De Long v. De Long Hook & Eye Co.

PARKER, J. The learned judge at special term decided that the defendant corporation should be restrained from using, in selling or placing upon the market, in connection with its goods, the name “De Long Hook & Eye Company,” upon the ground that the selection of such name was made with intent to identify the defendant with the plaintiffs’ business, to the injury of the latter, and its use is calculated to induce deception and confusion in the public mind as to the identity of the goods sold by the plaintiffs and defendant, respectively. An attentive examination of the evidence satisfies us that the determination of fact made at the special term as a basis for its decision is right. Undoubtedly, the phenomenal growth of plaintiffs’ business, and the large profits derived therefrom, suggested to one of the promoters of defendant corporation the feasibility of deriving a substantial benefit from the reputation of plaintiffs’ goods, known as “De Long’s Hooks and Eyes,” because of the fact that his name happened to be De Long. 'The facts which support this conclusion were so fully discussed in the opinion of the learned judge at special term that it is unnecessary for us to do more than present an outline of the more important features: The plaintiffs put upon the market, in the year 1889, a hook and eye which they called the “De Long Hook & Eye.” They were sewed upon cards upon the top of which was printed, “The De Long Hook & Eye.” With much advertising skill, and at considerable expense, the plaintiffs rapidly built up a large business. The sales, which were about $12,000 in 1890, reached nearly $450,000 in 1893. In the summer of 1892, Oscar A. Dé Long—a buyer for one of the departments of a large mercantile house, and who had, from time to time, purchased the plaintiffs’ [511] hooks and eyes, to be sold at retail by his employers—conceived the idea of making a change in the hook, which he calls an improvement, and in the latter part of that year he sought capital necessary to enable him to engage in the hook and eye business. He found persons willing to enter into the enterprise with him, and as a result a corporation was formed with the corporate name of “The De Long Hook & Eye Company.” Immediately thereafter the company commenced the manufacture and sale of hooks and eyes sewed upon cardboard in the same manner as the plaintiffs’, each of which bore the words, “De Long Hook & Eye Company, Makers, Hew York.” Later, he pasted over those words the words “Oscar A. De Long’s Improved,” pasting the words thus covered up on the back of the card, on a label. The effect intended and accomplished by the use of the words “De Long,” in connection with the style of tibe card on which the hooks and eyes were placed, was to secure some part, at least, of the benefit resulting from the extensive advertising which the plaintiffs had given to the name “De Long” in connection with their hook and eye business. It is not conceivable that it could have been otherwise, but we are not left to conjecture; for the plaintiffs, in support of their contention that the method adopted by the defendant was intended to, and did, deceive the public, produced witnesses who testified, in effect, that in response to requests for De Long hooks and eyes, made to dealers, they were given defendant’s hook and eye, when they desired the plaintiffs’. Starting, then, with the determination of fact of the special term— which we approve—that the defendant deliberately attempted to make such use of the name of one of its incorporators as to enable it to secure a portion of the business which plaintiffs had built up, we have no difficulty in arriving at the legal conclusion reached by that court. That there were slight differences in the name, variations of coloring and size of cards and shape of hooks, and some difference in printed matter on the cards, must be conceded. “But similarity, not identity, is the usual recourse, where one party seeks to benefit himself by the good name of another.” Bradley, J., in Celluloid Manuf’g Co. v. Cellonite Manuf’g Co., 32 Fed. 94. The real test in such cases is whether the thing offered for sale is so arranged and exhibited that when it strikes the eye of an intending purchaser, possessed with ordinary intelligence and judgment, a false impression is likely to be produced,—that the goods of another are being offered for sale. And when that inquiry must be answered in the affirmative, as it has been in this case, “it is the province of equity to interfere for the protection of the purchasing public, as well as of the plaintiff, and for the suppression of unfair and dishonest competition.” Fischer v. Blank, 138 N. Y. 251, 33 N. E. 1040. This equity will do where the business practices complained of may not be of such a nature as to enable the party aggrieved to obtain redress under the restrictive rules of law, if, nevertheless, they are of such a character as to offend that law of fairness which should govern the acts of men, of which equity may take cognizance. This doctrine has frequently been asserted in other jurisdictions besides our own. In Coats v. Thread Co., 149 U. S., at page 566, 13 Sup. Ct., at page 966, the court said: [512] “Rival manufacturers may lawfully compete for the patronage of the public In the quality and price of their goods, in the beauty and tastefulness of their inclosing packages, in the extent of their advertising, and in the employment of agents, but they have no right to imitative devices to beguile the public into buying their wares under the impression they are buying those of their rivals.” And in Lawrence Manuf’g Co. v. Tennessee Manuf’g Co., 138 U. S. 537, 11 Sup. Ct. 396, the court said: “Undoubtedly, an unfair and fraudulent competition against the business of the plaintiff, conducted with the intent on the part of the defendant to avail itself of the reputation of the plaintiff to palm off its goods as plaintiff’s, would, in a proper ease, constitute ground for relief.” It is the appellant’s contention that, notwithstanding the determination of the court that defendant’s conduct in the use of the words “De Long” was intended to deceive the public, and enable it to sell its goods as if they were plaintiffs’ goods, and therefore fraudulent, still it cannot be visited with the consequences which ordinarily flow from such action, because of the fact that one of its incorporators and stockholders bore the name of De Long. A man may use his own name, because he cannot truthfully do business under any other; and the law protects that right, ordinarily, even when such use is injurious to another, who has established a prior business of the same kind, and gained a reputation which goes with the name. . Even then the courts require that the name shall be honestly used, and will permit no deceit calculated to mislead the public into purchasing his goods under the belief that they are the manufacture of another. But that is not this case, for the promoters of this corporation could have given to it the name of either of the other incorporators, or any other name they liked, provided the designation was honestly made, and without injury to others. But the circumstances surrounding the creation of the defendant, and the name of it, satisfies us, as it did the trial court, that the selection of the name was not an honest one, but a part of the original scheme of Oscar A. De Long to make such use of his own name as would enable him to profit by the name which the plaintiffs had given to their hooks and eyes, and which they had made valuable by much labor and a. liberal expenditure of money. The recent case of Higgins Co. v. Higgins Soap Co., 144 N. Y. 462, 39 N. E. 490 (decided since the entry of the judgment appealed from) is conclusive that a corporation will not be permitted to make use of a name thus acquired, and for such purposes. In that case it appeared that Charles S. Higgins commenced the manufacture of soap for the market in 1846. After a time, his son, bearing the same name, became interested with him in the business, to which he succeeded upon the death of the senior Higgins. In 1890 the junior Higgins and others formed a corporation called the “Charles S. Higgins Company,” to which was sold and transferred the soap business of Higgins, together with the good will, labels, trade-marks, etc. The article manufactured was known to the trade as “Higgins’ Soap.” About a year after the corporation commenced the conduct of the soap business, some trouble arose among its officers and directors, resulting in the removal of Higgins from its presidency. As, in the bill of sale to the corporation, Higgins had re [513] served the right to engage in the manufacture of soap in the event of a termination of his employment by the corporation, he at once commenced preparations to that end. A corporation called the “Higgins Soap Company” was organized, under the laws of Hew Jersey, and Charles S. Higgins was chosen as its president. Impressed upon its bars of soap, and printed upon its wrappers, were the words, “Higgins Soap Company.” The suit to restrain the Higgins Soap Company from making use of its corporate name was unsuccessfully prosecuted until it reached the court of appeals, where it was held that the injunction should issue. In the course of the argument the court said: “The inference seems irresistible that the defendant assumed its corporate name so that it should carry the impression that it was the manufacturer of Higgins soap, so well known to the public. But if the name was assumed in good faith, and without design to mislead the public and acquire the plaintiffs’ trade, the defendant, knowing the facts, must be held to the same responsibility as if it acted under the honest impression that no right of the plaintiffs was invalid.” In this case, Oscar A. De Long, the original promoter of defendant, knew all the facts. He even had a conversation with the plaintiff De Long, in which a mutual attempt was made to discover whether there was any relationship existing between them, and this was some little time before he took any steps looking to the establishment of the hook and eye business. And, further than that, the facts before us are such, as we have already said, as to require the inference that he brought about the naming of the defendant with the intent that the public should receive the impression that it was the manufacturer of “De Long’s Hooks and Eyes,” so well and favorably known to the public. The court further decided, in Higgins’ Case, that the defendant derived no additional immunity from the fact that the name of Higgins, in its corporate name, was that of one or more of its incorporators, or that one of its members might have engaged in the same business under his own name, or had consented to the use of the name by the defendant. The decision in Higgins’ Case answers the contention of the appellant as to that point. The same proposition wgs recently asserted in William Rogers Manuf’g Co. v. R. W. Rogers Co., 66 Fed. 66. Food Co. v. Massam, 42 Law T. (N. S.) 851, 14 Ch. Div. 784, relied upon by the special term, is, in many of its features, analogous to this one. Briefly stated, the facts were that one Joseph Thorley for many years manufactured and sold an article called “Thorley’s Food for Cattle,” made according to a receipt not known to the public. After his death his executors continued the business. A brother, named J. W. Thorley, who was acquainted with the secret process by which the food was manufactured, survived him; and he, with others, formed a company under the name of “J. W. Thorley Cattle Food Company,” which thereafter manufactured and sold the same article under the name of “Thorley’s Food for Cattle.” It was held that the company had not the right to use the name of “Thorley’s Food for Cattle,” unless with such precautions as would prevent purchasers from believing that the articles sold by them were manufactured at [514] the original establishment of Joseph Thorley, and the company was restrained from using its name so as to produce confusion of its identity with that of the plaintiff’s firm. In view of the comment which the court made in Higgins’ Case, supra, upon Meneely v. Meneely, 62 N. Y. 427, it is sufficient to say in this case that it is not in point. While fully concurring with the main features of the judgment, we nevertheless think the complaint of the appellant, that the judgment is too broad, is well founded. It is certainly more comprehensive than either the decision or the opinion of the trial court. We find no authority in this record for holding that the defendant may not manufacture and sell hooks and eyes of the character which it was manufacturing. Nor are we able to find any basis for the claim that the plaintiffs have the exclusive right to the use of cards to hold hooks. In so far as the judgment restrains the defendant from using the words “Be Long,” the judgment should be affirmed, but it should not embarrass the defendant in any honest effort which it may hereafter make to put its goods upon the market in a manner which shall not have the effect of persuading customers that the defendant’s goods are the manufacture of the plaintiffs. It would seem as if its present form might have that effect. Therefore the judgment should be modified by inserting between the word “restrain” and the word “and,” at the end of the first adjudication in the judgment, the following: “But nothing herein shall operate to prevent the defendant from manufacturing and selling hooks and eyes put up in any form which shall not violate the trade-mark of the plaintiffs, or have the effect to induce the ordinary purchaser to buy defendant’s goods, believing them to be manufactured by the plaintiffs.” We do not find in the complaint any allegation, nor in the record any testimony, as to the value of the subject-matter involved in this suit. The extra allowance, therefore, seems to have been without authority, and the appellant is entitled to a modification of the judgment in that respect. Hanover Fire Ins. Co. v. Germania Fire Ins. Co., 138 N. Y. 252, 33 N. E. 1065. The judgment should be modified in accordance with this opinion, and, as modified, affirmed, without costs. All concur.