Koebel v. Chicago Landlords' Protective Bureau

Mr. Justice Wilkin delivered the opinion of the court:

It is not denied that the allegations of the bill are sufficient to justify the interposition of a court of equity to restrain the defendants in the use of the generic or descriptive words, “Landlords’ Protective Department,” and we are unable to see how it can be seriously contended that the evidence does not fairly support those allegations. The law undoubtedly is that the complainant, the Chicago Landlords’ Protective Bureau, had no right to appropriate to itself the exclusive use of that name to the exclusion of the right of the defendants to use the descriptive words “Landlords’ Protective Department,” so long as the use of those words was with a legitimate and honest purpose, but whenever defendants, intentionally or otherwise, took advantage of the similarity of the name adopted by them to the one under which the complainant was incorporated and had been carrying on its business, to mislead the public, or, without explanation, allowed their clients to be misled into the belief that the two business associations were one and the same, it violated the-lawful rights of the complainant and the plainest principles of equity. Fraud is the gist of actions of this kind. Courts of equity will never enjoin the use of generic or descriptive words in a trade-mark or business name except upon an allegation and proof of actual fraud or fraud resulting from the similarity of the names, tending to lead those dealing with the parties to believe that they are one and the same, even though they use ordinary care to discriminate between them. (Ball v. Siegel, 116 Ill. 137 ; Elgin Butter Co. v. Elgin Creamery Co. 155 id. 127.) In the case of Allegretti v. Allegretti Chocolate Cream Co. 177 Ill. 129 , on page 133 we said: “The defendants had a right to open up their business under the firm name of Allegretti & Co., provided they did so without any intent, act or artifice to mislead dealers in the market, or the public at large, as to the identity of the firm. If they established their new business and sought to conduct it with the fraudulent and wrongful intention of attracting to themselves the custom intended for appellees, this is clearly a fraud upon the rights of the latter. Whether the business was carried on with such wrongful intent to deceive is a question of fact which was found adversely to appellants upon a hearing, and is the one we must determine from an examination of the evidence.’’ The same' doctrine is announced in International Committee of Young Women's Christian Associations v. Young Women’s Christian Association of Chicago, 194 Ill. 194 .

We think the true ground upon which the jurisdiction of a court of equity to restrain the defendants, as prayed in this bill, rests, is that the name assumed by the de-

fendants is so similar to that of the complainant as to mislead and confuse the public mind in the city of Chicago as to the identity of the business in which the two parties were engaged. Investor Publishing Co. v. Dobinson, 72 Fed. Rep. 603; Guardian Fire Assurance Co. v. Guardian and General Ins. Co. L, R. 50 Ch. (N. S.) 253; Lee v. Halley, L. R. 5 Ch. App. Cas. 155; Knott v. Morgan, 2 Keene, 215; United States Mercantile Reporting Co. v. United States Mercantile Reporting and Collecting Ass. 21 Abb. N. C. 115 ; Matsell v. Flanagan, 2 Abb. Pr. 459 .

Sanders v. Jacob, 20 Mo. App. 96 , is a case in point illustrating the doctrine of the foregoing authorities. There the petitioner had been engaged in the practice of dentistry in the city of St. Louis, under the business name “New York Dental Rooms,” for many years. Some two months prior to the bringing of the suit the defendant, who was also a dentist, opened an office near the plaintiff’s, and displayed a sign bearing the words “Newark Dental Rooms,” the sign being similar in appearance to the plaintiff’s sign. The court, after stating that an injunction may issue where the resemblance between the two trade names is sufficiently close to raise a probability of mistake on the part of the public or the evidence shows the design to mislead and deceive on the part of the defendant, said: “In the present case both of these elements concur. There was sufficient resemblance between the two signs to raise a probability of mistake on the part of the class of customers that frequented the plaintiff’s place of business. The evidence further shows that such mistakes actually occurred. It further satisfies us that the defendant intended that they should occur.”

In United States Mercantile Reporting Co. v. United States Mercantile Reporting and Collecting Ass. 21 Abb. N. C. 115 , the ground upon which the injunction was granted and maintained was stated by the judge rendering the opinion: “It seems to me that the name under which the defendant was incorporated and is doing business is such a colorable imitation of that of plaintiff’s that an injunction should be granted restraining its continuance. The cards and bill-heads in evidence show a disposition on the part of the defendant to make unduly prominent that portion of its corporate name which is most similar to the name of the plaintiff. Certain it is that the use by the defendant of its corporate name has led to confusion in the delivery of the mail matter addressed to the parties in question.”

In the case of Lamb Knit Goods Co. v. Lamb Glove and Mitten Co. 120 Mich. 159 , this language appears: “In the present case the testimony shows that dealers have been misled, and in view of the fact that the complainant’s business is largely the manufacture of gloves and mittens and that the name ‘Lamb’ is prominent in the corporate name, we think it is likely to mislead. The decree will be reversed and a decree entered restraining the defendant from continuing the use of the corporate name ‘Lamb Glove and Mitten Company,’ or any name in which the word ‘Lamb’ appears in connection with other words indicating a business similiar to that of complainant.” And so cases might be cited almost without number, to the same effect.

While it is true that the defendant Campe, who seems to have been the active member of the defendant firm in the Landlords’ Protective Department, testified that he had no knowledge of the existence of the complainant corporation at the time of the organization of their department, he admits that he had knowledge of the fact that the similarity of the names was calculated to mislead the public to the injury of the complainant. He says: “I did not know of the Chicag'o Landlords’ Protective Bureau until about five or six months ago. I didn’t know it was in existence at the time I established the Landlords’ Protective Department. I had not seen their letter-heads. I didn’t know Mr. Terwilliger or Mr. Cheney.” But in answer to a question by his solicitor he stated that he had not instructed any of his agents to represent that they were connected with the complainant. “I warned them against it after I became acquainted with the name of the Chicago Landlords’ Protective Bureau.” And again: “I warned our agents against representing themselves as complainant as soon as I began to hear of the similarity of the name. * * * I cannot fix the date when I warned our agents not to represent themselves as complainant; -it was within the past six months.” '

We have already seen that such confusion did result, as is abundantly shown by the evidence. “Landlords’ Protective Bureau” and “Landlords’ Protective Department” are manifestly so similar as to almost necessarily lead to complication and confusion in the business of the two parties, and it is of no importance, in this view of, the case, that the defendants had no knowledge of the existence of the complainant until after they had organized their rival business, or had no intention of injuring complainant. As was said in Newby v. Oregon Central Railroad Co. Deady’s Rep. U. S. District of Oregon, 609: “Under the law the corporate name is a necessary element of the corporation’s existence. Without it a corporation cannot exist.- Any act which produces confusion or uncertainty concerning this name is well calculated to injuriously affect the identity and business of a corporation; and, as a matter of fact, in some degree, at least, the natural and necessary consequence of the wrongful appropriation of a corporate name is to injure the, business and rights of the corporation by destroying or confusing its identity. The motives of the persons attempting the wrongful appropriation are not material. They neither aggravate nor extenuate the injury caused by such appropriatioji. The act is an illegal one, and must, if necessary, be presumed to have been done with an intent to cause the results which naturally flow from it.”

It may be conceded that the evidence in this record as to the actual and intentional fraud is conflicting, and if the determination of the case depended upon that alone there would be force in the argument that the finding of the chancellor, who saw the witnesses and heard them testify, should not be disturbed, but we think the undisputed fact that the similarity of names resulted in embarrassment and injury to the complainant justified the conclusion of the Appellate Court, and its judgment will accordingly be affirmed. Judgment affirmed.