Essaji v Karachiwalla Limited (C.A. 8/1936.) [1936] EACA 63 (1 January 1936)

## COURT OF APPEAL FOR EASTERN AFRICA.

Before SIR JOSEPH SHERIDAN, C. J. (Kenya); LAW, C. J. (Zanzibar); and WEBB, J. (Kenya).

## MOHAMEDALI ESMAILJI ESSAJI, Appellant (Original Defendant)

## KARACHIWALLA LIMITED, Respondents (Original Plaintiffs). C. A. $8/1936$ .

Trade Name-Passing-off Action-Ironmongery Business-Defendant setting up in business in a name by which he was known-No fraud or risk of confusion-Pleading-Fraud.

In July 1935 the respondents acquired the business of retail ironmonger which had been carried on for many years by Essufali Esmailji Karachiwalla, whose shop had become known as "Karachiwalla's". The appellant, a cousin and former employee of Essufali Esmailji Karachiwalla, was known, at all events to a section of the public, as Mohamedali Esmailji Karachiwalla. though he had also called himself Mohamedali Esmailii Essaii or M. E. Essaji. In October 1935 the appellant started in business as an ironmonger in premises next door to those of the respondents, over his shop he had "M. E. Karachiwalla", and on his stationery "Mohamedali Esmailji Essaji Karachiwalla". The respondents in their plaint alleged that the appellant had deliberately chosen the name "Karachiwalla" with a view to passing-off his business as that of the respondents: they did not plead that he had taken the premises next door to theirs for that reason.

- Held (18-8-36).-That on the evidence there was no passing-off proved; as the appellant had been known for many years to a section of the public as Karachiwalla, he could not be said to have adopted the name for the purpose of his business, but was trading under a name which was his own. A man is entitled to trade in his own name provided he does what is reasonably necessary to distinguish his business from that of another person of the same name.<br>(Joseph Rodgers and Sons v. W. N. Rodgers and Co. (41 R. P. C. 277) and John Brinsmead and Sons, Ltd., v. E. G. S. Brinsmead $(29$ T. L. R. 706) followed). - Held Further.-That on the pleadings the respondents were not entitled to rely on the appellant having taken premises next door to theirs as evidence of fraud. Atkinson and Christie for the Appellant.

The finding that the appellant adopted the name Karachiwalla is contrary to the mass of evidence produced extending as far back as 1918, that he was known by that name to a number of people. If this is a name to which the appellant is entitled by repute, he will not be restrained from trading under it: Turton v. Turton (42 Ch. D.138), Jay's Ltd. v. Jacobi (1933 Ch. D.441).

The case of an incorporated company is different, because the name of a company is an invented name: Hairods, Limited v. R. Harrod Limited (40 T. L. R. 195), Lloyd's v. Lloyd's, Southampton (28 T. L. R. 338), Pinet v. Pinet (1898 1 Ch. 179)-Even in the case of a company an absolute injunction will not be granted if the defendants have done what is necessary to distinguish their business: Jameison v. Jameison (15 R. P. C. 169), Dunlop v. Dunlop (1907 A. C. 430), Joseph Rodgers and Sons v. W. N. Rodgers and Co. (41 R. P. C. 277). In fact the respondents are seeking to establish a monopoly in the name Karachiwalla. No confusion, much less deception, has been proved. The fact that the appellant took premises next door to those of the respondents was not pleaded as a fraudulent act by him, nor was he cross-examined about it, and it should not, therefore, have been relied upon: O. 6 r. 2, White Book 1936, 348.

## Patel for the Respondents.

It is a question of fact and the Court should look at all the circumstances of the case.

The name Karachiwalla has value because the agreement with the respondents' predecessor provided that the respondents should float a company under the name of Karachiwalla, Ltd. In Levy v. Walker (10 Ch. D. 436) it was held that an assignment of the goodwill and business included the exclusive right to use the name of the old firm.

There is evidence that the shop of the respondents and their predecessor was known by repute as Karachiwalla's. The appellant was not previously known in business as Karachiwalla; in 1910 he was known as Mohamedali Esmailji and in 1918 he was in business as Mohamedali Esmaiji Essaji. He has not merely added Karachiwalla to his name, but he has substituted Karachiwalla for Essaji. Even if the appellant was previously known to some people as Karachiwalla, he is not entitled to adopt the name now for business purposes. *Pomeroy* $v$ . *Scale* (24 R. P. C. 177).

If it were true that the appellant had never before used the name of Karachiwalla, the mere fact of his adopting it would prove fraudulent intention. See judgment of BUCKLEY, L. J. in John Brinsmead and Sons, Ltd. v. Brinsmead (30 R. P. C. Apart from this the proximity of the shops will raise $493).$ inference of dishonest intent.

The finding of fact by the learned trial judge that the appellant adopted name of Karachiwalla and as to his intention should not be upset. Nocton v. Ashburton (1914 A. C. at 957), Powell v. Streatham Manor Nursing Home (1935 A. C. 243). In any case in a passing-off action it is not necessary to aver and prove fraud. Bourne v. Swan and Edgar (1903 1 Ch. 211), Melachrino and Co. v. Melachrino Egyptian Cigarette Co. (4 R. P. C. 220).

It is not necessary to prove damage: in Hendriks v. Montagu (17 Ch. 638) the defendant was restrained from registering a company and no damage had accrued and in Clock Ltd. v. Clock House Hotel (52 R. P. C. 384) there was no damage and only one case of confusion proved but the respondent has proved eight different occasions of confusion.

The present case is also governed by the following cases in which injunctions were granted: Accident Insurance Co. v. Accident Disease and General Insurance Corporation (54 L. J. Ch. 104). Tussaud v. Tussaud (44 Ch. D. 678). North Cheshire and Manchester Brewery v. Manchester Brewery (1899 A. C. 83), Guardian Fire and Life Assurance Co. v. Guardian General Assurance Co. (50 L. J. Ch. 253) and Newmans case referred to in the judgment of JESSEL M. R. in Merchant Banking Co. of London v. Merchants' Jointstock Bank (9 Ch. D. at 564).

A company is in the same position as an individual: Merchant Banking Co. v. Merchants' Joint Stock Bank (supra). The case of Turton v. Turton (44 Ch. D. 128) is qualified by Reddaway v. Banham (1896 A. C. 188) in which it was held that even the use of a true name will be prevented under certain circumstances, e.g. if there are other names available. The case of Jay's Ltd. v. Jacobi (1933 Ch. D. 411) is not in point because (a) the plaintiffs were in London while the defendants were in Hove, (b) the defendants had used the name innocently and in business. (c) the defendants' business was in existence for two vears before action brought.

In any event a qualified injunction compelling the appellant to use his full name ought to be granted as in Rodgers v. Rodgers (41 R. P. C. 277). If the Court is against me, no costs ought to be allowed: Bosthwick v. Evening Post (37 Ch. D. at 460).

Atkinson replied.

SIR JOSEPH SHERIDAN, C. J.—The appellant, who according to the finding of the learned trial judge is Mohamedali Esmailii Essaji Karachiwalla, has been restrained from using in the hardware and ironmongery business in Mombasa the name, style or title of Karachiwalla or any other style or name which includes the name Karachiwalla. This means that he has been restrained from using his own name in his business. There is evidence that he bore the name Karachiwalla as long ago as 1918, for the name appears on his passport issued in that year; there is also evidence that he signed plans in 1930 and 1931 in the name of Karachiwalla and what is most important there is a large body of evidence in the Exhibits produced to the number of more than seventy that a variety of persons knew him by the name Karachiwalla. There is no question then in this case of his having adopted a name which was not his own or by which he was not known when he set up in business in hardware and

ironmongery in 1935. Although a number of cases have been cited to us, no case has been cited where a person has been wholly restrained from using in his business his own name. $\ln$ the case of Joseph Rodgers and Sons, Ltd. v. W. N. Rodgers and Co. (41 R. P. C. 277), where the defendant's business was opened under the title stated with the desire of confusing the business with the well-known firm of the plaintiffs, an injunction restraining W. N. Rodgers from using the name Rodgers was refused. ROMER J. as he was then, at p. 291 of the Report says: "I think the law can be very simply stated. It is the law of this land that no man is entitled to carry on his business in such a way as to represent that it is the business of another, or is in any way connected with the business of another: that is the first proposition. The second proposition is that no man is entitled so to describe or mark his goods as to represent that the goods are the goods of another. To the first proposition there is, I myself think, an exception; a man, in my opinion, is entitled to carry on his business in his own name, so long as he does not do anything more than to cause confusion with the business of another, and so long as he does it honestly. It is an exception to the rule which has of necessity been established. It is impossible to say, because Mr. Joseph Rodgers (for example) in the past established a business in cutlery which has now become so successful that his goods are known as "Rodgers Cutlery'' that no one whose name is Rodgers may embark upon a cutlery business, if as I say, he does it honestly and if he does not do anything more to cause confusion than merely carry on business in his own name. That is what I think was meant by Lord Justice Cotton in the well-known case of Turton $v$ . Turton (42 Ch. D. 138) where at page 143 he says: "In my opinion the Court cannot stop a man from carrying on his business in his own name, although it may be the name of a better-known manufacturer when he does nothing at all in any way to try and represent that he is that better known and successful manufacturer." In the well-known case of John Brinsmead and Sons, Ltd. v. Edward George Stanley Brinsmead (30 R. P. C. 493) an injunction to restrain the defendant from using the name of Brinsmead was refused. The defendant belonged to the family but not the firm of the well-known piano manufacturers and it was held to be legitimate for him to trade under the name of Brinsmead so long as he did not convey in the manner in which he described himself either that he was connected with or a member of the firm of John Brinsmead and Sons. That he might derive an advantage from bearing the name Brinsmead as showing that he was a member of the well-known family of Brinsmead piano manufacturers, it was held could not be taken The learned trial judge referred to the judgment $exception to.$ of Lord Justice Buckley in Brinsmead's case where he says that a trader will be restrained from using his own name if it is proved that its use results in deception unless he takes "such steps as will preclude the deception which is engendered by using his own name". If one were to assume that the respondent firm had acquired a reputation under the name of Karachiwalla in the hardware and ironmongery business—there is no evidence of what kind of reputation it had—can the appellant be enjoined from trading under the name M. E. Karachiwalla or Mohamedali Esmailji Karachiwalla? The question would be whether he has so described himself as to prevent his business being connected with or considered as an agency of the respondents in the minds of reasonable people. This is a matter of inference which on the recorded evidence this Court is in as good a position to judge as the learned judge who heard the case. In my opinion, the appellant has sufficiently described himself to eliminate any danger of his business being mistaken for that of the respondents'. The respondent company is trading under the title of Karachiwalla, Ltd., and the appellant under a different name, that of Mohamedali Essaji Karachiwalla or M. E. Karachiwalla and though mistakes may occasionally occur on the part of messengers of customers and clerks of purchasers and vendors in their accounts, there cannot be any case deserving of consideration of the business of one being mistaken for that of the other. When one reflects that neither the respondent company nor the appellant manufactures anything, different from most of the cases in the books, both being retail merchants dealing in a common type of goods, a case for an injunction taking into consideration the other facts of the case, does not deserve to succeed. $\quad \text{For} \quad$ customers in Mombasa who must be deemed to have a personal knowledge of the premises and the staff employed in the premises of the two rival establishments confusion is not reasonably possible and as for those outside Mombasa whether they be suppliers or purchasers it is equally difficult to see how confusion can arise. The description of the appellant's business on his stationery should prevent any confusion. I do not mean to suggest that if confusion did arise a case would be made out for an injunction. As I understand the authorities the Court would not interfere unless the appellant was holding out or representing that his business was the respondents' business or connected with it. That the use of the name Karachiwalla rendered it likely that the Post Office would make mistakes in the delivery of letters would not be a ground for an injunction. In my opinion, no case for an injunction has been made out; the appellant is trading under a name which is his own and which is different from that of the respondent company which is trading as Karachiwalla Ltd., if in using his own name he wishes to be regarded as a member of the family of his former employer and first cousin Gulamhussein Esmailji Jafferji Karachiwalla he is acting legitimately as was Stanley Brinsmead in the Brinsmead case. As the name Brinsmead in that case might suggest that the defendant came of "Brinsmead stock" and was a good musical name and that this would help him in the sale

of his pianos, so in this case the name Karachiwalla may be considered by the appellant to be advantageous in connoting that. persons dealing with him will meet with satisfaction. No casehas been made out for restraining the appellant from using the name Karachiwalla, in my opinion, and I would allow the appeal. with costs in this Court and the Supreme Court. I have found. it unnecessary to refer to the fact of the appellant having taken. premises next door to the respondents, a fact which was accepted. by the learned judge as disclosing a fraudulent intention, but $I$ wish to say that I agree with Mr. Atkinson's argument that as this fact was not pleaded as fraud and the appellant was never questioned on the point it would not be competent to regard. the circumstances as other than neutral.

LAW, C. J.—The learned trial judge has found that the appellant's name is Mahomedali Esmailji Essaji Karachiwalla. It would appear from the evidence that he has been reputedly known by that name since 1918. It is common ground that a man is entitled to carry on business in his own name provided. he acts honestly in so doing, and does not suggest that hisbusiness is in any way associated with that of another. $\quad \text{It is} \quad$ immaterial that confusion may unfortunately result from any similarity in name. There is no real evidence that the appellant is dishonestly using his name or that he has in any way represented his business as that of the respondents.

I have been privileged to see the judgment, in this appeal, of the learned President, with which I respectfully agree.

WEBB, J.—This is an appeal from an order restraining the appellant from carrying on the business of retail ironmonger in. Mombasa in the name, style or title of Karachiwalla or any other style or name which includes the name Karachiwalla or sonearly resembles the same as to be calculated to induce the belief that the business carried on by him is the same as that: carried on by the respondent company or in any way connected. therewith.

This decision is based, firstly, upon a finding of fraud againstthe appellant that he "adopted the name of Karachiwalla and started business in premises next door to the respondent's company with the deliberate intention of being mistaken for the well-known firm of Karachiwalla Limited and thereby filching some of their trade and/or benefiting by their reputation". $_{\rm In}$ my opinion the finding that the appellant adopted the name Karachiwalla is contrary to the mass of evidence both oral and documentary to the effect that long before the events, which occasioned these proceedings, he was known to a considerable number of the public as Mohamedali Esmailji Karachiwalla, or Mohamedali Essaji Karachiwalla, or M. E. Karachiwalla. I am. further of opinion that the learned judge was not entitled to rely.

in support of his finding of fraud, on the fact that the appellant had started business in premises next door to the respondent company, seeing that this fact was not pleaded as an allegation of fraud and, what is more, the appellant was not asked a single question on the subject. For all that we know he may have had a perfectly satisfactory explanation of the fact, and in the circumstances no inference should have been drawn from it.

So far, therefore, as the decision appealed from was based upon a finding of fraud, I am of opinion that it cannot be supported. But the learned judge said further that, apart from fraud he would have held that the respondents were entitled to relief on the ground that the use of the word Karachiwalla by the appellant was calculated to deceive, and he relied upon cases like North Cheshire and Manchester Brewery Co. v. Manchester Brewery Co. (1899 A. C. 83), British Legion v. British Legion Club (street) Ltd., (47 T. L. R. 571), British Medical Association v. March (47 T. L. R. 572) and Clock Ltd. v. Clock House Hotel, Ltd. $(52 \text{ R. P. C. } 386)$ . But cases between companies are, I think, hardly parallel, because the name of a company is necessarily an artificial name and in such a case, if the defendants have adopted, or propose to adopt, a name the same as or closely resembling that of an existing company, it can always be said that they are choosing a name which was not previously connected with them, when they were free to choose some other name. But the same cannot be said of an individual who already has a name associated with him. In such case the decisions, in my judgment, go no further than this, that a man will not be prevented from trading in his own name provided that he does whatever may be reasonably necessary, whether by the addition of his first names or his initials or otherwise, to distinguish his business from any previously existing business with which it might be confused. Brinsmead's case and Joseph Rodgers and Sons v. W. N. Rodgers and Co. (41 R. P. C. 277) are two out of many decisions to this effect. And if a trader does so distinguish his business, it seems to me that he will be none the less entitled to trade in his own name because he may hope or expect that the carelessness or stupidity of the public may bring him a certain amount of custom intended for his rival; he is not bound to insure his rival against such carelessness or stupidity. Here the appellant has distinguished his business by putting M. E. Karachiwalla over his shop and by printing Mohamedali Esmailji Karachiwalla on his stationery, and, in all the circumstances of this case that does seem to me to be reasonably sufficient to distinguish it from the business of the respondents. See Jay's Ltd. v. Jacobi (1933 Ch. 411). There have been a few cases of confusion by clerks or messengers, but no order appears to have gone astray, and, as Mr. Christie pointed out, if the customer goes himself to buy he has only to look in order to be able to distinguish one shop from the other, while, if he

$\sqrt{}$

sends an order by post or messenger, he has only to take the trouble to give the correct name or Post Office Box number. The respondents here are merely retail traders in articles that can probably be obatined in any ironmonger's, they are not manufacturers whose name has acquired over a wide area a special significance and association with a particular product as in the case of Rodgers' Cutlery or Brinsmead Pianos. No doubt the shop of their predecessor E. E. Karachiwalla was locally known, for the sake of brevity, as "Karachiwalla's", but there is nothing to show that it had such a reputation for peculiar excellence in some respect that confusion on the part of the public (if in fact it was likely to be general) would be a serious matter.

I agree that the appeal should be allowed and the action dismissed, with costs here and below.