Carroll v. Duluth Superior Mill. Co.

• Decision Date: 25 March 1916
• Docket Number: 4465.
• Citation: 232 F. 675
• Parties: CARROLL et al. v. DULUTH SUPERIOR MILLING CO.
• Court: U.S. Court of Appeals — Eighth Circuit

232 F. 675

CARROLL et al. v. DULUTH SUPERIOR MILLING CO.

No. 4465.

United States Court of Appeals, Eighth Circuit.

March 25, 1916

John M Coit, of Washington, D.C., for appellants.

Hjalmar H. Boyesen, of New York City (Sullivan & Cromwell, of New York City, Crassweller, Crassweller & Blu, of Duluth, Minn and Ralph L. Collett and R. Bernard Crispell, both of New York City, on the brief), for appellee.

Before SANBORN and CARLAND, Circuit Judges, and TRIEBER, District judge.

CARLAND Circuit Judge.

Appellants brought this action to restrain appellee from unlawful competition in business and for damages. The alleged unlawful competition is the use by appellee in the manufacture and sale of flour of a trade-mark known as 'Freeman's Superlative,' of which appellants claim to be the owners. Appellee admits the use of the trade-mark, but alleges that it is the owner thereof. The question to be decided therefore, is one of title. The trial court dismissed appellants' bill. The facts which must determine the question involved are substantially as follows:

In 1876 a copartnership composed of A. A. Freeman and his brother Marcus L. Freeman, acquired a flouring mill in La Crosse, Wis., and entered upon a general flour milling business. A. A. Freeman was the active partner in charge and the originator of 'A. A. Freeman & Co., Superlative' trade-mark. Marcus L. Freeman was inactive, and engaged in the furniture business on his own account in New York City. A. A. Freeman was also a member of the firm of Charles Haight & Co., flouring merchants of the same place, the members of the firm being Charles Haight, A. A. Freeman, A. Irving Freeman, and Henry Koper. This firm was a large purchaser of flour from A. A. Freeman & Co. for about 10 years subsequent to 1876. The firm of Charles Haight & Co. during this time had advanced to the firm of A. A. Freeman & Co. the sum of $196,840. On November 5, 1878, the firm of A. A. Freeman & Co. registered the 'A. A. Freeman & Co., Superlative' trade-mark as a label in the Patent Office. There is no question but that up to October 7, 1885, the trade-mark was the property of A. A. Freeman & Co. On that date, however, A. A. Freeman, his wife, and Marcus L. Freeman, executed and delivered to Charles Haight, Henry Koper, and A. Irving Freeman a mortgage embracing the land upon which the mill at La Crosse stood, 'together with the flouring mills, elevators, buildings, engine and boiler houses, with all the machinery, fixtures, and appurtenances, and everything in said premises situate, belonging, and appertaining to said mills. ' This mortgage was given to secure the payment of said sum of $196,840 on or before September 1, 1890. The amount secured by the mortgage was not paid. In June, 1891, the firms of A. A. Freeman & Co. and Charles Haight & Co. failed. It does not appear from the record just what legal form these failures assumed. It does appear, however, that the mortgage was assigned by Charles Haight & Co. to the Phoenix National Bank of New York City, to secure the bank for the indebtedness owning to it by said firm. The mortgage was not recorded until after it was past due, namely, June 4, 1891, and the assignment to the bank was not recorded until February 15, 1892.

Shortly before the failure of A. A. Freeman & Co. and Charles Haight & Co. the mill of A. A. Freeman & Co., at La Crosse, was wholly destroyed by fire. The bank foreclosed the mortgage, and title to the land on which the mill stood was conveyed to the city of La Crosse. It is not claimed by appellants that any right or title to the trade-mark in question passed from A. A. Freeman & Co. to Charles Haight & Co., by virtue of the terms of the mortgage. It is claimed, however, that at the time the mortgage was executed there was a contemporaneous oral understanding and agreement between A. A. Freeman and Charles Haight & Co. that the trade-mark should pass to Charles Haight & Co., together with the good will of A. A. Freeman & Co. Marcus L. Freeman testifies to this fact, and he is corroborated by the testimony of Henry Koper, deceased, given in the proceeding in the United States Patent Office to cancel trade-mark No. 66,288, filed by the Duluth Superior Milling Company. Henry Koper died in 1910, A. Irving Freeman in 1886, Charles Haight in 1891, and A. A. Freeman in March, 1909.

After the execution and delivery of the mortgage Charles Haight & Co. kept a representative at La Crosse to look after their interests. Henry Koper ordered the flour that was shipped to Haight & Co., and the flour was sold by Haight & Co. under the 'Freeman Superlative' brand. In June, 1891, when the firms of Charles Haight & Co. and A. A. Freeman & Co. failed, Henry Koper, assuming to be the surviving member of the firm of Charles Haight & Co., connected himself with the firm of Grinnell, Minturn & Co., merchants and exporters in New York City, and became manager of their flour department, and sold flour under the brand in question. M. L. Freeman continued his furniture business in New York City, while A. A. Freeman endeavored to enlist capital for the building of another mill. The testimony on the part of appellants shows that when Koper went with Grinnell, Minturn & Co., he arranged with the Consolidated Milling Company, of Minneapolis, Minn., to manufacture for him a high grade of flour, and thereafter he made his purchases of this flour from the Consolidated Milling Company, to whom he sent his stencil or brand 'Freeman's Superlative,' and on Mr. Koper's instructions the Consolidated Milling Company branded the flour 'Freeman's Superlative' and shipped the same to Mr. Koper or his customers, as he instructed them to do. This arrangement lasted for a few months, when Mr. Koper arranged with Mr. A. Ruyter and Mr. H. Wehmann, both of whom composed the firm of H. Wehmann & Co., to act as his broker in Minneapolis for the purchase of flour. Thereafter H. Wehmann & Co. bought large quantities of flour from the Minneapolis Flouring Mills Company for account of Mr. Koper, and he sent to that mill his stencil 'Freeman's Superlative.' On his instructions they branded the flour and shipped it to Henry Koper or his customers as Henry Koper directed them to do. About 1892 there was a new mill erected at West Superior, Wis., and Mr. A. A. Freeman, of the former firm of A. A. Freeman & Co., of La Crosse, Wis., having secured the position of manager of that mill, the mill was called the Freeman Milling Company.

About this time Koper induced the firm of Grinnell, Minturn & Co. to become heavy stockholders in the Freeman Milling Company, and for that reason he transferred his brands and trade-mark from the mills in Minneapolis to the Freeman Milling Company at West Superior. Among these brands which he transferred to them was this brand 'Freeman's Superlative,' and thereafter the Freeman Milling Company branded the flour 'Freeman's Superlative,' and shipped it to Mr. Koper and his customers as they were directed by Mr. Koper. Koper continued to favor this mill with his trade from the fall of 1892, or early in 1893, until 1899, when the Freeman Milling Company became a part of what was at that time known as the United States Flour Milling Company. Koper continued to trade with the United States Flour Milling Company, as he had with the Freeman Milling Company. About a year later the United States Flour Milling Company went into the hands of a receiver, and was later reorganized as the Standard Milling Company, and the different mills at West Superior and Duluth were grouped together as a subsidiary company, and known as the Duluth Superior Milling Company, the appellee in this case.

Koper continued to make his purchases from the Duluth Superior Milling Company, and it branded the flour on his instructions with his brand 'Freeman's Superlative,' and shipped the same as directed by Mr. Koper. On December 31, 1902, the firm of Grinnell, Minturn & Co. retired from business, and on the 1st of January, 1903, the firm of Henry Koper & Co. was formed, consisting of Henry Koper, Peter F. Carroll, and Edwin R. Freeman. This firm continued the flour business of Grinnell, Minturn & Co. and purchased their flour of the Duluth Superior Milling Company, who, on instructions from Henry Koper & Co. branded their different purchases with their 'Freeman's Superlative' brand, and shipped the same to Henry Koper & Co. or their customers as directed by Koper & Co. and were so doing at the time the testimony in this case was taken. After the death of Koper in 1910 appellants continued the business as Henry Koper & Co.

The parties to this action agree as to the ownership of the brand 'Freeman's Superlative' up to the time the mortgage was given by A. A. Freeman & Co. to Charles Haight &amp Co. Appellee traces its title to the trade-mark in question by evidence which shows that after the burning of the mill of A. A. Freeman & Co. at La Crosse, Wis., in 1890, A. A. Freeman sought capital with which to build another mill. The residents of the city of West Superior, Wis., were anxious to establish industries at that point, and one Edgar A. LeClair, with certain associates, joined with...