Ct. 1909). W. MARTELL et al., Appellants,
vs.
ST. FRANCIS HOTEL COMPANY, Respondent
No. 7494
SUPREME COURT OF WASHINGTON
51 Wash. 375, 98 P. 1116
January 5, 1909, Decided
Appeal from a judgment of the superior court for King county,
Albertson, J., entered January 14, 1908, upon findings in favor
of the defendant, after a trial before the court without a jury,
dismissing an action for an injunction.
TRADE NAMES -- INJUNCTIONS -- ENJOINING USE OF NAME FOR HOTEL.
The keepers of a small hotel used principally as a rooming house
by the week, called the Hotel St. Francis, are entitled to an
injunction preventing the use of the same name for a large hotel
catering principally to transients by the day, where it appears
that the two hotels are in the same locality, both competing for
transient trade, and that confusion results from the use of the
same name; and it is immaterial that the defendant when it
adopted the name had no knowledge of the prior use thereof by the
plaintiffs and had no intent to deceive or defraud, or that it is
more inconvenienced by the confusion than the plaintiffs, or the
public.
TRADE NAMES -- DEFENSES. In such a case, it is no defense that
the plaintiff purchased their hotel and its good will pending the
litigation, when all prior damages were waived.
Buck & Boddy, for appellants.
G. E. Steiner, for respondent.
MOUNT, J. HADLEY, C.J., DUNBAR, FULLERTON, RUDKIN, and CROW, JJ.,
concur. MOUNT
{*376} This action was brought to restrain the respondent from
using the name "St. Francis" for his hotel, and for damages. The
cause was tried to the court without a jury. Before the trial it
appeared that the appellants had purchased the interest of the
original plaintiffs, and the appellants were therefore
substituted as plaintiffs. At the trial the substituted
plaintiffs waived all damages prior to their purchase. Thereafter
the evidence was all submitted, the court made findings of fact,
and dismissed the action. The plaintiffs appeal.
The facts as found by the trial court are as follows:
"(1) That on or about the 20th day of May, 1907, the plaintiffs
herein purchased from F. A. Lane the lease, furniture,
furnishings and good will complete of the Hotel St. Francis,
situated at No. 816, Union street, Seattle, and ever since have
been and now are conducting said Hotel St. Francis; that said F.
A. Lane purchased said Hotel St. Francis complete from his
predecessors on or about the 11th day of July, 1906, and
continued to run said hotel from the time he purchased the same
until he sold it to the plaintiffs herein; that the predecessors
of F. A. Lane established said Hotel St. Francis on or about one
year prior to its purchase by said Lane; that said Hotel St.
Francis is a wooden structure of forty-eight rooms having in
connection therewith a dining room; that the patronage of the
plaintiffs' hotel is principally such as secure accommodations by
the week, or month, or for {*377} longer periods, and is such a
hostelry as is commonly known as a rooming house or boarding
house and does not make a specialty of transient trade; that the
lowest price charged for rooms at plaintiffs' hotel is $ 3.50 per
week.
"(2) That the defendant is a corporation organized and existing
under and by virtue of the laws of the state of Washington.
"(3) That on or about the 1st day of January, 1907, one H. E.
Kennedy and a partner, one Stuart Johnson, established a hotel on
the corner of Ninth avenue and Madison St. in the city of Seattle
and selected for the name of said hotel the name St. Francis;
that about the same time said Kennedy and Johnson filed articles
of incorporation of the St. Francis Hotel Co., which
incorporation was formed for the purpose of taking over said
hotel.
"(4) That on or about the first day of February, 1907, one W. F.
Kennedy purchased the interest of said Johnson in said hotel
property and said corporation; that said H. E. Kennedy and said
W. F. Kennedy thereafter subscribed for the entire capital stock
of the St. Francis Hotel Company, and conveyed to said
corporation the said St. Francis hotel.
"(5) That the defendant corporation has ever since been
conducting said hotel under the name St. Francis; that at the
time of forming said corporation and establishing said hotel and
for two or three months after said hotel was in operation,
neither said W. F. Kennedy nor his partner nor any one connected
with said hotel or corporation had ever heard of the plaintiffs'
hotel St. Francis, or of any other hotel of the same name in the
city of Seattle; that the defendant's hotel is located in a
building of brick and cement construction of one hundred and
seventy-eight rooms having commodious dining room attachment,
private baths, telephone exchange, billiard room and barber shop,
and is in every respect equipped and operated as a modern
transient hotel in the equipment of which defendants have
expended $ 45,000; that the prices charged for accommodations at
the defendant's hotel are from $ 2.50 to $ 4.50 per day; that in
forming said corporation and establishing said hotel the
defendant corporation and the individuals forming said
corporation were guilty of no fraud whatever toward the
plaintiffs, never having heard of plaintiffs' hotel, nor did
they, nor have they at any time or in any manner attempted to
attract to themselves the plaintiffs' {*378} patronage or good
name, or to advertise their hotel as the plaintiffs' hotel, or to
mislead the public into the belief that their hotel was the
plaintiffs' hotel.
"(6) That soon after the establishment of the defendant's hotel
the plaintiffs' predecessors began to receive many telephone
calls intended for the defendant's hotel; that the plaintiffs
continued to be and are yet the recipients of many telephone
calls daily intended for the defendant's hotel; that during said
Lane's ownership of the plaintiffs' hotel a consignment of
groceries intended for the defendant's hotel were delivered to
the plaintiffs' hotel and afterwards forwarded to defendant's
hotel; that two or three times per week trunks intended for the
defendant's hotel were delivered to the plaintiffs' hotel; that
upon one occasion a call for a doctor for a guest at plaintiffs'
hotel became confused and the doctor was delayed about two hours
in answering said call; that in order for the plaintiffs to
secure prompt delivery of supplies, baggage, etc., at the hotel,
or to secure prompt response to calls to the hotel and to prevent
confusion, it is necessary for the plaintiffs to add to the name
of the hotel in orders for supplies, calls, etc., the street
number of plaintiffs' hotel; that by adding such street number to
orders, calls, etc., all confusion was avoided; that plaintiffs
had knowledge of the said confusion and inconvenience and of the
pendency of this action at the time they purchased said hotel."
The trial court seems to have been impressed with the fact that,
at the time respondent named its hotel "St. Francis," it was not
aware of the existence of appellants' hotel St. Francis; and
with the fact that the hotels were of different grades, in that
the Hotel St. Francis operated by appellants was more of a family
hotel and conducted on a small scale and did not make a specialty
of transient trade, while the St. Francis hotel operated by
respondent catered more to transients and was a larger hotel and
conducted on a more elaborate plan; and also with the fact that
these appellants purchased knowing of the litigation which it
assumed to carry on. The court, however, found that the hotel St.
Francis was established about July, 1905, and that the St.
Francis hotel was established about January 1, 1907; and it is
conceded {*379} that the latter hotel is located about four
blocks from the former, in the city of Seattle. The court also
found that, after the establishment of respondent's hotel under
the name St. Francis, appellants daily received many telephone
calls intended for the other hotel; that groceries for one were
delivered to the other; that trunks and baggage intended for the
guests of one were sent to the other hotel, and upon one occasion
a call for a doctor at appellants' hotel became confused and the
doctor was delayed thereby. These facts of course show confusion
and injury, both to appellants' hotel and to the guests and the
public with whom the hotel transacts business.
The question in the case is, shall the respondent under the facts
as found by the court be enjoined from using the name St. Francis
to designate its hotel. The rule seems to be well established,
that "a corporation may be enjoined from using a name or
conducting its business under a name so similar to the name of a
previously established corporation, association, partnership, or
individual, engaged in the same line of business, that confusion
or injury results therefrom." Note to International Silver Co. v.
Rogers Corp., 66 N.J. Eq. 119, 57 Atl. 1037, reported in 2 Am. &
Eng. Ann. Cases, p. 407. That case reviews many authorities upon
the questions presented in this case, and many cases are there
cited, both in the opinion of that case and in the notes,
supporting the rule as above stated.
Respondent seems to rely mainly, as the trial court did, upon the
facts that there is a difference in the character of the two
hotels, and that there was no fraud or deception practiced or
intended by respondent, because at the time the name was chosen
it did not know of the appellants' hotel or its name. Respondent
also argues that the confusion shown is to the appellants and not
to the public, and that confusion to the appellants is not
sufficient to warrant a restraining of the use of the name. There
is a difference in the character of the two hotels in this, that
one is larger than the other, and {*380} is run on a more
expensive plan, and caters to transient trade and charges higher
prices; while the other is more of a family hotel, smaller, and
charges lesser rates. But both take transient guests and are
engaged in the same general business in the same locality. They
are both hotels, and necessarily in competition with each other.
The right to adopt a name already in use does not depend upon the
capital invested or upon the kind of business done. If the right
to adopt a name already used by a hotel depends upon the size of
the building, or the rates charged, or the number of servants
employed or the capital invested, then, as remarked by the
appellants in their brief, this rule "would permit another
company with more money than the defendant to establish a larger,
better, and more exclusive hotel across the street from the
defendant's hotel under the same name, and its business could be
thus injured or even ruined without redress." Of course, that is
not the rule. The general rule is, as before quoted, that one
person may not use the name of another already in the same line
of business so that confusion or injury results therefrom. There
is no doubt that these two hotels are in the same line of
business, and that injury and confusion results to the hotels and
to the public.
It is also argued that the facts do not show any fraud or
deception. Actual fraud or deception is not necessary in cases
like this. 28 Am. & Eng. Ency. Law (2d ed.), p. 429. In
International Silver Co. v. Rogers, supra, the court in
discussing this point uses this language, at page 131:
"That this rule is not confined to copies or imitations of trade
marks, appears from the following cases: Chas. S. Higgins Co. v.
Higgins Soap Co., 144 N.Y. 462; Wyckoff, Seamans & Benedict v.
Howe Scale Co., 110 Fed. Rep. 520; Hendriks v. Montagu, 17 Ch. D.
638; North Cheshire etc. Brewery Co. v. Manchester Brewery Co.,
L.R. App. Cas. 83 (1899). In the last case, which is particularly
pertinent because it involved the taking of a corporate name,
Lord Halsbury thus expressed himself: 'In the result it is
perfectly immaterial, to my mind, for the purpose of the
decision, whether {*381} they (the company) were fraudulent or
not. The question is whether this (that is, the assumption of the
name Cheshire and Manchester's Brewery Co.) is an injury to the
plaintiff's right. If it is an injury to the plaintiff's right,
it is perfectly immaterial whether they intended it or not. The
court must restrain them from doing that which is an injury to
another person, however inadvertently they may have done it.'"
To the same effect is Howard v. Henriques, 3 Sandf. (N.Y. Sup'r
Ct.) 725, which is a case of an inferior court, but very much
like this case. See, also, Dodge Stationery Co. v. Dodge, 145
Cal. 380, 78 P. 879; Van Houten v. Hooten Cocoa & Chocolate Co.,
130 Fed. 600. And the fact that the appellants bought the hotel
St. Francis and its good will pending this case and knew of the
litigation can make no difference in the case. Prior damages were
waived. Appellants certainly are entitled to what they bought,
and are as much entitled to the good name of the hotel as to the
lease and the furniture thereof. We are satisfied from the
evidence and from the findings of the court that the appellants
are entitled to the injunctive relief demanded, and that the
court erred in refusing to enjoin the respondent from using the
name St. Francis for its hotel.
The judgment of dismissal is therefore reversed, and the lower
court is ordered to enter a decree in accordance with this
opinion.
DISPOSITION
Reversed.
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