Terminal Barber Shops v. Zoberg

• Decision Date: 29 October 1928
• Docket Number: No. 128.,128.
• Parties: TERMINAL BARBER SHOPS, Inc., v. ZOBERG et al.
• Court: U.S. Court of Appeals — Second Circuit

28 F.2d 807 (1928)

TERMINAL BARBER SHOPS, Inc., v. ZOBERG et al.

No. 128.

Circuit Court of Appeals, Second Circuit.

October 29, 1928.

Weill, Wolff & Satterlee, of New York City (Henry F. Wolff and Arthur L. Newman, II, both of New York City, of counsel), for plaintiff.

Warfield & Watson, of New York City (F. P. Warfield and Donald L. Brown, both of New York City, of counsel), for defendants.

Before MANTON, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

MANTON, Circuit Judge.

The Terminal Barber Shops, Inc., a New York corporation, at the date of the commencement of this suit, maintained and operated a chain of barber shops and ladies' hair-dressing establishments under the name of "Terminal Barber Shops" and "Terminal Beauty Shops." This suit seeks to restrain the defendants from conducting their barber shops and ladies' hair-dressing establishments, using the name "Terminal Beauty Parlors," or other combinations including the word "Terminal." The plaintiff was organized in 1908, having its first three shops in the Hudson & Manhattan Railroad Terminal Buildings in New York City. It made part of its corporation and its trade-name, "Terminal," suggested by the name of the building of its first location. For 20 years it has continued to expand and grow and establish shops in railroad stations, large hotels, and office buildings, using the word "Terminal" in all its window signs and advertising. In 1917 it opened its first separate ladies' hair-dressing establishment, and since then has developed an extensive business in this field. At all times it has used the word "Terminal." The business has grown so that, on the date of the commencement of this suit, it had 31 shops, and it had under lease additional space to make a total of 38 places of business. The gross business in 1927 was $2,400,000, of which $750,000 represented the proceeds from the ladies' hair-dressing business.

When the plaintiff commenced business, it organized to improve the barber business along more sanitary lines. It eliminated the then universal use of the shaving mug and a cake of soap, one brush, comb, and towel used by several customers. It provided for cleanliness of the barber and cleanliness toward the customer by a novel service of individual brush, comb, and towel. Other sanitary conditions within the shop were provided. This gained for the plaintiff a reputation which helped to establish and expand its business. Now its shops and salons are located in New York, Michigan, Illinois, and Ohio. The plaintiff advertised, using the name "Terminal," extensively in magazines and newspapers, not only in the city of New York, but elsewhere, and, during the past three years, has expended annually $75,000 for such purpose. It has no shops in New Jersey, where the defendants are located, but it advertises extensively in trains used by commuters of New Jersey; also in newspapers in that state. The affidavits establish that the plaintiff's reputation for "terminal service" has become such that there constantly come to it proposals unsolicited from important cities in the United States, and from owners of buildings, stores, and hotels, desiring to introduce its service in their enterprises. This results in the plaintiff's ability to secure advantageous leases, frequently without competition, and is said to be based upon the high reputation for the type of service rendered.

The defendants, copartners, on June 22, 1927, filed a certificate for doing business under the assumed name of "Terminal Beauty Parlors" in Hudson county, and on August 26, 1927, in Essex county, New Jersey, and in New York county, New York, on January 24, 1928. At the time of the commencement of this suit, they operated a place of business as the "Terminal Barber Shop" in Union City, N. J., "Terminal Beauty Parlors," Union City, N. J., "Terminal Beauty Parlors," in West New York, N. J., "Terminal Beauty Parlors," Jersey City, N. J., "Terminal Beauty Parlors," Newark, N. J., and "Terminal Beauty Parlors," New York City. All of these, except the shop at Union City, were opened after June, 1927. These places of business are located within a few miles of Jersey City, which is but across the Hudson river from the Hudson Terminal Building in New York City. The defendants advertised their place of business in New York, when it was opened about the end of March, 1928, at 3652 Broadway, New York City, as an uptown branch of the "Terminal Beauty Parlors."

In October, 1909, the defendant Lenneper opened a barber shop on the west side of Eighth avenue and 128th street, New York City, and in his affidavit swears that he conducted this business for 2 years as the "Terminal Barber Shop." In 1911 he moved to Hoboken, N. J., where he went to work for another barber for 1 year. Thereafter he established himself, using the name "Terminal Barber Shop," in Hoboken, N. J., but sold this shop and then worked in New York City for another for 3 years. In 1918 he opened a shop at Union Hill, N. J., and did business under the name of "Terminal Barber Shop" for 2½ years. In 1921 he sold out his business and in 1923 again embarked in business as the "Terminal Barber Shop" at Union Hill, N. J. He conducted this shop for about 2 years and was forced to vacate the premises because, as he says, of a leaky condition in the cellar. He opened across the street as the "Terminal Barber Shop," and in 1926 opened his first ladies' hair-dressing establishment as the "Terminal Beauty Parlor" at Union City, N. J. Thereafter in 1927 he became associated with Zoberg. In January, 1928, after the commencement of this suit, they formed a corporation and transferred to it the business of the copartnership, consisting of four beauty parlors and one barber shop in New Jersey. There is evidence of confusion in the trade, both of customers and sellers of barbers' supplies. When the defendants opened their shop in New York, some of the bills for construction work were sent to the plaintiff. The defendant Lenneper explains the original use of "Terminal" by saying that, when he opened his first New York shop, a plumber suggested the name because it was a term known in the plumbing business. This is contradicted by an affidavit of an experienced plumber.

The District Judge granted an injunction, but confined its restraining provisions to New York state, and denied the prayer for injunctive relief in the state of New Jersey. As to New Jersey, it is apparent to us that the facts present the plaintiff and defendants competing under the same name in the same market. Newark is but 7 miles from Jersey City and Union Hill, and West New York 3 to 4 miles. A tunnel connects Jersey City with the Hudson Terminal Building, and the time of transportation is but 3 minutes. Jersey City, in time, is nearer to the plaintiff's downtown shops than Forty-second street, New York. The uptown terminal of the Hudson tubes is in close proximity to the establishment of the plaintiff at the Pennsylvania Hotel. New York City newspapers have a large circulation in New Jersey, and thus the plaintiff's advertisements are furnished to New Jersey patrons. New Jersey is a part of the New York retail market, and the geographical or state line in no way...