N.L. Pierce Nat. Detective Agency v. Pierce Detective Agency

• Decision Date: 24 May 1928
• Docket Number: 7 Div. 751
• Citation: 217 Ala. 594,117 So. 191
• Parties: N.L. PIERCE NAT. DETECTIVE AGENCY v. PIERCE DETECTIVE AGENCY.
• Court: Alabama Supreme Court

117 So. 191

217 Ala. 594

N.L. PIERCE NAT. DETECTIVE AGENCY v. PIERCE DETECTIVE AGENCY.

7 Div. 751

Supreme Court of Alabama

May 24, 1928

Appeal from Circuit Court, Etowah County; Woodson J. Martin, Judge.

Bill for injunction by the N.L. Pierce National Detective Agency against the Pierce Detective Agency. From a decree dismissing the bill, complainant appeals. Affirmed.

L.B Rainey, of Gadsden, for appellant.

O.R Hood, of Gadsden, for appellee.

BOULDIN J.

The bill is to enjoin alleged unfair competition in the use of a trade-name so similar to that of complainant as to lead to confusion and divert the good will of an established business to the profit of respondent, with consequent injury to the business of complainant.

About June 1, 1922, complainant, "N.L. Pierce National Detective Agency," was incorporated with main office in the city of Birmingham. N.L. Pierce, who had some prior experience in that line of business, organized the corporation, and became chief stockholder and manager. So far as here involved, it may be regarded as his business operated in a corporate name. The business included protection investigation, and commercial lines of national detective agencies.

About February 1, 1923, a branch office and agency was established at Gadsden. B.W. Pierce, brother of N.L. Pierce, then residing in Gadsden, was made manager or superintendent of the branch office.

About September 10, 1923, B.W. Pierce ceased to be branch manager and went into the insurance business, but continued his connection with complainant as salesman of contracts for protection and service to the business concerns of Gadsden.

About February 1, 1924, B.W. Pierce entirely discontinued his connection with complainant, and set up a local detective business of his own in Gadsden and vicinity. This business was incorporated under the name of "the Pierce Detective Agency." The bill was filed September 16, 1924.

The litigation, essentially one between Leonard Pierce on the one hand and Benton Pierce on the other, resulted in a decree for respondent January 12, 1927. The cause was submitted to this court on appeal January 17, 1928.

The remedy by injunction to prevent injury to an established business by the employment of a trade-name so similar as to take advantage of the good will of the former, and divert business resulting therefrom to the new concern, is well established and defined in the former decisions of this court. Kyle v. Perfection Mattress Co., 127 Ala. 39, 28 So. 545, 50 L.R.A. 628, 85 Am.St.Rep. 78; Epperson v. Bluthenthal, 149 Ala. 125, 42 So. 863, 13 Ann.Cas. 832; White v. Citizens Light & Power Co., 172 Ala. 232, 55 So. 193; Grand Lodge, etc., v. Grand Lodge, etc., 174 Ala. 395, 56 So. 963; Boston Shoe Shop v. McBroom Shoe Shop, 196 Ala. 262, 72 So. 102; G.B. McVay & Son Seed Co. v. McVay Seed & Floral Co., 201 Ala. 644, 79 So. 116; Harrison Transfer Co. v. Harris Transfer & Warehouse Co.,

208 Ala. 631, 95 So. 12.

The real basis of relief is fraud and irreparable injury. An actual intent to defraud need not appear. Sufficient if the facts pleaded and proven disclose such deceptive name and conduct of business as to work a fraud, diverting business coming through the prestige and good will of another.

The use of the family name in one's business is generally recognized as a personal right. In modern business, carrying the family name in a corporate enterprise is usually considered of the same class. Note to Seligman v. Fenton, 47 A.L.R. 1190; Burns v. Wm. J. Burns International Detective Agency, 235 Mass. 553, 127 N.E. 334.

However, under our statute, a corporate name should not be taken so nearly similar to that of an existing corporation as to lead to confusion and uncertainty. This statute qualifies in some measure the prevailing rule in the absence of statute. Harrison Transfer Co. v. Harris Transfer & Warehouse Co., 208 Ala. 631, 95 So. 12.

In any event, the use of a family name is subject to the general maxim, "sic utere tuo," etc. So coupling the family name with a trade-name as to designedly infringe upon the trade-name of another, which could readily be avoided without abandonment of the family name, is a fraud not to be sanctioned in equity. G.B. McVay & Son Seed Co. v. McVay Seed & Floral Co., supra.

In dealing with corporate names wherein the family name is carried by both, the law of corporations as well as the law relating to trade-marks, trade-names, and unfair competition furnishes a vast number of precedents. 14 C.J. p. 310 et seq., § 374, with illustrations in notes 23 and 24.

The application of sound principle to a given case is not always free from much difficulty. Much depends upon the facts of the particular case. There are cases where the name is such as to naturally and inevitably result in infringement upon the rights of another. In such case the party must be held to intend the natural result of his acts.

In other cases, the names may be similar in carrying a family name, but other differences be so marked that the one may by due care be used without substantial injury to the other. In such case honest use of the name, with due care to avoid appropriation of the good will of another, or confusion of business to his substantial injury, may become an issue of fact in an injunction suit. In this case there is much testimony as to similarity of the names as arranged and emphasized on letterheads and advertising matter, similarity of contracts with customers, metal tags, etc., and opposing evidence that in design, color, and subject-matter care was taken...