Jud Plumbing Shop on Wheels, Inc. v. Jud Plumbing and Heating Co., Inc.

• Decision Date: 28 June 1985
• Docket Number: No. 04-83-00412-CV,04-83-00412-CV
• Citation: 695 S.W.2d 75
• Parties: JUD PLUMBING SHOP ON WHEELS, INC., et al., Appellants, v. JUD PLUMBING AND HEATING CO., INC., Appellee.
• Court: Texas Court of Appeals

Page 75

695 S.W.2d 75

JUD PLUMBING SHOP ON WHEELS, INC., et al., Appellants, v. JUD PLUMBING AND HEATING CO., INC., Appellee.

No. 04-83-00412-CV.

Court of Appeals of Texas San Antonio.

June 28, 1985.

Rehearing Denied July 25, 1985.

Carl Raymond Crites, San Antonio, for appellants.

Thomas H. Crofts, Jr., J. Michael Ezzell, Groce, Locke & Hebdon, San Antonio, for appellee.

Before ESQUIVEL, TIJERINA and DIAL, JJ.

ON APPELLEE'S MOTION FOR REHEARING

ESQUIVEL, Justice.

Appellee has filed a motion for rehearing. Upon consideration of the points of error raised by appellee in its motion, we grant the motion for rehearing. Our prior opinion is withdrawn and the following substituted therefor.

This is an appeal from an order granting a temporary injunction wherein appellants, Jud Plumbing Shop on Wheels, Inc., d/b/a Jud Mechanical Service, and each and all of its owners, agents, servants and employees were enjoined from: (1) utilizing the name "Jud" in any manner, except that they were permitted to continue using the full name "Jud Plumbing Shop on Wheels, Inc."; (2) using the term "Jud Mechanical Service" in any manner whatsoever; (3) using all labels, signs, prints, packages, wrappers, receptacles, cards and advertisements in the possession of the appellants bearing the mark "Jud" in a form other than "Jud Plumbing Shop on Wheels, Inc."; (4) adding any telephone directory listings except those that contained "Jud" only in the form of the full name "Jud Plumbing Shop on Wheels, Inc." Further, appellants were ordered to: (1) make good faith efforts to forward any and all misdirected communications, whether of oral, written, or telephonic origin of any nature, which appeared to be meant for the appellee to the appellee; (2) delete from accounts held by customers, suppliers, or other individuals or companies with which defendant does business, any reference to "Jud" other than is used in the full name "Jud Plumbing Shop on Wheels, Inc."; (3) immediately notify any local, county, or state governments, with which any registrations have been made which purport to refer to "Jud" in any form other than "Jud Plumbing Shop on Wheels, Inc.," that the use of "Jud" other than in the form "Jud Plumbing Shop on Wheels, Inc." is being suspended pending disposition on the merits of this lawsuit and appellants make no further registrations which refer to "Jud" other than as "Jud Plumbing Shop on Wheels, Inc."

Appellee's complaint at trial was that appellants were using advertising practices which unfairly emphasize the similarity between their trade name and the trade name of the appellants. Appellee alleged that the appellants' actions caused the public to be confused, misled and deceived, and that their alleged actions were for the purpose of creating the impression with the public that their business was that of the appellee or affiliated with appellee. Appellee also claimed that the appellants' acts constituted unfair competition. In its first amended original petition, appellee added a cause of action for violation of 15 U.S.C.A. § 1125(a) (West 1982), known as the Lanham Act. From the order above referred to the appellants pursue this appeal. Appellants present four points of error.

In point of error number one, appellants allege the trial court erred in finding and concluding that appellee will probably prevail on the trial of this cause for the reason that under the state of the uncontroverted evidence from appellee's witnesses in this record, appellants would be entitled to judgment as a matter of law. In point of error number two, the appellants allege the trial court erred in finding and concluding "that the continued use by Jud Plumbing Shop on Wheels, Inc. of its trade name 'Jud Mechanical Service' will alter the status quo and tend to make ineffectual a judgment in favor of Jud Plumbing and Heating, Inc.," for the reason that the uncontroverted evidence in the record shows that the use by the appellants of the trade name "Jud Mechanical Service" was the status quo at the time of the hearing on temporary injunction and had been for more than three years prior to the time of the hearing on the temporary injunction. In point of error number three, the appellants allege that the trial court erred in finding and concluding "that the good will and business reputation belonging to and established by Jud Plumbing and Heating, Inc. will be irreparably harmed and damaged because of confusion of the public in and around San Antonio, Bexar County, Texas, between the terms 'Jud Mechanical Service' and 'Jud' or Jud Plumbing and Heating, Inc. and that Jud Plumbing and Heating, Inc. will be without an adequate remedy at law," for the reason that there is no evidence, or alternatively, insufficient evidence in the record to support such findings and conclusions. In point of error number four, appellants allege the trial court erred in denying its request for a supersedeas bond for the purpose of suspending the temporary injunction for the reason that under the facts in this record and the terms of the temporary injunction it is clearly inequitable to impose upon the defendants the virtual cessation of their going business under a trade name and use for more than three years and to impose the other burdens set out in the temporary injunction, particularly in view of the laches of the appellee in filing the suit in the original instance and in appellee's lack of diligence in seeking the temporary injunction.

The undisputed facts reveal that the appellee is a corporation wholly owned in equal shares by Howard Decker and Hollis E. Dowlearn, Jr. Both men are active in the management of the company and they were the principal witnesses for the company at the hearing on the motion. Appellee sued appellants, a corporation wholly owned by Charles A. Hughey. Mr. Hughey manages the appellants' corporation. There has been no principal named Jud associated with either company since 1950, when one T.W. Neely bought out the interest of Ed Jud in both companies. Jud Plumbing and Heating Co., Inc., is a plumbing, heating and air conditioning contractor with a history of work on large installations going back to 1929, when the appellee's predecessor carried out the total plumbing, heating and air conditioning contract on the Smith-Young Tower. Appellee's volume of business, at the time of the hearing on the motion, ranged from approximately six to nine million dollars a year, and it employed approximately seventy-five people. Appellants' business, when it was acquired by its then stockholders in 1975, was a modest repair service operated by two employees. In 1980, three persons were involved in the appellants' repair business; Edward J. Marek, his son, Edward F. Marek, and Charles A. Hughey. Mr. Hughey has since become sole owner of the company.

A trade name is a designation which is adopted and used by a person either to designate a good he markets or a service he renders or a business which he conducts. See Walters v. Building Maintenance Service, Inc., 291 S.W.2d 377, 382 (Tex.Civ.App.--Dallas 1956, no writ). "It is elementary that a trademark or name is property." Smart Shop v. Colbert's, 250 S.W.2d 431, 433 (Tex.Civ.App.--El Paso 1951, writ ref'd n.r.e.). A trade name represents the good will that has been built up by the energy, time and money of the user of the name. Hanover Manufacturing Co., Inc. v. Ed Hanover Trailers, Inc., 434 S.W.2d 109, 111 (Tex.1968). The crux of the appellee's cause of action in the trial court below was based on the concept of unfair competition. See, e.g., Avnet v. Texas Centennial Central Exposition, 96 S.W.2d 685, 687 (Tex.Civ.App.--Dallas 1936, writ dism'd). Unfair competition is founded upon common law; it is a tort and is governed by the law of the state wherein the cause of action arises. General Adjustment Bureau, Inc. v. Fuess, 192 F.Supp. 542, 547 (S.D.Tex.1961).

Appellant cites the case of Goidl v. Advance Neckwear Co., 132 Tex. 308, 123 S.W.2d 865 (1939), for the proposition that an individual cannot be restricted in the use of his own name unless he uses it fraudulently or dishonestly to injure someone. Id. at 313, 123 S.W.2d at 867. While this rule is generally true, it is not applicable to this case because neither of the parties to this action are named Jud. Therefore, the question is whether appellants have a name that is sufficiently similar to provoke competitive confusion and deception to the general public. Carson v. Harris, 242 S.W.2d 777, 780 (Tex.Civ.App.--San Antonio 1951, writ ref'd n.r.e.). Thus, fraud or dishonesty is not part of our inquiry when the facts do not involve an individual's use of his own name. Further, intent is not a necessary element to be proved in order to prevail in an unfair competition claim. Neither is actual deception, an element that must be proved. Appellee only had to show that a deception would naturally and probably result from appellant's use of the name Jud Mechanical Service, or that the public was likely to be deceived or confused. Line Enterprises, Inc. v. Hooks & Matteson Enterprise, Inc., 659 S.W.2d 113, 117 (Tex.App.--Amarillo 1983, no writ).

Pursuant to TEX.BUS.CORP.ACT ANN. art. 2.05 (Vernon 1980), appellant secured a notice of approval of the similar corporate name which in effect told the secretary of state that appellee consented to appellants' use of the name Jud Plumbing Shop on Wheels, Inc. Such a letter is necessary "if a comparison of the names by the secretary of state...