Garrett v. T.H. Garrett & Co.

• Decision Date: 08 December 1896
• Docket Number: 458.
• Citation: 78 F. 472
• Parties: GARRETT et al. v. T. H. GARRETT & CO.
• Court: U.S. Court of Appeals — Sixth Circuit

78 F. 472

GARRETT et al. v. T. H. GARRETT & CO.

No. 458.

United States Court of Appeals, Sixth Circuit.

December 8, 1896

Upton W. Muir, for appellants.

Augustus E. Wilson and Shackelford Miller, for appellee.

Before TAFT and LURTON, Circuit Judges, and SAGE, District Judge.

SAGE District Judge.

The appellants are manufacturers of snuff known to the trade as 'Garrett's Snuff,' and were complainants in a suit brought in the United States circuit court for the district of Kentucky to restrain the appellee from using certain labels upon cans and packages of snuff, and from using the name 'Garrett' on such packages and cans and from representing the same as 'Garrett's Snuff.' The case came before the court upon a motion by complainants for a preliminary injunction against the defendant, according to the prayer of the original and amended bills. The motion came on to be heard upon said bills, upon exhibits of cans and packages and labels used by the defendant in preparing and putting on sale its product and manufacture, and upon affidavits in support of the averments of the bills. The defendant resisted the motion upon its answer, and upon affidavits and exhibits.

The defendant company was incorporated February 23, 1895, with the capital stock of $2,000, in 20 shares, of the par value of $100 each, of which 5 shares were subscribed by each of the four incorporators, of whom T. H. Garrett was one. On the 12th of December, 1895, the articles of incorporation were amended by increasing the capital stock to $35,000, divided into 350 shares, each of the par value of $100. T. H. Garrett subscribed for 2 1/2 shares. There were several other subscribers each for a small number of shares. J. B. Holloway was a subscriber for 127 1/2 shares, Henry Laub for 5 shares E. R. Burley for 50 shares, and Hannah Laub for 121 1/2 shares. T. H. Garrett, in his affidavit, states that the means for the increase of the capital to $35,000 were furnished by Holloway, Lamb, and Burley.

The court granted the motion in part, upon the finding that the labels and devices used by the defendant company prior to its reorganization exhibits of which were filed with complainants' bill, so resembled the labels and devices used by complainants as to be likely to deceive and mislead an ordinary and unsuspecting customer. The defendant company was therefore enjoined to that extent, although it appeared, as the court recognized that it had ceased the use of the labels and devices referred to before the filing of the bill, and had endeavored to recall all the snuff which had been theretofore put upon the market, which, however, was claimed to be only a few hundred dollars worth. The court in its opinion said:

'The principal question on this motion is whether the complainants, as manufacturers of Scotch snuff, are entitled to the exclusive use of the word 'Garrett' on labels and other devices for advertising their Scotch snuff. This is so important and so doubtful a question that the court is unwilling to decide it upon mere affidavits, and upon a motion for a preliminary injunction.'

Complainants appeal from this ruling.

The labels and devices used by the defendant company under its original organization were, in their general design and appearance, close imitations of complainants' labels and designs. The cans, packages, labels, and wrappers of complainants were almost literally copied by the defendant company, excepting that 'T. H. Garrett, Louisville, Ky.,' was substituted for 'W. E. Garrett, Philadelphia.' The color of defendant's labels was the same as that of complainants'. The type used for the printed matter on the labels was similar in general appearance, arrangement, and general effect. That there was any intent to appropriate the good will or to deceive complainants' customers is stoutly denied by T. H. Garrett, and by the officers of the defendant corporation, and it is declared in their affidavits that the retail dealers, who were customers of, and those who were solicited by, the defendant company, were advised that the snuff was the manufacture of T. H. Garrett & Co. and not the manufacture of William E. Garrett & Sons. Whether retail dealers were advised that they could sell snuff manufactured and sold by complainants, and whether it was intended that those customers should be thus deceived is in dispute. Affidavits for complainants sustain the charge, and affidavits for the defendant deny it. But that the effect was to impose snuff manufactured by the defendants upon purchasers from retailers as 'Garrett's Snuff,'-- that is to say, as snuff manufactured by complainants,-- is, we think, too well established to be doubted; and we are fully impressed that it was the intention of the defendant company, by the use of the name 'Garrett,' to appropriate the good will and interfere with the trade of the complainants.

It is denied by the defendant company that the change of labels, which was made about the time of the reorganizations, was because of any apprehension of trouble with complainants, or of any feeling on the part of the officers of the company that there was the least infringement of the rights of the complainants. The defendant's version, as gathered from the affidavits of Garrett and Laub, the president of the reorganized company, and of Holloway, one of the largest stockholders, is that the snuff sent out under the original labels was of inferior quality, that they were satisfied that it 'would injure the business,' that they 'had heard that it was not good,' and that the change in labels and devices was made, 'not because of the resemblance to those of complainants, but because affiants and their associates were dissatisfied with the quality of the snuff.'

T. H. Garrett, in his affidavit, says that, when the company was reorganized, Holloway brought up the question whether their brands and labels could not be mistaken for those of complainants or others, and that counsel were consulted on the subject, and that they advised certain changes, 'out of abundant caution,' which were made. He affirms that these measures were taken 'to prevent confusion in the labels before there was any intimation of any dissatisfaction, or complaint on the part of complainants or anybody else. ' He also refers to and quotes from a circular put out by defendant company, December 31, 1895, in which the hope is expressed 'that no one who tries our snuff will take it for theirs; that we should hate to have any one who has used our snuff, use theirs afterwards, under the impression that it was ours, because it would hurt his opinion of our goods; and that we trust that everybody who tries our snuff will notice and remember that it is made by us, and not by them. ' If all this be true, why did defendant company, upon reorganization, cling to the name 'T. H. Garrett & Co.'? If that name had been attached to goods of inferior quality, why, in the reorganization, was it not dropped, and another substituted which would have relieved the company from the odium resulting, as they now claim, from the inferior quality of the snuff sold under that name? T. H. Garrett was the owner of only 2 1/2 shares of the capital stock, the entire number of shares being 350. He was not made an officer of the new company, and had only a subordinate position as an employe. There was no apparent reason why his name should be adopted as the corporate name, unless it was that 'Garrett's Snuff' had a reputation, and was in demand by the users of snuff all over the South,-- the territory sought to be occupied by the defendant company.

The statement, made by Holloway in his affidavit, that the only reason for retaining the name of T. H. Garrett in the name of the corporation was that he was its original projector and promoter, and that it would have been an unnecessary and unfair reflection on him to have changed the name, is mere pretense and sham, too bald to be even plausible. If it be said that it was to preserve the good will of the company as first organized, the answer is that by Garrett's own affidavit it is shown that, by reason of the poor quality of the snuff put on the market by that company, its good will if it ever had any, was all turned to ill will. Taking his own showing, it is apparent that the best thing for...