Eastern Outfitting Co. v. Manheim

• Decision Date: 28 July 1910
• Citation: 110 P. 23,59 Wash. 428
• Parties: EASTERN OUTFITTING CO. v. MANHEIM et al.
• Court: Washington Supreme Court

110 P. 23

59 Wash. 428

EASTERN OUTFITTING CO. v. MANHEIM et al.

Supreme Court of Washington

July 28, 1910

Department 1. Appeal from Superior Court, Spokane County; J. D. Hinkle Judge.

Action by the Eastern Outfitting Company against J. Manheim and another, copartners under the name of the Eastern Outfitting Company. From a judgment for defendants, plaintiff appeals. Affirmed.

Samuel R. Stern, for appellant.

Cohn, Rosenhaupt & Blake and A. M. Winston, for respondents.

GOSE J.

The plaintiff brought this action to enjoin the defendants from using the name 'Eastern Outfitting Company.' There was a decree in favor of the defendants, enjoining the plaintiff from using the name in the city of Spokane. The plaintiff has appealed.

Appellant is a foreign corporation, organized in the state of California under the name of 'Eastern Outfitting Company of Seattle, Washington.' In March 1902, it filed for record in the office of the Secretary of State of this state a certified copy of its articles of incorporation, and otherwise complied with the laws of this state respecting foreign corporations doing business here. The essential facts are that the appellant, since 1902, has been engaged in the business of selling 'cloaks and suits, also gents' clothing,' in the city of Seattle and its vicinity. Its mode of doing business, as testified by its manager, has been to sell on credit, receiving a cash payment of a few dollars at the time of the sale, and weekly or monthly payments thereafter until the purchase price is paid. It did no business in the eastern part of the state, aside from a single transaction with one customer who had moved from Seattle to Spokane. It has, in addition to its local trade, a mail order business in the territory adjacent to Seattle. The respondents were at one time copartners, doing a retail mercantile business in the city of Spokane under the name of 'Eastern Outfitting Company.' The business was started under this name by the respondent J. Manheim, in April or May, 1905. Later he associated Nathan Manheim with him in the business, and, before the commencement of the action, the latter acquired the entire ownership, and continued to conduct the business in the old name. There is no evidence that the respondents had any trade outside of the city of Spokane. About August, 1909, the appellant undertook to open a place of business in Spokane under the name of 'Eastern Outfitting Company,' and advertised that it had an exclusive right to the use of that name.

The court found that the business of both the appellant and the respondents is a retail installment business, purely local in character; that the respondents have expended large sums of money in advertising the business, and have established a large cash and installment business under their trade-name; and that in August, 1909, the appellant, with the intention to cheat and defraud the respondents and the public, sought to lure the public into its place of business in the city of Spokane by taking the respondents' trade-name, and thus divert and appropriate their business. The findings are supported by the evidence.

The appellant contends that it has the exclusive right to the use of the name 'Eastern Outfitting Company' throughout the state, because of its compliance with the laws of the state with respect to foreign corporations. We cannot concur in this view. The respective parties adopted the same trade-name and engaged in the same general business, but at points remote from each other, and they are to be dealt with precisely as if the names were those of private firms or copartnerships. Celluloid Mfg. Co. v. Cellonite Mfg. Co. (C. C.) 32 F. 94. 'No advantage accrues to a name of a corporation because it is borne by a corporation.' Nims on Unfair Business Competition, page 198.

The appellant next urges that, upon the principle of unfair business competition, the respondents should be enjoined from the further use of the trade-name. This position is untenable. In considering this question it is essential that the distinction be kept in mind between a trade-name as applied to a local business, and a trade-name as applied to a general business. In Martell v. St. Francis Hotel Co., 51 Wash. 375, 98 P. 1116, speaking to the identical question, we said: 'The general rule is, as before quoted, that one person may not use the name of another already in the same line of business, so that confusion or injury results therefrom.' This principle, stated in varying phraseology, may be found both in the text-books and in the adjudged cases. In cases like the one at bar the fact to the ascertained is, What is the market of the complaining party? His protection is coextensive with his market. Nims, § 114. 'But there is no standard except what the court in each particular case believes has worked fraud, or may work fraud or a loss to plaintiff.' Nims, § 108. There cannot be unfair trade copetition unless there is competition. Sartor v. Schaden, 125 Iowa, 696, 101 N.W. 511.

The doctrine of unfair competition is based upon the principle of common business integrity, and equity only affords relief when this principle has been violated. Hainque v. Cyclops Iron Works, 136 Cal. 351, 68 P. 1014; Sartor v. Schaden, supra. The mischief which a court of equity will guard against is a confusion in name, or in the identity of parties, or in the goods sold, so as to deceive the public and work a fraud upon the party having a right to the trade-name. Philadelphia Trust, Safe Deposit & Ins. Co. v. Philadelphia Trust Company (C. C.) 123 F. 534; Celluloid Mfg. Co. v. Cellonite Mfg. Co., supra; Blackwell's Durham Tobacco Co. v. American Tobacco Co., 145 N.C. 367, 59 S.E. 133; Cohen v. Nagle, 190 Mass. 4, 76 N.E. 276, 2 L. R. A. (N. S.) 964.

It is manifest that the respondents, doing a retail business in Spokane, could not pass off their goods as the appellant's goods, or pass themselves off as the appellant. The respondents did not invade the appellant's territory, but, on the other hand, it sought to invade their territory after they had devoted years of time and labor to giving a reputation to the name in the city of Spokane. Before the appellant attempted to open a business in Spokane there had been no confusion and no deception practiced upon the public or the appellant's customers. We have treated the question as if the parties had used the same trade-name, and have given no consideration to the fact that the words 'Seattle, Washington,' were a...