Coca-Cola Co. v. Feulner

• Decision Date: 26 July 1934
• Docket Number: No. 398.,398.
• Citation: 7 F. Supp. 364
• Parties: COCA-COLA CO. v. FEULNER.
• Court: U.S. District Court — Southern District of Texas

7 F. Supp. 364

COCA-COLA CO. v. FEULNER.

No. 398.

District Court, S. D. Texas, Houston Division.

July 26, 1934.

Harold Hirsch & Marion Smith, of Atlanta, Ga., and Baker, Botts, Andrews & Wharton, of Houston, Tex. (Frank Troutman, of Atlanta, Ga., and Dillon Anderson, of Houston, Tex., of counsel), for plaintiff.

Snell & Aynesworth, of Houston, Tex., for defendant.

HUTCHESON, Circuit Judge.

This is a civil contempt proceeding in furtherance of the objects of the original suit to prevent defendant from wrongfully selling spurious, that is diluted, Coca-Cola for the genuine, the undiluted, article. The law of the case is well settled. Without doubt, a retailer of Coca-Cola syrup may, in offering it for sale, dilute it as he pleases so long as it is sold as a diluted product. He may not, however, secretly dilute it and sell it as undiluted. Coca-Cola Co. v. Brown & Allen (D. C.) 274 F. 481; Coca-Cola Co. v. Brown (D. C.) 60 F.(2d) 319; Hydraulic Press Brick Co. v. Stevens (C. C. A.) 15 F.(2d) 312; Lysol, Inc., v. Montgomery (D. C.) 23 F.(2d) 682; Northam Warren Corporation v. Universal Cosmetic Co. (C. C. A.) 18 F. (2d) 774.

A civil contempt proceeding is in effect a continuation of the original suit. The jurisdiction invoked and asserted to make the decree effective is as broad and comprehensive as that which sustains the decree itself. Leman v. Krentler-Arnold Hinge Last Co., 284 U. S. 449, 52 S. Ct. 238, 76 L. Ed. 389. It is for the benefit of the complainant; the punishment meted out in it is remedial. Gompers v. Buck's Stove & Range Co., 221 U. S. 431, 31 S. Ct. 492, 55 L. Ed. 797, 34 L. R. A. (N. S.) 874. A proceeding for criminal contempt, on the other hand, is to vindicate the authority of the court and the sentence is punitive. Gompers v. Buck's Stove & Range Co., supra. In proceedings for criminal contempt, the defendant is presumed to be innocent and must be found guilty, and no contempt order will issue unless the defendant is proven guilty beyond a reasonable doubt. Id. In those for civil contempt, there is no presumption, and proof of the contempt need not be beyond a reasonable doubt. Oriel v. Russell, 278 U. S. 358, 49 S. Ct. 173, 73 L. Ed. 419. While this is so, a bare preponderance of the evidence will not suffice to hold one even in civil contempt. Proof of violation must be clear and convincing. Oriel v. Russell, supra; City of Campbell, Mo., v. Arkansas-Missouri Power Co. (C. C. A.) 65 F.(2d) 425. When it is, because the proceeding is remedial in its nature, the court should not withhold but should issue an order designed and effected to fully remedy the situation complained of. Leman v. Krentler-Arnold Hinge Last Co., supra.

The proper relief here, if a case has been made out, since there is proof neither of defendant's profits nor of plaintiff's damages outside of the expenses of the suit, would be a fine in the amount of plaintiff's out-of-pocket expenses about this suit. Krentler-Arnold Hinge Last Co. v. Leman (C. C. A.) 50 F. (2d) 699; Cheatham Electric Switching Device Co. v. Transit Development Co. (C. C. A.) 261 F. 792; Kreplik v. Couch Patents Co. (C. C. A.) 190 F. 565. What difficulties attend the disposition of this case arise out of the fact contentions they are inherent in the testimony itself.

Plaintiff insists that the record makes out a clear case of violation. Defendant, that viewing the evidence in the light most favorable to plaintiff, there is at best a bare preponderance. This is the record.

On September 17, 1929, plaintiff, suing for an injunction and damages, filed its petition alleging in substance that the defendant, in response to orders for Coca-Cola, was selling as Coca-Cola not the genuine, but a diluted and therefore ungenuine, product. The matter was set down for hearing on November 11, 1929, plaintiff to have thirty days for its affidavit proof, defendant fifteen days for reply. Within the time limited, plaintiff filed affidavits showing that at various times it had procured samples of the product defendant was selling as Coca-Cola, that it had caused these products to be analysed, and that in the opinion of the affiants, the product was not Coca-Cola.¹ Defendant filed no controverting affidavits. On November 18th, a temporary injunction was issued, restraining defendant from:

(a) Infringing upon the trade rights of plaintiff and from substituting a spurious syrup for the syrup of the plaintiff.

(b) Selling and delivering in response to calls for "Coca-Cola" any beverage other than that made from Coca-Cola syrup manufactured by plaintiff.

(c) Marketing any product of the same identical or similar color so long used by plaintiff in its product, other than Coca-Cola manufactured by plaintiff.

(d) Drawing from the fountain or other container for the purpose of mixture and sale as Coca-Cola any syrup other than the unadulterated and unaltered syrup made by plaintiff and known as "Coca-Cola."

On March 23, 1931, defendant Feulner consenting, the temporary injunction was made permanent.

On May 15, 1934, plaintiff, alleging that the terms of the injunction had been and were being violated by defendant, moved in the cause for a contempt order. Defendant appeared to the rule, and there was a full hearing. Plaintiff offered proof which, if believed, showed that what had been purchased as Coca-Cola from Feulner's Drug Store in April of this year was not Coca-Cola as manufactured and distributed by it for sale, but a diluted product substantially different in color and content. The proof consisted of analyses of liquids purchased at the Feulner fountain in January and March, 1934,² proof in camera, DuPont De Nemours Powder Co. v. Masland, 244 U. S. 103, 37 S. Ct. 575, 61 L. Ed. 1016; Herold v. Herold China & Pottery Co. (C. C. A.) 257 F. 911; Taylor Iron & Steel Co. v. Nichols, 73 N. J. Eq. 684, 69 A. 186, 24 L. R. A. (N. S.) 941, 133 Am. St. Rep. 753; Wigmore, 26 Ill. Review 564, of the phosphoric acid and caffein content of Coca-Cola as plaintiff manufactured it and put it out for vending, and the opinions of expert chemists and persons dealing with and acquainted with the constituents of Coca-Cola that the liquids analyzed were not Coca-Cola, but dilutions of it. Plaintiff proved further the small purchases from Coca-Cola distributors defendant had made in the period in question, and argued from that that he must be diluting his product to make it go so far.

Defendant countered by proving that for some time he had been buying his Coca-Cola from the Auditorium Drug Store, a retail druggist, in small quantities of a gallon or two at a time. He explained that he did this because he could buy it in these small quantities from the druggist who had bought in large quantities, at a price less than he would have had to pay the distributor for small quantity purchases, and that he was not financially able to buy in large quantities to get the cheaper price. He also swore positively, and put on persons in and who had been in his employ to swear, that they had not made nor noticed the making of any changes or adulterations. In addition, he offered proof of analyses made by chemists of samples of Coca-Cola they had taken from various places; one from a gallon of syrup purchased by defendant from the local distributor and taken to the chemist for analysis; the other, samples taken from drinks purchased from several fountains, including Feulner's. These analyses, as testified to by Coguenheim, the chemist who made them, unlike those testified to by Chason, were stated in terms of P2O5 Phosphorus Pentoxide. As so stated, they were:

                        P2O5                   Caffein
                        .223                     .092
                        .212                     .080
                        .221                     .105
                        .230                     .088
                        .231                     .078
                

Converted to H3PO4 phosphoric acid by the use of the agreed formula multiplying by 1.38, they would be:

                                     .308
                                     .293
                                     .305
                                     .317
                                     .319
                

It is interesting to note that Mr. Coguenheim not knowing that plaintiff's chemist had expressed the phosphoric acid contents in terms of H3PO4 testified, at considerable length, to the remarkable similarity of his results and those of plaintiff's chemist in finding almost the same amount of acid in his samples as plaintiff had found in the ones they took from defendant. When his attention was called to the fact that instead of there being a similarity, there was a great discrepancy because of the different form of expression of the phosphoric acid content, and that in fact he had found in the samples of Coca-Cola he analyzed considerably more phosphoric acid than the in camera testimony showed was ever originally placed in it, he made no explanation. In their brief, defendant's counsel did undertake, by submitting a tabulation of the contents expressed by weight and by volume, but not supported by any evidence, to try to explain some of this discrepancy away. In view of the fact that there is no testimony to which this attempted explanation can relate, or by which it can be tested, and that no request has been made to reopen the case for the purpose of making this explanation, it must be disregarded, and the case decided on the evidence as it stands.

Coguenheim, in addition to testifying to the analyses, swore that it was impossible to analyze with absolute exactness and that exact results could not be obtained except within tolerance limits. He testified that analyses of phosphoric acid varying from each...