Geo. T. Stagg Co., &C., v. E. H. Taylor, Jr., & Sons

• Decision Date: 16 June 1894
• Citation: 95 Ky. 651
• Parties: Geo. T. Stagg Company, &c., v. E. H. Taylor, Jr., & Sons.
• Court: Kentucky Court of Appeals

95 Ky. 651

Geo. T. Stagg Company, &c., v. E. H. Taylor, Jr., & Sons.

Court of Appeals of Kentucky.

June 16, 1894.

APPEAL FROM FRANKLIN CIRCUIT COURT.

HUMPHREY & DAVIE FOR APPELLANTS.

COPYRIGHT MATERIAL OMITTED

D. W. LINDSEY AND JOHN W. RODMAN, ON SAME SIDE.

GEO. C. DRANE FOR APPELLEES.

WM. LINDSAY ON SAME SIDE.

JUDGE HAZELRIGG DELIVERED THE OPINION OF THE COURT.

In January, 1887, the appellees, E. H., J. S. & Kenner Taylor, formed a partnership under the name of E. H. Taylor, Jr., & Sons, and began the manufacture of whisky at what had theretofore been known as the "J. S. Taylor Distillery," in Woodford County, Ky. They at once changed the name of their distillery to the "Old Taylor" distillery, and before the end of the year had discontinued the use of the name, "J. S. Taylor," in connection with the distillery or the whisky manufactured there, branding, advertising and selling their product as "Old Taylor" whisky. They devised a brand which was put on barrels, bottles and other packages and used in their advertisements, circulars, letter-heads, etc., consisting of the words "Old Taylor Hand-made Sour Mash Whisky, E. H. Taylor, Jr., Distiller, Frankfort, Ky," arranged in a circle; and underneath this appeared the inscription, "E. H. Taylor, Jr., & Sons," in fac simile of the handwriting of E. H. Taylor, Jr. They branded other of their whiskies, later on, "Old Taylor," and underneath these words placed the inscription, "E. H. Taylor, Jr., & Sons," in the autograph of E. H. Taylor, Jr. They continued without interference to operate the distillery and transact business as whisky merchants, with office and headquarters at Frankfort, some seven or eight miles distant from their distillery, until the early part of 1889, when, as we learn from their petition, the appellants began to manufacture whisky at their distilleries, known as the "O. F. C." and "Carlisle" distilleries, near Frankfort, and to imitate the brands of the appellees, use the autograph signature of E. H. Taylor, Jr., and otherwise interrupt and injure their business. On the 16th of October, 1889, they brought this action to prevent the appellants from further using the brands and script in question and for damages.

The appellants asserted the right to use the disputed brands, including Taylor's autograph, and set up by way of counterclaim that the appellees had themselves wrongfully appropriated the brands, trade-marks, labels, etc., of the appellants, for which they asked damages. They based their claims upon a state of case growing out of E. H. Taylor's connection with themselves in operating the "O. F. C." and "Carlisle" distilleries prior to the formation of the partnership of E. H. Taylor, Jr., & Sons in January, 1887.

Upon hearing, after an elaborate preparation of the case, the chancellor determined the issues of fact and of law adversely to the appellants, and enjoined them from using the words "E. H. Taylor, Jr., Distiller," and the autograph signature of E. H. Taylor, Jr., upon any whiskies produced at their "O. F. C." and "Carlisle" distilleries since January 1, 1887; ordered an account taken of profits on the whiskies manufactured by the appellant since January, 1887, on which the script autograph had been used, and dismissed their counterclaim.

The controlling questions are, has E. H. Taylor, Jr., so complicated himself with the business of the appellants during the years prior to January, 1887, as to deprive himself and his associates of the use of the firm name, E. H. Taylor, Jr., & Sons, and as to confer on the appellants the right to use against his will the autograph signature of E. H. Taylor, Jr. And have the appellants in connection with E. H. Taylor, Jr., or otherwise, so appropriated the name, "Old Taylor," for the whiskies theretofore made at the "O. F. C." and "Carlisle" distilleries as to preclude the appellees, E. H. Taylor, Jr., & Sons, from such use as a trade-mark or brand?

In 1868, or 1869, E. H. Taylor, Jr., became the owner of and began to operate a distillery in Franklin County, near Frankfort, to which he gave the name of "O. F. C." Distillery, and to the product of which he gave the name of "O. F. C. Whisky." He put upon his packages of whisky, and used upon labels and in advertisements, a brand, in circular form, consisting of the words "O. F. C. Hand-made Sour Mash Whisky, E. H. Taylor, Jr., Distiller, Frankfort, Ky."

Taylor continued to operate the distillery in this way until about May, 1877, when he failed, and was forced by his creditors into bankruptcy. In December, 1877, a composition was effected with his creditors at twenty cents on the dollar, and Gregory, Stagg & Co., St. Louis whisky merchants, and large creditors of Taylor, agreed to furnish the funds necessary to effectuate the composition — an arrangement being made alike profitable to both parties. In pursuance of this arrangement, the O. F. C. distillery property was, by order of the United States District Court, reconveyed to Taylor, who, with his wife, conveyed the property to Geo. T. Stagg. Taylor then assigned to Stagg the O. F. C. trade-mark, and Stagg, Gregory, Stagg & Co. uniting with him, leased to Taylor the O. F. C. distillery property with the right to use the O. F. C. trade-mark. Taylor continued the business in his own name, the "O. F. C." whisky, in the meantime, attaining a phenomenal reputation, until the fall of 1879, when, for reasons not disclosed in the record, a corporation was organized and created of the style of "The E. H. Taylor, Jr., Company." To that corporation Stagg, in October, 1879, conveyed the distillery property and also assigned the trade-mark. As this trade-mark or brand is, to an important extent, the subject-matter of this litigation, we turn to the registration made of it by Taylor in the patent office in 1872, and to its reregistration in the same office by Geo. T. Stagg as assignee of Taylor, made shortly before its assignment to the E. H. Taylor, Jr., Co. The specification filed by Taylor is as follows: "The whisky made by me is hand-made sour mash whisky, and as such is known in the market. The trade-mark consists of the letters `O. F. C.' and is used with or without the words `Hand-made Sour Mash Whisky, E. H. Taylor, Jr., Distiller, Frankfort, Ky.,' or words to like effect. It is branded on the heads of the barrels or packages containing said whisky, and, therefore, mostly used in black color, though it may also, in suitable tint, be printed on labels that apply to bottles, and on showcards, or notices that advertise the same to the public." Stagg, in 1878, thus described it:

"My trade-mark consists of the letters `O. F. C.,' the same being an arbitrary symbol. This trade-mark has generally been arranged as shown in the accompanying fac simile, to-wit, in connection with the words `Hand-made Sour Mash Whisky, E. H. Taylor, Jr., Distiller, Frankfort, Kentucky;' but the said words may be transposed, some of them omitted, or other words substituted, as may be found most convenient for the purpose intended, without materially changing the character of my trade-mark, the essential feature of which is the symbol consisting of the letters `O. F. C.'" Again, in October, 1881, the E. H. Taylor, Jr., Co. registered this trade-mark in the patent office in substantially the language employed by Stagg some three years before.

At this point in the history of the case we may state our conclusion to be, that the trade-mark thus coming to the ownership of the corporation, E. H. Taylor, Jr., Co., consisted, so far as it was exclusively distinctive in its character, only of the letters "O. F. C." The other words were appropriately grouped about these letters to indicate the general character of the whisky and that E. H. Taylor, Jr., was the distiller. We do not suppose these words, "hand-made" and "sour mash," are such as can properly be claimed and used exclusively as a trade-mark, and we suppose the name "E. H. Taylor, Jr.," was one for which another name was to be "substituted," as "Distiller," when occasion demanded it, which would be when Taylor ceased to be the distiller of the "O. F. C." whisky. But be this at it may, the intention of the parties adopting this trade-mark, as expressed in its repeated registration, is to the effect that the symbolic letters, "O. F. C.," alone constituted the trade-mark.

Upon the organization of this corporation Stagg became its president and E. H. Taylor, Jr., its vice-president, the stock being owned and controlled by them, with all distilling operations under Taylor's management. It erected at once another distillery adjacent to the "O. F. C.," and to it gave the name of the "Carlisle Distillery," and upon all packages of whisky manufactured at this distillery the company placed a brand consisting of the words, "Carlisle Standard Sour Mash Whisky, E. H. Taylor, Jr., Co., Distiller, Frankfort, Ky." There was no registration of this brand as a trade-mark, but the fair inference is that its "essential feature" was intended by the parties to be the word "Carlisle." The words "Standard Sour Mash Whisky" were not so intended, even if they could have been so used, and for the name of the distiller in the brand there was to be substituted, as we must suppose, the name of the person of whom it could be truthfully said, he was the "distiller."

In the operation of these distilleries — the "O. F. C." and the "Carlisle" — the distiller was E. H. Taylor, Jr. That it was deemed important to indicate to the trade that he was the distiller is shown by the conduct of all the interested parties. He had been engaged in distilling for more than twenty years, and had given the "O. F. C." whisky a reputation equal to any made in Kentucky. Its superior quality was attributed largely to his skill as a distiller, and the intelligent and careful superintendency he gave to the methods of distillation. In one of the E. H. Taylor Co.'s circulars (and we use it as a sample of many others...