174 A. 3 | Pa. Super. Ct. | 1934
Argued March 15, 1934. The defendant has appealed from a decree of the court below sustaining the principal averments of a bill filed by John H. Gates, trading as John H. Gates Coal Company, and issuing an injunction, the effect of which was to require Gates Coal Company, Inc., a Pennsylvania corporation, to change its name.
As the findings of fact by the chancellor are sustained by competent evidence, and as there is but one assignment of error as to findings of fact, and that not material to the question involved, we will state the facts as found. John H. Gates for twenty-two years had been actively engaged in conducting a retail coal business in Dauphin County with an office in Harrisburg. Until 1921 he was in partnership with his father, and thereafter was associated with his father's legal representatives until 1924 when he acquired the interest of the estate of his father. Since that time *160 he has been the sole owner of the business and has traded under the name "John H. Gates Coal Company," and since November, 1918, that name has been registered under the Fictitious Name Act of 1917. He has used a trademark, "Gates Clean Coal." J. Warren Gates, a brother of the plaintiff, was employed in this business until 1924 when he embarked in the business of selling coal at wholesale in Pennsylvania and four or five other states. In November, 1931, J. Warren Gates became one of the incorporators of the "Gates Coal Company, Inc.," being the principal stockholder and the owner of ninety-eight per cent of the stock. Since the incorporation, he has followed the same line of business at the same place. Only a small proportion, two per cent, of his sales were for performance in the County of Dauphin. This corporation has not engaged in the retail coal business "and is not in competition with plaintiff's business," but by the terms of its charter is authorized to engage in a retail business. The plaintiff has not suffered any financial loss as a result of the organization of the defendant company and did not learn of its incorporation until after the charter was granted.
It is a well settled rule that no one shall, by imitation or unfair device, induce the public to believe that the goods he offers for sale are the goods of another and thereby appropriate to himself the value of a reputation which his rival has acquired for his own merchandise. This prohibition against unfair competition has extended to the use of a rival's packages, names, insignia, or other distinctive title or mark: 26 R.C.L. 875. "There are two classes of cases involving judicial interference with the use of names, first, where the intent is to get an unfair and fraudulent share of another's business, and second, where the effect of defendant's action, irrespective of his intent, is to produce confusion in the public mind and consequent *161
loss to the complainant. In both cases the courts of equity administer relief without regard to the existence of a technical trademark": Amer. Clay Mfg. Co. v. Amer. Clay Mfg. Co.,
The rule just stated is, however, frequently modified by an equally well settled principle giving one the benefit of the use of his own name. "Every man has an 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 contrivance for the purpose of producing the impression that the establishments are identical, or do anything calculated to mislead. Where the only confusion created is that which results from the similarity of the names the courts will not interfere. A person cannot make a trademark of his own name, and thus obtain a monopoly of it which will debar all other persons of the same name from using their own names in their own business": Meneely v. Meneely,
There remains for consideration the right of an incorporator to use his own name as the whole or part of a corporate name. In the case of Howe Scale Co. v. Wyckoff, Seamans Benedict,
The case of White v. Trowbridge,
A leading case that questions the doctrine that the right to use one's own name in business, notwithstanding the prior use of that name by others in a similar business, extends to a corporation of which he is promoter and member is one cited by the appellee and the court below, Chas. S. Higgins Co. v. Higgins Soap Co.,
In the case of Amer. Clay Mfg. Co. v. Amer. Clay Mfg. Co., supra, the Supreme Court recognized two grounds for awarding relief in cases of this general nature; to wit, intent to get an unfair and fraudulent share of another's business, and where there was not an evil intent but there was produced confusion in the public mind and consequent loss to the competitor. A Pennsylvania corporation sought to prevent a corporation organized under the laws of another state from using the name, American Clay Manufacturing Company, and there was not involved a question of the right to use a family name, but rather a use of a previously appropriated artificial title. In other cases where the confusion and consequent loss to a competitor have been relied upon as grounds for relief, there was present an element of fraud and the second ground was resorted to as a makeweight rather than as an exclusive basis for relief. If the Higgins case is authority for the proposition that the same rights to use a family name in an unincorporated business do not extend to a corporation where the name in question is that of one of the corporators and promoters, it is directly contrary to our own cases of Seligman v. Fenton, supra, and White v. Trowbridge, supra.
Here the plaintiff's business was almost exclusively retail in and around the city of Harrisburg, while the business of the defendant was wholesale and but two per cent of his business was carried on in Dauphin County. The court found as a fact that the plaintiff had suffered no pecuniary loss and relied on the inconvenience in telephone and mail communications as a sole basis for its decree. *165
It is conceded by the defendant that some confusion has arisen by the use of the word "Gates," and it is suggested that a change or addition should be made to the name that would otherwise distinguish it. Both parties are engaged in the coal business, and "Coal" is certainly a proper part of the title of the business of each. They are likewise both entitled to use the word "Gates." In any title of which "Gates" was a part, there would be the same confusion as now exists. John H. Gates and J. Warren Gates were sons of the father who had established the business and had both been reared in it and were entitled to all benefits therefrom, so long as they did not resort to artifice to obtain an unfair share of the trade or mislead the public. They are not competitors, no financial loss has been suffered by the plaintiff, and under the circumstances mere inconvenience was not, in our opinion, sufficient to warrant the interference of a court of equity to require the defendant to change its corporate name. Fair dealing would suggest to the parties concerned that they should each endeavor, not only for their own individual interests, but in the interest of the other to so conduct the business that confusion should be reduced to a minimum, but there is not here ground for equitable relief.
Judgment of the lower court is reversed, and the case is remitted to the court below with directions to dismiss the bill at costs of appellee.