Eastern Outfitting Co. v. Manheim, 59 Wash. 428, 110 Pac.


23 (1910).

          [No. 8797. Department One. July 28, 1910.]
EASTERN OUTFITTING COMPANY, Appellant, v. J. MANHEIM
                     et al., Respondent. 1

TRADE-MARKS

AND TRADE-NAMES - CORPORATIONS - RIGHT TO USE

NAME - FRAUD - INJUNCTION. A corporation organized in this state
under the name of "Eastern Outfitting Company" for the purpose of
selling cloaks, suits and men's clothing, has no exclusive right
to the use of the name throughout the state for that purpose;
and where its business had been confined to a retail and mail
order business in the vicinity of Seattle, it will be enjoined
from opening a branch house under the same name in Spokane,
for the purpose of defrauding the public and a copartnership
that had for several years been doing the same kind of business
under the same name in the city of Spokane, where there had
been no confusion theretofore owing


1 Reported in 110 Pac. 23.

           EASTERN OUTFITTING CO. v. MANHEIM.           429
 July 1910          Citations of Counsel.

to the fact that neither had invaded the territory of the other
(MORRIS and CHADWICK, JJ., dissenting).

SAME - UNFAIR COMPETITION - INJUNCTION - RELIEF. In such a case,
the corporation (which was first in the use of the name) is not
entitled to an injunction preventing the further use of the
trade-name by the copartnership; since protection to a trade-name
is only coextensive with the market, and there cannot be unfair
trade competition unless there is competition (MORRIS and
CHADWICK, JJ., dissenting).

SAME - TRADE-NAME - CORPORATIONS - NAMES. The name of a
corporation is not its trade-mark, as the latter refers to
the thing sold, and a trade name embraces both the thing and
the individuality of the seller.

APPEAL - REVIEW - PARTIES ENTITLED TO ALLEGE ERROR. Upon an
appeal from an order enjoining the use of a trade-name, the
appellant is not entitled to have the court review an order
punishing a third person for violating the injunction.

Appeal from a judgment of the superior court for
Spokane county, Hinkle, J., entered November 27, 1909, upon
findings in favor of the defendants, after a trial on the
merits before the court without a jury, in an action for an
injunction. Affirmed.

Samuel R. Stern, for appellant, contended, inter alia, that
a corporation is protected in the use of its name. Cook,
Corporations (6th ed.), SS 15; Clark & Marshall, Corporations,
pages 155, 156; Paulino v. Portuguese Beneficial Ass'n, 18
R. I. 165, 26 Atl. 36, 20 L. R. A. 272; Boston Rubber Shoe
Co. v. Boston Rubber Co., 149 Mass. 486, 21 N. E. 875;
Nims, Unfair Business Competition, pages 199, 215-217; 10
Cyc. 151, art. 3 Sanders v. Utt, 16 Mo. App. 322; Sanders
v. Jacob, 20 Mo. App. 96; State v. McGrath, 92 Mo. 355,
5 S. W. 29; Illinois Watch Cash Co. v. Pearson, 140 Ill. 423,
31 N. E. 400, 16 L. R. A. 429; Elgin Butter Co. v. Elgin
Creamery, 155 Ill. 127, 40 N. E. 616; Ottoman-Cahvey Co.
v. Dane, 95 Ill. 203; Tussaud v. Tussaud, 44 Chan. Div. L. R.
678. The mere fact that two concerns happen to be widely
separated geographically is no proof that no confusion can
or may result by the use of the name by both. Nims, Unfair
Business Competition, p. 224. Samuels v. Spitzer, 177 Mass.

 430    EASTERN OUTFITTING CO. v. MANHEIM.
                Opinion Per GOSE, J.               59 Wash.

226, 58 N. E. 693; Blackwell's Durham Tobacco Co. v.
American Tobacco Co., 145 N. C. 867, 59 S. E. 123. An
injunction will be granted although the business of the parties
was not in the same locality. Lamb Knit-Goods Co. v. Lamb
Glove & Mitten Co., 120 Mich. 159, 78 N. W. 1072, 44
L. R. A. 841; Hopkins, Trade-Marks, SS 13; Derringer v.
Plate, 29 Cal. 292, 87 Am. Dec. 170; Hygela Distilled Water
Co. v. Consolidated Ice Co., 144 Fed. 139; McLean v.
Fleming, 96 U. S. 245; Menendez v. Holt, 128 U.S. 514; Martell
v. St. Francis Hotel Co.,
51 Wash. 375, 98 Pac. 1116. See,
also, Edison Storage Battery Co. v. Edison Automobile Co.,
67 N.J. Eq. 44, 56 Atl. 861; Philadelphia Trust etc. v.
Philadelphia Trust Co., 123 Fed. 534; Nesne v. Sunder, 93
Minn. 299, 101 N. W. 490, 106 Am. St. 439; Rogers v.
William Rogers Mfg. Co., 70 Fed. 1017; Celluloid Mfg. Co.
v. Celluloid Mfg. Co., 32 Fed. 95; Goodyear Rubber Co. v.
Goodyear's Rubber Mfg. Co., 21 Fed. 276; Nolan Bros. Shoe
Co. v. Nolan, 131 Cal. 271, 63 Pac. 480, 82 Am. St. 346, 53
L. R. A. 384; Newby v. Oregon Cent. R. Co., Fed. Case,
No. 10,144; Holmes etc. v. Holmes, 37 Conn. 278, 9 Am.
Rep. 324; Higgins Co. v. Higgins Soap Co., 144 N.Y.
462, 39 N. E. 490, 43 Am. St. 769, 27 L. R. A. 42; Investor
Pub. Co. v. Dobinson, 72 Fed. 603; Bissell Chilled Plow
Works v. Bissell Plow Co., 121 Fed. 357; Buzby v. Davis,
150 Fed. 275; Dale v. Smithson, 12 Abb. Pt. 237; De Youngs
v. Jung, 7 Misc. Rep. 56, 27 N.Y. Supp. 370.

Cohn, Rosenhaupt & Blake and A. M. Winston, for
respondents.

GOSE

GOSE, J, - The plaintiff brought this action to enjoin the
defendants from using the name "Eastern Outfitting
Company." There was a decree in favor of the defendants,
enjoining the plaintiff from using the name in the city of
Spokane. The plaintiff has appealed.

Appellant is a foreign corporation, organized in the state
of California under the name of "Eastern Outfitting Company

           EASTERN OUTFITTING CO. v. MANHEIM.           431
 July 1910          Opinion Per GOSE, J.

of Seattle, Washington." In March, 1902, it filed for
record in the office of the secretary of state of this state a
certified copy of its articles of incorporation, and otherwise
complied with the laws of this state respecting foreign
corporations doing business here. The essential facts are that
the appellant, since 1902, has been engaged in the business
of selling "cloaks and suits, also gents' clothing," in the
city of Seattle, and its vicinity. Its mode of doing business,
as testified by its manager, has been to sell on credit,
receiving a cash payment of a few dollars at the time of the sale,
and weekly or monthly payments thereafter until the
purchase price is paid. It did no business in the eastern part
of the state, aside from a single transaction with one
customer who had moved from Seattle to Spokane. It has, in
addition to its local trade, a mail order business in the
territory adjacent to Seattle. The respondents were at one time
copartners, doing a retail mercantile business in the city of
Spokane under the name of "Eastern Outfitting Company."
The business was started under this name by the respondent
J. Manheim, in April or May, 1905. Later he associated
Nathan Manheim with him in the business and, before the
commencement of the action, the latter acquired the entire
ownership, and continued to conduct the business in the old
name. There is no evidence that the respondents had any
trade outside of the city of Spokane. About August, 1909,
the appellant undertook to open a place of business in
Spokane under the name of "Eastern Outfitting Company," and
advertised that it had an exclusive right to the use of that
name.

The court found, that the business of both the appellant
and the respondents is a retail installment business, purely
local in character; that the respondents have expended large
sums of money in advertising the business, and have
established a large cash and installment business under their
tradename; and that in August, 1909, the appellant, with the
intention to cheat and defraud the respondents and the public,

 432    EASTERN OUTFITTING CO. v. MANHEIM.
                Opinion Per GOSE, J.               59 Wash.

sought to lure the public into its place of business in the
city of Spokane by taking the respondents' trade-name, and
thus divert and appropriate their business. The findings are
supported by the evidence.

The appellant contends that it has. The exclusive right to
The use of the name "Eastern Outfitting Company" throughout
the state, because of its compliance with the laws of the
state with respect to foreign corporations. We cannot concur
in this view. The respective parties adopted the same
tradename and engaged in the same general business, but at points
remote from each other, and they are to be dealt with
precisely as if the names were those of private firms or
copartnerships. Celluloid Mfg. Co. v. Cellonite Mfg. Co., 32 Fed.

"No advantage accrues to a name of a corporation because
it is borne by a corporation." Nims, Unfair Business
Competition, page 198.

The appellant next urges that, upon the principle of
unfair business competition, the respondents should be enjoined
from the further use of the trade-name. This position is
untenable. In considering this question it is essential that
the distinction be kept in mind between a trade-name as
applied to a local business and a trade-name as applied to a
general business. In Martell v. St. Francis Hotel Co.,
51 Wash. 375, 98 Pac. 1116, speaking to the identical question,
we said:

"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."

This principle, stated in varying phraseology, may be
found both in the text books and in the adjudged cases. In
cases like the one at bar the fact to be ascertained is, what is
The market of the complaining party. His protection is
coextensive with his market. Nims, SS 114. "But there is no
standard, except what the court in each particular case
believes has worked fraud, or may work fraud or loss to the

           EASTERN OUTFITTING CO. v. MANHEIM.           433
 July 1910          Opinion Per GOSE, J.

plaintiff." Nims, SS 108. There cannot be unfair trade
competition unless there is competition. Sartor v. Schaden, 125
Iowa 696, 101 N. W. 511.

The doctrine of unfair competition is based upon the
principle of common business integrity, and equity only affords
relief when this principle has been violated. Hainque v.
Cyclops Iron Works, 186 Cal. 551, 68 Pac. 1014; Sartor v.
Schaden, supra. The mischief which a court of equity will
guard against is a confusion in names, or in the identity of
parties, or in the goods sold, so as to deceive the public and
work a fraud upon the party having a right to the
tradename. Philadelphia Trust, Safe Deposit & Ins. Co. v.
Philadelphia Trust Co., 128 Fed. 534; Celluloid Mfg. Co. v.
Cellonite Mfg. Co., supra; Blackwell's Durham Tobacco Co.
v. American Tobacco Co., 145 N. C. 367, 59 S. E. 123;
Cohen v. Nagle, 190 Mass. 4, 76 N. E. 276, 2 L. R. A.
(N. S.) 964.

It is manifest that the respondents, doing a retail business
in Spokane, could not pass off their goods as the appellant's
goods, or pass themselves off as the appellant. The
respondents did not invade the appellant's territory but, on the
other hand, it sought to invade their territory after they
had devoted years of time and labor to giving a reputation
to the name in the city of Spokane. Before the appellant
attempted to open a business in Spokane, there had been no
confusion and no deception practiced upon the public or the
appellant's customers. We have treated the question as if
the parties had used the same trade-name, and have given
no consideration to the fact that the words "Seattle,
Washington," were a part of the corporate name of the appellant.

The contention of the appellant that the name is its
trademark cannot be upheld. As a general rule a trade-mark has
reference to the thing sold, whilst a trade-name embraces
both the thing sold and the individuality of the seller.
Armington v. Palmer, 21 R. I. 109, 42 Atl. 808, 79 Am. St. 786,
43 L. R. A. 95; Sartor v. Schaden, supra.

 434    EASTERN OUTFITTING CO. v. MANHEIM.
                Dissenting Opinion Per CHADWICK, J. 59 Wash.

"The office of a trade-mark is to point out distinctively the
origin or ownership of the article to which it is affixed; or, in
other words, to give notice who was the producer. This may,
in many cases, be done by a name, a mark, or a device well
known, but not previously applied to the same article." Canal
Co. v. Clark, 15 Wall. 311, 322.

A third party was punished for contempt for violating the
injunction order. The appellant seeks to review the
contempt order on this appeal. It cannot be so reviewed.
The appellant suggests that error was committed in
rejecting and admitting certain evidence. Neither the evidence
admitted nor that rejected was material in determining the
issue.

The decree is affirmed.

RUDKIN, C. J., and FULLERTON, J., concur.

MORRIS, J. (dissenting) - I dissent. When appellant fully
complied with the laws of this state, it became entitled to do
business within this state and within the entire state. It had
no locality except the state itself. The fact that it selected
Seattle as its situs did not confine its business to that city,
nor circumscribe to any extent its powers. It was a
corporation in Spokane, and as much entitled to do business there,
and to have its name protected while engaged in such
business, as it was in Seattle. I do not comprehend upon what
theory appellant can be clothed with greater powers in Seattle
and less in Spokane. I know no law making such a distinction.
Its powers are coextensive with the state, and should
be so regarded and protected. Our statute, Rem. & Bal.
Code, SS 3680, protects it in the exclusive use of its chosen
name, and such protection should be extended to all portions
of the state. The judgment should be reversed.
-Dissenter-

CHADWICK
-Dissenting_Opinion-

CHADWICK, J. (dissenting) - Aside from the considerations
advanced by Judge Morris, in which I concur, it seems to
me that the reasoning of the majority defeats itself. It
proceeds upon the theory that a business once established

                EASTERN OUTFITTING CO. v. MANHEIM.      435
 July 1910          Dissenting Opinion Per CHADWICK, J.

must cover a whole field in its inception, rather than upon the
evident fact, proven by the history of the whole business
world,' that a business legitimately organized is entitled. to
the protection of the law .in its development from a small
local concern to the larger concern into which it has the
natural right to grow. Another reason, and to my mind a
forceful one, why the judgment of the lower court should be
reversed, is that the rule allowing an injunction to protect
a trade-name cannot be invoked by defendants in this case.
The business of defendants is a partnership, and it is an
established principle of law that a partnership can have no
property in a trade-name which imports that it is a corporation,
and especially so where there is a corporation organized
and doing business in the state under the same name and
under the protection of the statute. Clark v. Aetna Iron
Works, 44 Ill. App. 510, cited in 28 Am. & Eng. Ency. Law
(2d ed.), p. 356. In the same text, at page 368, the rule
is laid down that:

"A peculiar collocation of words which, although
descriptive in their meaning, are arbitrary in their selection and
arrangement, and are not the only words which could he
employed to describe the article to which they are applied,
may be protected as a trade-mark. It is not always clear,
nor often very material, in this class of cases, whether
protection is afforded upon the ground of technical trade-mark
or upon the ground of unfair competition. It is so easy to
avoid any similarity, that its mere existence is almost
conclusive proof of a fraudulent intent, and hence of unfair
competition. At all events, a deceptive imitation will be
enjoined."

The same rule applies by analogy to trade-names. In
10 Cyc., at page 151, the general rule is stated to be that:

"While the name of a corporation is not in strictness a
franchise, yet the exclusive right to its use may be protected
in equity by the writ of injunction by analogy to the
protection of trade-marks, just as the name of an individual, a
partnership, or a voluntary association may he so protected."

 436    JOHNSTONE v. PEYTON.
                Statement of Case.                59 Wash.

This would be the rule if we had no statute against the
duplication of corporate names, and should certainly be
applied where the policy of the law has been declared by the
legislature to he that confusion in names of business concerns
shall he avoided.