Bourjois, Inc. v. Park Drug Co.

• Decision Date: 13 March 1936
• Docket Number: No. 10367.,10367.
• Citation: 82 F.2d 468
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: BOURJOIS, Inc., v. PARK DRUG CO., Inc.

82 F.2d 468 (1936)

BOURJOIS, Inc., v. PARK DRUG CO., Inc.

No. 10367.

Circuit Court of Appeals, Eighth Circuit.

March 13, 1936.

Asher Blum, of New York City (Lewis, Rice, Tucker, Allen & Chubb, of St. Louis, Mo., and Mock & Blum, of New York City, on the brief), for appellant.

Ralph Kalish, of St. Louis, Mo., for appellee.

Before GARDNER, WOODROUGH, and VAN VALKENBURGH, Circuit Judges.

WOODROUGH, Circuit Judge.

Bourjois, Inc., is a New York corporation engaged, among other things, in selling its face powder throughout the United States under its registered trade-mark "Evening in Paris." The product is skillfully compounded of pure nonpoisonous and harmless ingredients, has been nationally advertised at great cost, and deservedly enjoys an excellent reputation so that the good will of the business is of the value of much more than $3,000. On April 23, 1934, Bourjois, Inc., brought this suit in equity against the Park Drug Company, Inc., a Missouri corporation, which operates six cut-rate drug stores in St. Louis, Mo., charging the defendant with trademark infringement and unfair competition. It alleged that defendant sold the Bourjois "Evening in Paris" face powder in its stores, but also kept other competing face powder, from the sale of which it could make more profit, and that defendant endeavored to and did "switch" customers of "Evening in Paris" face powder into buying the competing face powder, "by falsely * * * representing * * * that plaintiff's `Evening in Paris' face powder was of inferior quality * * * that it would injure the skin * * * that it contained poisonous ingredients such as mercury or lead." The prayer was that defendant be enjoined from making any untrue statements or representations relative to the quality or purity of plaintiff's preparations, from switching prospective customers who ask for plaintiff's products to other products, and for accounting and damages.

The Park Drug Company pleaded that it had not made, was not making, and would not make, any false representations or statements concerning the plaintiff's product. It denied that its clerks had done so, but, if any of its clerks had made any false statements with respect to the plaintiff's product, such statements were made without the knowledge of defendant and contrary to defendant's instructions to its clerks.

On the trial of the case there was no proof of trade-mark infringement or "palming off," and the case was tried on the issue of unfair competition.

It appeared that the Bourjois company required the retail dealers who handled its "Evening in Paris" face powder to resell it at the price of $1.10 per box, and it was sold at that price in prominent stores in the city of St. Louis. But the defendant, from the time it started business, in about 1930, obtained the face powder from sources other than the plaintiff and persistently sold it at a lower price. On one occasion in February, 1934, it inserted an advertisement in the St. Louis Post-Dispatch that it would sell a combination of Bourjois advertised products, which included a box of the face powder, a lip stick, and a perfume, for 69 cents. Defendant says this was done to meet the challenge of a competitor in the city who had made the same offer two weeks before, it being defendant's policy to allow no competitor to undersell it. Ordinarily the defendant never "featured" the plaintiff's "line"; "never gave them counter display or window display or newspaper advertising, outside of occasional spots." Never advertised "Evening in Paris" since the advertisement in February.

About February 1, 1934, the Bourjois company, having exhausted its efforts to get defendant to sell the product at its standard price, hired a certain Mrs. Ruth Uthe, at $15 a week and expenses, in the capacity called a "shopper," to buy up all the Bourjois products offered for sale at cut prices by the defendant at any of its stores. Mrs. Uthe continued in such employment until June, 1934, and "shopped" at each of defendant's stores, and altogether she bought several hundred dollars worth of the Bourjois products. The clerks in the stores came to know her and must have known she was shopping for a purpose. Mrs. Uthe was the only person employed and paid by the plaintiff to "shop" the defendant's stores, but eleven other women who had come to the defendant's stores to buy "Evening in Paris" face powder testified as witnesses in the plaintiff's behalf. Mrs. Uthe's mother was one and her sister another; also, her sister's sister-in-law. Three others lived at the same address given by Mrs. Uthe, and it seems probable that they all visited the defendant's stores at the direct or indirect instigation of Mrs. Uthe. All of them said that the clerks of defendant endeavored to induce them to purchase a face powder called "Excella," which was sold exclusively in St. Louis by the defendant, and upon which the defendant made a large profit. They also testified that in the course of the sales talk the clerks made statements that the plaintiff's "Evening in Paris" face powder contained mercury, or that it contained white lead, or that it had a rice base (which, in truth, it has not), or that it contained other ingredients injurious to the skin of the user.

The vice president general manager of defendant and eight of its employees described in detail the selling system carried out in the stores. There are many items of merchandise upon which the margin of profit is large and the clerks are paid a commission upon the sale of such items, the commissions aggregating a substantial percentage of the clerks' total compensation. The face powder called "Excella" was one of the items upon which such commission would be paid and "Evening in Paris" face powder was not. There was, therefore, inducement for the clerks to push the sale of "Excella." But the general manager said: "Our policy was to frown upon any type of high pressure selling. It is the policy of our company that misrepresentations hurt us in the long run; that we cannot build up a business by misrepresenting merchandise;" "our policy is to sell merchandise cleanly, without misrepresentation. We do not at any time allow knocking in our stores;" the clerks "cannot misrepresent some other person's merchandise"; they forbid their clerks to knock any merchandise; "knocking means to misrepresent an article, to present it unfairly, to utter untruths about it which might be detrimental and cause hurt to the item; also means to underrate an item possibly;" "we do not at any time allow knocking in our stores." It was proven that very peremptory bulletins were published and brought directly to the attention of the clerks, absolutely forbidding them to "knock" any merchandise as a means of pushing the sale of competing articles. The clerks maintain most positively, through direct and extended cross-examination, that the instructions given them against "knocking" were understood and obeyed and that no misrepresentation of the plaintiff's product was ever made as alleged in the bill.

The trial court concluded that the plaintiff had "failed to prove and establish the defamatory allegations and charges against defendant in plaintiff's bill of complaint contained," and among the "Findings of Fact" appear the following:

"19. That, if any of defendant's sales clerks made any misrepresentations or disparaging remarks or statements in connection with a competitive or advertised article, such instances were contrary to and in disobedience of, defendant's said instructions, and were without the knowledge or consent of defendant's managing or executive officer or officers."

"21. That defendant has not, by falsely and willfully and maliciously representing and stating to prospective customers inquiring or asking for `Evening in Paris' face powder that plaintiff's said `Evening in Paris' face powder was of inferior quality, or that it would injure the skin of the customer, or that said `Evening in Paris' face powder contained poisonous ingredients, such as mercury or white lead, `switched' such customers into buying or accepting defendant's said `Excella' or other competing face powder."

The plaintiff's suit was dismissed and it has prosecuted this appeal. It contends at the outset that the findings of the trial court do not show whether the court believed or disbelieved the testimony of the plaintiff's witnesses to the effect that the clerks of defendant made "defamatory allegations and charges" concerning "Evening in Paris" face powder. The testimony related entirely to alleged statements of the clerks of defendant of and concerning plaintiff's product, while the court's...