French Bros.-Bauer Co. v. Townsend Bros. Milk Co.

25 Ohio N.P. (n.s.) 548
CourtOhio Superior Court, Cincinnati
DecidedOctober 15, 1925
StatusPublished

This text of 25 Ohio N.P. (n.s.) 548 (French Bros.-Bauer Co. v. Townsend Bros. Milk Co.) is published on Counsel Stack Legal Research, covering Ohio Superior Court, Cincinnati primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
French Bros.-Bauer Co. v. Townsend Bros. Milk Co., 25 Ohio N.P. (n.s.) 548 (Ohio Super. Ct. 1925).

Opinion

Marx, J.

The old maxim that competition is the life of trade is good sense and good law. The policy of the law is to foster competition and to frown upon monopoly in the hope that better service and lower prices will result. Gorman, J., in Home Steam Laundry v. Smith, 8 N. P. (N.S.), 402. By this is meant fair and honest competition, for it is equally true that unfair" and dishonest competition is the thief of legitimate business. The law, therefore, aims to encourage fair competition and to prevent unfair competition.

The law upon this subject deals with one of the most important phases of every day life, — the struggle for a living. It is free from legal red tape and technicality. It has been boiled down by the author of the best treatise upon the subject to one simple rule,- — -“compete honestly.” Introduction to second edition of Nirns on Unfair Competition, which concludes:

“The great fundamental rules of honesty and fair dealing are still the touch stones by which the relations of commercial life are to be measured.”

The plaintiff complains that the defendants have transgressed these rules, first, in adopting the trade name of the plaintiff in order to. take advantage of their good will; and second, in enticing away their employees for- the purpose of securing confidential information and property of the plaintiff in its trade routes, ete.

[550]*550The defendants deny these claims and assert the right to use their own names in a corporate capacity, and their right to employ all persons who will accept the employment offered.

Since, "each case is, in a measure, a law unto itself,” and "unfair competition is always a question of fact,” (38 Cyc. 779) the facts of the present ease will be briefly stated.

In 1906, the French Brothers Dairy Company purchased the stock of the Townsend Milk Company which had previously been owned by John Townsend. In 1910 The French Bros.Bauer Company was incorporated. The Townsend Milk Company corporation was dissolved and the business of the John Townsend Dairy and the Townsend Milk Company was conducted under the Townsend name as an independently operated branch of The French Bros.-Bauer Company. In 1915 the plaintiff purchased the business of the Charles I. West & Son Dairy and thereafter conducted the business of selling milk, buttermilk, butter and dairy products under' the name of “Townsend-West Dairy.” From the time the business of the John Townsend Dairy was purchased by the plaintiff, the sons of John Townsend were employed by the plaintiff company. There were three sons, namely: Henry, Elmer D. and Roy D. Townsend. .From about 1912 Elmer D. Townsend was continuously employed by the plaintiff 'as the manager and executive head of the Townsend or Townsend-West Dairy. In 1924 he was made a director of the plaintiff company and was paid a salary of $10,000.00 per annum. During the same period Roy D. Townsend was employed by the plaintiff company as the head of the office foree of the Townsend or Townsend-West Dairy. From the evidence it appears that the Townsend-West Dairy was operated as an independent dairy under the complete control and direction of Elmer D. Townsend who directed the policies of the dairy, including its buying, selling, advertising and the hiring and firing of employees. He enjoyed the confidence of the plaintiff to such an extent that he was asked to prepare himself to succeed Frank French as president of the plaintiff company. He had access to the confidential information of the plaintiff company and was permitted to spend [551]*551large sums of money, by the plaintiff in advertising the products sold by' the Townsend-West Dairy. In the expenditure of this money he advertised the name “Townsend’s” as identifying a'brand of buttermilk without using the word “West” in connection therewith (Exhibit No. 3). He also used the word “Townsend’s” as identifying a brand of fancy butter (Exhibit No. 1). Milk, cream, eggs and cottage cheese were similarly advertised under the slogan, “Buy Quality. Townsend’s” (Exhibit No. 2.)

In this manner and by reason of the long acquaintance of the public with the- name “Townsends” in connection with a high quality of dairy products,, a valuable good will was built up with the money of the plaintiff for the name “Townsend.” In 1924 Henry Townsend became associated with and president of the Niser Ice Cream Company, a competitor of the plaintiff. In June, 1925,- Roy D. Townsend and Elmer D; Townsend left the employment of the plaintiff company and immediately upon leaving the plaintiff company associated themselves with their brother Henry in a competing company and adopted the corporate name of “The Townsend Bros. Milk Company.” Elmer D. Townsend became manager of the new company on July 1, 1925, and took with him a number of the key men of the Townsend-West Dairy, including the chief route foreman, some of the best route foremen, skippers and drivers of Townsend-West Dairy. Within a few days twelve more of the most valuable of the employees of the Townsend-West Company, — named in the amendment to the petition,— quit that company with the expectation of working for the new company.

There is uncontradicted evidence in the record that Elmer D. Townsend personally, within a few days after leaving the employ of the plaintiff company, solicited drivers who were working for the plaintiff company to leave their employer and to work for him.

The evidence further tends to prove that the Townsend Bros. Milk Company was formed and the plans laid for building up its business at the expense of the plaintiff company, while [552]*552both Roy Townsend and Elmer Townsend were still trusted employees of the plaintiff company and1 before they had given the plaintiff any notice of their intention to resign. * * *

Upon commencing business The Townsend-Bros. Milk Company sent the drivers formerly employed by the plaintiff company, over the routes which they had formerly served for the plaintiff, and although it does not appear that there was an exclusive solicitation of the plaintiff’s customers, it does appear that a great number of these customers were taken from the plaintiff by the defendants. It is a matter of dispute as to whether these customers, or some of them, were misled by a similarity of milk bottle caps, names, color and dress of wagons and what was said to them by the drivers into believing that they were still dealing with the same company from which they -had formerly bought milk. Shortly after this alleged raid upon the business of the plaintiff was commenced by the defendants, this action was brought to prevent the use of the word “Townsend” by the defendants in the milk business and' to prevent the defendants from enticing the employees of the plaintiff to leave their employ or to solicit the customers of the plaintiff by the use of confidential information or trade lists acquired by the defendants or its employees while in the employ of the plaintiff company. * * *

Subsequently the defendants filed answers to the amended petition, and by agreement this cause was heard by the court upon its merits. Upon the hearing three questions were presented and have been ably argued by counsel upon both sides.

First. The defense that the plaintiff is not in court with clean hands by reason of its operation of the Townsend’-West Dairy without disclosing the plaintiff’s connection therewith.

Second. The prayer for an injunction to stop the defendants; from using the name “Townsend.”

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Cite This Page — Counsel Stack

Bluebook (online)
25 Ohio N.P. (n.s.) 548, Counsel Stack Legal Research, https://law.counselstack.com/opinion/french-bros-bauer-co-v-townsend-bros-milk-co-ohsuperctcinci-1925.