Burge v. Dallas Retail Merchants Ass'n

257 S.W.2d 733, 1953 Tex. App. LEXIS 2364
CourtCourt of Appeals of Texas
DecidedMarch 20, 1953
Docket14618
StatusPublished
Cited by20 cases

This text of 257 S.W.2d 733 (Burge v. Dallas Retail Merchants Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burge v. Dallas Retail Merchants Ass'n, 257 S.W.2d 733, 1953 Tex. App. LEXIS 2364 (Tex. Ct. App. 1953).

Opinions

DIXON, Chief Justice.

This case involves two appeals: One from an order overruling defendant’s plea of privilege; the other from a later order granting plaintiff a temporary injunction restraining defendant from using a certain trade-name. We shall consider both appeals in this opinion.

Appellee, Dallas Retail Merchants Association, plaintiff in the trial court, is an unincorporated association of retail merchants doing business in the City of Dallas and belonging to the Dallas Chamber of Commerce. It is a voluntary nonprofit organization which has operated since 1922 as a division of the Dallas Chamber of Commerce. The purpose of the Association is to carry on such activities and to perform such functions as its Board of Directors may decide upon in order to render service to its members and to promote goodwill in their behalf. It does not engage in the collection business.

Appellant, defendant in the trial court, is an individual, doing business as Retail Merchants Association of Dallas. His business is the collection of delinquent accounts in behalf of retail merchants. Defendant has used the above trade-name since 1948. ■ In 1949 he registered it with the County Clerk of Dallas County.

Plaintiff filed suit April 18, 1952, alleging that it had built up prestige and had become prominently identified in Dallas with the name Dallas Retail Merchants Association by continuous use of the name since 1922; that defendant by adopting and using the name Retail Merchants Association of Dallas, had intentionally caused the public to do business with defendant in the belief that it was dealing with the plaintiff. Plaintiff asked for an injunction and $5,000 damages.

Defendant filed a plea of privilege seeking to have the case transferred to Wichita County, the place of his residence. Plaintiff’s controverting plea contended that venue properly lay in Dallas County because defendant’s acts constituted a trespass under subdivision No. 9 and fraud under subdivision No. 7 of Art. 1995 R.C.S., Vernon’s Ann.Civ.St. art. 1995, subds. 7, 9. Defendant’s plea of privilege was overruled June 5, 1952.

About two weeks later, after another hearing, a temporary injunction was granted restraining defendant from using the name Retail Merchants Association of Dallas.

The record contains much testimony and numerous exhibits to the effect: Plaintiff [735]*735over the years has built up a good reputation as the representative in this community of retail merchants; plaintiff and also the Better Business Bureau of Dallas- have received many telephone calls and letters showing confusion in the ■ minds of the inquirers as to whether defendant is the same as plaintiff, or is affiliated with plaintiff; plaintiff's manager had talked to defendant about this confusion and defendant told him he had registered the name and that he had a right to use it; defendant has used the trade-name “The Credit Bureau,” “Co-operative Credit Service of Texas,” and others in selling collection service franchises over the State of Texas —his letter-heards showing affiliation with “Retail Merchants Association of Dallas.” Defendant testified that his reason for doing this is obvious: — it showed he had a connection with and was handling accounts for the “Retail Merchants’ Association;” defendant has advertised extensively in newspapers and the telephone book; defendant has had calls in regard to trade days, store-closing hours and other inquiries, which is the type of information dispensed by plaintiff as part of its service, and in such cases defendant has always referred the inquirers to plaintiff.

Defendant says there is no evidence of fraud or of trespass in this.case, inasmuch as he has a right to use the name in question by reason of having registered it in compliance with Art. 5924, R.C.S., and having used the name for more than four years. We overrule the contention. Priority in adoption and use of trade-names confers a superior right to the use thereof. We think the infringer would be guilty of a trespass within the meaning of Art. 1995, subdivision 9, R.C.S. The prior user may restrain its use by another, though the latter may have registered the name in the assumed name records. Russ v. Duff, Tex. Civ.App., 49 S.W.2d 905; Dilworth v. Hake, Tex.Civ.App., 64 S.W.2d 829 (error dis.).

Defendant says further that fraud is not the basis of plaintiff’s cause of action but. is merely incidental thereto, hence Art. . 1995, subdivision 7, does not apply. This contention is also overruled. Unfair competition is predicated upon fraud. Dixiepig Corporation v. Pig Stand Co., Tex.Civ.App., 31 S.W.2d 325.

It has often been held in cases involving unfair competition that though geographical names and words of ordinary usage are not susceptible of exclusive appropriation, they may, in certain combinations of words, become so associated in the public mind with the business, goods, or services of some one person as to acquire a secondary meaning; in which case no other person may use the same or similar combination of words without clearly indicating that his business, goods, or services are not the same as those with which such terms have become associated. 41 Tex.Jur. 389; 52 Am.Jur. 553, 554.

However, defendant asserts in his points Nos. 3 and 7 that since he and plaintiff are in noncompeting lines of business, his use of the name involved cannot constitute unfair competition. The authorities are in conflict as to whether competition in the same line of business is a necessary element of “unfair competition.” Most of the older cases hold that it is. Many of the more recent cases hold that it is not. An annotation, giving authorities on both sides, will be found in 148 A.L.R., pp. 12-125. We have not been cited a Texas case directly in point. Aultz v. Zucht, Tex.Civ.App., 1919, 209 S.W. 475 (writ not applied for), cited by appellant, holds that partners did not lose their right to protect their trade-name against use by competitors merely because they had permitted their trade-name to be used by a noncompeting corporation organized by themselves.

In our opinion a person or association may, under some circumstances, be entitled to injunctive relief against a later user of the same or a similar trade-name although the parties are not in competing lines of business. It is not easy to lay down any general rule to apply in such cases, because circumstances vary and each case must be judged by its own circumstances. We think the gravamen of the matter is this: Whether a fraud was perpetrated and whether the complainant [736]*736suffered or will probably suffer harm. Equity abhors fraud; and in keeping with its well known maxim that no wrong shall be without a remedy, we think that where it is shown that there has been, or will be harm, equity will not withhold its aid merely because the victim of the fraud happens not to be in a competing line of business with the wrongdoer.

We believe that the circumstances in the present case should be tested át a trial on the merits by the rule stated in 148 A.L.R.

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Burge v. Dallas Retail Merchants Ass'n
257 S.W.2d 733 (Court of Appeals of Texas, 1953)

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Bluebook (online)
257 S.W.2d 733, 1953 Tex. App. LEXIS 2364, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burge-v-dallas-retail-merchants-assn-texapp-1953.