Godefroy Mfg. Co. v. Lady Lennox Co.

• Decision Date: 05 December 1939
• Docket Number: No. 25031.,25031.
• Citation: 134 S.W.2d 140
• Parties: GODEFROY MFG. CO. v. LADY LENNOX CO. et al.
• Court: Missouri Court of Appeals

134 S.W.2d 140

GODEFROY MFG. CO. v. LADY LENNOX CO. et al.

No. 25031.

St. Louis Court of Appeals. Missouri.

December 5, 1939.

Rehearing Denied December 22, 1939.

Appeal from St. Louis Circuit Court; Eugene J. Sartorius, Judge.

"Not to be reported in State Reports."

Suit by Godefroy Manufacturing Company against the Lady Lennox Company, and Norman W. Siebras to enjoin the defendants from the use of an alleged secret formula for making of black hair dye, and the sale of preparations made according to such formula and for damages. From judgment for plaintiff, the defendants appeal.

Reversed.

S. D. Flanagan and C. Delitala, both of St. Louis, for appellants.

Salkey & Jones, of St. Louis, for respondent.

BECKER, Judge.

This is a suit in equity instituted by Godefroy Manufacturing Company, a corporation, in the Circuit Court of the City of St. Louis, on May 15, 1934, by the filing of a petition seeking to enjoin Norman W. Siebras and Lady Lennox Company, a corporation, from the use of an alleged secret formula for the making of black hair dye, and the sale of preparations made according to said formula, on the ground that the defendant Norman W. Siebras acquired knowledge of the secret ingredients contained therein and of the selling methods employed in the handling of the preparation by reason of his position of confidence and trust with plaintiff, and that the defendant Lady Lennox Company is a company organized and controlled by him. The petition alleges that plaintiff has been materially damaged in an amount in excess of $10,000.

The answer was a general denial.

Upon trial of the case, at the conclusion of the evidence, the court found in favor of plaintiff and against the defendants, and granted the injunctive relief prayed for in the petition. Defendants in due course took an appeal to this court, which dismissed the appeal because prematurely taken inasmuch as the judgment appealed from had left undisposed the issue of damage (Godefroy Mfg. Co. v. Lady Lennox Co., et al., Mo.App., 110 S.W.2d 803). Plaintiff then dismissed its prayer for damages from its petition and the circuit court entered a final judgment in favor of plaintiff and against defendants. From such judgment, after an unsuccessful motion for new trial, defendants have taken this appeal, and here assign as error that plaintiff failed to make its case, and that the judgment below should be reversed.

While it is universally held that secret formulas and processes are property rights which, even though unpatented, will be protected by injunction against those who, through a breach of trust or violation of confidence, attempt to apply the secret to their own use or to impart it to others (Germo Mfg. Co. v. Combs, 209 Mo.App. 651, 240 S.W. 872, 881; Luckett v. Orange Julep Co., 271 Mo. 289, 196 S. W. 740; Reilly Optical Co. v. Burke, Mo. App., 41 S.W.2d 909), yet such property right in a secret process or formula is subject to be lost if another honestly discovers or rightfully comes into the possession or knowledge thereof. Eli Lilly & Co. v. Wm. R. Warner & Co., D.C., 268 F. 156; John D. Park & Sons Co. v. Hartman, 6 Cir., 153 F. 24, 82 C.C.A. 158, 12 L.R.A.,N.S., 135; Germo Mfg. Co. v. Combs, supra; Chadwick v. Covell, 151 Mass. 190, 23 N.E. 1068, 6 L.R.A. 839, 21 Am.St.Rep. 442; Watkins v. Landon, 52 Minn. 389, 54 N.W. 193, 19 L.R.A. 236, 38 Am.St.Rep. 560.

Inasmuch as we have reached the conclusion that the judgment entered below is not supported by the evidence, we set out the testimony rather fully.

It appears that one Alexander Godefroy, a hair dresser, opened up a hair dressing shop in St. Louis in the year 1882, and among the services offered his customers was that of dyeing hair. In the year 1894 he took his family to Europe where he spent considerable time in furthering his knowledge of making hair dye, and developed a secret formula for making hair dye, and he made a dye under his secret formula which he put on the market and sold under the name of "Larieuse." Alexander Godefroy continued to do business in his individual name until 1905, when, although he remained the sole owner, he continued his business under the name of Godefroy & Sons until 1912, in which year his son Charles Webb Godefroy became the sole owner of the business, including the secret formula for the making of hair dye, which formula was in turn sold to the plaintiff Godefroy Manufacturing Company upon its incorporation in January, 1924.

In 1915 defendant Norman W. Siebras, then about 15 years of age and attending public school, was employed by Charles Webb Godefroy to do odd jobs about the business after school hours. This employment was obtained through Siebras' mother who had long been an employee of the Godefroys. Siebras did his work well and after he had finished school he was given steady employment, and in due course became a trusted employee of Charles Webb Godefroy, and by 1927 had become assistant manager, his salary and bonus for that year amounting to about $6000. In that year Charles Webb Godefroy went to Europe as president of the National Hair Dressers and Cosmetologists Association. During his absence he left the business under the management of Siebras with power of attorney to draw company as well as Godefroy's personal checks.

Charles Webb Godefroy himself testified that at no time did he ever divulge the formula of the "Larieuse" hair dye to any one; that he had learned the formula from his father and that outside of his wife no one had access to the formula; that in order to protect the secret of the compound he personally did all of the buying of the materials that were necessary for the making of the dye; that he had all the ingredients for making dye delivered to his home or to a place where he himself would pick them up; that "by receiving the packages outside of my business I could remove the labels and destroy the packing cases which showed the source of origin; and I got up a cipher number which we used on the package. All chemicals of a trade secret nature which are used in Godefroy's `Larieuse' hair dye are not labeled on the premises. They bear numbers. The numbers identify them and even one possessed of the quantitative formula without knowing the ingredients which were being used, could not know exactly what he was using. We have a laboratory in the back of the third floor, and I did the weighing and actual compounding of those ingredients to make the finished dye. * * * Afterwards I would hand the ingredients * * * to employees like Siebras * * * for the purpose of mulling and blending it and putting it in capsules. At no time did we ever divulge the formula of the Larieuse Hair Dye knowingly; I am certain it was never done." Godefroy further testified that in 1927, when he took his trip to Europe and left the business in charge of Siebras, "I estimated all the dye which could possibly be sold and added a generous abundance and left it prepared for use during my absence. I also took precaution so that in case of a fire or of business being much better than we anticipated, another quantity of dye could be delivered there without Mr. Siebras' or any other employee's knowledge. Some of the dye which I left unpacked was still left when I returned from Europe, though while in Europe I received a most urgent message from Mr. Siebras that they were about to run out of black dye and it was imperative that the stock be replaced. I then communicated with my communicant, and caused the delivery of that reserve stock as it could be delivered and the formula and ingredients and source of origin still remain in my possession."

According to Godefroy he discharged Siebras, effective January 4, 1932, because he had "found gross irregularities in my pay roll book and in other things." According to Godefroy, in the spring of 1932, after the Lady Lennox Company, a corporation, had been formed, of which company Siebras later became president, the company placed upon the market Lady Lennox Hair Dye, which "is to all purposes identical with our dye."

Charles Barban, a witness for plaintiff, testified that he is a consulting chemist and chemical engineer with offices in New York city, and is consultant for most of the leading hair dye manufacturers of this country; that he had been chemical consultant on research and development work of the Godefroy company's dye formula since 1926. As to the "Larieuse" formula he testified that he had "been working continuously on this formula. I know the exact formula. When I was first retained in 1926, Mr. Godefroy gave me a copy of his formula sheets and as changes are made they become part of the latest formula sheets which I have in my possession. There are no variations or changes made without my approval. I have made a chemical analysis of the `Larieuse' formula constantly in order to check the way the product stands up. Frequent analysis is made and at all times checked with the formula, which is in my possession. To my knowledge the `Larieuse' formula is a secret formula which is not general property. The ingredients are not of general knowledge; they are strictly secret to the possessor of the formula and have come to his knowledge through research and development work. It is not knowledge ascertained from consulting literature; it is not one of these standard formulas which are purchasable. It is a product which has been produced over a long period of time, by development, research and experimentation." Barban testified that in 1930, Siebras had come to his office and in the course of the conversation a discussion of hair dye arose, and "there was some question of constituents and Siebras said to me, `you have the formulas I believe,' and I answered, `yes' whereupon Siebras said `well, if we can examine them we can talk more intelligently.'" Barban thereupon told Siebras that he could not produce the formulas or discuss them unless authorized by Mr. Godefroy. Barban testified that Siebras...