Petition for A Writ of Certiorari — Finsterwald Furniture Co. v. Finsterwald Clothing Co.

SUBJECT INDEX

Page

Petition for Writ of Certiorari ................. 1-10

RPRIN: TIN dG 6 ees bea 2

Rams of Sorigtiotion 3.650 oo a 2

Summary Statement of Matters Involved..... 2-8

Questions. Presented 2.00.5. cs 8

Reasons Relied upon for Allowance of Writ 9-10

Brief in Support of Petition ................... 11-24

Opinions of the Courts Below ............... 11

Ferree, SEO EEE TT RU aR CAR a 11

ptatement of thé Cane... .. 605 ra 11

Specification of Errors .............cccceccne 12

PUNO 6s Son ai Wea Se 13-22

1. Decision of Circuit Court of Appeals

Conflicts with Decisions of other Circuit

Courts. of- Appeal =. 5.4 655.0 aaa 13-19

2. Cireuit Court of Appeals did not decide

issues in accordance with Local Law.... 19-22

en ee aT pir ip ee NC maT 22-24

TABLE OF CASES CITED

Bell v. Service Coal Company, 280 Mich. 172; 273

Fis MO bhkeccke Luce weinades ee 21

Fidelity Bond and Mortgage Co. v. Fidelity Mort-

gage Co., 12 Fed. (2d) 582 (Sixth Cireuit).. 15,16

Gleaves v. W. B. Fishburn Co., 82 Fed. (2d) 627

Ceram CAYOUIED V5 vs Wi vend vecein ee pe 9, 18

Good Housekeeping Shop v. Smitter, 254 Mich. 592,

eet See We AS ici ee oes 19

ii

Herring-Hall-Marvin Safe Co. v. Hall’s Safe Co.,

208 U. S. 554, 52 L. Ed. 616 ..................

Holland Furnace Co. v. New Holland Machine Co.,

PR EO kc s ab occ vices cpiscied Sue

Horlicks Malted Milk Corp. v. Horluck’s Ine., 59

Fed. (2d) 13 (Ninth Circuit) ..............

Howe Scale Co. v. Wyckoff, et al., 198 U. S. 118,

a. Ce G00, 6 Ll. Bd $72... cc. k ee

Kellogg Company v. National Biscuit Co., 305 U. S.

BE Be OO Sa koe ca eo xbccednes Sinwasas

Yestatement of the Law on Torts, Volume ITI, page

UN NUE WOME Soo ho sc kde Soe bo kk nes vice

Schwanneke v. Genesee Coal & Ice Co., 262 Mich.

NRE SE i UE oo hos es ca es ce caches

John B. Stetson Co. v. Stephen L. Stetson Co., 85

Fed. Rep. (2d) 586 (Second Cireuit) ........

W. & H. Walker, Inc. v. Walker Bros. Co., 271 Fed.

395, (Cert. Den.) 256 U. S. 702 ..............

L. E. Waterman Co. v. Modern Pen Company, 235

U. S. 89, 94; 59 L. Ed. 142, 146 ..............

Young & Chaffee Furniture Co. v. Chaffee Brothers

Furniture Co., 204 Mich. 293; 170 N. W. 48..

Page

9,17

16

16

9,19

IN THE

Supreme Court of the United States

OCTOBER TERM, 1941

FINSTERWALD FURNITURE COMPANY,

a Delaware corporation,

Petitioner (Appellant below),

vs.

FINSTERWALD CLOTHING COMPANY -

a Michigan corporation,

Respondent (Appellee below)

—_——

PETITION FOR WRIT OF CERTIORARI

ae ee

(Unless otherwise clearly shown by context, figures in parentheses

refer to pages of the printed Record)

To the Honorable, the Chief Justice, and the Associate

Justices of the United States:

The above named petitioner prays that a writ of cer-

tiorari issue to review the judgment of the Circuit Court

of Appeals for the Sixth Circuit entered June 6, 1941,

affirming a decree of the District Court of the United

2

States for the Eastern District of Michigan, Southern

Division, restraining petitioner from selling men’s cloth-

ing under its own corporate name.

OPINIONS BELOW

The opinion of the District Court (394) confirms a

Special Master’s report (357). The opinion of the Cir-

cuit Court of Appeals (409) was filed June 6, 1941.

BASIS OF JURISDICTION

Jurisdiction is invoked under Section 240(a) of the

Judicial Code, as amended by Act of February 13, 1925,

43 Stat. 938.

The judgment of the Circuit Court of Appeals was en-

tered June 6, 1941.

SUMMARY STATEMENT OF THE MATTERS

INVOLVED

This suit involves a fundamental question of free trade.

The petitioner, Finsterwald Furniture Company, a Dela-

ware corporation, and the respondent, Finsterwald Cloth-

ing Company, a Michigan corporation, have both been

doing business in the City of Detroit, Michigan, for over

thirty years under their respective corporate names. The

respondent has limited its business to the sale of men’s

and boy’s clothing and haberdashery. Petitioner originally

limited its business to the sale of furniture but during the

course of the years added various departments, until now

it is virtually a department store selling sporting goods,

electrical appliances, radiators, refrigerators, blankets,

jewelry, phonographs, curtains, draperies, dishes, optome-

trists’ supplies, women’s clothing, automobile tires and

3

batteries (359). Short!., before the institution of this

litigation by the respondent, petitioner added a clothing

department in order to meet the competition of its com-

petitors in the City of Detroit, and in conformity with the

growing trend of business concerns of its nature through-

out the country to add clothing departments. This de-

cision was arrived at without regard to the existence of

respondent’s business. The Special Master made a find-

ing (363) :

““* * * that the defendant has reached a stage in

its development when it would want to sell cloth-

ing, irrespective of the existence of plaintiff, that

its dominant motive is to expand its own business

rather than to capitalize upon the good will of the

latter.’’

The respondent brought suit to restrain the petitioner

from selling clothing under its present corporate name,

claiming that to permit petitioner to do so would result

in unfair competition for the respondent. It is admitted

that there is no question as to the proprietary right of

petitioner to use its corporate name (24). Nor is there

any question concerning the good faith of the petitioner.

The Special Master found (364) that the case presents:

‘<* * * an ‘Tfonest conflict between two substantial

business interests: that of plaintiff in selling its

goods free from confusing competition by one

using a similar name, and that of defendant in ex-

panding its business under its own name.’’

The petitioner’s position rests squarely upon its right

legitimately to have and exercise the trade benefits at-

taching to its own name as it has continued to do for the

past thirty years. The respondent concedes the proprie-

tary right of the petitioner to its own name (24).

4

The respondent claims, however, that by reason of the

inclusion of the word ‘‘Finsterwald’’ in its own name, it

will suffer in a competitive market through the continued

use by the petitioner, Finsterwald Furniture Company,

of its own name. The respondent’s position is that while

the ‘‘Smith Furniture Company’’ could compete with the

Finsterwald Clothing Company, the Finsterwald Furniture

Company must not do so. Its demand to be protected

from the competition of the petitioner does not arise from

a claimed superior right to the word ‘‘Finsterwald.’”’ It

is made to rest entirely upon the claim that the cireum-

stance of the same dominant word in both names must

be submitted to by the petitioner as a restriction upon its

right normally to compete and to exploit its long ac-

cumulated good will as a department store.

The trial court expressly bases its order of restraint

upon the ground that the respondent may lose business

in a competitive market to the petitioner. The fact alone

of competition is denounced as a vice. To take business

from a competitor is called a wrong and in itself is made

to carry an unlawful intent (403, 399 and 401):

‘e# * * Tf the defendant says he fell out of some

other man’s bed room window at four o’clock in

the morning, the Court doesn’t have to believe him

when he says he didn’t intend to steal the money.

The Court can apply the old doctrine that a person

is presumed to intend the natural consequences of

his acts.’’

‘*# * * That is the only change I want to make

in the Master’s findings. I want to find on this rec-

ord, not as a fundamental fact and not as a fact

that any witness has testified to, unless it be the

defendants themselves, that it was the intention of

the Finsterwald Furniture Company to produce the

wrong complained of in this case* * *’’

oe

5

‘“‘T do not want to be misunderstood about any-

thing I have said or do say about the Master’s find-

ings that if there was no similarity of names, the

Finsterwald Furniture Company would still engage

in the clothing business. I say that is a finding of

fact irrelevant to this lawsuit. I have no doubt

that the Furniture Company has several reasons

behind its attempt to sell clothing. One of the rea-

sons it gives is that some of its competitors who

were in the furniture business are also engaged in

the clothing business* * *’’

**As I said to the counsel for defendant in the

argument, it is like a white slave case, where we

have to get at the motive. What is the purpose of

taking a female from Detroit to Chicago? The de-

fendant will always try to side-track the jury by

the argument that there was a World’s Fair or

a ball game or something else that was the motive

for his going there. However, it is not for the

jury and the courts to find out wether that was

the motive or not, because that is irrelevant. You

think about all those things for the purpose of de-

termining whether or not the trip was made for an

immoral purpose.’’ (Italics supplied.)

The obvious fact that competition for patronage is

the common objective of every lawful trade endeavor is

lost in a confusion of reasoning bearing no relationship

to the legal issues. Nor did the petitioner find in the Cir-

cuit Court of Appeals a consideration of the position

which it has so earnestly advanced. The only reasons for

the rejection of its appeal is found in the order of the

Circuit Court of Appeals (409) providing:

**It is ordered, adjudged and decreed that the

decree appealed from be and the same is in all

things affirmed upon the grounds and for the rea-

sons set forth in the opinion of the District Court

found at page 394 et seq of the transcript of

record.’’

a

6

In order to allay respondent’s fear of possible con-

fusion, petitioner offered to observe the following practices

to be made mandatory by decree:

“1, The advertising and publicity matter of the

defendant will be characterized by a signature cut

in the form of Exhibits 15, 16 or 17, whichever

the plaintiff prefers, which consists of the full

corporate name of the defendant, equal emphasis

and significance being given to all words of the

name, and all words of the name being set up in

letters of the same size and type. The defendant

will not use the name of Finsterwald alone any-

where in any advertising or publicity matter in

which clothing is advertised; wherever the name

Finsterwald is used in relation to clothing, the full

corporate name shall be used, uniform prominence

in every instance being given to the word ‘Furni-

ture.’

2. The defendant will never advertise or distri-

bute any publicity material in which clothing shall

be the sole item of merchandise offered for sale,

but instead all advertising and publicity material

relating to clothing will form a part of advertise-

ments dominated by offerings of furniture or other

home furnishings and the items of clothing included

in such publicity material or advertisements will

form a subordinate or included part.

3. The defendant’s clothing department will be

situated upon the fifth floor of its building. No

article of clothing will be offered for sale on the

main floor of the building; there will be no display

of clothing in the windows of the defendant’s

store which does not also include furniture or home

furnishings as a composite part.

4. The articles of clothing offered for sale by

the defendant will not bear any label with the de-

fendant’s name upon it, or any part of such name.

Instead, such clothing will be labeled with the name

‘Harrington’ or ‘Harrington De-Luxe’,

7

5. The defendant will include in the package in

which any article of clothing sold by it is enclosed,

a card, a copy of which is attached to the ‘Defend-

ant’s suggestions with relation to the sale of cloth-

ing, ete.,’ setting forth in definite terms that the

article is purchased from Finsterwald Furniture

Company, the defendant, which is in no way con-

nected with the plaintiff.

6. To change the large front vertical sign upon

its building so that its full corporate title is shown

thereon.’’

The Court rejected this offer and entered a decree (391)

permanently restraining petitioner from engaging in the

retail sale or advertisement of men’s and boy’s clothing,

wearing apparel and haberdashery under its present cor-

porate name or any other name in which the word

**Finsterwald”’ or ‘‘Finsterwald’s’’ is the dominant word,

with the proviso that petitioner be permitted to sell men’s

clothing if it changes its name to a compound name which

may include ‘‘Finsterwald’’ or ‘‘Finsterwald’s’’ as the

second word in such name with some other major name as

the first word (such as, by way of illustration, the name

**Hadley-Finsterwald Furniture Company’’). Petitioner

was also restrained from advertising the sale of clothing

with any advertising which uses the word ‘‘Finsterwald’”’

or ‘‘Finsterwald’s’’ except for a statement in type, not to

exceed ten point underneath the clothing store signature,

‘*Operated by Finsterwald Furniture Company,” or words

of similar import.

Petitioner was also restrained from exhibiting or selling

men’s clothing on the first floor of its store building and

from exhibiting such clothing in its store windows.

Respondent had urged the possibility of confusion in

the mind of the public and offered some testimony as to

such confusion in the past. It was conceded, however,

that petitioner was not responsible for the confusion. The

respondent’s secretary testified (111):

**Q. You made it quite clear, as a matter of

fact, that the confusion which has existed up to this

time is inherent in the use of the name Finster-

wald?

A. That’s right, yes, sir.

Q. You don’t believe that that confusion results

from any fraudulent conduct on the part of the

Finsterwald Furniture Company, do you?

A. No, sir.’’

QUESTIONS PRESENTED BY THIS PETITION

The questions presented in this case are:

1, May a corporation lawfully doing business under its

own corporate name for more than thirty years, in the

normal expansion of its business, add a clothing depart-

ment thereto without presenting unfair and unlawful

competition to another corporation with the same domi-

nant word in its corporate name already engaged in the

sale of clothing?

2. If it is found that the corporation already engaged

in the sale of clothing is entitled to protection against

confusion, does such right of protection extend to the

deprivation of the other corporation’s right to use its

own name in the sale of clothing?

REASONS RELIED UPON FOR ALLOWANCE

OF THE WRIT

1, The United States Circuit Court of Appeals for the

Sixth Circuit has rendered a decision restraining a cor-

poration from conducting and expanding its business

under its own corporate name in conflict with the deci-

sions of this Court and of other Circuit Courts of Appeals

on the same matter. John B. Stetson Co. v. Stephen L.

Stetson Co., 85 Fed. Rep. (2d), 586 (Second Circuit);

Gleaves v. W. B. Fishburn Co., 82 Fed. (2d) 627 (Fifth

Circuit); Horlicks Malted Milk Corp. v. Horluck’s Inc.,

59 Fed. (2d) 13 (Ninth Circuit).

2. The United States Circuit Court of Appeals for the

Sixth Circuit has decided an important question of local

law in a way probably in conflict with applicable local

decisions. Young & Chaffee Furniture Co. v. Chaffee

Brothers Furniture Co., 204 Mich. 293; 170 N. W. 48.

Wherefore petitioner prays that a writ of certiorari be

issued out of and under the seal of this Court directed

to the Circuit Court of Appeals for the Sixth Circuit,

commanding that Court to certify and send to this Court

for its review and determination as provided by the

statutes of the United States a full and complete tran-

script of the Record and all proceedings in the case num-

bered and entitled on its docket, ‘‘No. 8487, Finsterwald

Furniture Company, a Delaware corporation, Defendant

and Appellant, v. Finsterwald Clothing Company, a Michi-

gan corporation, Plaintiff and Appellee,’’ and that the

decree therein of the said Circuit Court of Appeals be

reversed by this Court, and that your petitioner may

10

have such other and further relief in the premises as to

the Court may seem just and proper.

FINSTERWALD FURNITURE COMPANY ‘

Petitioner,

By THEODORE LEVIN,

Attorney for Petitioner,

1250 Penobscot Building,

Detroit, Michigan.