Sheffield-King Milling Co. v. Sheffield Mill & Elevator Co.

117 N.W. 447, 105 Minn. 315, 1908 Minn. LEXIS 524

Opinion

START, C. J.

Appeal from the order of the district court of the county of Hen-nepin denying the defendant’s motion for a new trial in an action in equity brought for the purpose of enjoining the defendant from doing certain acts on the ground that the doing of such acts constF tutes unfair competition in trade. The trial court made findings of fact to the effect following:

The plaintiff, Sheffield-King Milling Company, is a corporation duly organized on July 1, 1902, and existing under the laws of this state. The defendant, Sheffield Mill & Elevator Company, is a corporation organized April 11, 1906, and existing under the laws of this state. From 1876 to 1896 M. B. Sheffield was engaged in the business of operating a flour mill'at Walcott, Minnesota, and manufacturing and selling flour, which became known throughout the United States and other countries as “Sheffield’s Flour.” In the year 1896 he moved such business "to .Faribault, this state, and in con-lection with his son,'B. B. Sheffield, and his son-in-law, Alson Blod-jett, Jr., organized under the laws of this state a corporation enti-led the “Sheffield Milling Company,” of which the incorporators were :he board of directors. The Sheffield Milling Company acquired at iaribault, about the time of its incorporation, a large flour mill, and succeeded to and acquired all of the flour-manufacturing business >f said M. B. Sheffield, together with the good will thereof, and all he flour brands, trade-marks, trade-names, and labels theretofore ised by M. B. Sheffield in his business of manufacturing flour. The Íheffield Milling Company thereafter, and until 1902, continued to se and operate the plant at Faribault, and to manufacture, ship, nd deliver flour thereat and therefrom, and carried on the business : had acquired from M. B. Sheffield, using the name “Sheffield’s” s a part of its trade-marks, trade-names, and brands, and its flour ontinued to be known, bought, sold, and asked for as “Sheffield’s lour,” and the name “Sheffield’s” became known all over the world i the flour business. M. B. Sheffield died prior to the year 1902, nd all of his interest in the stock and business of the Sheffield Mill-ig Company became the property of his son, B. B. Sheffield, his aughter, Frances S. Blodgett, and his son-in-law, Alson Blodgett, Br., and in the year 1902 they owned all of the stock of the Sheffield ■Tilling Company, and constituted its board of directors.

■ The plaintiff corporation was incorporated on July 1, 1902, with I. B. Sheffield, Frances S. Blodgett, Alson Blodgett, Jr., Henry H. King, and W. W. Allen, as its incorporators, with its principal office in Minneapolis, with a capital stock of $300,000, of which Sheffield and his associates had one-half, and King and Allen the other half. The flour mill at Faribault, and the business, good will, trade-marks, trade-names, and all other property of the Sheffield Milling Company, used in carrying on its business of manufacturing and selling flour, were duly transferred to the plaintiff, which also acquired from the Crown Milling Company a small mill at Morristown, Minnesota, known as the “Crown Mill,” together with the good will, brands, trade-marks, and trade-names of the Crown Milling Company. The plaintiff continued to use th,e brands which it acquired from the Sheffield Milling Company, among which were “Sheffield’s Best” and “Gold Mine,” and its flour was generally known in,the trade as “Sheffield’s Flour,” and has continued to be so known. A considerable portion of plaintiff’s mail has always come addressed to “Sheffield Milling Company.”

In February, 1906, B. B. Sheffield, Frances S. Blodgett, and Al-| son Blodgett, Jr., sold to King their stock in the plaintiff company and in part consideration therefor the Morristown mill was deeded to them. No part of the good will or business of the plaintiff was transferred to Sheffield and his associates, nor any of its flour brands trade-marks, or names. In February, 1906, Sheffield started in tc solicit the customers and agents of plaintiff, sending circulars to them| addressed “To Our Patrons,” and writing and personally interviewing them, and advising them that he was about to -start again ill the flour-milling business. These circulars and letters were sen out in the name of “Sheffield Mill Company.” In April, 1906, Shef] field and his associates incorporated the defendant company. Th defendant, by its officers and agents, particularly Sheffield, has perl sistently solicited plaintiff’s customers to buy its flour, by represent ing to them and to the public that the defendant was the successo of the old Sheffield Milling Company, and in some instances th, the plaintiff had gone out of business, and, further, that the plaid tiff’s leading brand of -flour, “Gold Mine,” was no longer made, btj was now made by the defendant under the brand “Big Diamond, Great confusion and loss has resulted to the business of the plaiil tiff by the false and fraudulent representations of the defendant th; it was the successor of and continuing the business of the original Sheffield Milling Company. The corporate name of the defendant, “Sheffield Mill &.Elevator Company,” is so similar to the plaintiff’s name that it is liable to, has, and does create great confusion on the part of the public as to the identity of the manufacturers of the Sheffield flour, and in the business of the plaintiff. It is apparent that an effort was made by the defendant so to name itself that the business built up by the plaintiff’s predecessor, the Sheffield Milling Company, might be attracted by the name “Sheffield”; that the name •of the defendant was fraudulently selected by it for that purpose, and for the purpose of diverting the business of the plaintiff to itself ; and, further, that the defendant has been guilty of unfair competition in business with plaintiff. No consent by plaintiff to the ■use by the defendant of the name of “Sheffield Mill & Elevator Company” was shown.

As a conclusion of law the trial court directed judgment for the plaintiff, enjoining the defendant and its officers and agents, as follows: “First, from using as a part of its corporate name the word 'Sheffield,’ associated with the word 'mill,’ or any other word indicating a business similar to that of plaintiff; second, from using as a trade-mark or trade-name for flour, or as a part thereof, the word ■‘Sheffield’ • or ‘Sheffield’s’; third, from representing itself to be the successor to the business of the Sheffield Milling Company; fourth, from doing any act or thing which tends to deceive or mislead the public, and cause if to believe it is dealing with plaintiff, when it is, in fact, dealing with defendant; fifth, from selling, or causing to be sold, any flour manufactured by it as ‘Sheffield’s flour’; sixth, from selling, or causing to be sold, any flour manufactured by it as flour manufactured by plaintiff.”

1. Only two of the trial court’s findings of fact are challenged by any assignment of error as not supported by the evidence. The first relates to the finding to the effect that the plaintiff did not consent to the use of the defendant’s corporate name, and the other is, in substance, that such corporate name was selected and used for an unfair and fraudulent purpose. The 'burden was upon the defendant to show that the plaintiff consented to the adoption and use of the •defendant’s corporate name, and the evidence falls far short of show ing that the defendant was entitled, as a matter of strict right, to a. finding that the plaintiff did so consent. While we are not prepared to hold that, if the trial court had found for the defendant -upon this issue, the finding would be set aside as not supported by the evidence, within the rule applicable to such cases, yet we are of the-opinion that the finding that the plaintiff did not so consent is sustained by the evidence, and hold that it cannot be disturbed.

The intent of the promoters, officers, and agents of the defendant in adopting and using the name “Sheffield,” in connection with the business of manufacturing and marketing- flour by the defendant, may be inferred from their acts and the circumstances connected with the incorporation of the defendant and the conduct of its business. It clearly appears from the evidence that the name “Sheffield,” by long use, became and is a valuable trade-name, descriptive of the flour made by the plaintiff, and signifies to the commercial world a desirable grade of flour, and, further, that the right to use the name in such connection was sold to the plaintiff by the promoters of the defendant. Upon the evidence in this case, much of which is not disputed, it seems difficult to explain the acts and conduct of the defendant’s officers and agents, except upon the theory that they intended the necessary consequences thereof, which were unfairly to deprive the plaintiff of that which it had honestly acquired and paid a fair consideration therefor. A consideration of the evidence, as set out in the record herein, has led us to the conclusion that the finding of the trial court that the defendant’s corporate name was 1 fraudulently selected and used for the purpose of diverting the busi- 1 ness of the plaintiff to the defendant is sustained by the evidence. I

2. The defendant also claims that the trial court erred in not hold- B ing that the plaintiff had lost, by its laches, its right to complain of | the use by the defendant, in its corporate name, of the name “Shef- I field,” in connection with the word “mill.” Laches is a defense pe- H culiar to a court of equity, the practice of which is to deny affirm- m ative relief to a party who applies therefor after unreasonable delay. H What will constitute unreasonable delay depends upon the facts of H each particular case. In equity actions for relief against infringe- g ment of trade-marks or unfair competition in trade, greater diligence H is required in bringing the action where an accounting for profits is H sought than is required where an injunction is prayed against future infringements or acts of unfair competition. In the latter case equity will not, as a general rule, refuse the injunction on account of delay in seeking 'the relief, even though the delay may be such as to preclude an accounting of profits. McLean v. Fleming, 96 U. S-245, 24 L. Ed. 828; Menendez v. Holt, 128 U. S. 514, 9 Sup. Ct. 143, 32 L. Ed. 526; Saxlehner v. Eisner & Mendelson Co., 119 U. S. 19-39, 21 Sup. Ct. 7, 45 E. Ed. 60.

The evidence in this case, taking the most favorable view of--it for the defendant, is sufficient to justify a finding to the effect that the plaintiff knew the use the defendant was making of the name-“Sheffield,” in its corporate name and otherwise, for approximately one year before the commencement of this action; that the plaintiff made no request of the defendant to cease using such name, nor make any effort to prevent it, except to file a complaint against the defendant with the Chamber of Commerce of Minneapolis; and, further, that the defendant knew that such use of the name was objectionable to the plaintiff. This evidence justified the omission of the trial court to direct an accounting of profits. It is, however, obvious that the evidence, when tested by the rule stated, is insufficient to justify a refusal of relief to the plaintiff by way of an injunction. We therefore hold that the court did not err in holding that the plaintiff had not lost its right to the relief granted by reason of its laches.

3. The last contention of the defendant to be considered is that the facts found by the trial court do not justify the conclusion of .aw to the effect that an injunction issue enjoining the defendant ‘from using, as a part of its corporate name, the word ‘Sheffield' issociated with the word ‘mill,’ or any other word indicating a busiless similar to that of plaintiff.” It is to be noted that the defend-mt in the court below made a motion to strike out this conclusion, lut it did not ask to have the conclusion so amended as to allow the ■se of the word by the defendant in such modified way as not to Receive the public or be unfair to the plaintiff. Nor was there in ■ie court below, nor is there here, any suggestion that it is practicable to so modify the finding, by providing that an “explanation must Bccompany the use (of the name) so as to give the antidote with the bane.” Herring-Hall-Marvin Safe Co. v. Hall’s Safe Co., 208 U. S. S54, 28 Sup. Ct. 350; Rowley v. J. F. Rowley Co. (C. C. A.) , 161 Fed. 94.

In the last case cited the decision of the lower court was reversed, on the ground that it was error to restrain the defendant from using his own name, in any manner whatsoever, in the manufacture and sale of artificial limbs, instead of “allowing the use, provided that an explanation is attached.” It may be fairly assumed in the case cited that the required modification was practicable and would prove effectual.

If, in the case at bar, it be impracticable to make any modification of the defendant’s corporate name, and it be necessary, for the plaintiff’s protection from the unfair competition shown by the court’s findings of fact, to restrain the defendant from using the word “Sheffield” as a part of its corporate name, in connection with the word “mill,” then it is a condition intentionally created by the defendant, and the consequences thereof, equitably, should fall upon it, and not upon the plaintiff. It is, however, urged on behalf of the defend' ant that an injunction in accordance with the other five conclusions of law will give to the plaintiff all needful protection; hence the! retention of the first is not necessary. Upon a consideration of all| the facts found by the trial court, we are of the opinion that an in-j junction restraining the use of the word “Sheffield,” in the manner! indicated in the first conclusion of law, is reasonably necessary foij the protection of the plaintiff.

This brings us to the ultimate question as to whether the facts| found sustain the court’s first conclusion of law. How far the riglx .to the use of a family name in business may be enjoined is a questiorl which has been frequently passed upon by the courts. The trenq of the later cases is to extend the1 limitation upon the right wheneve it is necessary to do justice, and prevent unfair competition in tradel Upon principle and authority we hold that every person is entitle' honestly to use his own name in business either alone or associate*! with others in a partnership or corporation. He may not, howevei| use his name as an artifice to mislead the public as to the identiti ■of the business or corporation, or the article produced, and thereb unfairly divert the business of another person, partnership, or coi poration, who first lawfully selected the trade-name, established a business, and produced an article which is identified by the name. Such a use of one’s own name, unaccompanied by a caution or explanation so specific as to prevent any confusion as to the identity of the corporation or its product, may be enjoined. Hopkins, TradeMarks (2d Ed.) 145; 28 Am. & Eng. Enc. (2d Ed.) 426; Brown Chemical Co. v. Meyer, 139 U. S. 540, 11 Sup. Ct. 625, 35 E. Ed. 247; Higgins v. Higgins, 144 N. Y. 462, 39 N. E. 490, 27 L. R. A. 42, 43 Am. St. 769; Lamb v. Lamb, 120 Mich. 159, 78 N. W. 1072, 44 L. R. A. 841.

The findings of fact clearly bring the case at bar within the rule stated, and we hold that all the conclusions of law are sustained by the findings.

Order affirmed.