Opinion
No. 47/518.
01-12-1920
AUTO HEARSE MFG. CO. v. BATEMAN et al.
Albert R. McAllister, of Bridgeton, for complainant. Francis A. Stanger, Jr., of Bridgeton, for defendants.
Bill by the Auto Hearse Manufacturing Company, a corporation of New Jersey, against J. Paul Bateman and John Bateman, trading as Bridgeton Hearse. & Ambulance Company. Hearing at return of order to show cause for injunction pendente lite. Injunction granted.
Albert R. McAllister, of Bridgeton, for complainant.
Francis A. Stanger, Jr., of Bridgeton, for defendants.
LEAMING, V. C. Complainant seeks an injunction restraining defendants from engaging in unfair competition. At the return of an order to show cause, answering affidavits were filed and read in behalf of defendants; by those affidavits some of the averments of the bill were controverted, others were not.
The verified averments of the bill which have not been controverted disclose that prior to May 2, 1916, J. Paul Bateman was sole owner of a business conducted in Bridgeton in his own name, which business included the construction of hearses and other bodies for motor and horse-driven vehicles. On that date he conveyed his business and its good will to complainant corporation, which had then been formed to take over and continue the business. The name of the corporation so purchasing the business was J. Paul Bateman Company; its name has recently been changed to Auto Hearse Manufacturing Company.
Prior to the transfer of the business to complainant corporation, J. Paul Bateman advertised in the trade journal pertaining tofuneral directors and undertakers over his own name that he was the builder of "Bateman motor hearse body"; immediately and continuously after the transfer, complainant, under the name of J. Paul Bateman Company, and while J. Paul Bateman was its president, inserted in the trade journals advertisements in which "Bateman bodies" were featured, and during the same time the order blanks used by complainant stated, among other things, that the order was for a "Bateman motor hearse body," and during the period in which J. Paul Bateman was mechanical superintendent of complainant, and while he was traveling through the eastern part of the United States soliciting orders for complainant, orders secured by him for complainant were on the order blank above referred to.
June 5, 1919, J. Paul Bateman severed his connection with complainant, except as a stockholder, and formed a partnership with his brother in a competing business under the name of "Bridgeton Hearse & Ambulance Company." Order sheets used by defendants state, among other things, "J. Paul Bateman, Manager Bridgeton Hearse & Ambulance Company, Jefferson Street, Bridgeton, N. J.," and further read: "J. Paul Bateman, Bridgeton, N. J.—Dear Sir: Please enter my order for (blank) Bateman motorcar (blank) body." Defendants have circulated a letter announcement at the head of which letter the words "J. Paul Bateman, Manager," appear followed by the words "Bridgeton Hearse & Ambulance Company," and the type used for the name J. Paul Bateman is larger and features that name. Photographs have been printed and circulated by defendant company showing a motor hearse body and the words, "Built by J. Paul Bateman, Manager of Bridgeton Hearse & Ambulance Company, Bridgeton, N. J.," appear directly beneath the cut. In the issue of the "Casket" of September 1, 1919, there appears an advertisement of defendant company in which, in boldfaced type, the words, "Original' Bateman Hearse," appear, and the further words, "J. Paul Bateman, Manager," are used in connection with the advertisement; that advertisement also states in part as follows:
"The past year I have called on hundreds of undertakers. Many have wanted to trade in their auto hearses. They would say I bought one a year ago, but my trade demands a better one. You avoid mistakes when you buy the original Bateman hearse. They are built by the Bridgeton Hearse & Ambulance Company, J. Paul Bateman, Manager."
It is also undisputed that confusion of the trade has resulted, but the defensive affidavits indicate that such confusion has been less than is claimed by complainant.
The answering affidavits make no specific denial of the matters above set forth; but the affidavit of J. Paul Bateman states that all business of defendant company has been transacted under its name of Bridgeton Hearse & Ambulance Company with his name appearing only as manager, and that there has never been any attempt on his part or on the part of defendant company by advertisements or otherwise to lead any person to think that defendant company is connected in any way with complainant company, or that it is handling or selling any product manufactured by complainant company, and that in fact all advertising done by defendant company has been to the direct opposite; and that neither he nor defendant company has intentionally or fraudulently done anything to injure complainant company or deceive the public. The affidavit of John Bateman, the partner, also states that neither he nor his company has intentionally or fraudulently done any act or thing to injure or deceive the public regarding business transacted.
These averments of the two partners comprising defendant company, in so far as they relate to the specific verified averments of the bill describing the stationery and advertisements of their company, can only be properly understood as admitting the accuracy of the averments of the bill describing such stationery and advertisements, but denying that their effect on the trade and the business of complainant is that claimed by complainant. Their averments that they have not intentionally or fraudulently done any act or thing to injure complainant or to deceive the public may be properly accepted on this preliminary hearing as facts so far as intentions are concerned; but it is obviously for the court to determine whether what has admittedly been done by defendants has been calculated to deceive the public by leading the trade to believe that products theretofore on the market and known to the trade under a trade name owned by complainant was the product which defendant was selling, and thereby injure complainant.
The sale by J. Paul Bateman of his business conducted under that name, including its good will, did not deny him the right to conduct a competing business in the absence of an express agreement on his part not to do so; it merely denied to him the right to specifically solicit the trade of the customers of the business he sold. Nor did such sale deny to J. Paul Bateman the right to use his own name in a competing business, so long as his name was not used in a manner calculated to deceive the public and in that manner gather the fruits of the business he had sold. Hilton v. Hilton, 89 N. J. Eq. 182, 104 Atl. 375, L. R. A. 1918F, 1174. But the sale of the business and good will necessarily included as assets sold any established trade-names of the business, and such tradenames often comprise some of the most valuable assets of modern business.
The undisputed proofs disclose that, at the time the business was sold by J. Paul Bateman to complainant company, he had advertised that he was the builder of "Bateman motor hearse body," and that complainant company, under his management, continued to advertise "Bateman bodies" and used order blanks which stated that the order was for a "Bateman motor hearse body." It accordingly seems impossible to escape the conclusion that it is unfair and unlawful competition for defendants to now advertise as their, product "original Bateman hearses." Especially is that so when the hearse so advertised is specifically and conspicuously associated with the name "J. Paul Bateman, Manager." It will also be noted that in the "Casket" advertisement of September 1, 1919, the "original Bateman hearse" is referred to in a manner to clearly indicate that it is the hearse which for the preceding year J. Paul Bateman had been selling, whereas prior to June 1, 1919, he had been selling that hearse for complainant. Indeed, it seems almost impossible to escape the conviction that the conspicuous use of the name "J. Paul Bateman, Manager," as described in the bill, is not only calculated to deceive the patrons of complainant, but is in fact intended to lead such patrons to believe that a product heretofore supplied by complainant is the very product defendants are now supplying. The right of J. Paul Bateman to use his own name in business cannot be doubted, but his right to use it in a manner and for the purposes last suggested may well be doubted. It is also difficult to conceive any reason for order blanks of defendant company to read, "J. Paul Bateman, Bridgeton, N. J.—Dear Sir," and refer to a "Bateman motor car," other than a purpose to induce the trade to believe that the product theretofore known under the trade-name of "Bateman motor hearse body" was the product defendants were selling.
But in an application for a preliminary injunction doubts of the nature suggested must always be resolved in favor of defendants. But I see no reason to doubt that in advertising the "original Bateman hearse" defendants are engaging in unfair competition and leading the public to believe that their product is that which has been heretofore manufactured by complainant and known under the trade-name already referred to as owned by complainant, especially when the advertisement refers to that product in a way to indicate that it is the product that J. Paul Bateman was selling a year prior to that time.
I will accordingly at this time, pending final hearing, enjoin defendants specifically from advertising in the manner they advertised in the "Casket" of September 1, 1919, and enjoin them generally from in any way making representations by advertisements or otherwise of a nature calculated to lead others to believe that the product they are supplying is the product of complainant company.