Tillman & Bendel v. California Packing Corporation

• Citation: 63 F.2d 498
• Decision Date: 07 March 1933
• Docket Number: No. 6676.,6676.
• Parties: TILLMAN & BENDEL, Inc., v. CALIFORNIA PACKING CORPORATION.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

63 F.2d 498 (1933)

TILLMAN & BENDEL, Inc., v. CALIFORNIA PACKING CORPORATION.^*

No. 6676.

Circuit Court of Appeals, Ninth Circuit.

February 6, 1933.

Supplemental Opinion March 7, 1933.

Herman Phleger, Maurice E. Harrison, and William S. Graham, all of San Francisco, Cal., for appellant.

Pillsbury, Madison & Sutro, F. D. Madison, Marshall P. Madison, and L. B. Groezinger, all of San Francisco, Cal., for appellee.

Before WILBUR and SAWTELLE, Circuit Judges, and NORCROSS, District Judge.

SAWTELLE, Circuit Judge.

The appellant brought this suit to enjoin the appellee's use of the trade-mark "Del Monte" on coffee, and for an accounting and general relief. The defendant-appellee, by answer and cross-claim, denied the plaintiff-appellant's right to the trade-mark, alleged that its trade-mark rights had been infringed, and asked for an injunction perpetually restraining the appellant from using the trademark "Del Monte" on coffee. In a supplement to its answer and cross-complaint, the appellee asked for damages, which it asserted to be $1,000,000. Additional pleadings were filed by both parties, and a lengthy trial was had.

The lower court entered a decree enjoining the appellant, perpetually, from using the name "Del Monte" on coffee "not by or for the defendant appellee made." In an amended decree, the court below awarded costs, amounting to $533.03, in favor of the appellee and against the appellant. In a memorandum opinion¹ the District Court declared that because of the appellant's good faith and because of the fact that the appellee had not proved actual damage, there would be no award of damages in favor of the appellee.

Tillman & Bendel, Inc., the appellant herein, was established in 1857 under the name of F. Tillman & Co., a partnership, by F. Tillman, father of Frederick Tillman, a witness in this case, and grandfather of F. A. Tillman, president of the appellant and its predecessor company since 1915. The concern was incorporated on December 31, 1891, and was re-incorporated, under the style of Tillman & Bendel, Inc., in 1920. Under an agreement dated April 1, 1920, Tillman & Bendel transferred to Tillman & Bendel, Inc., all of the old corporation's "trademarks, trade names, patents, and inventions."

Up to 1924 the appellant and its predecessors had been engaged in the "diversified wholesale grocery business." In 1924 the corporation, under the direction of F. A. Tillman, the grandson, liquidated the different departments of its business, except the manufacturing department, "which was always the profitable end of the business." The company thereafter manufactured tea, coffee, spices, and extracts, until about 1926, when it "decided to eliminate the manufacture of spices and extracts and give up teas, and concentrate all its efforts on coffee."

In the late eighties, Tillman & Bendel began selling coffee under the name "Del Monte." The testimony varies as to the precise year, but it was probably some time between 1886 and 1888. The court found the year to be 1887, or prior thereto.

The origin of the name is relied upon by the court below and by the appellee as indicating that, as used by the appellant, "Del Monte" was a grade mark and not a trademark. For that reason a brief history of such origin will be helpful.

In about the year 1886, George Schonewald, buyer for Hotel Del Monte, near Monterey, Cal., and later buyer for Castle Crag, purchased a blend of coffee from Tillman & Bendel which pleased him so much that he insisted it be stenciled "Del Monte." According to one of the appellant's witnesses, the quality of the merchandise likewise so pleased Mr. Schonewald "that he told his patrons, his friends, and little by little a demand manifested itself for Del Monte goods, * * * and the appellant commenced to list Del Monte commodities under the Del Monte brand * * * and many people, private individuals, friends of ours, heard about it, and used to prevail upon us to sell them the Del Monte blend." The court found substantially in accordance with this testimony, but also found that the appellant used the name merely as a grade mark and not a trade-mark, until 1925, when the appellant attempted a trade-mark use.

The court below also found that "prior to the year 1927, plaintiff appellant did sell coffee under the name Del Monte in the states of California, Nevada, Oregon, Washington, Montana, and Arizona, but not elsewhere." The appellant, indeed, concedes that "during the succeeding years and until 1926, the Del Monte coffee business of Tillman & Bendel continued to be very largely a western business." The appellant also concedes that "meanwhile, between 1904 and 1918, the defendant appellee and its predecessor company were establishing markets in all parts of the country for their Del Monte fruits and vegetables."

In 1926, following the liquidation of all of the appellant's business save the manufacturing, as set forth above, the appellant "made plans for an extension" of its coffee business. In furtherance of these plans, its president, F. A. Tillman, made several trips east, during which he came into contact with brokers and called on a great many large accounts throughout the United States. Other representatives of the appellant made similar trips. These trips covered a period extending from June, 1927, to December, 1929. Other promotional work was undertaken.

As a result of this sales campaign, the appellant established an extensive market for its Del Monte coffee in the middle west and in the east. One of the appellant's exhibits in the court below is a comparative table of sales of Tillman & Bendel's Del Monte coffee, as follows: 1925, 9,302 pounds; 1926, 8,329 pounds; 1927, 301,196 pounds; 1928, 227,506 pounds. The present suit was filed on January 14, 1929. Another exhibit, showing the sales of the appellant's Del Monte coffee by localities, discloses considerable distribution in sections east of the Mississippi river.

But there is no affirmative evidence that any confusion disadvantageous to the appellant has resulted from the sale of the two Del Monte brands, either in the east or the west, and the lower court so found. Five pieces of testimony do, indeed, indicate that there might have been confusion in favor of the appellee and disadvantageous to the appellant, but speculation and inference cannot take the place of affirmative proof.

We refer to the testimony of T. S. Spaulding, a grocer of Woodland, Yolo county, Cal., who stated that "in the early days," in the year 1888, the appellant's coffee bearing the Del Monte brand was better known than the appellee's Del Monte fruits and vegetables; the testimony of L. B. Taft, a grocery broker of Salt Lake City, to the effect that in 1929 and the early part of 1930, the "California Packing Corporation, covering practically the same territory as we did, had stepped in with its Del Monte coffee with a considerably larger sales organization than we have, and had gathered in the business that we had established on our Del Monte coffee of the appellant"; the testimony of Frank H. Cooney, merchandise broker of Butte, Mont., who said that "the effect of this Del Monte advertising of the California Packing Corporation upon our sales of Del Monte coffee of Tillman & Bendel has been that it has almost ruined it"; the statement of F. A. Tillman as to the "disastrous" effect of the appellee's Del Monte coffee advertising upon the Tillman Del Monte coffee business; and the assertion of Kenneth G. Blodgett, a Boston merchandise broker, that an impression given by a representative of the appellee to the effect that Tillman & Bendel had "sold out" to the appellee, had lost Mr. Blodgett a customer for the appellant's Del Monte coffee.

It will be noted that nowhere in the foregoing testimony is there a statement that a single can of the appellee's coffee was sold to a customer who believed that he was buying the appellant's product. Furthermore, all the evidence as to confusion whereby the appellant might have been damaged was in the form of testimony given in open court, and the District Judge was better qualified to pass upon the weight to be given to it — especially when several of the appellant's own witnesses testified that there was no confusion, one way or the other, in the minds of retailers or their employees, or in the minds of the general public.

There is, on the other hand, considerable evidence of confusion between the appellant's and the appellee's Del Monte coffees disadvantageous to the appellee; that is to say, confusion whereby purchasers of the appellant's Del Monte coffee believed they were buying Del Monte coffee put out by the appellee, as a result of which confusion it is safe to assume that the appellee lost numerous sales of its own coffee. We will take up the evidence of this confusion in its proper place, as part of the discussion of the appellee's history, to which we now turn our attention.

The appellee's first predecessor, the Oakland Preserving Company, was incorporated on April 14, 1891. Frederick Tillman, the father of F. A. Tillman, the president of the appellant since 1915, was the incorporator and the president of the Oakland Company. In 1899 that company combined with certain other corporations to form the California Fruit Canners' Association. In 1916 the California Packing Corporation, the appellee herein, took over the business of the California Fruit Canners' Association, including the latter's brands, good will, and trademarks.

The Oakland Preserving Company began using the name Del Monte on its canned fruits and vegetables some time prior to June, 1891.

Frederick Tillman, who at that time owned the controlling interest in the Oakland Company and also was a partner in the firm of Tillman & Bendel, suggested that the Oakland Company use the name Del Monte on its products. The story of the origin of the name, so far as the appellee's predecessor is concerned, is told by Charles William Pike of San...