Armington v. Palmer

• Decision Date: 28 December 1898
• Citation: 42 A. 308,21 R.I. 109
• Parties: ARMINGTON v. PALMER et al. SIMS v. SAME.
• Court: Rhode Island Supreme Court

42 A. 308

21 R.I. 109

ARMINGTON

v. PALMER et al.

SIMS

v. SAME.

Supreme Court of Rhode Island.

Dec. 28, 1898.

Two bills, one by Pardon Armington, and the other by Gardiner C. Sims, against Julius Palmer and others. Decree for complainants.

Archibald Matteson and Amasa M. Eaton, for complainants.

Where a trader has taken a substantial part of another's trade-mark or trade-name, the burden of proving that purchasers would not be deceived rests upon the former. Orr v. Johnston, 13 Ch. Div. 434, 40 Law T. (N. S.) 307; Ford v. Foster, 7 Ch. App. 611; Manufacturing Co. v. Wilson, 2 Ch. Div. 434, reversed in 3 App. Cas. 376. A corporation cannot imitate the trade-name of another, although using in good faith a name of one of its own stockholders. William Rogers Mfg. Co. v. R. W. Rogers Co., 66 Fed. 56; Id., 17 C. C. A. 576, 70 Fed. 1017; William Rogers Mfg. Co. v. Rogers & Spurr Mfg. Co., 11 Fed. 495. No individual partnership or corporation can use its own name with the intention or result of injuring another or imposing on the public. Sykes v. Sykes, 3 Barn. & C. 541; Croft v. Day, 7 Beav. 84; Holloway v. Holloway, 13 Beav. 209; Clark v. Clark, 25 Barb. 76; Howe v. Machine Co., 50 Barb. 236; De Youngs v. Jung (Com. Pl.) 27 N. Y. Supp. 370. Where a patent has expired, any one has a right to make articles based upon the ideas of the patent, and to advertise himself as making the articles protected by the patent. Manufacturing Co. v. Shakespear, 39 Law J. Ch. 36; Cheavin v. Walker, 5 Ch. Div. 850; Linoleum Mfg. Co. v. Nairn, 7 Ch. Div. 834; Manufacturing Co. v. Stanage, 6 Fed. 279; Manufacturing Co. v. Riley, 11 Fed. 706; Brill v. Manufacturing Co., 41 Ohio St. 127; Coats v. Thread Co., 149 U. S. 562, 13 Sup. Ct 966. Though a person, the patent having expired, can advertise himself as making the heretofore protected articles, such as "Maclellan saddle," "Corliss engine," etc., no maker of Corliss engines, except Corliss himself or his authorized successor, can hold himself out as Corliss. Manufacturing Co. v. Wilson, 3 App. Cas. 376. See, also, Massam v. Food Co., 14 Ch. Div. 748, at pages 760, 761, by Bramwell, L. J. Every one has a right to the exclusive use of his own name in the honest pursuit of his own business. Reeves v. Denicke, 12 Abb. Prac. (N. S.) 92; Meneely v. Meneely, 62 N. Y. 427; McLean v. Fleming. 96 U. S. 245-253; Johnston v. Orr, 7 App. Cas. 219; Browne, Trade-Marks (3d Ed.) § 508. To prevent the use of complainant's name in business, neither injury to the complainant nor actual fraud is necessary to entitle him to relief. Davis v. Kendall, 2 R. I. 566; Glenny v. Smith, 2 Drew. & S. 476; Holmes, Booth & Haydens v. Holmes, Booth & Atwood Mfg. Co., 37 Conn. 278; Britannia Co. v. Parker, 39 Conn. 450; Hookham v. Pottage, 8 Ch. App. 91; Le Page Co. v. Russia Cement Co., 2 C. C. A. 555, 51 Fed. 941; Saunders v. Assurance Co. [1894] 1 Ch. 537. Ignorance of complainant's rights and absence of intent to defraud on part of respondent are immaterial. Coffeen v. Brunton, 4 McLean, 516, Fed. Cas. No. 2,946; Davis v. Kendall, 2 R. I. 566; Peterson v. Humphrey, 4 Abb. Prac. 394; Dale v. Smithson, 12 Abb. Prac. 237; Cartier v. Carlisle, 31 Beav. 292. Equity will restrain the wrongdoer by injunction, on the ground of protection of complainant in the exercise of a legal right, the prevention of irreparable mischief, the suppression of fraud, or the misleading of the public. Croft v. Day, 7 Beav. 84; Manufacturing Co. v. Spear, 2 Sandf. 599; Glenny v. Smith, 2 Drew. & S. 476; Holmes, Booth & Haydens v. Holmes, Booth & Atwood Mfg. Co., 37 Conn. 278; Pom. Eq. Jur. (2d Ed.) § 1345; Cohen v. Wilkinson, 1 Macn. & G. 481; London, B. & S. C. R. Co. v. London & S. W. R. Co., 4 De Gex & J. 362; Kernaghan v. Williams, L. R. 6 Eq. 228; Pickering v. Stephenson, L. R. 14 Eq. 322; Lord Auckland v. Board, 7 Ch. App. 597; Cannon v. Trask, L. R. 20 Eq. 669; Tomkinson v. Railroad Co., 35 Ch. Div. 675; Croft v. Day, 7 Beav. 84; Manufacturing Co. v. Spear, 2 Sandf. 599; Holloway v. Holloway, 13 Beav. 209; Wotherspoon v. Currie, L. R. 5 H. L. 508; Thompson v. Montgomery, 41 Ch. Div. 35; Cement Co. v. Le Page, 147 Mass. 206, 17 N. E. 304; Chemical Co. v. Meyer, 139 U. S. 540, 11 Sup. Ct. 625; Pillsbury v. Mills Co., 12 C. C. A. 432, 64 Fed. 841; Thread Co. v. Armitage, 67 Fed. 896: Klotz v. Hecht. 73 Fed. 822: Publishing Co. v. Dobinson, 72 Fed. 603. The principle involved is that no one, by assuming another man's name, shall be allowed to deprive that other of the gain or fame to which he is fairly entitled. Knott v. Morgan, 2 Keen, 213; Croft v. Day, 7 Beav. 84; Howard v. Henriques, 3 Sandf. 725; Marsh v. Billings, 7 Cush. 322; Christy v. Murphy, 12 How. Prac. 77; Colton v. Thomas, 2 Brewst. 308; Meyer v. Medicine Co., 7 C. C. A. 558, 58 Fed. 884; Chemical Co. v. Meyer, 139 U. S. 540, 11 Sup. Ct. 625; Coats v. Thread Co., 149 U. S. 562, 13 Sup. Ct. 966; Holloway v. Holloway, 13 Beav. 209; Wotherspoon v. Currie, L. R. 5 H. L. 508; Radde v. Norman, L. R. 14 Eq. 348; Hirst v. Denham, Id. 542; Hookham v. Pottage, 8 Ch. App. 91; Manufacturing Co. v. Wilson, 2 Ch. Div. 434; Id., 3 App. Cas. 376; Siegert v. Findlater, 7 Ch. Div. 801; Braham v. Beachim, Id. 848; Metzler v. Wood, 8 Ch. Div. 606; Orr v. Johnston, 13 Ch. Div. 434; Johnston v. Orr, 7 App. Cas. 219; McLean v. Fleming, 96 U. S. 245; Somerville v. Schembri, 12 App. Cas. 453; Celluloid Mfg. Co. v. Cellonite Mfg. Co., 32 Fed. 94; Thompson v. Montgomery, 41 Ch. Div. 35; Lawrence Mfg. Co. v. Tennessee Mfg. Co., 138 U. S. 537, 11 Sup. Ct. 396; Chadwick v. Covell, 151 Mass. 190, 23 N. E. 1068; Salt Co. v. Burnap, 67 Fed. 534, affirmed 20 C. C. A. 27, 73 Fed. 818; Range Co. v. Kiechle, 76 Fed. 758.

Richard B. Comstock sad Rathbone Gardner, for respondents.

STINESS, J. These bills set out that the complainants were formerly partners, under the name of Armington & Sims, in the manufacture of high-speed engines, which were protected by patents. In 1882 they procured an act of incorporation from the general assembly of this state, as the Armington & Sims Company, and upon organization they conveyed to the corporation all the assets of the partnership, including the patents and good will. In 1883 another act of incorporation was procured for the Armington & Sims Engine Company, to which the former corporation made a similar conveyance. The latter corporation went on in business until August, 1896, when, becoming seriously involved, an agreement of six parts was entered into between the Armington & Sims Engine Company, a committee of the creditors of said corporation, creditors of the said corporation who were not holders of its stock, creditors of the corporation who were holders of stock, holders of a majority of the stock of the corporation, and Armington and Sims as individuals. The indebtedness of the corporation was extended for the term of three years; the sum of $35,000 was advanced by certain creditors for small bills and a working capital; the control of the business was given to the creditors' committee, to whom a majority of the stock of the corporation was transferred; and they were to sell the property to pay its indebtedness, upon request of a majority of the creditors other than the stockholders of the company. It was found to be impossible to carry on the business in that way, and upon request, as aforesaid, the property was sold at auction to the respondent Scott, who, with the respondents Palmer and Bushnell, organized, under the general laws of this state, a new corporation, with the name Armington & Sims Company. A meeting of the Armington & Sims Engine Company was called to ratify and confirm the use of the name "Armington & Sims" in the name of the new corporation, and at said meeting, by a viva voce vote, and against the written protest of the complainant Sims, a resolution granting to the respondents the right to use the name "Armington & Sims Company" as the name of their corporation was declared to be passed, said Armington not being present. The respondents, under this name, are engaged in business to sell "Armington & Sims engines," as "Armington & Sims Company, Successors to Armington & Sims Engine Company."

The complainants, individually and as stockholders in the last-named company, claim that this is a wrongful and injurious use of their names, against which they pray for an injunction restraining the use of such corporate name and for other relief. The respondents demur to the bills, upon the ground that a suit for such an injunction cannot be maintained by private parties against a corporation organized under the laws of this state, but that suit must be brought by or in behalf of the state; and also that no facts are set out which entitle the complainants to relief.

Upon the first ground of demurrer, the question is whether a private party can maintain a bill against a corporation for the wrongful assumption of its name. The respondents rely upon Rice v. Bank, 120 Mass. 300; Boston Rubber-Shoe Co. v. Boston Rubber Co., 149 Mass. 436, 21 N. E. 875; American Order of Scottish Clans v. Merrill, 151 Mass. 558, 24 N. E. 918; and Paulino v. Association, 18 R. I. 165, 26 Atl. 36. The first of these cases was an information quo warranto, to exclude the respondents from exercising the franchise of being a corporation. The court held that such a bill must be filed by the state, and not by private parties. With this doctrine we need not disagree. The second case was a petition for leave to file an information quo warranto, and to restrain the respondent from doing business under the name of the Boston Rubber Company, claiming that this was distinct from the franchise to be a corporation. The statutes of Massachusetts of 1870 provided that the name assumed in the agreement of association should not be changed but by act of the legislature, and also that the agreement was to be submitted to a commissioner of corporations for his approval. The court held that, as...