Lawyers Title Ins. Co. v. Lawyers Title Ins. Corporation

• Decision Date: 16 October 1939
• Docket Number: No. 7329.,7329.
• Citation: 109 F.2d 35
• Parties: LAWYERS TITLE INS. CO. v. LAWYERS TITLE INS. CORPORATION.
• Court: U.S. Court of Appeals — District of Columbia Circuit

109 F.2d 35 (1939)

LAWYERS TITLE INS. CO. v. LAWYERS TITLE INS. CORPORATION.

No. 7329.

United States Court of Appeals for the District of Columbia.

Decided October 16, 1939.

Rehearing Denied November 30, 1939.

Writ of Certiorari Denied April 8, 1940.

Louis M. Denit, Thomas Searing Jackson, and J. Richard Earle all of Washington, D. C., for appellant.

H. Cecil Kilpatrick, of Washington, D. C., and Andrew D. Christian, of Richmond, Va., for appellee.

Before GRONER, Chief Justice, and MILLER and RUTLEDGE, Associate Justices.

Writ of Certiorari Denied April 8, 1940. See ___ U.S. ___, 60 S.Ct. 806, 84 L.Ed. ___.

RUTLEDGE, Associate Justice.

The appeal is from a judgment dismissing the bill after hearing on the merits as to both law and facts. The parties will be designated as they stood below. Plaintiff sought an injunction restraining defendant from using its corporate name for doing the business of insuring real estate titles in the District of Columbia. The corporate names of plaintiff and defendant are identical except for the difference between the words "company" and "corporation".

Plaintiff is a District corporation, organized in 1896 under the name "Lawyers Title and Guaranty Insurance Company". In 1922 the name was changed formally by omitting the words "and Guaranty". From 1896 to 1922 plaintiff conducted its business, principally certification of titles, entirely independently. In the latter year it made a "working agreement" with two other District title companies, previously competitors, the District Title Insurance Company and the Washington Title Insurance Company, as plaintiff's president testified, to reduce operating costs and give customers greater financial responsibility. The three companies undertook to elect identical officers, occupy a single building, pool equipment, including records (title to those then existing was not affected), issue joint certificates of title, contribute specified sums as working capital, and share profits (and losses) in stipulated percentages (40% to plaintiff) after paying all expenses, including salaries. The agreement provided for termination by vote of shareholders owning two-thirds of the capital stock of any one of the companies. A majority of the stock of each corporation now is held by a fourth, the Consolidated Title Company. The contract appears to embody all of the elements essential to constitute a partnership among the constituent companies, effective, if valid, perpetually except at the will of the holding corporation, Consolidated Title Company.

The contract became effective January 1, 1923, and has been carried out continuously since that date in accordance with its terms. The work involved in certifying titles is done on behalf of all the companies by a single staff with a single plant in a single office. The "cooperating" corporations have identical officers (except directors, who interlock to some extent) and identical employees who are "jointly" paid; maintain (since 1922) a single set of records and indices; collect "jointly" all fees for title certificates and premiums for insurance; keep these in a "joint" bank account, from which they pay "joint" expenses and distributive shares of profits. The latter go to the constituent companies, which keep separate bank accounts from which each pays its own dividends and expenses, principally taxes and license fees.

There is no formal "partnership" name, but in doing business with the public the corporate name of each constituent has become merged in either a full combination or some abbreviation of the three corporate names. Whether in the combination or an abbreviation, the name appearing first is that of the District Title Insurance Company. Plaintiff's name appears in second place, between the other two. This order is followed on printed forms of certificates of title, policies, letterheads, etc., and in official signatures which are made by a single "joint" officer. No separate forms for each company appear to exist. The office building signs are: "1413 The District Lawyers Washington Title Insurance Companies". The findings of fact state that plaintiff and its associates are called generally by the public, "The District Title Company", "The District Title Insurance Company", "The District Title Companies", "The District Title Insurance Companies", "The District Lawyers and Washington", or the "D. L. & W.";¹ that plaintiff is not referred to in business circles as "The Lawyers Title Insurance Company", and that there is no evidence that plaintiff ever acquired a reputation under that name alone.²

Prior to 1935, plaintiff's associate, the District Title Insurance Company, qualified to do business in Virginia as a foreign corporation. It does not appear that this business is conducted in any way differently from that done in the District. Presumably, therefore, it is done on behalf of plaintiff pursuant to the "working agreement".

Defendant was incorporated in Virginia in 1925, has its home office in Richmond, and has qualified to do business in seventeen states and in the District. Its business consists exclusively in insurance of titles, not in issuance of certificates. Prior to 1935 it issued policies on property in the District, but only on certificates issued by local title companies, some by plaintiff. Defendant attempted to induce plaintiff to become its agent in the District, but plaintiff declined. Failing to find another satisfactory agent, defendant qualified in the District in 1935, and on June 13, 1938, opened its own office less than a block distant from plaintiff's. It is admitted that qualification and entry by plaintiff's associate in Virginia had some, but not controlling, influence in causing defendant to qualify to do business in the District.

The trial court found that defendant's entrance into the District was "in the process of the natural and logical development of its business", not only for expansion but to give more efficient service to existing customers; that the location of its office was selected, not to divert business unfairly from plaintiff, but because of its nearness to offices of real estate brokers and others having title business; that defendant did not choose its name originally in order to lure business from plaintiff (in fact at that time it had no intention of competing with plaintiff); and that defendant has done all that reasonably could be required of it to prevent confusion of identity with plaintiff.

Evidence sustaining the latter finding shows that on defendant's office door, letterheads, forms, signs, advertising and telephone listings, it has added to the statement of its corporate name distinguishing matter, such as "Home Office — Richmond, Virginia Washington Branch". Similarly distingnishing identification is made orally in answering telephone calls. Distinctive type, color and arrangement, not similar to those used by plaintiff, are employed in signs, letterheads, forms, etc.

The court found further that title certificates and policies are obtained in Washington principally by real estate brokers and lawyers for their clients, and by banks, insurance companies, loan and trust companies and building associations, all of whom are experienced in title matters, will not be misled by the similarity of names, and constitute a discriminating clientele; that there is no evidence disclosing any injury to plaintiff by defendant's conduct; and that there is no reasonable probability that plaintiff will suffer injury on account of confusion of identity with defendant, in view of the dissimilarity in publicity created by defendant.³

Pursuant to these findings, the court denied relief to plaintiff and dismissed the bill on three grounds: (1) that plaintiff has not shown such similarity of names by which it and defendant are known publicly as to deceive plaintiff's customers and divert their business to defendant; (2) that defendant has done all that reasonably could be required to prevent confusion of identities; and (3) that the services in question are rendered to a discriminating clientele. who will not be misled by "any fortuitous similarity" of the corporate names.

We think the findings of fact are sustained by the evidence and that the judgment was right.

The corporate names may be regarded as identical. The stated objects and the enterprises carried on overlap, even in the technical sense, since plaintiff is authorized to issue and to a very limited extent does issue policies of insurance.⁴ Further, although there are important technical differences between insuring titles and certifying them,⁵ the practical effect of extending title insurance is to curtail certification. The businesses are highly competitive and plaintiff seeks to ward off danger threatening its entire operations.

The case involves no deliberate attempt by one competitor to simulate another or crafty scheme for luring away business by deception. Both parties have conducted themselves honorably and with regard for high conceptions of business ethics. Their subjective attitudes, if material,⁶ are not fraudulent or dishonest. The naked question is whether plaintiff has an exclusive right, by virtue of prior appropriation in this jurisdiction, to use the name which each has acquired lawfully and with honest purpose.

The decision below was based on principles applicable in a case presenting issues of unfair competition, in which considerations relating to deception of the public and injury, actual or probable, to plaintiff's business determine the scope of the right and of the remedy applied to protect it.⁷

Plaintiff contends, however, that it has acquired in its name a more absolute right, unqualified by necessity for showing such injury or danger of public confusion. Defendant's right to do business in the District is not, and could not well be, disputed. But if defendant does so, plaintiff asserts, in effect, that it must use a new name, different from that in...