Economy Food Prods. Co. v. Economy Grocery Stores Corp.

• Decision Date: 07 November 1932
• Citation: 281 Mass. 57,183 N.E. 49
• Parties: ECONOMY FOOD PRODUCTS CO. v. ECONOMY GROCERY STORES CORPORATION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

281 Mass. 57

183 N.E. 49

ECONOMY FOOD PRODUCTS CO.

v.ECONOMY GROCERY STORES CORPORATION.

Supreme Judicial Court of Massachusetts, Suffolk.

Nov. 7, 1932.

Appeal from Superior Court, Suffolk County; Lummus, Judge.

Suit by the Economy Food Products Company against the Economy Grocery Stores Corporation. Decree in favor of the defendant, and the plaintiff appeals.

Affirmed.

L. E. Thayer, of Boston, for appellant.

M. E. Bernkopf and L. M. Ring, both of Boston, for appellee.

WAIT, J.

The plaintiff, Economy Food Products Company, was incorporated in Massachusetts in 1913, and began to carry on a business in the manufacture and sale of baking preparations, such as prepared and ready mixed flours. From time to time it added new products until it deals in a varied line of groceries. It dealt and deals only at wholesale, seeking especially ‘institutional’ trade, that is, purchases by hospitals, schools, convents, jails, restaurants, but including also householders who are prepared to buy in considerable quantities. It has never maintained a retail store nor sought purchases by small householders. It has had a factory and office at Cambridge, Massachusetts, and, through correspondence and salesmen, it has dealt with customers throughout a wide territory and in many States. It has used as a mail address, Boston, 41, the postal district in which Cambridge is located. Up to the date of the hearing its greatest gross business in any year was $330,000 in 1919, not one fifth of it in the Boston district. It never created a secondary meaning to the word ‘Economy,’ as indicating itself or its product, known to any large part of the population of Boston and its vicinity. In 1914 one Julius Robbins opened a retail grocery store in Boston which he styled the ‘Economy’ grocery store, and began building up a chain of such stores bearing that name. In 1915 he incorporated, as ‘Economy Grocery Stores Company,’ to carry on and enlarge the chain of retail grocery stores. He knew nothing of the Economy Food Products Company. The business, after a period of discouragement, came under direction and control of a nephew under whose management it prospered greatly. Another chain store business was purchased, and, in 1925, the defendant, Economy Grocery Stores Corporation, was chartered in Massachusetts. It took over the business, good will and name of the earlier company; and built up a large chain store business carrying on a wide trade in groceries in Boston and vicinity within a radius of fifteen miles. At the time of the trial it carried on three hundred sixty stores, all but two within the territory indicated. Its gross annual sales are in millions of dollars. It has never, knowingly, sought the plaintiff's customers. In 1925 a trade war began between the Great Atlantic and Pacific Tea Company, doing a chain grocery business across the United States of America, the First National Stores, Incorporated, doing a chain grocery business throughout New England, and the defendant, which resulted in sales at a very small margin of profit in the neighborhood trade in Boston and its vicinity. Customers in the Boston district of the plaintiff, in its institutional trade, took the opportunity to buy groceries at low prices; and in some instances dealt with the Economy Grocery Stores Corporation in a mistaken belief that it was the same as the Economy Food Products Company. Some injury to the latter arose, also, from repugnance to deal with chain stores on the part of buyers who connected it in their minds with the former. Mistakes by transportation and banking companies and in the mails have occurred, owing to the similarity in the names, but have been corrected by the stores company without loss other than delay.

In 1917 Economy Food Products Company first learned of the Economy Grocery Stores Company. It then wrote calling attention to the use of the word ‘Economy’ by the food products company in its corporate name and as a trade mark; and serving notice that if at any time the grocery stores company began to compete with it or to injure it in any way by the use of the word ‘Economy’ it would take legal steps to prevent such use. Again, in July, 1930, the plaintiff's attorney wrote the defendant that interference was resulting through its use of the plaintiff's registered trade mark ‘Economy’ and the use of a corporate name so similar as to be taken for that of the food products company. This suit followed in September of 1930. The bill alleged unfair competition by the Economy Grocery Stores Corporation and unlawful use of a corporate name so similar to the plaintiff's as to be likely to be mistaken for it.

The judge found that there was no unfair competition, and no enforceable right to require a change of name. The plaintiff appeals, without stating the evidence in detail, we are satisfied that it justified findings that, here, there was no secondary meaning attached to the word ‘Economy’ which identified it in the public mind with the plaintiff corporation and its products; no effort by the defendant to pass off its goods as the product of the plaintiff; no intentional invasion of a business field occupied by the plaintiff; no fraudulent adoption of a similar name. In the absence of findings to the contrary, there was no proof of unfair competition, and no basis for the maintenance of a bill to restrain unfair competition. There is here only the all but inevitable diversion of trade which happens from the growing business on the part of the Economy Grocery Stores Corporation in its particular field within part of the greater area in which the Economy Food Products Company seeks a different class of customers. The law will not interfereto restrain such competition where there exists no conscious intent to injure; no effort to secure for oneself the benefit of another's industry, business capacity and capital outlay; and no harm to the public from imposition through probable confusion. No case cited by the plaintiff compels a different conclusion. In support of our opinion we cite only Tent, Inc., v. Burnham, 269 Mass. 211, at pages 213, 214, 168 N. E. 735, and cases cited; John L. Whiting-J. J. Adams Co. v. Adams-White Brush Co., 260 Mass. 137, 156 N. E. 880;Libby, McNeill & Libby v. Libby, 241 Mass. 239, 135...