Solar Baking Powder Co. v. Royal Baking Powder Co.

Laughlin, J.: Plaintiff and the corporate ■ defendants are competitors in the business of manufacturing and selling baking powder. The plaintiff, claiming the exclusive right to use the word “ Solar ” as an unregistered trade mark and as a trade name in advertising and selling its baking powder, brings this action to enjoin the defendants from using it, and also bases its demand for injunctive relief on the ground of unfair competition in trade, it being alleged that the defendants have unlawfully agreed to ruin plaintiff’s business, and are now engaged in carrying out their conspiracy, the general nature of which is stated. An accounting for damages alleged to have been caused by the wrongful acts of the defendants in execution of the conspiracy is demanded, and there are also allegations tending to show that the acts of the other defendants, of which complaint is made, were for the benefit of and were instigated by appellant, and it is responsible upon that theory also for their acts. It is quite probable that plaintiff’s right to in junctive relief hinges on its right to the exclusive use of the word “ Solar ” as a trade mark or trade name. The allegations with respect to the conspiracy and wrongful acts appear to be predicated upon plaintifE’s exclusive right to use this trade mark or name, for defendants are charged [552] with having plotted and schemed to deprive plaintiff of the fruits of such right and ownership. If this right and ownership be in the defendants, or one of them, and .not in the plaintiff, then it is not clear that any of the acts complained of would afford ground for relief. in equity or would even ' be wrongful. However, the allegations with respect to the use of the word “ Solar ” by defendants, and which would make each responsible to plaintiff for the acts of the other and would make appellant accountable for the acts of the other defendants, are put in issue, and if the plaintiff should succeed in establishing an exclusive ownership in or right to use the word “ Solar ” as a trade name or trade mark, then it would be essential for it to show that appellant has trespassed upon it's rights with respect to the use of the same and is accountable for the acts of the other defendants as well. The plaintiff is entitled to examine appellant for that purpose, not ,only concerning the personal acts of appellant, but also with respect to the alleged conspiracy and the wrongful acts of others in furtherance thereof so far as embraced ' within the issues, because appellant may not itself have committed any of the wrongful acts and yet if it unlawfully conspired to induce another party to violate the rights of the plaintiff or induced such violation for its own benefit and advantage, it would be responsible and accountable for the acts of such other party in furtherance of the unlawful conspiracy or within the scope of such agency or employment and might be enjoined from further consummating the conspiracy or scheme. The examination, however; should be limited to these matters. It is contended that since it is admitted by the pleadings that the ' predecessor of defendant, the Independent Baking Powder Company used the word “ Solar ” in some localities on packages of baking powder prior to the use thereof by plaintiff and that subsej quent to use thereof by plaintiff appellant procured its registration in the name of said Independent Company, plaintiff cannot succeed. Plaintiff does not concede that the prior use of this word by the predecessor of the Independent Company was such that it acquired any right to use the same as a trade mark or name. That is one of the issues to be tried. The learned justice at Special Term evidently was of opinion that the scope of the order was too broad, but declined to modify it [553] upon the ground that such defect was not pointed out in the moving papers and that relief in that regard was not expressly demanded. The motion was to vacate the order in toto it is true, but there was the usual demand for other and further relief. In such case, even though the motion to vacate the order failed, we think the court was authorized to modify the order by properly limiting and confining it to those things which are shown to be material and necessary both with respect to issues and to witnesses and that it was' the duty of the court to do so on attention being drawn on the argument of the motion to the fact that the scope of the order was too broad and the court might have done it, as this court often does, on its own motion. If the plaintiff succeeds the usual course of procedure will be to decree an interlocutory judgment adjudging with respect to injunctive relief and with respect to the liability of the respective defendants to account and directing an accounting. The quantum of damages will only arise, if at all, on an accounting and no examination is now necessary therefor. An examination extending to appellant’s legitimate trade secrets and methods is neither necessary nor material and should not be permitted. The examination should be limited to showing the use of this trade mark or name and the relations between appellant and either or both of the other defendants material to a decision of the question as to appellant’s liability for its own acts and for their or either of their acts. It is urged that the examination will tend to convict appellant of a crime, and that, therefore, the order should not be granted. It is manifest that the officers of appellant may be able to give material testimony on some of the issues which would not be privileged, and in such cases, at least, the witness should be left to assert his privilege when a question calling for an answer which might tend to incriminate is propounded. (Skinner v. Steele, 88 Hun, 311.) The order provides for the examination of every officer of the appellant at the same time and place. No necessity for this is shown. It is manifest that this would be an unnecessary annoyance and inconvenience to a going business corporation. Of course, if it should become necessary, the officers may all be examined, but that should be from time to time, as the necessity is made to appear and in a manner to avoid unnecessary inconvenience. The moving [554] papers should have.pointed out more definitely which officers are likely to have personal knowledge, for two should not be ordered examined if one will.suffice, and, if the examination of two or more be necessary, the facts showing this should he stated. (Marjori v. Waddington, 56 Misc. Rep. 435.) It is a reasonable inference, however, that the treasurer would know about the financial rel'a* tio.ns and transactions .between defendants embraced' within the allegations of the complaint and probably that the secretary would know about the correspondence aiid the minutes of. action taken by the board, if any, in the. premises. There is also an intimation and some ground to believe that the second vice-president- possesses knowledge material to a decision of the main issue's. There is nothing to indicate that the other officers .have any material knowledge on these questions. ■ The order should, therefore, be modified by limiting the examr ination to the. second vice-president,, secretary and. treasurer as herein indicated, and as thus modified affirmed, without costs and without prejudice to. a renewal of the application for the examination of one or more, of the other officers as. may be found necessary after this examination, and as thus modified affirmed, without costs. Patterson, P. J., Ingraham, Clarke and Scott,. JJ., concurred. Order modified as directed in opinion, and as modified affirmed, without costs. Settle order on notice.