                 TIHEACTOIZNEY              GENERAL

                             OFTEXAS

GEFMID C, MANN               AUUTIN ai.TEXAR




    Hon. M. 0. Flowers
    Secretary of State
    Austin, Texas
    DEar Sir:                    Att'n: Claude A. Williams
                                 Opinion No. 0;1711
                                 Re: Is the name "Texas Federatlon
                                      of Taxpayers" available for co-
                                      operate use due to the simllar-
                                      ity of such name to the exlst-
                                      ing corporation by the name of
                                      "Texas Taxpayers' Association"?
              We are in receipt of your request for an opinion
    on the following question:
              "Application has been made to this Department
        by the "Texas FederatFon of Taxpayers" for a cor-
        porate charter. Its domicile Is to be at Mount
        Pleasant, Texas.
              "Our records disclose that a domestic corpora-
        tlon by name of 'Texas Taxpayers' Association',
        domiciled at Longvlew, Texas, has previously been
        incorporated and is In good standing.
              "We respectfully request your opinion as to
        whether or not the name 'Texas Federation Taxpag-
        ers' is available for corporate use due to the
        simllaritg of such name to the existing corporation
        by name of 'Texas Taxpayers' Assoalatlon'.
              We believe the law of Texas In respect to,.theadop-
    tion of a similar name by a corporation is summed up in the
    following paragraph from the case of THE GRAND TEMPLE, et6.,
    v. INDEPENDENT ORDER, K. &D. of T., ,44 S.W. (2d) 973:
              "A corporation cannot lawfully adopt either the
        same name as that of an existing corporation created
        by or under the laws of the state, or of an unincor-
        porated association or partnership therein, or a name
        so similar to that of an existing corporation or as-
        sociation that its use is calculated to deceive the
        public and~result in confusion or unfair and fraud-
Hon. M. 0. Flowers, page 2         O-1711


    ulent competition (14 C.J. p. 312) and may be en-
    joined from such use, whatever may be the character
    of the corporations, and whether or not they are
    formed for profit, to the same extent and upon the
    same principles that 1ndlviduals are protected in
    the use of trade-marks and trade-names (14 C.J. p. 326).
    And there can be no distinction In principle between
    taking the entire name of the prior corporation
    and takLng so much of 1t as will mislead Into the
    belief that the two concerns are the same. The mis-
    chief is of precisely the same character, differing
    only in degree. Similarity, and not identity, is
    the usual recourse where one corporation seeks to
    benefit itself by the name of another."
          Where a subsequent corporation seeks to adopt a
name similar to or so nearly like that of another corpora-
tion as would be likely to produce mistake or confusLon in
the public mind, the Secretary of State would be acting wlth-
In his authority in refusing to grant a charter to the of-
fending corporation.
    BOARD OF INS. COMM. v. NATIONAL AID LIFE (Clv.
     App.) 73 S.W. (2d) 671, error refused.
          "The statutes of many states expressly adopt
    the rule, and it has been held, even where no such
    -expressstatutory provision exists, the court, of-
    ficer, or administrative or mtnisterial board whose
    duty It is to grant or refuse charters, or articles
    of incorporation, or certificates of authority, or
    permits to transact or carry on business within a
    state, will not permit the use by any subsequent
    corporation of a name similar to or so nearly like
    that of another corporation as would likely to pro-
    duce mistake or confusion."
          The general rule Is that "there is an unlawful ap-
propriation where one corporation appropriates and use;
the distinctive portion of another corporation's name.
    THOMPSON ON CORPORATIONS, 3rd Rd., Mol. 1, p. 81:
          On page 100 of Thompson on Corporations, supra, var-
ious names, the similarity of which has been held to warrant
Injunctive relief, are set out as follows:
          "'The Holmes, Booth & Atwood Mfg. Co.' and
    'Holmes, Booth & Hayden'. 'United States Mercantile
    Reporting Co., and IUnitid States Commercial Agency
Hon. M. 0. Flowers, page 3        O-1711


   & Collecting Co.'; 'The Young Woman's Christian As-
   sociation' and 'International Committee of the Young
   Woman's Christian Association'; 'Lamb Knit Goods Co.'
   and 'Lamb Glove & Mitten Co.'; 'The Legal Aid Society'
   and 'The Co-operative Legal Aid Society,' on the
   ground that the similarity was calculated to mislead
   the public; 'Society of the War of 1812’ and 'Society
   of the War of 1812 in the State of New York'; 'Rdi-
   son Storage Battery Co.' and 'Rdlson Automobile Co.';
   Philadelphia Trust, Safe Deposit & Insurance Co.,'
   a corporation which by usage acquired the name 'The
   Philadelphia Trust Co.,' and a later corporation
   having the name 'The Philadelphia Trust Co.'; 'The
   Dodge Stationery Co.' and 'J. S. Dodge Co.,' where
   it appeared that the latter was conducting the same
   kind of b,uslness; 'Cincinnati Vicl Shoe Co.' and
    'Cincinnati Shoe Co.,' although the secretary of
   state had permitted the incorporation of each; 'The
   Manchester Brewing Co.' and 'The North Cheshire &
   Manchester Brewing Co.,'; 'Landlords' Protective
   Bureau' and 'Landlords' Protective Department,' on
   the ground that the slmilarltg was sufficient to
   mislead and confuse the public as to the identity of
   the 6orporations; 'The Hanoverian and Oldenburg
   Coach Horse Association of America' and 'The Olden-
   burg Coach Horse Association of America'; 'N.J.
   Henry Manufacturing Company, Inc.' and 'Henry Screen
   Manufacturing Company'; 'Pansy Waist Company Inc.'
   and 'Pansy Dress Company, Inc.'; 'Grand Rapids
   Furnlture Company' and 'Grand Rapids Furniture Shops';
    'Sovereign Camp of the Woodmen of the World' and
    'Woodmen of the World'; 'Supreme Lodge of the World
   Loyal Order of Moose' and 'Improved Benevolent
   Protective Order of Moose of the World.'"
          In the case of The Grand Temple, etc. v. Independ-
ent Order, K &D of T., supra, a Texas CommissLon of Appeals
case, it was held that the name "Knights and Daughters of
Tabor of International Order of Twelve" and "Independent
Order of Knights and Daughters of Tabor of America', were
similar as a matter of law, entitling the former corporation
to injunctive relief against the latter.
          It is obvious that the distinctive portion of the
names of the above two charitable corporations IS "Knights
and Daughters of Tabor" and that the mere addition of unlm-
portant words in an appellation of such length would not
distinguish the second corporation from the first.
          In the present instance we have the two names:
Hon. M. 0. Flowers, page 4        O-1711


"Texas Taxpayer's Association" and "Texas Federation of Tax-
payers". The test Is whether or not the names are so,similar
that their use will deceive the public and result in confu-
sion and unfair competition to the corporation who first ob-
tained its name as a part of its franchise. a
          We concede that the issue is close due to the use
of the words "Texas" and "Taxpayers" but Ft cannot be con-
cluded that the average man would be confused by the use of
the words 'association' and "federation". The established
rule is that the similarity must be such that any person, of
such reasonable care and caution as the public generally are
capable of using and may be expected to exercise,~would mis-
take,the one corporation for the other. The words "associa-
tion" and "federation" do not have the same meaning nor are
they indl~tlnguishable by idem sonans.   A "federation of
Taxpayers suggests a far greater scope and magnitude than
an 'association".-'Thepresent case 1s not so clear cut as
the "Knights and Daughters of Tabor" confllot. Futhermore,
we do not find the 'samedegree of similarity between the
names "Texas Taxpayer's Assoclatlon" and "Texas Federation
of Taxpayers“ as exists between the names glven'ln the list
quoted above from Thompson on Corporatlons.
          The rlghts of the corporation first established
must be recognized, but the governing rule of law will not
be strictly and harshly appled. It Is true that slmllarity,
rather than Identity of name, is the determining norm, but
In the present tnstance the distlnctlve essence of .the name
"Texas Taxpayer's Association" Is not appropriated or vlo-
lated by the words "Texas Federation of Taxpayers". Again
the arrangement of words is essentlallg differ~entand suggest
a distinct organization.
          We think there is a closer analogy between the names
under oonslderatlon and those Instances of similarity cited
In Thompson on Corporation where injunctive relief was re-
fused than those where the relief was granted.
    TROMPSON ON CORPORATION, 3rd Ed. Vol. 1, p. 102:
         "There are some oases where,the names of the
   corporations were somewhat slmllar but the o,ourts
   denied the relief by injunotion; as, for Instance,
   in the cases of the following names: 'Elgin Butter
   Company' and 'Elgln Creamery Company'i Internation-
   al Banking Company' and 'International Bank'; 'In-
   dustrial Mutual Deposit Co.' and 'Central Mutual
   Deposit Co.'; 'Richardson & Boynton Co.' and 'Rioh-
   ardson and Morgan Co.'; the 'Goodyear Rubber Co.,
. --




       Hon. M. 0. Flowers, page 5           O-1711


           a New York corporation, and 'Goodyear's India Rub-
           ber Glove Manufacturing Co.,' a Connecticut corpor-
           atlon. The supreme court of Massachusetts refused
           to enjoin a benevolent society acting under the
           name 'Order of Scottish Clans' at the suit of a
           prior corporation engaged in similar business under
           the name 'American Order of Scottish Clans,' after
           a certificate of incorporation had been granted by
           the secretary of state under a statute which pro-
           vided thst the certificate should be conclusive
           evidence of the existence of the corporatron at the
           date of such certificate. So, it was held that
           the 'Sun Life Assurance Society,' of England, was
           not entitled to enjoin the 'Sun Life Assurance
           Company of Canada' from transacting a similar busi-
           ness In England, in the absence of przof of actual
           fraud, either practiced or attempted.
                 It is our opinion that the similarity between the
       names "Texas Taxpayers Association" and "Texas Federation
       of Taxpayers" Is not so marked as to violate the rule of
       law that a corporation cannot adopt a name so similar to
       that of an established corporation that its use will de-
       ceive the public and result in confusion, and that as a
       result the name "Texas Federation of Taxpayers' is avall-
       able for corporate use in Texas despite the existence of
       a corporation with the name "Texas TaxpayersR Association",
       and that the secretary of state may not refuse to issue a
       charter to the "Texas Federation of Taxpayers" solely on
       the ground of similarity of name.
                  Trusting that we have fully answered your inquiry,
       we are
                                       Yours very truly
                                    ATTORNEY.GENERAL OF TEXAS

                                       By s/Dick Stout
                                            Dick Stout
                                            Assistant

       DS:ob:wc

       APPROVED NOV 28, 1939
       s/Gerald C. Mann
       ATTORNEY GENERAL OF TEXAS
       Approved Opinion Committee By s/BWB Chairman
