Cano v. Macarena

• Decision Date: 25 September 1980
• Docket Number: No. 1599,1599
• Citation: 606 S.W.2d 718
• Parties: Jesus CANO, Appellant, v. Marcos MACARENA, Appellee.
• Court: Texas Court of Appeals

Page 718

606 S.W.2d 718

212 U.S.P.Q. 792

Jesus CANO, Appellant, v. Marcos MACARENA, Appellee.

No. 1599.

Court of Civil Appeals of Texas, Corpus Christi.

Sept. 25, 1980.

Rodolfo R. Munoz, Kingsville, for appellant.

Leo Villarreal, Kingsville, for appellee.

OPINION

NYE, Chief Justice.

This is an appeal from a suit brought to determine ownership of the trademark, "La Tapatia," and its accompanying design, on certain corn tortilla products. Marcos Macarena sued Jesus Cano for damages and a permanent injunction prohibiting Cano's future use of such trademark. Cano answered, alleging that he had a superior common law ownership right to the trademark that he acquired by his own "prior, sole and exclusive use in the local market." Cano filed a "counter claim" seeking damages for Macarena's alleged breach of a contract to sell certain tortilla equipment to Cano. After a jury trial, the trial court entered a judgment declaring Macarena to be the owner of the trademark in question and permanently enjoining Cano from using the trademark. No damages were awarded to either party. Cano appeals.

Cano's claim that he is the owner of the trademark in question is based upon a course of business dealings between the parties that commenced in April of 1977. At that time, Macarena owned Mexico Bakery No. I and No. II, located in Kingsville, Texas. In a separate building located behind Bakery No. II, Macarena maintained all the equipment necessary to produce corn tortillas, a product not sold at either of his other two bakeries. Cano and his wife, who were former Kingsville residents and who were then vacationing in Kingsville from their home in California, stopped at Bakery No. I to purchase pastries. While in the bakery, Macarena offered Cano an opportunity to return from California to Kingsville to engage in the corn tortilla business.

According to Cano's testimony, Macarena offered to sell the corn tortilla equipment to Cano if Cano would return to Kingsville, operate the business for a year and pay Macarena 50% of the net profits generated from the business. The purchase price was to be a mutually agreed upon sum. Macarena testified that he offered Cano the opportunity to manage Macarena's corn tortilla business for a salary of 50% of the net profits during the first year. If, after one year, Cano liked the work, Macarena agreed he would sell the business to Cano for a mutually agreeable price to be determined later.

In July, 1977, Cano moved to Kingsville. The parties first attempted to reduce their agreement into a written instrument. On August 8, 1977, the parties executed a form "lease" which had been completed by Macarena's bookkeeper and notary public. Pursuant to the terms of this agreement, Macarena as "Lessor" leased to Cano the building and corn tortilla equipment for a one-year term commencing August 8, 1977, for rental payments equal to "50% of the Net Profits of all the Business." At that time, the parties did not agree upon the terms of the proposed sale of the business and the following clause was stricken from the agreement before it was executed by the parties:

"Lessee (Cano) shall have option to buy Corn Tortilla Equipment for $20,000.00 at 5% interest at the end of said Lease."

Both parties testified concerning discussions that took place during the following months regarding a purchase price for the corn tortilla equipment. However, no other agreement was executed.

The record contains considerable evidence, including testimony of several witnesses and numerous business documents, concerning the manner in which the corn tortilla factory was operated and the business relationships between Macarena and Cano. In summary, the evidence indicates that both parties participated in the conduct of the corn tortilla business. Macarena, for example, paid the expenses, including payroll expenses, related to the business with printed checks denominated "Mexico Bakery," which contained an added stamped notation, "La Tapatia Corn Tortilla Factory" just above the signature line of the check. Macarena also issued checks for half of the net monthly profits which were made payable to Cano and generally contained the further handwritten notation "payment as per contract." Cano assumed the responsibilities for the daily production of the tortillas.

The record also contains evidence pertaining to the adoption and use of the trademark "La Tapatia." Cano testified in substance that, after Macarena first proposed the business proposition and prior to the time Cano moved from California to Kingsville, he and his wife visited a corn tortilla factory in Selma, California, which was called the "La Tapatia" factory. Cano observed the operations of the factory and returned with a plastic bag printed with a "La Tapatia" label and design. Cano's wife testified that it was her idea to use the name "La Tapatia" in conjunction with the Kingsville corn tortilla factory operations and that she suggested the idea to Macarena who agreed the idea was a good one. Macarena's testimony is consistent. He stated that Cano brought the idea of "La Tapatia" to him and that he went to a plastics factory in Elsa, Texas, where he placed an order and paid for plastic bags and plates for the bags printed "La Tapatia."

During the year Cano operated the "La Tapatia" in Kingsville, he and Macarena had several discussions concerning the purchase price of the tortilla equipment Macarena would accept upon the completion of their one-year written contract. According to Macarena, a purchase price of $15,000.00 was discussed, but an actual agreement between the parties was never reached. Cano, however, testified in summary that on May 8, 1978, Macarena agreed to sell the equipment for $15,000.00 and that he broke the agreement on July 25, 1978, by informing Cano that the purchase price would be $30,000.00.

By the end of July in 1978, Cano terminated his association with Macarena. He then moved to Falfurrias, where he began to make corn tortillas on equipment he purchased there from David Longoria. Cano stated that, commencing in August, he operated the tortilla business in Falfurrias under the name "City Tortilla," and that, sometime around October, 1978, he sold corn tortillas under the name "La Tapatia." In the meantime, Macarena continued the corn tortilla business in Kingsville under the name "La Tapatia." The sales territory of the respective parties overlapped. Macarena filed this suit on September 6, 1978. On September 11, 1978, Macarena obtained a certificate of registration in Texas for the trademark "La Tapatia" and its accompanying design.

After hearing all of the evidence, the jury received a charge containing thirteen special issues. The first six special issues concerned the respective claims of the parties, each of whom asserted prior common law ownership of the trademark "La Tapatia." The remainder of the special issues concerned Cano's counterclaim which alleged the existence of a contract of sale of the tortilla equipment between the parties which Macarena allegedly breached. The jury failed to find that either party had acquired prior common law rights to the trademark in question. The jury, however, did find Macarena's and Cano's trademarks "La Tapatia" to be sufficiently similar so as to "confuse or mislead the consumer" regarding their respective corn tortilla products. The jury failed to answer the remaining issues concerning a contract of sale on Cano's counterclaim. The trial judge entered a judgment declaring Macarena to be the owner of the "La Tapatia" trademark and emblem based upon his Certificate of Registration and entered a permanent injunction prohibiting Cano from using the trademark.

Judgment in this case was entered by the trial court on March 27, 1979. Thereafter, Cano timely filed a motion for new trial which was overruled by operation of law on May 21, 1979. Thirty days later (June 20, 1979), Cano filed an instrument designated "COST BOND." On July 2, 1979, more than thirty days after judgment was entered, Cano filed an instrument designated "APPEAL BOND" which contains a notation of approval by the clerk of the trial court.

In his first "counterpoint," Macarena challenges our jurisdiction "because Appellant did not file his appeal bond within thirty days after his motion for a new trial had been overruled by operation of law." We find no merit in Macarena's contention. Macarena completely ignores the "cost bond" which was timely filed. Although the original bond was defective in several respects, it was filed by the clerk and it was sufficient to invoke our jurisdiction. See Woods Explor. & Prod. Co. v. Arkla Eq. Co., 528 S.W.2d 568, 570 (Tex.Sup. 1975); United Ass'n of Journeymen, Etc. v. Borden, 160 Tex. 203, 328 S.W.2d 739, 741 (1959); Grogan Mfg. Co. v. Lane, 140 Tex. 507, 169 S.W.2d 141 (1943); Rule 430, T.R.C.P. At no time, either in the trial court or here on appeal in his counterpoint, did Macarena challenge the form or substance of either bond that Cano filed. See Rules 354(a), 365, 366, 430, Texas Rules of Civil Procedure.

First, Cano contends that the trial court was not authorized to grant an injunction based upon Macarena's Certificate of Registration of the trademark in question because such certificate was not specifically mentioned in his pleadings. Cano's second theory is that the issue of priority of ownership of the trademark was based upon common law principles and, since the jury failed to find that Macarena adopted or used the trademark in question prior to Cano, Macarena does not have a valid Certificate of Registration. Cano, therefore, concludes that the trial court erred in granting the injunction because Macarena's pleadings were insufficient and because Macarena did not have common law rights as a necessary prerequisite to obtaining a valid Certificate of Registration. We do not agree with either theory.

Cano complains of an evidentiary matter. See Tex.Bus. & Comm. Code § 16.15...