Hazelton Boiler Co. v. Hazelton Tripod Boiler Co.

Mr. Chief Justice Bailey delivered the opinion of the Court: This is a controversy between two corporations, one the Hazelton Boiler Company, organized June 23, 1888, under the laws of the State of New York, and the other the Hazelton Tripod Boiler Company, organized February 29, 1888, under the laws of this State, in which the former is seeking to restrain the latter from using its own corporate name, and from usin g the words, “Hazelton Boiler,” and the word “Hazelton,” in the transaction of its business of manufacturing and selling steam boilers. Hazelton, Holmes, Hallett and Kirkpatrick are also named as defendants, but as it is not shown, either by the pleadings or proofs, that they are or have been using said names or words in the transaction of said business except in their capacity of officers and agents of the 'Hazelton Tripod Boiler Company, their rights and liabilities must necessarily depend upon those of their principal, the corporation, and they may therefore be omitted from the discussion. So far as the suit relates to the right of the defendant corqioration to make use of its own corporate name in the transaction of the business for which it was incorporated, it does not seem to us that the case presented is one upon which there can be any material difficulty or doubt. In the pursuit of this part of the remedy sought, twro obstacles seem to confront the complainant, both of which are apparently insuperable. The first grows out of the fact that the complainant is a junior corporation seeking to contest with a senior corporation the right of the latter to the use of its corporate name, and the second arises from the position of the complainant as a foreign corporation seeking to contest with a domestic corporation the right of the latter to the corporate name given by the sovereignty which created it. The incorporation of the defendant antedates that of the complainant by nearly four months, and, consequently, at the time the complainant was organized, the defendant had already received and appropriated its corporate name, and if there has been any infringement, it is the complainant and not the defendant which is the aggressor. If the two names are substantially identical, as is claimed, "the defendant’s right, by virtue of prior appropriation, would seem to be paramount. Even if the complainant were accorded the same legal status which it would have held if it were a domestic corporation, the name given it, if the substantial identity of said name with that of the defendant is conceded, would have been in violation of that provision of section 2 of our statute "in relation to corporations which forbids a license to be issued to two corporations of the same name. But the complainant is in the attitude of a foreign corporation coming into this State and seeking to contest the right to the use of a corporate name which this State, in furtherance of its own public policy and in the exercise of its own sovereignty has seen fit to bestow upon one of its own corporations. For such a purpose, a foreign corporation can have no standing in our courts. Such corporations do not come into this State as a matter of legal right but only by comity, and they can not be permitted to come for the purpose of asserting rights in contravention of our laws or public policy. It is competent for this State, whenever it sees fit to do so, to debar any or all foreign corporations from doing business here, and whatever it may do by way of chartering corporations of its own, can not be called in question by corporations which are here only by a species of legal sufferance. It follows from what we have said that the decree of the Superior Court was clearly right so far as it related to the use by the defendant of its corporate name. It remains to he seen whether the complainant has shown itself entitled to protection in the exclusive use, in its business of manufacturing and selling steam boilers, of the words “Hazelton Boiler” and the word “Hazelton.” If it be admitted that the assignment by Hazelton to John P. Kennedy of “all his right, title and interest” in and to the business of the firm of which Hazelton was a member, “its assets, profits and emoluments,” was sufficiently broad to transfer to Kennedy all property rights which Hazelton had in any trade-mark or trade-name connected with said business, we are unable to find from the evidence that these words or any of them had been so adopted, appropriated or used in said business, prior to the retirement of Hazelton therefrom as to constitute them, in any legal sense, the trade-mark or trade-name of said firm. It is a circumstance worthy of notice that no .specific reference is made in said assignment to any trade-mark or trade-name, or to any peculiar property in or appropriation of said words or any of them to the steam boilers said firm were manufacturing and selling, or to the business in which the firm was engaged. Not only is this so, but all the witnesses agree that, in the negotiations which led to the execution of said assignment, no mention whatever was made of the subject of trade-marks, trade-names or the good-will of the business as a portion of the assets within the contemplation of the parties. None of these matters were discussed or apparently thought of, and the present contention is based solely upon the claim that the term “assets” of said business is sufficiently broad to include all possible property rights to which Hazel-ton, as a member of said firm, was in any way entitled, and so must be deemed to have included trade-marks and trade-names, if the firm, as a matter of fact, had, up to that time, become entitled to any such. The evidence shows, as we have already seen, that when the business of said firm was commenced in March, 1884, the name “Hazelton Boiler Company” which had been agreed upon as the name of the corporation which the parties had propos'ed to organize was adopted and used as the firm name, and this, if anything, became the trade-name of the firm. There is evidence tending to show that the boilers which Kennedy and and Hazelton manufactured and sold were, known from the first, to some extent at least, as “Hazelton Boilers,” and that said firm so denominated them in their advertisements and circulars, but these facts do not show the adoption of those words or of the word “Hazelton” as either a trade-mark or trade-name. A trade-mark owes its existence to the fact that it is actually affixed to a vendible commodity. Browne on Trade-Marks, sec. 91. There is no evidence, or if there is any, it is exceedingly slight, that the words “Hazelton Boiler” or “Hazelton” had been actually affixed to said boilers as a trademark prior to July 10, 1884. The mere adoption of these words in advertisements and circulars gave the firm no exclusive right to their use. It is undoubtedly true, as was held in Frazer v. Frazer Lubricating Company, 121 Ill. 147, that where a party sells out an established business, and with it his own name, to be used in connection with such business, his vendee will acquire a right to the use of the name, and the vendor can not afterwards assume it in carrying on the same business. That case, however, differs essentially from this in the fact that there the vendor, in the instrument by which the business was sold, expressly authorized the vendee to use his name as a trade-mark, or as indicating the material or product theretofore manufactured by the vendor, and conferred upon the vendees the exclusive authority to use his name for such purpose. But in the present case there is no reference, in the instrument by which the business was transferred, to the use in connection with said business, of the vendor’s name, either exclusively or otherwise. The transfer of the exclusive right to ■ the use of said name is sought to be made out from the mere fact that said instrument assigned all the assignor’s interest in the assets of the business, and trade-marks and trade-names, if such there were, are claimed to have been a part of the assets assigned. The right of a man to use his own name in connection with his own business is so fundamental that an intention to entirely divest himself of such right and transfer it to another will not readily be presumed but must be clearly shown. Where it is so shown the transaction will be upheld. But it will not be sustained upon doubtful or uncertain proof. All the circumstances surrounding the execution by Hazelton of the assignment of his interest in the business tend to negative the assumption that any property in a trade-mark or a trade-name was within the contemplation of the parties, and the evidence, to say the least, leaves it doubtful whether the firm, at the time said assignment was made, had any property rights of that character. We therefore think that the intention on the part of Hazelton to divest himself of the right to use his own name in any business in which he might see proper to engage, is not shown with such clearness and certainty as would justify the courts in undertaking to enforce it. We are also of the opinion that there is a failure by the complainant to show any improper interference by the defendant with the complainant’s business of manufacturing and selling steam boilers. The complainant’s place of business is in the city of New York, while that of the defendant is in the city of Chicago. Neither puts its steam boilers on the market to be sold by retailers or middle-men to the final purchaser, but both deal directly with customers who-purchase boilers for their own use, and who give their orders directly to the complainant or defendant as the case may be. In this way the liability of intending purchasers to be deceived into mistaking boilers of the defendant’s manufacture for those of the complainant, if not wholly obviated, is reduced to the minimum. It is difficult to see how purchasers of ordinary intelligence dealing directly with the manufacturers could be misled into confounding two such establishments situated nearly one thousand miles apart. But whether this is so or not, the evidence fails to show any act on the part of the defendant either intended or calculated to deceive in this respect. Unquestionably the two establishments are rivals, and as they are manufacturing and selling boilers of very similar construction and qualities, and are each seeking to avail themselves of the markets of the country, the competition between them is doubtless sharp and energetic. But competition, when conducted fairly, and with no intention or attempt to deceive, gives no legitimate ground for complaint. It is to be encouraged rather than condemned. It is not shown that the defendant has ever attempted in any way to palm off its own boilers as being of the complainant’s manufacture. On the other hand, the evidence seems to show more than ordinary efforts on the part of the defendant to apprise the public that it and the complainant were two separate concerns having no connection with each other, and that its boilers were different from those manufactured by the complainant. If any confusion ha^ occurred, it has arisen from the similarity of the two corporate names, and not from any attempts on the part of the defendant to deceive. But, as we have already held, the similarity of names is a circumstance of which the complainant has no right to complain, the defendant having at least as good a right to the use of its corporate name in the transaction of its business as the complainant has to use its name. If injury results to the complainant from such cause, it is damnum absque injuria. Much reliance, however, is placed upon evidence that the defendant, in selling its steam boilers, took the liberty to refer its customers to certain boilers still in use manufactured and sold by Hazelton and Kennedy while they were in business together, such reference being made for the purpose of showing the durability and other desirable qualities of boilers of that class; and also that the defendant had, to some extent, availed itself of recommendations given to the complainant by its customers commendatory of boilers of the same class manufactured and sold by the complainant. So long as it does not appear that the defendant did this by way of deceiving intending purchasers into the belief that the boilers in which the defendant was dealing were of the complainant’s manufacture, we are unable to see that there was anything legally improper in all this. These boilers being all constructed upon the same general plan and operating in the same general way, it was not illegal or improper for the defendant, in order to show the capabilities and qualities of its own boilers, to refer its customers to examples of boilers manufactured by the complainant, or refer its customers to what people who had used the complainant’s boilers were disposed to say in their praise. There was no trade secret in their manufacture which was hedged about by any sanctity which the defendant was not at liberty to invade. So far as boilers involving the same principle and plan of construction were in use, it had a right to refer to them as evidence of the capabilities of its own, without reference to who built them. If those owning and using them were willing to allow them to be examined by the defendant’s customers, the complainant had no ground of complaint. When it sold said boilers, it parted with all interest in them, and so long as their construction was not covered by valid patents, a thing which is not now claimed, no reason is to be perceived why the defendant was not as ■much at liberty as the complainant to refer to such boilers and make use of them as examples of the capacity and qualities of boilers of that general class. In view of the whole reco.rd, we think the complainant has failed to show itself entitled to relief, and that its bill was properly dismissed for want of equity. The judgment of the Appellate Court affirming the decree of the Superior Court will be affirmed. Judgment affirmed. Mr. Justice Shore: I concur in the conclusion reached, but not in all of the reasoning of this opinion.