275 N.W. 324 | Neb. | 1937
This is a suit in equity, in which the plaintiff seeks to enjoin the defendant from using its corporate name, claiming the use thereof constitutes unfair competition. The trial court, by its decree upon the merits, denied the injunction, and the plaintiff presents the record here for review.
The pleadings are so involved we can only epitomize them. The plaintiff asserts that it is a corporation organized under the laws of the state of Delaware, licensed to transact the business of a small loan and finance company in Nebraska, under the name of Personal Finance Company, of Lincoln, and is engaged in such business at Lincoln ; that it began business on June 15, 1931; that on the 6th day of June, 1935, the defendant was incorporated under the laws of the state of Nebraska to carry on a similar business under the corporate name of Personal Loan Service; that one Joseph J. Hynes had been active manager of plaintiff’s business until the incorporation of the defendant, at which time he left plaintiff’s employ and organized the defendant corporation for the purpose of carrying on a finance business, also at Lincoln, in competition with the plaintiff; that the plaintiff’s business had been built up because of its reputation for honesty and fair dealing; that the defendant Hynes, during this period, was its chief managing officer; that the plaintiff’s name had thus become a valuable trade-name; that the said Hynes
The defendant, after traversing the general allegations of the petition, admits that it is incorporated' under the name Personal Loan Service and is doing business as such. It avers as an affirmative defense that the secretary of state has issued, a permit to the defendant to use such trade-name.
From the evidence it appears that the plaintiff began business in Lincoln in 1931, spent approximately $200 a month for advertising; that it made about 1,200 loans every year; that one Joseph J. Hynes, the secretary-treasurer of the defendant, was employed by the plaintiff as its managing officer in June, 1932, and continued in such employment about three years; that he was assisted by one Fern Beardsley as cashier; that in 1935 Hynes left the employ of the plaintiff voluntarily, and with one Waller organized the defendant company; that shortly after the organization of the defendant company the cashier, Fern Beardsley, volun
The stationery adopted by defendant at the commencement of its business bore striking similarity to that previously used by the plaintiff.
The question for decision here is whether the manner in which the defendant was conducting its business under its corporate name amounts to unfair competition. The courts say that unfair competition means any conduct in a trade or business whereby one party, by deceptive means, transacts his business with the public in such a manner as to
While rival tradesmen may lawfully compete for the patronage of the public, they have no right, by either imitating devices, or unfair means, to beguile prospective customers into dealing with them under the erroneous be
Courts are quite unanimous in declaring that descriptive terms or generic words are not susceptible of exclusive appropriation by any one, but may be used by all the world in an honestly descriptive or nondescriptive manner. This rule rests upon the theory that every one should have the right to properly describe his goods or business, and should be able to use all terms necessary or appropriate for that purpose. It has also been said that corporate names made up solely of generic or descriptive terms, ordinarily cannot be exclusively appropriated. Amoskeag Mfg. Co. v. Trainer, 101 U. S. 51, 25 L. Ed. 993.
There seems to be one well-recognized exception to the general rule. The courts hold that, even though the words used may be descriptive or generic in their nature, if by their use, either singly or in combination, one person intends to avail himself of another’s reputation, and is enabled to transact his business as that of another, it may become unlawful. In such cases intent or calculation to accomplish the result must be established. American Wine Co. v. Kohlman, 158 Fed. 830. In the case just cited the names of plaintiff and defendant were identical, and the court held, notwithstanding such identity, the plaintiff would not be entitled to enjoin their use unless he established a specific intent on the part of the defendant to transact its business as the business of the plaintiff.
Generic words whose primary meaning is merely descriptive of the business to which they are applied, or are such as are in common use for that purpose, or such as to convey facts applicable with equal truth and right to others, cannot be exclusively appropriated as a trade-name. As a matter of law, no one is entitled to the exclusive use of the descriptive adjectives of the language. Iowa Auto Market v. Auto Market & Exchange, 197 Ia. 420, 197 N. W. 321.
The law being abhorrent of monopolies, courts will not, except where unfair competition is clearly established, hold that an individual or corporation has acquired such a property right in the use of a word, or combination of words, that it can exclude all others from the use of such words or combinations, bearing some similarity in import but dissimilar in meaning.
Complaint is made that the trial court found that the permit to transact business issued to the defendant by the secretary of state operates in the nature of res adjudicata. While it appears that the trial court made no such positive finding, we agree that such language should not have been used. Courts are creatures of the judicial department of government, constituted for the purpose of reaching conclusions of both law and fact as to all questions justiciable. The judicial department need not recognize a finding of fact made by an officer of the executive department as binding upon it. The issuance of the permit by the secretary of state was purely a ministerial act. The findings of fact made by an officer of the executive department cannot be held to be binding or conclusive upon the courts so as to bring it within the rule of res adjudicata.
After making a de novo investigation of all the evidence presented by the record, we think the proper inference to be drawn therefrom is that the defendant, by adopting its
Reversed.