Scottish Court of Session Decisions

The Society of Accountants in Edinburgh were incorporated by royal charter in 1854. The Institute of Accountants and Actuaries in Glasgow were incorporated by royal charter in 1855. The Society of Accountants in Aberdeen were incorporated by royal charter in 1867. These three societies are the only bodies of accountants in Scotland who are incorporated by royal charter. The conditions of membership are in each

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body regulated by the charter or by bye-laws and regulations under the powers of the charter. These conditions are not uniform, but have generally the same object, viz., the exaction and maintenance within the societies of a high standard of education, conduct, and professional capacity. The members of the three bodies are numerous, and carry on the practice of their profession in competition. There is no provision in the charters or in any bye-laws hitherto made prescribing any particular designation to be used by the members. But from about the date of each charter, the members of each body have been in use to designate themselves as “chartered accountants,” and to use as an abbreviation for that title, and as an affix to their names, the initial letters C.A. Professional men and the public generally came to understand the words “chartered accountant” and the abbreviation “C.A.” as designating the members of these three chartered bodies. Before 1891 no other persons used this designation or these initials with the exception of a few members of the Institute of Chartered Accountants of England and Wales who practised in Scotland.

In 1884, and again in 1890, an association styling itself “The Scottish Institute of Accountants” presented a petition to Her Majesty in Council, praying for the grant of a royal charter of incorporation. On each occasion the petition was opposed by the three chartered societies, and the prayer of the petition was refused.

On 12th November 1891 seven members of the Scottish Institute of Accountants formed themselves into a company, and registered themselves at the office of the Registrar of Joint-Stock Companies for Scotland under the Companies Acts 1862 to 1890 under the name of “The Corporation of Accountants, Limited.” Article 12 of the articles of association of the said company was as follows—“Every member shall be entitled to a certificate of admission, which shall entitle him to designate himself ‘corporate accountant’ as belonging to this association, and he may take and use any initials or abbreviations thereof.” The certificate of membership is directed to be in the form given in Schedule C annexed to the articles of association, and which form runs as follows—“This is to certify that of is a member of ‘The Corporation of Accountants, Limited,’ and that as such he is entitled to designate himself ‘corporate accountant,’ and to take and use any initials or abbreviations thereof.—Given under the Common Seal of the Corporation of Accountants, Limited, this day of 18.—President; Secretary.”

Thereafter the members of the Corporation of Accountants, Limited, made public use of the letters “C.A.,” appended them to their signatures, and inserted them in advertisements after their names in course of their professional employment.

In these circumstances the three chartered societies and two members of each society, as individuals, raised an action against the Corporation of Accountants, Limited, and two individual members thereof, concluding, first, for reduction of the articles of association of the defenders' company, or otherwise article 12 of the said articles and relative schedule, “in so far as the same purport to confer on the individual members of the said corporation the right to use for professional purposes and as a professional designation, the letters C.A., or any other words or abbreviation of words calculated to lead the public to believe that they are members of one or others of the bodies of accountants in Scotland which are incorporated by royal charter, “and the certificate of incorporation granted by the Registrar of Joint-Stock Companies for Scotland following thereon;” and secondly, for interdict against the individual defenders, prohibiting them, “and each of them, from using for professional purposes or as a professional designation the letters C.A., or any other letters or words or abbreviation of words calculated to lead the public to believe that they are members of one or other of the bodies of accountants in Scotland which are incorporated by royal charter, and from doing anything to infringe the sole and exclusive right of the pursuers, the said James Howden, Thomas Goldie Dickson, Walter Mackenzie, John Ebenezer Watson, Alexander Ledingham, and James Meston, and the other members of the Society of Accountants in Edinburgh, the Institute of Accountants and Actuaries in Glasgow, and the Society of Accountants in Aberdeen, to the use of the said letters as a professional designation.”

In their condescendence the pursuers stated, inter alia—“The pursuers believe and aver that in framing the said articles of association, and forming themselves into a company, the promoters had no legitimate object to serve, and that their sole purpose, or at least their main purpose, was to make use of the initial letters ‘C.A.,’ which, although they are the initials of the words ‘corporate accountant’ (a term never before heard of), will in reality lead the public to believe that they represent the words ‘chartered accountant,’ and which will thus deceive the public, and injuriously affect the interests of the pursuers and of the individual members of the chartered societies. The defenders have all along been well aware of the use by the pursuers of the designation ‘chartered accountant,’ and of the letters ‘C.A.’ as an abbreviation therefor, and they have also known the meaning and value which these words and letters have acquired in the mind of the public as denoting membership of one or other of the chartered societies… . The use of these of initial letter [C.A., by the two individual defenders] is calculated to deceive, and does deceive, members of the public into the belief that the said defenders Martin and Addie are members of one or other of the chartered societies, and have the special qualifications which the members of these societies possess. The pursuers are apprehensive

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that as the result of the said illegal and misleading use of the said initials by the defenders, the public will employ the defenders professionally, in the erroneous belief that they are members of one or other of the said chartered societies, to the loss, injury, and damage of the pursuers.”

The pursuers pleaded—“(1) The memorandum and articles of association libelled, and in particular the 12th article and relative schedule, being an infringement of the pursuers' rights as condescended on, the pursuers are entitled to decree of reduction in terms of one or other of the alternatives libelled. (2) In respect that the Companies Act 1862 does not authorise or contemplate the conferring of any trade name or designation on the individual shareholders registered under its provisions, the 12th article of association and relative schedule are not authorised by the Act, and the registration thereof is inept and invalid. (3) In respect that the part of the Companies Act 1862, under which the defenders' company has been registered, applies to aggregates of individuals seeking to trade as corporations, under a corporate name, and not as individuals trading under their own names, the individual defenders have no statutory authority or protection in appropriating to themselves as individuals a trade name or professional name or designation; and in particular, they have no such authority or protection in respect of any such name or designation which has been already appropriated to others. (4) The pursuers having prior and exclusive right to the use of the letters ‘C.A.’ for professional purposes, and the defenders having interfered, or threatened to interfere, with the rights of the pursuers as libelled, the pursuers are entitled to interdict as craved, with expenses. (5) The use by the defenders of the said professional designation being calculated to deceive, and actually deceiving, the public into the belief that the defenders are members of one or other of the said chartered societies of accountants, to the injury of these societies and the members thereof, the pursuers are entitled to interdict as craved, with expenses.”

The defenders lodged defences, and pleaded—“(1) No title to sue. (2) The pursuers’ statements are irrelevant and insufficient to support the conclusions of the summons. (3) In respect that the pursuers have no exclusive right to the use of the letters ‘C. A.’ for professional purposes, they are not entitled to decree as libelled. (4) The defenders not having infringed the rights of the pursuers in any way whatever, are entitled to absolvitor, with expenses.”

A proof was taken by the Lord Ordinary ( Kyllachy), which brought out the facts already stated.

On 12th January 1893 the Lord Ordinary pronounced the following interlocutor:—“Finds that the pursuers have no interest to insist in the reductive conclusions of the summons, therefore dismisses the same; and with respect to the conclusion for interdict, interdicts, prohibits, and discharges the defenders, the said James Martin and James L. Addie, and each of them, from using for professional purposes or as a professional designation the letters ‘C.A.,’ or any other letters or words, or abbreviation of words, calculated to lead the public to believe that they are members of one or other of the bodies of accountants in Scotland which are incorporated by royal charter; and quoad ultra dismisses the said conclusion, and decerns, &c.

“ Opinion.—… I am satisfied that it is not necessary to pronounce any decree of reduction in order to open to the pursuers the question they desire to try. The registration under the Companies Acts of a company under a certain name does not preclude a challenge at common law of the use of that name. Still less can registration of articles of association, conferring powers on the members of a company, with respect to their professional designation preclude questions with third parties with respect to the lawfulness of those designations. I do not therefore propose to consider how far the pursuers have a title to reduce the articles of the defenders' company, or how far such reduction is otherwise competent.

But the action contains further conclusions which raise the true question which is at issue—[ His Lordship here read the conclusion for interdict].

It will be observed that this conclusion suggests two distinct grounds of action, which are also set forth separately in the pursuers' pleas. One is that the defenders have wrongfully represented themselves as members of one or other of the pursuers' corporations. The other is that they have infringed an alleged sole and exclusive right on the part of the individual pursuers, and the other members of the three corporations, to the use, as a professional designation, of the letters C.A.

It appeared to me when the case was first argued in the procedure roll that, apart from the element of misrepresentation—that is to say, deception of the public to the pursuers' prejudice, it would be difficult to support the action in so far as laid upon the second of the grounds which I have just mentioned—I did not then see, nor do I see now, how there can be any right or property or exclusive use in a name, except when and in so far as the use of such name by others involves personation, and amounts to fraud. I thought, however, that it might possibly be shown by evidence that the proceedings complained of involved not only a false assumption of membership of one or other of the pursuers' corporations, but involved also such an assumption of identity with the individual pursuers or their co-members as might bring the case within what is (perhaps somewhat loosely) called the doctrine of infringement of trade name. For that reason, as explained at the time, I allowed a general proof, and what I have now to consider—at least in the first place—is the import and effect of that proof.

I cannot say that upon the mere matter of fact I have had much difficulty. I think that the evidence, and particularly the

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evidence of the defender Mr Martin (which was given, I must say, with the greatest candour) establishes beyond doubt that the defenders in adopting the designation of C.A. have conveyed to the public that they are members of one or other of the pursuers’ corporations, and have thereby appropriated benefits in the conduct of their business which belong properly to the members of those corporations. I think it is further established upon the same evidence that the defenders' purpose in making use of the designation in question was to obtain those benefits. That is to say, I think their object was to identify themselves with the members of the corporations, and to share that amount of reputation and public confidence which the latter, in virtue of their membership, enjoy. I do not say that the defenders admit this in so many words. Their view is that they had right to use the designation, and that such benefits as followed were theirs by consequence. But I am satisfied that the effect and object of the defenders' action was what I have said. And I cannot hold that their position is made better by the formation of the limited company, and their assumption as members of that company of the title of ‘corporate accountant.’ The whole history of that matter, and particularly of the defenders' application for a royal charter, and their failure to obtain it, make it, I think, plain that the formation of the company was a mere device for the purpose of giving a legal colour to the assumption of the disputed title. The public are not, I think, likely to regard the letters C.A. as representing the words corporate accountant; and I am unable to believe that the defenders either expect or desire that they should do so. The case is, in my view, just the same as if the defenders openly dubbed themselves chartered accountants, and practised their profession under that name.

The question, however, remains, whether and how far what the defenders have done constitutes a legal wrong, of which the pursuers, or any of them, have a title to complain. And here I may say that if the pursuers' success depended on bringing the case within the principle of those decisions which were chiefly quoted in argument—I mean the decisions on the doctrine of trade name—I should have had considerable difficulty. These cases all rest on the element of personation—personation of some firm or individual, or of the business or manufacture of some firm or individual. Their doctrine does not extend to what I may call personation of a class—that is to say, to the false assumption of some character or qualification common to a number of persons and open to be acquired by an indefinite number of persons. With respect even to ‘invented’ or fancy names, the doctrine has not hitherto at least been applied, except when the name has become proper to some single person or single firm. Now, the pursuers' corporations do not as such carry on business. There is therefore no personation of the corporations. And with respect to the individual members there are two difficulties. In the first place, they do not all sue, and I doubt whether those who do have a title to sue on behalf of the others, or a sufficiently direct interest to sue on behalf of themselves. But further, I also doubt whether the designation chartered accountant or the abbreviation C.A. is of the nature of a trade name at all. I rather think that both of them are merely descriptive, and descriptive of a character or qualification possessed by a number of persons, and put forward by those persons, not at all for purposes of identification, but as assertive simply of the fact that the character or qualification is possessed. Nor is it enough to say that the designations which are or were primarily merely descriptive may yet by usage come to have a secondary meaning. I do not think that the words chartered accountant can be held to have attained, or perhaps to be capable of attaining, any secondary meaning. I rather think that the designation still signifies just what it signified at the first. The case is not in the category of ‘Stone Ale’ or Glenfield Starch’ or ‘Glenboig Fireclay.’ It is rather in the category of ‘Burton Ale’ or ‘Edinburgh Ale’ or ‘Water of Ayr Stone.’—( Montgomery v. Thomson, May 12, 1891, L.R., H.L.; Wotherspoon v. Currie, L.R., 5 HL 508; Dunnachie v. Young, 10 R. 508; Montgomerie v. Donald, 10 R. 566.) In short, I should not, as at present advised, see my way to interfere if the pursuers’ case depended on what I have called their second ground of action, as set forth in the second part of their conclusion for interdict, and in their fourth plea-in-law.

But the other ground of action—that expressed in the first part of the conclusion for interdict and in the fifth plea-in-law—stands, I incline to hold, in a different position. The question is new, and perhaps it opens up a new chapter in the law. But still I am disposed to hold that a corporation, or at least a corporation which exists for such objects as those in question, viz., objects connected with a profession or trade, has a legal right to prevent the assumption of the status of membership by persons who are not its members; and further, that this right may exist although, as here, the complaint is made jointly by three several corporations, and is to the effect that certain persons are in use falsely to represent to the public that they are members of one or other of the three corporations.

The question is certainly simplified if it be confined to the case of a single corporation, as, for example, the Society of Accountants in Edinburgh. It seems difficult to doubt that a false assumption of membership of that particular corporation would constitute an invasion of its corporate privileges. The society holds a charter from the Crown, and that charter prescribes (by itself or by the bye-laws which it authorises) certain conditions of admission to membership. It prescribes certain examinations and other safeguards

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which go to secure the repute of the corporation, and it also prescribes certain admission and other fees which go to augment its funds. It further provides (in effect, if not in words) that the status of membership shall be conferred only by the corporation, and shall be held by nobody on whom it has not been so conferred, and who has not complied otherwise with the prescribed conditions. Now, in these circumstances, is it not an invasion of the charter, and therefore a legal wrong, that a person outside the corporation shall so act as to appropriate the status and reputation of membership, and the pecuniary and other benefits thence arising, and shall do so without complying with the conditions which the charter prescribes? I am bound to say that I see no good reason why I should hesitate so to hold. I do not know that in such a matter much light is to be got from analogies. Each illustration may perhaps be open to the answer that it is idem per idem. But what, for example, is to be said as to a false assumption of a degree of some university, or of the Fellowship of the Royal College of Surgeons or of the Royal College of Physicians, as to a false assumption of membership of the Royal Scottish Academy or of the Institute of Civil Engineers or of the Society of Writers to the Signet? I do not know, with respect to any of these bodies, that the question has ever arisen, but if so, it perhaps is because the point has been thought to be too clear. I say nothing at present as to corporations like the Royal Society, or the Royal Society of Edinburgh, or the Society of Antiquaries, or the like, where the element of patrimonial interest is perhaps awanting. Nor do I say anything of societies which are unincorporated, and where also there might possibly be a difference. Here each of the corporations is not only incorporated, but each has a distinct patrimonial interest in enforcing its conditions of membership—an interest attaching both to the corporations as such, but also to its individual members.

But if this be so—if a wrong is done—and a title to sue exists where there is only one corporation, does it make any difference that there are here three corporations, and that the injury consists in conduct which involves a false representation of membership of one or other of the three? I do not, I confess, see that this makes a difference in principle—at least assuming that, as here, the three corporations jointly complain. There may be a difference in degree. That is to say, there may be a difference in the degree of the injury to each body individually, but I think that that is all, and I am not able to hold that that is enough. Each corporation suffers a legal wrong, greater or less, and that being conceded, the question becomes one merely of title to sue. It may be that upon that question there might be a difficulty if, instead of the whole injured corporations complaining, the complaint was at the instance of only one of them. But here the whole corporations join in the action.

On the whole, I have come to the conclusion that the pursuers are entitled to interdict in terms of the first part of their conclusion for interdict.”

The defenders reclaimed, and argued—The interdict should be refused. These three chartered bodies seemed to think that they had some sort of undefined right to the letters C.A. But before they were entitled to interdict, they must show that they had a patrimonial connection with the letters which were being invaded; they must have some pecuniary interest of which the law would take note. A man might call himself “a minister” or style himself “reverend” and it would be preposterous to maintain that he could be interdicted from doing so. A man might also assume the name of a family— Du Boulay v. Du Boulay, March 11, 1869, L.R., 2 P.C. 430—or call his house by the name which was borne by the seat of a neighbouring proprietor— Day v. Brownrigg, December 4, 1878, L.R., 10 Ch. Div. 294—and no one was entitled to interdict him. It had also been held that a firm was not entitled to the sole use of an abbreviation of their name for telegraph purposes— Street v. Union Bank of Spain, June 19, 1885, L.R., 30 Ch. Div. 156. The pursuers had the same right to the abbreviation “C.A.” as Street & Company had to the abbreviation “Street,” and that was no right at all. The right of the pursuers was, in short, not such a tangible right as the law would recognise. If they had maintained that the use of these letters by the defenders caused patrimonial injury to themselves they might have had a case, but there was no such argument advanced. Assuming that the pursuers had a right to demand an interdict, they had not had such an exclusive use of these letters as would entitle them to exclude others from the use. They had assumed a name their charters did not give them. The Edinburgh society was formed first, they had tolerated the use of the name “chartered accountant” and the abbreviation “C.A.” by the Glasgow society after it was founded in 1855, and both had tolerated the use of the name and abbreviation by the Aberdeen society in 1867. [ Lord Trayner—They will also tolerate you if you get a royal charter.] Besides, the evidence showed that some men not belonging to these three chartered societies used the initials “C.A.” namely, English Chartered Accountants practising in Scotland but who under their charters had no right to practise as chartered accountants outside of England. Two grounds had been chiefly relied on by the pursuers to make out their case—(1) They averred that the use of these letters by the defenders would mislead the public; and (2) that such use would cause loss to themselves. As regards the first of these, a dread of the public being misled was not a ground for interdict which the Court would consider by itself— Borthwick v. The Ev ning Post, January 23, 1888, L.R., 37 Ch. Div. 449. As regards the second of these grounds no such loss was proved. An incorporation had no title to come

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forward and claim interdict on an averment that the status of its members would be lowered if interdict was not granted. The injury or loss must be so clear as to make the law take account of it; the law would not take account of probabilities. The pursuers had not proved such prejudice, past, present, or prospective, as would entitle them to such a remedy as they asked here. In all cases like this injury to property must be proved. A monopoly in a name was ridiculous. As regards the individual members of these societies who sued, the rights which they claimed to vindicate were too indirect, they did not vindicate any special right for themselves, but a general sentimental privilege for themselves and hundreds of others— Ewing v. Glasgow Commissioners of Police, January 19, 1837, 15 S. 389, and August 16, 1839, M'L. & R. App. 847.

Argued for the pursuers and respondents—The interlocutor of the Lord Ordinary should be affirmed. The adoption of the designation of “C.A.” by the defenders deceived the public and caused loss and injury to the pursuers. The pursuers had a good title to sue— Mitchell v. Gregg, December 7, 1815, F.C.; S.S.C. Society v. Clark, July 15, 1886, 13 R. 1170. The fact that members of the English society practising in Scotland designated themselves “C.A.” did not apply to the case of the defenders, because the former (1) were chartered accountants, and (2) had made no organised attempt to form a society in Scotland.

At advising—