This is an "unfair competition" suit brought by appellee against appellant in the circuit court of Mobile County, in Equity, to enjoin appellant from using in his taxicab business the words "Yellow Cab" or "Yellow Cab Company" and the colors yellow and black in any combination likely to confuse his cabs with those of appellee. The appeal here is from the final decree granting the relief prayed for.
Although there are assignments of error questioning the propriety of enjoining appellant in any respect, we gather from appellant's brief that the claimed error insisted on is that the injunction is made operative in territory (the corporate limits and police jurisdictions of the municipalities of Prichard and Chickasaw, in Mobile County) where appellee is not licensed to do business but appellant is so licensed. The argument seems to be that the doctrine of "unclean hands" is applicable, so as to deny to appellee the right to seek injunctive relief with respect to unfair competition in such municipalities. A further argument is that since appellee is not legally authorized to do business in said municipalities, and appellant is so authorized, appellant cannot be said to be engaged in unfair competition therein with appellee. It is insisted that the decree should be modified so as to exclude such territory from the operation of the injunction.
Appellee's cabs are painted yellow and black with distinctive designs. Each cab has on the top a yellow lighted sign bearing the word "Yellow" on one side and appellee's telephone number on the other.
"Yellow Cab" is a trade or business name developed many years ago by the Yellow Cab Manufacturing Company of Chicago which encouraged and licensed the installation of "Yellow Cab" taxi systems in numerous localities throughout the United States. The Yellow Cab Manufacturing Company went out of business many years ago. Mr. Robin C. Herndon, Sr., predecessor of appellee, operated under this system and continued to use the name "Yellow Cab" after he discontinued purchasing the Manufacturing Company's cabs. In 1947 Mr. Herndon transferred his taxicab operations to the Mobile Cab and Baggage Company, Inc., appellee, which has continued the use of the name until the present time.
For several years appellant has been licensed to do a taxicab business in Prichard and Chickasaw, while appellee has never been so licensed. Appellant is not licensed to do a taxicab business in the City of Mobile.
In 1950 appellant admittedly decided "to capitalize on the national reputation of the word `Yellow Cab' and the yellow color in his business and in October of that year he adopted the name `Powell's Yellow Cab' and began to operate under his license five or six yellow and black taxicabs in Prichard and Chickasaw". On the top of his cabs he put a light similar to that used by appellee, except in place of the word "Yellow" in front he put the word "Powell's". Like appellee, he put his company's phone number on the other side.
Appellant picks up passengers in Prichard and Chickasaw and sometimes discharges passengers in Mobile. Appellee discharges passengers in Prichard and Chickasaw and on a telephone call will send a cab to either of those municipalities for the purpose of picking up a customer; but appellee instructs its drivers not to pick up passengers on the streets of either. Appellant advertises, as does appellee, in the telephone directory which is common to Mobile, Prichard and Chickasaw. Introduced in evidence was a map of "Greater Mobile" showing the location of Prichard and Chickasaw in relation to Mobile. Prichard adjoins Mobile on the north and Chickasaw adjoins Prichard on the north, the three cities constituting a single heavily populated metropolitan
In addition to the testimony of witnesses, the parties stipulated as follows:
We have given careful consideration to the argument made by appellant, and the authorities relied on by him, and are unable to agree that the trial court erred in making the injunction operative in Prichard and Chickasaw.
It appears to be clearly established that appellee picks up and discharges passengers in Prichard and Chickasaw. And it is appellant's insistence that such action subjects appellee to certain licenses prescribed by the license codes of said municipalities; that appellee has not obtained the prescribed licenses; that such failure constitutes a violation of each of said codes, punishable as criminal offenses; and that appellee thus comes into court with unclean hands and cannot be heard to complain about any unfair competition by appellant in said municipalities. We do not think the doctrine of "unclean hands" is applicable here. It seems to us that the securing of a license to do business in Prichard or Chickasaw is a matter between appellee and said municipalities, and that only those municipalities can take advantage of appellee's failure to obtain any licenses required by them. It should be emphasized that the proceeding under review is one involving a question of "unfair competition", and whether appellee is obligated to secure municipal licenses in connection with its business has no bearing on that issue.
In discussing applicability of the "unclean hands" doctrine in unfair competition cases, it is stated in Callman's Unfair Competition and Trade-Marks, 2d Ed., § 87.1(b)(3), p. 1751, as follows:
Also bearing on the question is the following from § 87.1(b)(5), p. 1765, of the same authority:
In Ruffin v. Crowell, 253 Ala. 653, 661, 46 So.2d 218, 225, we stated the rule as follows:
In discussing the "unclean hands" doctrine in Foster v. Winchester, 92 Ala. 497, 501, 9 So. 83, 84, this court said:
From 19 Am.Jur., Equity, § 475, p. 328, is the following:
The rule is thus stated in 30 C.J.S., Equity, § 98 c., pp. 491-492:
The wrongs of appellee in not securing licenses, if there be wrongs, were against the municipalities of Prichard and Chickasaw, and ones of which only those municipalities could properly complain. "The revenue laws, it is said, provide ample punishment for the evasion by taxpayers of their just debts." Pomeroy's Equity Jurisprudence, 5th Ed., Vol. 2, Sect. 401d, p. 114.
Our conclusion is that appellee's failure to secure licenses, if liable therefor, was so unconnected with the issue raised in the suit that that defense can not be invoked so as to deny appellee its day in court. As aptly observed by Judge Learned Hand in
We have not been cited to any case, nor have we found any, dealing with the specific question here involved. However, we think the following authorities lend support to the conclusion which we have reached, viz.: Nims Unfair Competition and Trade Marks, 4th Ed., Vol. 2, § 417d, § 418, pp. 1320-1322; Northwest Ready Roofing Co. v. Antes, 117 Neb. 121, 219 N.W. 848, 850; Sterling Products Corporation v. Sterling Products, D.C.S.D.N.Y., 43 F.Supp. 548, 549-550; Western Auto Supply Co. v. Western Auto Supply Co., D.C.N.H., 13 F.Supp. 525, 528; General Film Co. of Missouri v. General Film Co. of Maine, 8 Cir., 237 F. 64, 66.
We see no occasion to discuss whether the case could be decided on the theory of potential competition under the doctrine of reasonably expectable expansion of business, through which the public might be confused, since the evidence shows an already existing actual competition. (By this we do not mean to imply that the business being done by appellee in Prichard and Chickasaw is covered by the ordinances now in effect. We do not pass on that question.) That there is such competition appears to be recognized by appellant in insisting that appellee has violated license ordinances of Prichard and Chickasaw by doing business therein without securing licenses.
The decree appealed from is due to be, and is, affirmed.
LIVINGSTON, C. J., and SIMPSON and MAYFIELD, JJ., concur.