Umpqua Broccoli Exchange v. Um-Qua Valley Broccoli Growers

• Court: Oregon Supreme Court
• Writing for the Court: BEAN, J. (after stating the facts as above).
• Citation: Umpqua Broccoli Exchange v. Um-Qua Valley Broccoli Growers, 117 Or. 678, 245 P. 324 (Or. 1926)
• Decision Date: 20 April 1926
• Parties: UMPQUA BROCCOLI EXCHANGE v. UMQUA VALLEY BROCCOLI GROWERS.

245 P. 324

117 Or. 678

UMPQUA BROCCOLI EXCHANGE v. UMQUA VALLEY BROCCOLI GROWERS.

Supreme Court of Oregon

April 20, 1926

Department 2.

Appeal from Circuit Court, Douglas County; J. W. Hamilton, Judge.

Suit by the Umpqua Broccoli Exchange, against the Um-Qua Valley Broccoli Growers. From a judgment of dismissal, plaintiff appeals. Affirmed.

This is a suit brought by the plaintiff, Umpqua Broccoli Exchange, to enjoin the defendant, Um-Qua Valley Broccoli Growers, from using as its corporate name, or transacting business under the name of "Um-Qua Valley Broccoli Growers," or any name with the combination of the words "Umpqua" or Um-Qua" and "Broccoli" therein.

The trial court found that it did not appear from the evidence that defendant's name was adopted by those who organized defendant with the intent to defraud plaintiff by means of the similarity of the name of the two corporations; that while there has been some confusion in the delivery of mail of defendant to plaintiff, yet such misdelivery was through failure to exercise ordinary care; that plaintiff had failed to show any injury or damage likely to accrue to them through the alleged similarity of names, and dismissed plaintiff's complaint. Plaintiff appeals.

The plaintiff corporation was organized and received its charter in September, 1921, and during the season of 1922 and 1923 carried on an extensive business in the shipping and selling of broccoli, or winter cauliflower, during which time it expended considerable sums of money in advertising itself as a seller and shipper of broccoli, and by its manager making several trips throughout the middle West and South acquainting himself with dealers in broccoli, and advertising his company and building up for itself a good name and trade.

The defendant is an Oregon corporation organized in May, 1923 formed by about 40 growers of broccoli, in the Umpqua Valley Douglas county, Or., organized and carried on for the purpose of marketing the products of its stockholders.

The defendant has expended considerable sums of money in the construction of a warehouse, where it carries on the shipping busiess of its stockholders. The plaintiff did not file its articles of incorporation in Douglas county until after defendant was incorporated.

The principle business in which the plaintiff is engaged is the buying and selling and shipping of broccoli, the principal market for which is in the East, middle West, and South; both the plaintiff and defendant shipping principally in carload lots and selling to jobbers and brokers, and practically all of the business being transacted by telegraph and mail orders. The sellers and shippers are known to the trade only by their respective corporate names and seldom come in direct contact personally with the buyers. The principal office and place of business of both plaintiff and defendant is in the city of Roseburg, Douglas county, Or.

The evidence discloses that the directors and other stockholders of the defendant, Um-Qua Valley Broccoli Growers, had been for years engaged in the business of growing broccoli in Umpqua Valley and marketing the same prior to the incorporation of plaintiff, Umpqua Broccoli Exchange.

Dr. C H. Bailey and R. B. Cooley, two of defendant's stockholders, were the originators of the broccoli industry in the Umpqua Valley about the year 1914; Mr. Cooley at the time of the trial being secretary of the defendant. These persons were formerly stockholders and officers of the Umpqua Valley Fruit Union, which had been dissolved before the incorporation of either party to the suit.

The Umpqua Valley Fruit Union was a shipper of broccoli which was marketed under the name of "Um-Qua Broccoli"; the peculiar spelling of the word "Um-Qua" having been adopted in order to register a United States trade-mark; the words as so spelled being inclosed within a double circle and followed by the word "Broccoli." Several years prior to the incorporation of either party to this suit those who later incorporated the defendant marketed broccoli in this way; all crates and containers being marked "Um-Qua Broccoli." By reason of the business so conducted, and the advertising of the products of these persons, a large market became established for Umpqua Valley Broccoli in different parts of the United States.

When the Umpqua Valley Fruit Union ceased to do business, it assigned its trademark in the word "Um-Qua" to S.D. Cooley, who later became the secretary of defendant, and permitted defendant to make use of the trade-mark in the same way as the Umpqua Valley Fruit Union had used it.

The gist of plaintiff's complaint is that the defendant, well knowing the value, efforts, and expenditures the plaintiff had given to the combination of the two words "Umpqua" and "Broccoli," and the advertising of plaintiff, with intent to benefit therefrom without expense to itself, and in fraud of the rights of the plaintiff, and over the protests of plaintiff, adopted the name of "Um-Qua Valley Broccoli Growers," thereby simulating plaintiff's name, with intent thereby to reap the benefit from the combination of the words "Umpqua" and "Broccoli," made valuable by the good name, advertising, and work of plaintiff.

It is further alleged that confusion has resulted in delivery of mail, telegrams, and bills of lading; that the railroad company made a mistake in spotting a carload of crates. The evidence shows the delivery of a few pieces of mail to plaintiff which was intended for defendant, but no delivery of plaintiff's mail to defendant, no confusion in telegrams or express matter, and two cars of shooks were erroneously spotted by the railroad company. The errors that occurred were at the early stage of the business, soon after defendant was incorporated, and was soon practically discontinued. The evidence does not show that plaintiff ever lost an order for broccoli because of defendant's being in business. The manager of the Western Union Telegraph Company of the Roseburg office testified that his office had handled perhaps 1,000 telegrams for plaintiff during the past season prior to the trial, without a single misdelivery. Some confusion existed in the box manufacturing plant, where both parties purchased box shooks for their customers, and where the customers or growers would resort to obtain the material for their crates.

Plaintiff also complains that the defendant engaged in the practice of selling cars of broccoli at auction, which was displeasing to the customers of plaintiff, who charged the act to plaintiff.

Ray B. Compton and Dexter Rice, both of Roseburg (Rice & Orcutt, of Roseburg, on the brief), for appellant.

B. L. Eddy, of Roseburg, for respondent.

BEAN, J. (after stating the facts as above).

Plaintiff maintains that, by reason of the fact that it first adopted the name "Umpqua Broccoli Exchange" as its corporate name and had built up a good reputation under such name, the defendant should be enjoined from using as its corporate name any name similar to plaintiff's; that the use of the name so similar to plaintiff by defendant amounts to a piracy of plaintiff's name in business; that it is a fraud upon the plaintiff and is unfair competition. Defendant maintains there is no such similarity between the names "Umpqua Broccoli Exchange" and "Um-Qua Valley Broccoli Growers" as to justify an injunction; and, there being no evidence of fraud, plaintiff cannot prevail. Defendant claims a prior right to use the trade-mark "Um-Qua" and that the predecessor in interest of defendant first used the combination of the words "Um-Qua Broccoli" in shipping their product.

There is no dispute about the facts in the case. It is practically conceded that a court of equity has jurisdiction in the consideration of the question involved.

Our statute (Or. L. 6861) provides thus:

"Whenever there shall be presented to the secretary of state for filing any articles of incorporation in which the name assumed by the proposed corporation shall appear to said secretary of state to resemble the name of a corporation previously formed under the laws of this state so closely as to be likely to cause confusion, or when, in the opinion of the secretary of state, the name so assumed tends to mislead or deceive the public as to the character, purpose or plan of business of the proposed corporation, then the secretary of state may require, before filing such articles, that the name of the proposed corporation shall be changed."

A corporate charter grants no immunity in the use of a deceptive name. The same rule applies to corporate names as applies to the names of natural persons. The name may be used, but only if used honestly. A name selected and adopted for the purpose of deception and calculated to produce it will be enjoined. Corporate names will be protected from imitation constituting unfair competition. Injunction will be refused where no probability of deception by reason of the name is shown. Priority in adoption and user usually confers the superior right. In cases of alleged conflict of corporate names a court of equity is guided by the same principles that are applied in the protection of individuals in the use of trade-marks and trade-names. The question for consideration is whether the public purchasing the commodity or service in question will probably be deceived to the injury of plaintiff. 38 Cyc. 819 et seq.; Danton v....