
    The Employer’s Liability Assurance Corporation, Limited, App’lt, v. The Employer’s Liability Insurance Co. of the United States, Resp’t.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed November 13, 1891.)
    
    1. Trade names—Injunction.
    The words * ‘ Employer’s Liability ” being descriptive of a class of insurance business, and in common use in respect thereto, one person or corporation cannot obtain an exclusive right to use them so as to be entitled to an injunction against their use by others.
    2. Injunction—Insurance companies doing business without permission.
    Defendant, a New Jersey corporation, was refused permission to do business in this state by the superintendent of insurance on account of the similarity of its name to that of plaintiff. It, however, opened an office in New York city, and issued several policies which were filled-out in Jersey City. Plaintiff and defendant were the only companies there using similar names. Held, that the defendant being in the transaction of business in this state in defiance of our laws, any person or corporation injured by those acts had a right to maintain an action to restrain it, and that plaintiff was therefore entitled to an injunction.
    3. Same.
    The making out of policies in Jersey City on applications received in New York, and the delivery of such policies to the assured in New York, is a violation of the law, as the business is done where the policy is delivered and becomes operative.
    Appeal from judgment of the special term dismissing complaint
    
      W. A. Butler, for app’lt; H. Wallis, for resp’t.
   Van Brunt, P. J.

The plaintiff in this action was and is a corporation duly incorporated and existing under and by virtue of the laws of the Kingdom of Great Britain and Ireland having and exercising the power of carrying on the business of insurance. The said corporation had been in existence ever since the year 1880 and has carried on its business not only in London, England, where its principal office is established, but also in other parts of the above named kingdom and other kingdoms of Europe and Australia and in the United States since 1886.

The business of the plaintiff is the insurance of employers against liability for accidents to persons in their employ, which business it originated in 1880; and it has become greatly extended and is carried on by a large number of agents or managers of the various branches of the plaintiff’s corporations in foreign countries. The authorized capital of the plaintiff is £500,000, of which £100,000 has been paid in in cash and the available assets of the corporation amount to about £300,000.

The plaintiff has on deposit with the insurance departments of the states of New York and Massachusetts for the payment of policyholders in the United States $650,000. It has fully complied with the laws of the state of New York entitling it to do business therein and also with the laws of the other states of the United States in which it does business, and employs capital and assets on such business in the United States amounting to upwards of $840,000.

In the year 1890 the defendant was duly incorporated in the state of New Jersey under the name of the Employers’ Liability Insurance Company of the United States, and prior to the commencement of this action opened an office at No. 9 Pine street in the city of New York for the purpose of the transaction of business, and issued to persons and firms in New York forty or more policies upon applications, some of which at least, if not all, were received at their office in Pine street The defendant corporation made an application to the Department of Insurance of New York for a license to do business in the state of New York underthe name of the Employers’ Liability Insurance Co. of the United States, which was refused .upon .the ground of the similarity of name between that of the defendant and that of the plaintiff, who had already been licensed to do business within this state. The plaintiff thereupon commenced this action, claiming an exclusive right to the use of the name Employers’ Liability in connection with the insurance business, and asking that the defendant be restrained from using the said name or title. o

The defendant answered, admitting most of the foregoing facts, but denying the right of the plaintiff to the exclusive use of the term “Employers’Liability.” Upon the trial the complaint was dismissed, and from the judgment thereupon entered this appeal is taken.

We are of the opinion that the court below was correct in refusing a general injunction against the defendant in this action, prohibiting it from the use of the term “ Employers’ Liability,” upon the ground that this term is a descriptive term used generally to designate a certain well known branch of the insurance business. But it is claimed that, wholly irrespective of any question of exclusive property in the name, the plaintiff was entitled to protection against any such appropriation as would interfere with its business by inducing the public to suppose that a. new company trading under the same was the original plaintiff corporation ; that it is not necessary that fraud or evil practice should be shown; if the fact is made to appear that the use of a trade mark or corporate name lawfully possessed and enjoyed by a trading company is so used by a competitor as to deceive or mislead dealers to the prejudice of the corporation lawfully using the name, equity will protect by injunction. And our attention is called to certain cases, among which are McLean v. Fleming, 96 U. S., 245; and Goodyear Co. v. Goodyear Rubber Co., 128 id., 598. But we think that an examination of those cases is fatal to this claim. The rule is there expressly recognized that exclusive right to use a term descriptive of a character of business- cannot be acquired, and the evidence in this case shows that the term “ Employers’ Liability was in common use in respect to this class of insurance.

But the attention of the court was called by the requests to find, upon the part of the plaintiff to another branch of the case, and that was that the defendant was doing business in defiance of the prohibition of the law of the state of New York. No foreign insurance company can, nor can an agent of any such company, lawfully do business within this state until either it or he has been, duly licensed to do so by the superintendent of the insurance, department Such superintendent is authorized, for certain causes, to refuse permission to any company or association appljing to be permitted to transact the business of insurance in this state, and for other causes he is required to refuse such permission. He is required to refuse such permission when a foreign company or association proposes to, do business under a name which, in his judgment, is so nearly similar to one already in use as to lead to confusion or uncertainty on the part of the public. The defendant applied to the superintendent of the insurance department for permission to do business within the state of New York; and it is apparent from the evidence of the witness Mac-Rae (although he did at first swear that there had been no refusal and that the superintendent' did not issue the permission only because he was too busy) that such permission had been refused upon the ground of similarity of names; because as soon as he saw that there was a chance of his being confronted with the superintendent in person, he admitted that the superintendent had raised the,point that the defendant must alter its name, which it did subsequent to the commencement of this action.

The making out of policies in Jersey City upon applications received in New York, and the delivery of such policies to the assured in New York, was a clear violation of the Laws of this state. The place where the policies are written out and signed was not the place where the business was done. The business is certainly done where the policy is delivered and becomes operative, and some part of it may also be done where applications are made and accepted.

Notwithstanding the subfe 'uges resorted to by the defendant its methods were so plain a violation of our laws that it has ceased even attempting to resort to them upon the mere recommendation (as it is termed by the witness MacRae) of the superintendent of the insurance department

The defendant thus being at the time of the commencement of this action in the transaction of business in this state in defiance of our laws, any person or corporation who was in any manner injured by these unlawful acts had a right to apply to the court to prevent a continuance of the injury. It is true that the evidence on the subject of special injury in the case at bar was slight But the facts proven show that the defendant bad issued forty or more policies in New York and that the plaintiff and the defendant were the only companies using similar names; that confusion had arisen and might arise; and that the superintendent of the insurance department, because he believed that such would be the case, had refused a license to the defendant.

Under such circumstances the court will upon slight evidence of special injury, protect a party who has complied with our laws enacted for the protection of the public from an injury which has arisen from the acts of a party done in direct violation of those laws

It is true that the counsel for the respondent criticises with great severity the testimony offered upon the part of the plaintiff to show that parties had been misled by the similarity of the names of these companies But we think upon a reading of that testimony it shows that there was an evident mistake in one ease; and how many other of the persons insured by the forty policies issued in this state (we say issued in this state because they were delivered to parties in this state) were misled, we do not know, and it is not m the power of the plaintiffs to show.

The testimony of the witness MacRae in so far as it tended to sustain any claim made upon the part of the defendant whose agent and servant he was, is entirely unreliable because he evidently was willing to swear to whatever was necessary in order to protect the defendant The witness for instance is asked: “Were not you aware of the provision of law prohibiting the doing of business in Hew York by a company that has not been admitted in Hew York?” He answers, “Ho, sir; I don’t know the law exactly.”

. “Q. Had not you been informed of that law ? A. Ho.”

And yet he is the man who immediately afterwards swears that, he signed the necessary papers making the application to the insurance department for permission to do business in the state-of Hew York.

We think that under all these facts the plaintiff was entitled to-some relief, namely, to an injunction restraining the defendant from attempting to do any business within the state of Hew York.

This conclusion necessarily leads to a reversal of the judgment, appealed from and the ordering of a new trial, with costs to the appellant to abide the event

Daniels, J., concurs.  