351 Mass. 283

Massachusetts Mutual Life Insurance Company vs. Massachusetts Life Insurance Company.

Suffolk.

May 5, 1966.

July 1, 1966.

Present: Wilkins, C.J., Spalding, Whittemore, Kirk, & Reardon, JJ.

*284Edward J. Duggan {Daniel J. Johnedis with him) for the plaintiff.

Robert M. Morrison {Alan E. Robbins with him) for the defendant.

Reardon, J.

In this suit in equity the plaintiff, Massachusetts Mutual Life Insurance Company, sought to enjoin the defendant from doing business under the name “Massachusetts Life Insurance Company.” A demurrer to the bill was overruled. The plaintiff prayed for relief (1) on common law equitable principles, (2) under the provisions of G-. L. c. 110, § 7A (which deals with injunctive relief in certain cases of trademark infringement or unfair competition), and (3) under the provisions of C. L. c. 155, § 9 (see footnote No. 1). The evidence was agreed.

The plaintiff has been conducting business under its name since 1851. On August 15, 1963, the defendant filed its articles of organization with the Secretary of the Commonwealth (the Secretary). That same day the Commissioner of Insurance (the Commissioner) considered objections to the defendant’s choice of name (made by the Massachusetts Hospital Life Insurance Company) and approved the defendant’s name. The plaintiff never assented in any way to the assumption of the name by the defendant and, on September 12, 1963, filed with the Secretary a protest regarding the name, sending a carbon copy to the Commissioner. On September 18, 1963, the Director of the Corporation Division of the office of the Secretary asserted that the Secretary’s office had no jurisdiction to act on the protest and suggested instead a hearing with the Commissioner. On September 23, 1963, the Commissioner offered to entertain the protest and hold a hearing. The plaintiff, on October 2, 1963, sent a letter to the Commissioner denying that he had authority to consider the protest or hold the hearing “but expressed its gratitude for the opportunity offered for a hearing and its hope that such a hearing might resolve the matter.” The hearing before the Commissioner was held on October 30, 1963. At that and all sub*285sequent times, the plaintiff “denied that either consideration of its protest by the Commissioner or the granting of a hearing by him was required by any provision of the General Laws of the Commonwealth or that 'G. L. c. 30A [the State Administrative Procedure Act] applied to the hearing. ’’ In his decision the Commissioner found the defendant’s name to be “proper” and reaffirmed his prior approval. The plaintiff did not seek judicial review of the decision. On February 11, 1964, the plaintiff brought this suit.

The defendant in an answer and counterclaim alleged that the plaintiff in appearing before the Commissioner had elected to seek administrative relief and in failing to seek judicial review of the resulting administrative decision had thus lost its right to attack collaterally on any grounds the defendant’s use of the name. In a memorandum of law, order for decree, and interlocutory decree the trial judge ruled that the Commissioner was the proper party to hear and pass upon the plaintiff’s protest of the defendant’s name, and that the hearing “was an adjudicatory proceeding within the confines of Chapter 30A, Sect. 1 (1).” He ruled further that the plaintiff had failed to seek a timely review and that the doctrine of exhaustion of administrative remedy applied, resulting in a lack of jurisdiction in the Superior Court to entertain the plaintiff’s claim for relief under G. L. c. 155, § 9. The judge also ruled that the plaintiff might be entitled to independent relief based on unfair competition and general equitable principles and that the plaintiff might seek relief on those grounds. The case was reported to us by the trial judge on the interlocutory decree.

1. The requirements regarding the assumption of a name by a new corporation are set out in G. L. c. 155, § 9.1

*286(a) The first question which we consider involves the identity of the authorities which are to be charged with passing upon a name proposed by an applicant insurance company for itself. General Laws c. 155, § 9, conveys broad power to the Secretary regarding approval of corporate names. It is argued by the defendant that, since the proviso of that section which requires prior written approval by the Commissioner of a name of a corporation “formed for the purpose of acting as an insurance agent, insurance broker, or adjuster of fire losses” fails to specifically include “insurance' companies,” they are thereby excluded from the control of the Secretary with regard to approval of their names. But, as the plaintiff points out, when the amendment to G. L. c. 155, § 9 (St. 1963, c. 59),2 was en*287acted the names of insurance companies were already subject to the Commissioner’s prior written approval under G. L. c. 175, § 49, as it then read and now reads. *3 Corporations doing the business of agents, brokers and adjusters were not formed under G-. L. c. 175, § 49, and the effect of the proviso added to c. 155, § 9, was simply to establish the requirement of approval of their names by both the Commissioner and the Secretary, as was already required for insurance companies. It is our view that but for this additional review by the Commissioner the procedures for the approval of a corporate name are the same for all types of insurance companies as for any other corporation.

General Laws c. 175, § 49, dealing with the formation of insurance companies, wholly incorporates the provisions of c. 155, § 9, “except as otherwise expressly provided in this chapter.” Chapter 175, § 49, reaffirms establishment in *288c. 155, § 9, of the requirement of approval of the insurance companies’ names by the Secretary. The trial judge interpreted “the interplay” of these two statutes as follows: “It would appear . . . that the legislature intended that insurance companies are ‘to be removed from the category of other corporations specifically as far as control of the name is concerned. ’ An interpretation other than that which substitutes the Commissioner for the Secretary throughout the provisions of Sect. 9 . . . would result in a most unusual division of authority.” We cannot agree with this construction of the two statutes.

The express legislative language necessary to permit such a construction is absent from G. L. c. 175, § 49. Elmer v. Commissioner of Ins. 304 Mass. 194, 197. See Rizzuto v. Onset Cafe, Inc. 330 Mass. 595, 597-598. That the Legislature has provided in G. L. c. 175, § 49, for the approval of the Commissioner as one of the requirements in the formation of an insurance company should not be construed as an ouster of the Secretary from his function of approving corporate names under c. 155, § 9. General Laws c. 175, § 49, indeed itself lends strength to this interpretation. The net effect is thus to require, in the case of the names of insurance companies, written approval of the Commissioner prior to, and as well as, the approval of the Secretary. That the Secretary retains statutory control of the proceedings is further indicated in the provision of G. L. c. 175, § 49, which calls upon the Commissioner to execute a certificate of his findings on articles of organization submitted to him and to attach it to those articles prior to their filing with the Secretary.

(b) The second question confronting us relates to the identity of the official charged with holding a hearing upon the protest of a name approved by both the Secretary and the Commissioner. Under G. L. c. 155, § 9, there is a detailed procedure available for the challenging of an approved name. The hearing there described is to be before the Secretary and “within thirty days of the date when the certificate or articles of organization of any corporation are *289filed ...” (emphasis supplied). Our interpretation that Gr. L. c. 175, § 49, does not remove insurance companies from the requirements of Gr. L. c. 155, § 9, is consistent with this phrase.

The defendant does not deny that it is the province of the Secretary to hold this type of hearing for all other corporations. The issue involved in a hearing on an insurance company name will not be appreciably different from that for any other corporation. It will not require a skill peculiar to the Commissioner or lacldng in the Secretary. We, therefore, see no practical reason to strain toward acceptance of the interpretation proposed by the defendant and adopted by the trial judge. Procedures are established for the hearing before the Secretary in the second paragraph of Gr. L. c. 155, § 9. It is unreasonable to assume that, with this provision at hand as a model, our Legislature would have wholly failed to make some careful and similar provision in Gr. L. c. 175 regarding the procedures for a hearing to be held before the Commissioner if, as the judge stated, the Legislature had in fact “intended that insurance companies . . . ‘. . . be removed from the category of other corporations specifically as far as control of the name is concerned. ’ ” See Elmer v. Commissioner of Ins. 304 Mass. 194, 197. No “unusual division of authority” results from this interpretation. General Laws c. 155, § 9, intends that the Secretary have the responsibility for the conduct of all hearings involving corporate names.

(c) Thus the Secretary was in error in stating that he had no jurisdiction to hear the protest of the plaintiff. The hearing before the Commissioner was a nullity and the decision is void. Since that is so, the plaintiff lost no rights in failing, under G. L. c. 30A, to seek judicial review of the Commissioner’s decision. We therefore do not consider the question of failure by the plaintiff to exhaust its administrative remedies.

2. Under G. L. c. 155, § 9, the Superior Court is explicitly given jurisdiction to enjoin a corporation “from doing business under a name assumed in violation of any *290provision of this section, although articles of organization . . . may have been approved and filed and a certificate of incorporation issued.” This jurisdiction exists in the instant case. We are not presently concerned with the effect on that jurisdiction of a challenge to the approval of a name, a hearing before the Secretary, a failure to seek judicial review of his adverse decision, and then a subsequent proceeding in equity under Gr. L. e. 155, § 9.4 Nor do we pass on whether, in the instance of a hearing and timely petition for review to the Superior Court, the proceeding in the Superior Court would be de nova. See First Natl. Stores v. First Natl. Liquor Co. 316 Mass. 538, 539; Union Oyster House, Inc. v. Hi Ho Oyster House, Inc. 316 Mass. 543, 544; Monroe Stationers & Printers, Inc. v. Munroe Stationers, Inc. 332 Mass. 278, 279. We hold only that in this instance the plaintiff may properly proceed under Gr. L. c. 155, § 9, to challenge in a de nova proceeding the Commissioner’s and the Secretary’s approvals of the defendant’s name.

3. The trial judge ruled that the plaintiff might proceed to be heard upon those prayers for relief based upon general equitable principles and G-. L. c. 110, § 7A.

(a) The considerations involved in an application of Gr. L. c. 155, § 9, are not identical with those involved in an application of Gr. L. c. 110, § 7A. The Secretary, under c. 155, § 9, considers only the abstract likelihood or possibility of one name being mistaken for another because of literal similarity, and a court acting under the same statute can do no more. Under Gr. L. c. 110, § 7A, however, whether or not the names in the abstract appear so similar or likely to be mistaken one for the other as to warrant an injunction under Gr. L. c. 155, § 9, the court may still proceed to determine whether the location or the manner of the use of the. *291name may result in “injury to business reputation or . . . dilution of the distinctive quality of a trade name” and grant an injunction. The proceedings under GL L. c. 110, § 7A, are more broadly based than those under GL L. c. 155, § 9. See First Natl. Stores v. First Natl. Liquor Co. 316 Mass. 538, 541, 542. See also Union Oyster House, Inc. v. Hi Ho Oyster House, Inc. 316 Mass. 543, 547; Healer v. Bloomberg Bros. Inc. 321 Mass. 476, 477-478; Jays Inc. v. Jay-Originals Inc. 321 Mass. 737, 738, 740; Monroe Stationers & Printers, Inc. v. Munroe Stationers, Inc. 332 Mass. 278, 281-282; Food Fair Stores, Inc. v. Food Fair, Inc. 177 F. 2d 177, 185 (1st Cir.). We hold that the plaintiff may proceed under both c. 155, § 9, and c. 110, § 7A.

(b) We now consider whether, in addition to the above two statutory remedies, the plaintiff still has a common law remedy under general equitable principles. We hold that it does. Chapter 110, § 7A (St. 1947, c. 307), is not the exclusive prescription of remedies for unfair competition.5 Cases which have dealt with this section have not determined that it preempts the field of unfair competition. They have indicated rather that the section has widened and clarified one area of unfair competition and is to an extent a supplement to common law rights. Healer v. Bloomberg Bros. Inc. 321 Mass. 476, 477-478. Jays Inc. v. Jay-Originals Inc. 321 Mass. 737, 742. New England Tel. & Tel. Co. v. National Merchandizing Corp. 335 Mass. 658, 665-666. Great Scott Food Mkt. Inc. v. Sunderland Wonder, Inc. 348 Mass. 320, 323. Certain other cases need not be read as indicating that c. 110, § 7A, designates exclusive successors to all of the equitable grounds for relief against unfair competition. Skil Corp. v. Barnet, 337 Mass. 485, 488-491. Esquire, Inc. v. Esquire Slipper Mfg. Co. Inc. *292139 F. Supp. 228, 232-233 (D. Mass.). See Food Fair Stores, Inc. v. Food Fair, Inc. 177 F. 2d 177,185 (1st Cir.); Libby, McNeill & Libby v. Libby, 103 F. Supp. 968, 970 (D. Mass.).

. It is true, as was noted in Skill Corp. v. Barnet, 337 Mass. 485, 489, that the legislative history sheds little light upon the purpose of c. 110, § 7A. It is our view, however, that it is a statutory declaration and clarification of a portion of the extant common law of unfair competition but that it does not preclude the court’s granting of consistent common law remedies to a plaintiff who seeks them.

4. The interlocutory decree is therefore to be modified so as to permit the plaintiff’s suit under Gr. L. c. 155, § 9, to proceed, and as so modified is affirmed.

So ordered.

Massachusetts Mutual Life Insurance v. Massachusetts Life Insurance
351 Mass. 283

Case Details

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Massachusetts Mutual Life Insurance v. Massachusetts Life Insurance
Decision Date
Jul 1, 1966
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351 Mass. 283

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Massachusetts

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