Beebe v. Tolerton & Stetson Co.

• Decision Date: 17 October 1902
• Citation: 117 Iowa 593,91 N.W. 905
• Court: Iowa Supreme Court
• Parties: BEEBE v. TOLERTON & STETSON CO.

117 Iowa 593

91 N.W. 905

BEEBE

v.TOLERTON & STETSON CO.

Supreme Court of Iowa.

Oct. 17, 1902.

Appeal from district court, Woodbury county; Geo. W. Wakefield, Judge.

Suit in equity to enjoin defendant from using a counterfeit label on cigars sold by it. Decree for plaintiff, and defendant appeals. Modified and affirmed.Shull & Farnsworth, for appellant.

Quick & Carter, for appellee.

DEEMER, J.

Plaintiff, as a member and president of a local cigarmakers' union at Sioux City, Iowa, which union was a member of what is known as the Cigarmakers' International Union of America, a voluntary association composed of local unions organized in various parts of the country, brought this action to enjoin defendant, a corporation engaged in the wholesale grocery business in Sioux City, Iowa, from using or selling or affixing to cigar boxes a counterfeit of a label duly adopted and recorded by the aforesaid cigarmakers' union, and more particularly from selling a brand of cigars known as the “Rose Noble,” made by one Meiskey, on the boxes of which was a counterfeit union label, and to recover damages and attorney's fees, under section 5050 of the Code of Iowa. That section, so far as material, reads as follows: “Every person, association or union adopting a label, trade mark or form of advertisement as specified in the preceding section, may proceed by action to enjoin the manufacture, use, display or sale of any counterfeits or imitations thereof.” There is no doubt that defendant was selling Rose Noble cigars in boxes upon which there was a counterfeit union label. But it is contended that the court was in error in granting the permanent injunction, for the reason that, as soon as defendant was notified that the label was counterfeit, it stopped the sale of the cigars, and attempted to recover by exchange all that it had theretofore sold, and was in good faith attempting to take all cigars off the market which it had sold which bore a counterfeit label. There is evidence in support of this contention, but the testimony also shows that, after the defendant had been notified of the counterfeit character of the label, it filled two orders for the Rose Noble cigars by delivering them to purchasers thereof. It is doubtless true that these orders had been taken before it was advised of the counterfeit character of the label, but it was its duty, after becoming aware of the fraud, to stop the delivery of goods bearing that label; and, as it failed to do so, plaintiff was justified in bringing this action, and was entitled to a decree of permanent injunction. Defendant's good faith will not be allowed to operate as a shield as against its wrongful act in delivering goods contrary to law and in violation of an agreement, which it made with plaintiff and other representatives of the local union at the time the fraud was discovered, to take the cigars off the market, and to take up all that it had theretofore sold, so far as it was able to do so. That it acted innocently is no defense. Saxlehner v. Siegel-Cooper Co., 179 U. S. 42, 21 Sup. Ct. 16, 44 L. Ed. 77. The act, and not the intent, is what the law aims at in such a case. Delivery of goods bearing a counterfeit label, after the fraud was discovered and made known, is conceded, and the only excuse made is that defendant forgot to notify its shipping clerk not to fill any more orders for these goods. As the law prohibits the act, no matter what the intent, it is clear, we think, that the trial court committed no error in granting the permanent injunction.

Defendant further contends that the statute quoted does not apply to a case where defendant has no knowledge of the fraudulent character of the label. This, to our minds, is not a proper construction of ...