plaintiff had produced it.
The injury to appellant by the infringement on its name lies not only in the financial loss occasioned by reason of sales that may be made by respondent to persons who believe that they are dealing with appellant, but in the representation that the merchandise sold or services performed by respondent are sold or performed by appellant when in fact the latter has no control over them. Its reputation for fair and honest dealing is thus in jeopardy, since respondent is indifferent to the maintenance of appellant's good name and is at liberty to sell goods and services of a quality inferior to those that the public is accustomed to procure from appellant.
Although the findings were all in favor of appellant the judgment as modified permits respondent to continue the unfair competition that gave rise to the action, provided only that he uses words indicating that he is not the plaintiff, which gives but a soupcon of protection.
This is not a case of innocent or unintentional trespass on appellant's good will. It was a deliberate and premediated act on the part of respondent and the court found that it was done for a fraudulent purpose, was inequitable and unjust, and constituted a fraud on the public. No equities rest on respondent's side of the case.
A judgment should be explicit and certain and should so delimit the respective rights of the parties that future litigation and construction will be unnecessary. In this particular the judgment in the form approved by the majority is deficient. If respondent should use the words ‘Western Columbia’ in connection with other words he is required to notify the public that he is not the plaintiff, but the manner of giving such notification is not specified. The protective feature of the judgment of the trial court that any other words shall be of the same size, style and design of lettering is omitted. The explanatory words may be so diminutive as to pass unnoticed by the casual observer, and need not be ‘in equally large and conspicuous letters' as was required in the Waterman Pen case (L. E. Waterman Co. v. Modern Pen Co., 235 U.S. 88, 93, 35 S.Ct. 91, 59 L.Ed. 142, 145), or in letters of the same size and character, as prescribed by the trial court.
In Weinstock, Lubin & Co. v. Marks, 109 Cal. 529, at page 539, 42 P. 142, at page 145, 30 L.R.A. 182, 50 Am.St.Rep. 57, the court said: ‘The fundamental principle underlying this entire branch of the law is that no man has the right to sell his goods as the goods of a rival trader,’ and (at page 541, of 109 Cal., at page 146 of 42 P.): ‘Equity will not concern itself about the means by which fraud is done. It is the results arising from the means—it is the fraud itself—with which it deals.’
Appellant is entitled to a judgment restraining the invasion of its property right in its name and the impairment of its good name and good will, and one that will prevent the foisting of respondent's merchandise on the public in a manner calculated and intended to deceive.
The judgment should be modified by adding a provision restraining respondent from using the words ‘Western Columbia’ in conjunction with any other word or words on or about any establishment in which merchandise is sold or offered or advertised for sale similar to or in competition with the merchandise dealt in by appellant, and from using said words in connection with or in advertising any business in competition with appellant's business, or in any manner calculated to cause purchasers to believe that they are dealing with appellant.
McCOMB, Justice.
MOORE, P. J., concurs.
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Docket No: Civ. 15625.
Decided: December 30, 1946
Court: District Court of Appeal, Second District, Division 2, California.
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