Baltimore Bedding Corp. v. Moses

• Decision Date: 04 November 1943
• Docket Number: 18.
• Parties: BALTIMORE BEDDING CORPORATION v. MOSES et al.
• Court: Maryland Court of Appeals

34 A.2d 338

182 Md. 229, 59 U.S.P.Q. 405

BALTIMORE BEDDING CORPORATION v. MOSES et al.

No. 18.

Court of Appeals of Maryland

November 4, 1943

Appeal from Circuit Court No. 2 of Baltimore City; George A. Solter Judge.

Suit by Daniel J. Moses and another, copartners, trading as Baltimore Spring Bed Company, against the Baltimore Bedding Corporation, to restrain defendant from using its corporate name in unfair competition with plaintiffs. From a decree for plaintiffs, defendant appeals.

Affirmed.

Abram C. Joseph, of Baltimore (Daniel C. Joseph and Samuel J. Friedman, both of Baltimore, on the brief), for appellant.

Leonard Weinberg and George L. Clarke, both of Baltimore (Weinberg & Green, of Baltimore, on the brief), for appellees.

Before SLOAN, C.J., and DELAPLAINE, COLLINS, MARBURY, GRASON MELVIN, ADAMS, and BAILEY, JJ.

MELVIN Judge.

The bill of complaint in this case was filed by the appellees Daniel J. Moses and Raymond W. Taylor, co-partners, trading as Baltimore Spring Bed Company, against Baltimore Bedding Corporation, appellant, charging the latter with unfair competition in the use of its corporate name, and seeking an injunction against such use. The defendant answered the bill in due course and after a hearing in open Court the Chancellor granted the prayer of the bill and issued an injunction in these words: 'That a writ of injunction be issued from this Court perpetually enjoining and restraining the Defendant, Baltimore Bedding Corporation, its agents servants and employees, from the use by the said Defendant of the name 'Baltimore Bedding Corporation' in connection with the advertising for sale of mattresses or other bedding materials, or for renovating the same, or in soliciting or obtaining orders for sale or renovation of such mattresses or bedding materials on price lists or form orders, or other printed or written matter, except in such manner as to prevent the public from believing that the goods and services of the defendant are those of Daniel J. Moses and Raymond W. Taylor, co-partners trading as Baltimore Spring Bed Company. And such form of disclaimer as may be adopted by said defendant in compliance with this decree is hereby required to show clearly and amply the said absence of connection with complainants and their business.' It is from this decree that the present appeal is taken.

The essential facts of the case are practically undisputed. Appellees are co-partners, trading as Baltimore Spring Bed Company, with their principal office in Baltimore City, and for over twenty-five years have been engaged in the bedding business under that trade name. Their products are sold at wholesale to jobbers and retailers, principally throughout Maryland and adjacent territory, orders being received from their salesmen as well as by mail and telephone.

According to both parties to the case, the term 'bedding' is that generally used in the trade and covers 'practically everything', that is to say, mattresses, springs, cots, couches, qualits, cushions, and also the bed itself. Besides manufacturing and selling these products, the appellees' business includes repairing and renovating them for their customers, and also, to a minor degree, in acting as distributor for bedding goods of other manufactures, not located in Baltimore. All, however, are advertised as coming from one commercial source--the appellees.

Since the beginning of their operations over twenty-five years ago, appellees have extensively publicized their trade name 'Baltimore Spring Bed Company', built up a large patronage thereunder, and have established good will and a reputation for fair dealing and excellence of products. The present worth of the firm is $200,000, and for the year 1941 it did a business of 'close to $400,000.'

Appellant was incorporated under the laws of Maryland in February, 1942, with its principal office in Baltimore City, and with the name of Ralph Pheterson being given as the resident agent. The business of the corporation was to be that of manufacturing, renovating and selling mattresses and bedding in Baltimore City and elsewhere. According to Pheterson, the corporation was originally set up to do a wholesale business. His associates at first, he testified, were Leonard L. Eisenberg, who represented himself to Pheterson to be a lawyer, and one Moe Snyder, both of whom were employees of the Comfort Spring Company located in Baltimore. Eisenberg was a salesman or foreman for that Company, and, inferentially from the testimony, was familiar with the names and standing of those already engaged in the bedding business in Baltimore. The only money that was put in the business to start with was about $2,300, of which Eisenberg put up about $2,000, and Snyder $300. Pheterson put in no money but contributed 'services and knowledge and machinery.' Eisenberg was made president and Pheterson became 'production manager.'

After the incorporation on February 2, 1942, operations were held up by the Maryland State Health Department 'for some time', during which interval appellees, through their counsel, wrote a letter to appellant under date of February 19, 1942, stating: 'We have noted the recent incorporation of the Baltimore Bedding Corporation, and it is obvious that the use of this name by the corporation will result in considerable confusion with the business operated by our clients. Mr. Moses and Mr. Taylor have been conducting their business in Baltimore City for a number of years and have established a valuable trade name in the Baltimore Spring Bed Company. We must, therefore, insist that you cease to use the name Baltimore Bedding Corporation or we shall be forced to take the necessary action to protect our clients' interests.'

This letter was receive by Eisenberg, who threw it in the wastebasket, according to Pheterson. When asked 'how much advertising had you done up to that time' (the receipt of the letter), Pheterson's reply was 'I wouldn't know.' Continuing the testimony:

'Q. You wouldn't know? A. No sir, it wasn't in my part.

'Q. Had it done $50. of advertising? A. I wouldn't know.

'Q. It had not done any business up to that time, had it? A. I wouldn't know.

'Q. Didn't you just tell his Honor that for the first few weeks you didn't do any business because the Health Department wouldn't let you? A. Yes. But you know all that. Why ask it again, I wonder?

'Q. Having got that notice and request from us, what did you do about it? A. You heard that too.

'Q. You did nothing about it, is that it? A. No, sir.'

Appellees made further protests to appellant, through telephone calls and correspondence, against the adoption and use of the name 'Baltimore Bedding Corporation', but the appellant persisted in its refusal to heed any of these protests and went ahead despite them.

Some time 'around June or July', according to Pheterson, both Eisenberg and Snyder ceased to have any connection with the corporation, since which time the business has belonged to Pheterson 'entirely.' He modified this statement later by saying that:

'This isn't my own individual business. This is a corporation. It belongs to the stockholders.

'Q. Who are the stockholders? A. Myself, my son-in-law.

'Q. Who are the officers of the corporation now? A. Myself, my son-in-law, my wife and my daughter.

'Q. And they are also the stockholders? A. Yes sir.'

The record shows that Pheterson moved to Baltimore from his home town, Rochester, New York, via Norfolk, 'over two years' before this suit. He was 'looking for a job', he said--'and I contacted the Sanitary Mattress Company and they engaged me.' He was foreman in that employ and left the Company in September, 1941. About a month or so later he set up in business in Baltimore as 'Acme Mattress Company' but had not gotten under way in this when he and Eisenberg and Snyder incorporated the Baltimore Bedding Corporation.

These details give a definite idea of the background of the appellant and of the man who was practically the sole operator of it, although, according to him, it was the salesman-lawyer Eisenberg, who conceived the plan of incorporating Pheterson and setting him up in that form as a dealer in bedding.

Pheterson denies that he was the one who selected the name 'Baltimore Bedding Corporation.' However, on cross-examination he undertook to tell the Chancellor why he preferred the name in question to any other name. His answer is: 'Well, from my forty years experience, Your Honor, I have found that people like to deal with a local concern, and it is worth while to make it known that we are a local concern.' That was at the beginning of the corporate life of the appellant when, Pheterson said, 'we were set up to go in the wholesale business.' Ever since his partners left him, he continued, he turned more toward renovating and the business of second-hand and re-built mattresses. He had been in this business in Rochester under the name 'Best Grade Mattress Company', and thereafter chose 'Acme Mattress Company' for his next venture, and did not hit upon the name 'Baltimore Bedding Corporation' until after he had gotten in touch with Eisenberg.

Since the principal acts which form the basis of this suit were directed in large part by Eisenberg and his colleague Snyder, it is significant to note that neither one of them was called as a witness in the case and no explanation given for failure to do so.

This recital of facts focuses attention, therefore, on the conduct of appellant's officers in two particulars: (1) Their persistence in the use of the name Baltimore Bedding Corporation, which was admittedly set up in the beginning for a line of business in competition with appellees, after formal protest had been made against the use of that trade name because...