Penn Oil Co. v. Vacuum Oil Co.

• Decision Date: 06 April 1931
• Docket Number: No. 5054.,5054.
• Citation: 48 F.2d 1008,60 App. DC 96
• Parties: PENN OIL CO. v. VACUUM OIL CO.
• Court: U.S. Court of Appeals — District of Columbia Circuit

60 App. DC 96, 48 F.2d 1008 (1931)

PENN OIL CO. v. VACUUM OIL CO.

No. 5054.

Court of Appeals of District of Columbia.

Submitted March 10, 1931.

Decided April 6, 1931.

Alvin L. Newmyer and Joseph L. Tepper, both of Washington, D. C., for appellant.

Wilton J. Lambert, R. H. Yeatman, and Wm. E. Leahy, all of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB, HITZ, and GRONER, Associate Justices.

HITZ, Associate Justice.

This is an appeal from a decree of the Supreme Court of the District of Columbia granting a permanent injunction restraining the defendant company, its officers, agents, and servants from selling as "Mobiloil" any other oil, without first informing purchasers of the substitution.

The appellee here, plaintiff below, and hereafter called plaintiff, is a New York corporation engaged in refining and selling at wholesale lubricating oil for internal combustion engines.

Its oil is marketed and sold under the trade-name "Mobiloil," registered in the Patent Office as a trade-mark on January 27, 1920, but used as a trade-name since 1904, and applied to different grades of its oils by designating letters as "Mobiloil A" and "Mobiloil B."

The defendant company is a Maryland corporation selling lubricating oils and gasoline at retail; both companies operating in the District of Columbia and elsewhere.

On August 21, 1925, the Vacuum Oil Company filed its bill of complaint in the trial court setting out something of the history of its sixty years in business; the extensive scale of its operations in this country and abroad; its expenditure of several millions of dollars in advertising its product as Mobiloil — all resulting in the costly attainment of a valuable reputation in the trade.

The bill alleges that the defendant company, at many of its filling stations in Washington during the twelve months prior to the filing of the bill, sold to sundry customers asking for Mobiloil other and different oil, falsely represented as Mobiloil, and for the price of Mobiloil, but without disclosing the substitution to the purchasers.

The bill then charges ten specific sales of such substituted oil falsely represented as Mobiloil from ten different stations of the defendant company in the city of Washington on stated days; avers that the defendant company will continue said substitutions unless restrained; alleges irreparable loss and injury; and prays for a permanent injunction against such sales.

The bill was supported by several affidavits detailing the alleged purchases and analyses of the oils in question.

A rule to show cause against a preliminary injunction having been issued, the defendant company filed its answer to the bill and rule denying all the specific substitutions alleged; denying that it ever made any such substitutions at any time, or that it intended to engage in or continue any such practice; and alleging that the bill was brought in the course of an effort to eliminate the defendant from commercial competition following an unsuccessful attempt to buy out the defendant company and its business, which had reached large proportions upon its own efforts, expenditures, and merits.

This answer was supported by several affidavits denying the allegations of the bill, and on August 26, 1925, after a hearing, a temporary injunction was denied and the rule discharged.

Thereafter the plaintiff, by leave of court granted over objection of the defendant, amended the bill by adding allegations that on two specified occasions on different days an agent of the defendant company at one of its stations sold to a customer asking for Mobiloil an oil that was not Mobiloil, but which had been previously used in an internal combustion engine, and commonly known as crank case drainings.

The defendant answered the amended bill by denying the alleged sales of crank case drainings as substitutes for Mobiloil, or otherwise, and on the issues thus raised, on September 15, 1926, the case was ordered to the calendar for hearing, where it appears to have reposed until February, 1929, when it was heard in the trial court.

On February 6, 1929, after hearing, a memorandum opinion was filed by the court stating that the plaintiff's case had been established by the evidence in respect of the undisclosed substitution of other oil for Mobiloil, and that a permanent injunction against such sales would be granted.

On February 14, 1929, a supplemental memorandum of the trial judge stated that the evidence respecting the alleged sale of crank case drainings was insufficient to justify an injunction against the defendant company in that respect; the evidence indicating such sales, if made at all, to have been the act of one employee alone.

On the same day the final injunction complained of was granted, and it was "adjudged, ordered and decreed that the defendant, Penn Oil Company, its officers, agents, servants, and employees, be and they hereby are permanently enjoined and restrained from selling to anyone seeking and offering to buy or asking for `Mobiloil' by name, any other or different lubricating oil without first informing such intending purchaser or purchasers that an oil other than `Mobiloil' is to be supplied."

From this decree an appeal to this court was perfected and the record here contains eight assignments of error which can be conveniently considered as presenting but two main contentions:

I. That the decree was not justified by the evidence and the law applicable thereto, because it showed the bill to have been brought as part of a commercial campaign and not to restrain a legal wrong; because the weight of the evidence touching the alleged substitutions was insufficient to warrant an injunction at any time; and because there was no evidence offered of alleged substitutions for several years prior to the trial, and consequently no showing of continuing injury.

II. That the final decree should have formally dismissed the charge of selling crank case drainings in accordance with the supplemental memorandum of the trial judge.

As the controversy is mainly one of fact the evidence will be considered in some detail.

I. As to the decree being insufficiently supported by the evidence and the law, it appears that twenty-eight witnesses testified orally before the trial judge, of whom eleven were recalled once or more for further examination. On behalf of the plaintiff, this testimony tended to show that a certain motorcar had been specially equipped with a device more or less resembling the conduit by which lubricating oil is usually poured into the crank case, but which device led, not into the crank case, but into a removable can placed to receive the fruits of the intended purchases.

That two men were sent from New York to Washington, one an employee of the plaintiff and one apparently employed and loaned by a Better Business Bureau; these men testified in detail to many visits to many stations of the defendant company in Washington on July 25, 27, 28, and 30, 1925, always asking for Mobiloil.

At some stations they were told that the defendant company sold only its own oil and not Mobiloil, but at ten specified stations of the defendant company oil was sold to them as Mobiloil, at the price of Mobiloil, which was 10 cents per quart higher than defendant's oil; that such purchases...