Hartzler v. Goshen Churn & Ladder Co.

• Decision Date: 04 February 1914
• Docket Number: No. 8184.,8184.
• Citation: 55 Ind.App. 455,104 N.E. 34
• Parties: HARTZLER et al. v. GOSHEN CHURN & LADDER CO.
• Court: Indiana Appellate Court

55 Ind.App. 455

104 N.E. 34

HARTZLER et al.

v.GOSHEN CHURN & LADDER CO.

No. 8184.

Appellate Court of Indiana, Division No. 2.

Feb. 4, 1914.

Appeal from Superior Court, Elkhart County.

Action by the Goshen Churn & Ladder Company against Aaron Hartzler and others. From a judgment for plaintiff, defendants appeal. Affirmed as to a part of defendants and reversed and remanded as to others.Lou W. Vail, of Goshen, for appellants. E. A. Dausman, of Goshen, and P. L. Turner, of Elkhart, for appellee.

IBACH, J.

This suit was brought by appellee against the individual defendants and the Security Ladder Company, a corporation, to recover damages and to enjoin them from interfering with their business, upon the theory of unfair competition.

The averments of the complaint are the following:

“That the plaintiff is a corporation organized and existing under and by virtue of the laws of the state of Indiana, and for eight years last past has been, and now is, engaged in the business of manufacturing and selling churns, ladders, and lawn swings.

“That the plaintiff's home office, its factory and its principal and only place of business, now is, and for the eight years last past has been continuously, at the city of Goshen, in the county and state aforesaid.

“That the plaintiff for eight years last past has manufactured and sold, and is now manufacturing and selling, a certain stepladder, under, by, and in the trade-name of the ‘Security Ladder’; that during the eight years last past the plaintiff has applied the said trade-name to said ladder, and has stamped said trade-name thereon; that the plaintiff has expended large sums of money and devoted much time and effort in introducing and placing on the market said security ladder under said trade-name; that by extensive advertising and continuous effort the plaintiff has built up a good trade in said security ladder; that the plaintiff has made a specialty of said security ladder, and the manufacture and sale thereof constitutes a prominent feature of plaintiff's business; that said security ladders have been and now are extensively advertised throughout the country by jobbers and retailers who purchase them from the plaintiff; that said security ladders had become widely known to the trade and to consumers by the name of the ‘Security Ladder,’ and have attained a high reputation for strength, durability, and good qualities generally; that the manufacture and extensive sale of said ladders is a source of profit to the plaintiff.

“That the defendant the Security Ladder Company is a corporation, organized and existing under and by virtue of the laws of the state of Indiana, and has its home office and its principal and only place of business in the city of Goshen, in the county and state aforesaid.

“That the said defendant corporation is engaged in the manufacture and sale of stepladders similar in design and construction to plaintiff's said ladders.

“That the individual defendants Aaron Hartzler, Samuel F. Poorman, Arthur E. Brownell, George Bosse, Harvey D. Rough, William O. Vallette, George A. Riley, and Lou W. Vail are the stockholders and officers of the defendant the Security Ladder Company.

“That the defendant Aaron Hartzler was one of the original incorporating members of the plaintiff corporation, the Goshen Churn & Ladder Company, and was a stockholder in and was the secretary and treasurer of the said the Goshen Churn & Ladder Company from the organization thereof to November 16, 1909; that on November 16, 1909, said Hartzler sold his interest in the said the Goshen Churn & Ladder Company to his associate stockholders therein, and that thereupon he promoted the organization of the defendant corporation the Security Ladder Company; that the defendants Samuel F. Poorman, Arthur E. Brownell, and Harvey D. Rough, on and prior to November 16, 1909, were in the employ of the plaintiff in the capacity of traveling salesmen; that the defendant George Bosse, on and prior to November 16, 1909, was in the employ of the plaintiff in the capacity of foreman of one of the departments, and that each and all of the individual defendants at the time of the organization of the defendant corporation, well knew the use the plaintiff had made and was then making of the name ‘Security’ in connection with the advertisement and sale of its ladders, and well knew the plaintiff's interest in said name.

“That the said individual defendants, in disregard of the plaintiff's rights, conspired to create a corporation which should have a pretended color of right to use the name ‘Security Ladder’ for the purpose of deceiving the public into the belief that they were the original makers or the manufacturing successors of the original makers of such ladders, and thus create, by means of the deception, an unfair and tricky competition in trade with the plaintiff.

“That the defendants have prominently displayed the plaintiff's corporate name in their advertising literature in connection with the corporate name of the defendant corporation, concerning the manufacture and sale of ladders; that the defendants in their advertising literature announced to the public the fact that the defendant Hartzler was formerly with the plaintiff in the capacity of secretary and treasurer, and that the defendants Poorman, Rough, and Brownell were formerly with the plaintiff in the capacity of traveling salesmen, and would continue to travel the same territory they formerly covered ‘for the Goshen Churn & Ladder Company’; that in said advertising matter and literature the plaintiff's corporate name is prominently displayed in connection with the corporate name of the defendant company, and in connection with the names of the individual defendants as dealers in ladders, and in connection with the name of the defendant Hartzler as plaintiff's former secretary and treasurer, and in connection with the names of the defendants Poorman, Rough, and Brownell as plaintiff's former traveling salesmen; that said advertising matter is well calculated to deceive ordinary purchasers of ladders into the belief that the defendants are carrying on the business of the plaintiff-their former employer-or in some way connected with it; and that the defendants have been selling their goods, the ladders herein referred to, from the plaintiff's catalogues and photographs.

“That the name of the defendant corporation was unlawfully and wrongfully selected specifically for the benefit that would accrue from the use of the name ‘Security Ladder’ and for the purpose thereby unnecessarily to create unfair competition.

“That the name of the defendant corporation was wrongfully and unlawfully selected in imitation of plaintiff's trade-name ‘Security Ladder’ for the fraudulent purpose of deceiving the public and appropriating plaintiff's good will and reputation.

“That by reason of the defendants' literature, advertising matter, and correspondence being subscribed by the corporate name of the defendant corporation, ‘The Security Ladder Company,’ purchasers, dealers, and users are led to believe and will be led to believe, are induced to buy and will be induced to buy from the defendant corporation in the belief that they are buying plaintiff's goods, as and for the goods made by the plaintiff, and that purchasers of ladders, while intending to buy of the plaintiff, are led to purchase, and will continue to be led to purchase, ladders of the defendant corporation's manufacture, thereby diminishing plaintiff's profits, to the great and irreparable injury of the plaintiff.

“That by reason of the fact that the ladders manufactured and to be manufactured by the defendants are similar in size and design to the ladders manufactured by the plaintiff, the use of the name of the defendant corporation, in any manner therewith, whether stamped thereon or otherwise associated with said ladders, tends to mislead and confuse dealers, purchasers, and users of ladders as to the origin of the goods, and enables the defendants to sell their goods as and for the goods of the plaintiff, and that the defendants are thus wrongfully appropriating the benefits of the corporation acquired by the plaintiff's goods; that the defendants by wrongfully selecting, adopting, and appropriating the plaintiff's said trade-name, and for the corporate name of the defendant corporation, are enabled to palm off their goods as and for the goods of the plaintiff, and that the defendants are thereby palming off their goods as and for the goods of the plaintiff; that the plaintiff has the exclusive right to the use of said trade-name ‘Security’ as applied to ladders, and to the tradename ‘Security Ladder’ especially as against the defendants' wrongful and misleading use of said names as aforesaid, and that the use of the name ‘The Security Ladder Company,’ or ‘Security Ladder Company’ as and for the name of the defendant corporation is an unwarranted interference with the trade and good will and reputation of the plaintiff.”

It is also alleged that in the manner and form aforesaid the defendants have pirated the plaintiff's trade-name and business; are attempting to wrongfully take and appropriate the plaintiff's business prestige and reputation; are stealing the business, good will, profits, and emoluments accruing to plaintiff by reason of its long term of years in selling and advertising security ladders; and are endeavoring to sell their ladders as plaintiff's, to plaintiff's damage in the sum of $10,000; that the defendants threaten to, and will, unless restrained by this court, continue to infringe on plaintiff's rights as aforesaid, and to stamp the name “The Security Ladder Company” or the name “Security Ladder,” or the name “Security,” on their ladders, to the irreparable injury of the plaintiff, for which he cannot be compensated in damages. Wherefore the plaintiff prays judgment for $10,000, and that defendants, all and each of them, be perpetually enjoined from...