Prudential Ins. Co. of America v. Prudential Life & Cas. Ins. Co.

• Decision Date: 17 July 1962
• Docket Number: No. 38917,38917
• Citation: 377 P.2d 556
• Parties: , 1962 OK 184 The PRUDENTIAL INSURANCE COMPANY OF AMERICA, a corporation, Plaintiff in Error, v. PRUDENTIAL LIFE AND CASUALTY INSURANCE COMPANY, a corporation, and Joe B. Hunt, Insurance Commissioner of the State of Oklahoma, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 556

377 P.2d 556

134 U.S.P.Q. 417, 1962 OK 184

The PRUDENTIAL INSURANCE COMPANY OF AMERICA, a corporationPlaintiff in Error, v.PRUDENTIAL LIFE AND CASUALTY INSURANCE COMPANY, a corporation, and Joe B. Hunt, Insurance Commissioner of the State of OklahomaDefendants in Error.

No. 38917.

Supreme Court of Oklahoma.

July 17, 1962.

Rehearing Denied Dec. 11, 1962.

Application for Leave to File Second Petition for Rehearing

Denied Jan. 22, 1963.

Syllabus by the Court

Where testimony established that respondent insurance company's use of name of Prudential Life and Casualty Insurance Company was deceptively similar to petitioner insurance company's name of The Prudential Insurance Company of America and that the former's use of such name was misleading to public and caused the public to purchase its insurance thinking it to be the latter's, petitioner insurance company was entitled to an order directing respondent insurance company to cease doing any advertising or the conducting of any business under its present corporate name, and in the event that respondent insurance company in changing, qualifying, and/or modifying its present corporate name, continues therein the word 'Prudential', said word is never to be used by respondent insurance company with greater emphasis thereon than any other word or words, and shall not be the first word nor the dominant word in such corporate name.

Appeal from the District Court of Oklahoma County; W. R. Wallace, Jr., Judge.

Petitioner, the Prudential Insurance Company of America, filed a protest with the Insurance Commissioner of the State of Oklahoma against the use by the Prudential Life and Casualty Insurance Company of such name, or any name including the word 'Prudential'.From an order of the Insurance Commissioner denying said protest, petitioner appealed to the district court.After a trial de novo, the order was affirmed and petitioner appeals.

Reversed and remanded with directions.

V. P. Crowe, William G. Paul, Embry, Crowe, Tolbert, Boxley & Johnson, Oklahoma City, for plaintiff in error.Wellington S. Crouse, Houston, Tex., of counsel.

Robert D. Allen, Oklahoma City, for defendant in error, Joe B. Hunt, Insurance Commissioner.

John A. Johnson, of Savage, Gibson, Benefield & Shelton, Oklahoma City, for defendant in error, Prudential Life & Casualty Insurance Company.

WILLIAMS, Chief Justice.

On July 31, 1957, Prudential Life and Casualty Insurance Company, hereinafter referred to as respondent, filed with the Insurance Commissioner of the State of Oklahoma, hereinafter referred to as Commissioner, its plan for conversion into a stock legal reserve life insurance company to be named Prudential Life and Casualty Company.The Commissioner on August 1, 1957, issued respondent a certificate of authority to transact a life and accident and health insurance business in the State of Oklahoma under said name.On September 16, 1957, The Prudential Insurance Company of America, hereinafter referred to as petitioner, filed with the Commissioner a request that he direct respondent to discontinue the use of any name including the word 'Prudential', or in the alternative, hold a hearing on the matter 'for the reason that the use of the same causes uncertainty and confusion due to the similarity of that company's name to the name of'petitioner.After a hearing on October 7, the Commissioner on January 20, 1958, entered an order refusing to take such action.Petitioner appealed to the District Court of Oklahoma County where in a trial de novo the action of the Commissioner was sustained from which petitioner now appeals.

Petitioner is a corporation organized and existing under the laws of the State of New Jersey and has transacted business as a life insurance company continuously under its present name since 1877.It was licensed to do business in what is now the State of Oklahoma in 1901, and has thereafter transacted business in this state.Petitioner is authorized to carry on and does engage in the life and accident and health business in all of the states of the United States and the Provinces of the Dominion of Canada.Petitioner is the second largest life insurance company operating in the United States with assets at the end of 1957 valued at $13,919,000,000.It spends almost $9,000,000. per year on advertising, twice as much as the company spending the next highest amount.

Respondent was incorporated in 1927 under the name of United Protective Association which was later changed to Continental Travelers Insurance Company.In 1953 the name was changed to Mutual Life and Accident Insurance Company.It indicated in its 1957 annual report, assets of $36,242.00.

The evidence and testimony at the trial below developed that the change of name of respondent to Prudential Life and Casualty Company and all the steps to effectuate such change took place without prior notice to or knowledge of petitioner; that at no time did petitioner consent to or acquiesce in such change of name; that several persons purchased insurance from respondent under the assumption that they had purchased one of petitioner's policies; that some of such purchasers retained their policies after they learned that petitioner and respondent were not one and the same; that persons receiving respondent's advertising had thought it was petitioner's; that claims by respondent's policy holders had been submitted to petitioner; that mail intended for respondent had been sent to petitioner; that complaints against respondent had been sent by the commissioner's office to petitioner; that a public recognition survey indicated that a great majority of those interviewed who associated the word 'Prudential' with insurance connected it with petitioner.

We agree with the trial court that the issue is whether the commissioner's act of issuing a certificate of authority to respondent to engage in business under the name Prudential Life and Casualty Insurance Company was correct.

Petitioner's 'Proposition I' is:

'The Commissioner's Acts permitting Respondent to use to present name are unlawful and void and the court's determination that they should be upheld is contrary to the weight of the evidence.'

Petitioner first contends under this proposition that 36 O.S.1959 Supp. § 620 was applicable to the commissioner's act of issuing a certificate to respondent.This section is as follows:

'A.No insurer shall be authorized to transact insurance in Oklahoma which has or uses the name so similar to that of any insurer already so authorized as to cause uncertainty or confusion; except, that in case of conflict of names between two insurers the Insurance Commissioner may permit or require the newly authorized insurer to use in Oklahoma such supplementation or modification of its name as may reasonably be necessary to avoid such conflict.'

The commissioner and the District Court held 36 O.S.1959 Supp. § 2502 to be the applicable statute.It reads in part:

'The persons mentioned in Section 2501 shall be designated as corporators, and such persons shall associate themselves by articles of agreement in writing, duly signed and acknowledged, setting forth:

'First: The corporate name of the proposed corporation, which shall not be the name of any corporation heretofore incorporated or doing business in this state for similar purposes, or any such imitation of such name calculated to mislead the public. * * *'

A study of section 2502 reveals that the primary purpose of the legislature in passing it was to prescribe the contents of the articles of agreement of a proposed insurer.The reference to names of proposed insurers was incidental to the primary subject of said section.On the other hand, section 620 deals exclusively with names of insurers seeking authorization to do business in the State of Oklahoma.The primary purpose of this section was to set a standard for the commissioner to follow in approving or rejecting names of proposed insurers.

The commissioner and the district court should have considered 36 O.S.1959 Supp. § 620 as well as 36 O.S.1959 Supp. § 2502.

Under its first propositionpetitioner next contends that 'The Court's judgment upholding the Commissioner's act of allowing Respondent to use its present name is contrary to overwhelming and uncontradicted evidence.'Respondent contends that the fact 'That large expenditures for advertising may have created a 'special significance' in a word in a corporate name does not give the right to monopolization of such single descriptive word, arising from the peculiar manner of advertising, but only the right to prevent its use by a competitor in any unfair way.'We are favorably impressed with both of these contentions.The question before us is whether respondent's name is deceptively similar to that of petitioner.No relief is sought against any other party.The propriety of such use in any other situation would have to be determined in the light of the circumstances surrounding such situation.Metropolitan Life Insurance Co. v. Metropolitan Insurance Co., 7 Cir., 277 F.2d 896.

In Carpet City v. Carpet Land, Okl., 335 P.2d 355, this court said:

'Practices between competitive businesses that tend to lead to unfair competition will not be permitted.Neither will a competitor be permitted to use even a generic term in conjunction with other terms, designs, or symbols which serve to confuse the identity of its business with that of another so as to mislead the public and divert business from its competitor to it.However, the trade name, design or symbol used must be such that the ordinary buyer, exercising ordinary intelligence and observation in business matters, will certainly or probably be deceived, a mere possibility of deception and confusion being insufficient.Coalgate Abstract Co. v. Coal County Abstract Co., [180 Okl. 8, 67 P.2d 37]supra;Stillwater Milling Co. v. Eddie, 188 Okl. 234, 108 P.2d 126;O. K. Bus & Baggage Co. v. O. K. Transfer...