Hall's Safe Co. v. Herring-Hall-Marvin Safe Co.

• Decision Date: 20 June 1906
• Docket Number: 1,494.
• Citation: 146 F. 37
• Parties: HALL'S SAFE CO. et al. v. HERRING-HALL-MARVIN SAFE CO.
• Court: U.S. Court of Appeals — Sixth Circuit

146 F. 37

HALL'S SAFE CO. et al. v. HERRING-HALL-MARVIN SAFE CO.

No. 1,494.

United States Court of Appeals, Sixth Circuit.

June 20, 1906

Lawrence Maxwell, Jr., for appellee.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

SEVERENS Circuit Judge.

The parties to this controversy are engaged in the business of manufacturing and selling safes. The complainant is a corporation organized under the laws of New Jersey. The defendant the Hall's Safe Company is an Ohio corporation and the other defendants are citizens of that state. The bill was filed for the purpose of obtaining an injunction restraining the defendants from carrying on the business of manufacturing or selling fireproof or burglar proof safes or vaults under the name of the 'Hall's Safe Company,' or under any other trade-name substantially or essentially the same, and calculated to deceive the public or intending purchasers into the belief that they are dealing with the complainant, or with the establishment founded by Joseph L. Hall and carried on by complainant, when they are dealing with the defendants, and from advertising their products as 'Hall's Safes,' and from marking them with that name, and for the recovery of profits and damages already lost and suffered by the complainant from acts of the like character, and there was a prayer for general relief.

The facts, about which there is not much controversy, are these From about the year 1847 to 1867, one Joseph L. Hall had, in successive co-partnerships with other persons, been engaged at Cincinnati, Ohio, in the manufacture and sale of fire and burglar proof sales. In this business he had been the principal and managing member of his corporation under the laws of Ohio by the name of 'Hall's Safe & Lock Company,' for the purpose of carrying on the same business. Its factory and principal office were located at Cincinnati, and its business of selling safes extended throughout the United States and into foreign countries. Its safes were known as 'Hall's Safes: and 'Hall's Standard Safes,' and certain styles of them were marked 'Hall's Standard Safes,' and the safes had a good reputation. In March, 1889, the said Joseph L. Hall, who was at that time the principal stockholder in the corporation last mentioned, died. He sons, Edward C William H., and Charles O. Hall, were also stockholders. The first two became, successively, presidents of the corporation. The stock of Joseph L. Hall continued part of his estate, and the business went on as before until May 4, 1892, when the corporation sold to the Herring-Hall-Marvin Company, a New Jersey corporation, all its 'real estate and leasehold interests, tools, machinery, fixtures, merchandise, trade-marks and good will,' and the Halls Safe & Lock Company covenanted and agreed that it would close up its affairs and be dissolved and would not in the future engage or continue in said business. This sale and agreement was assented to by the above-named sons of Joseph L. Hall, who are the individuals made defendants in this cause. Edward C. Hall and William H. Hall at or about the date of the transfer became stockholders (as we must suppose), directors, and, respectively, president and treasurer, of the Herring-Hall-Marvin Company, at stated salaries agreed upon at the time of said transfer. But in 1895 these persons were deposed from their offices, and their salaries reduced, and on August 1, 1896, they resigned their offices as directors. Their resignations were accepted, and they withdrew from the company. At the time when these parties became associated with the Herring-Hall-Marvin Company, a written agreement with that company was entered into by each of them, which, after stating the terms of their employment, contained the following stipulation:

'And in consideration as aforesaid, I, the said Edward C. Hall (in the other contract, William H. Hall), do hereby covenant, promise, and agree that I will not, so long as the Herring-Hall-Marvin Company may desire to retain my services as above, engage, either in the state of Ohio, or in the state of New Jersey, or in any of the states east of the Mississippi river, in the business of manufacturing, selling, buying, or dealing in fire or burglar proof vaults and safes, or in any business or occupation such as the said corporation known as the Hall's Safe & Lock Company has heretofore been engaged in, or such as the Herring-Hall-Marvin Company is authorized or impowered to engage in, or in any other business which will or may compete or interfere in any manner with the business of the said Herring-Hall-Marvin Company.'

In September, 1896, Edward C. Hall, William H. Hall, Charles O. Hall, and other persons organized a corporation under the laws of Ohio by the name of the 'Hall's Safe Company,' the corporation defendant herein, and this company shortly thereafter went into the business of manufacturing and selling safes. A bill in equity was soon after filed in the Circuit Court of the United States against the new company by the Herring-Hall-Marvin Company, complaining that the former was infringing its trade and good will, and praying for an injunction. While that suit was pending the Herring-Hall-Marvin Company became insolvent, and a receiver was appointed. A new corporation was organized in New Jersey, the complainant in this suit, an order of the court for a sale of the assets of the old company was obtained, and the new company became the purchaser in December 1900, by a deed which purported to convey to the complainant all the real estate, personal property, manufacturing plant, tools, machinery, merchandise, assets, franchises, property, and good will of the Herring-Hall-Marvin Company. The bill in that case was dismissed upon a ground not now material, but without prejudice. Not long after the present bill was filed by the new company.

The gravamen of the complaint is that the defendants invade and injury the good will and reputation of the complainant's business by the adoption of the corporate name of the defendant the 'Hall's Safe Company,' and also by inducing the public, through advertisements, circulars, and other representations, to believe that their safes are the product of the complainant's business. The defendants admit the acquisition by complainant of the properties, including the good will, of the Hall's Safe & Lock Company, but claim that the individual defendants were not by the sale of the latter company deprived of the right to organize a new company which shall include their family name, and that the name of 'Hall's Safe Company,' is one which may lawfully be adopted. The defendants also filed a cross-bill, in which they charge complainant with unfair conduct in seeking to divert the defendant's trade by false representations concerning it. The complaint of the cross-bill was that the defendant therein had some time prior to the commencement of this suit removed its manufacturing plant from Cincinnati to Hamilton, Ohio, and had directed all mail addressed to the Hall's Safe & Lock Company at Cincinnati to be forwarded to it at Hamilton, and that it was holding itself out as the Hall Safe & Lock Company or Hall Safe & Lock Works, and the like, and was representing by its signs, advertisements, publications, and stationery that it was the 'Successor of Hall's Safe & Lock Co., or was 'operating Hall's Safe & Lock Works,' or was making and selling 'Hall's Safes,' and upon answer and replication evidence was taken upon those matters. The court below dismissed the cross- bill, and decreed for the complainant upon the original bill, awarding an injunction. Complaint is made of the decree, that it is vague and uncertain in respect to the things which the defendants are restrained from doing; a matter to be recurred to later on.

Counsel for complainant content that it is entitled to the relief it demands by virtue of the contract between its predecessor and assignor and the Hall Safe & Lock Company by which it, though the assignment, acquired the property and good will of the latter company, and that its rights are not to be measured by the rules and principles which apply in the case of unfair competition in trade, and it is argued that this consideration distinguishes the case from that of Howe Scale Co. v. Wyckoff, Seamans, etc., 198 U.S. 118, 25 Sup.Ct. 609, 49 L.Ed. 972, where there was much discussion of the extent of the right of a person to use his own name in the conduct of his business, whether it be his private business, or that of a corporate business in which he is associated with others; and reference is made to the language of the chief Justice at page 140, where he says:

'We hold that, in the absence of contract, fraud, or estoppel, any man may use his own name in all legitimate ways, and as the whole or a part of a corporate name.'

Upon this contention it becomes important to determine what were and are the relations between the complainant and its predecessor in title and the several defendants. Undoubtedly the Herring-Hall-Marvin Company acquired by its contract of purchase with the Hall Safe & Lock Company all its physical properties and the good will which it had acquired in its business, as well as the right to use such trade-names as had been customarily used to identify its products. It acquired also the right to require that the Hall's Safe & Lock Company should go out of business, or, in substance, that it should not longer engage in business of the kind which it sold to the Herring-Hall-Marvin Company. But it is contended that the contract reaches beyond the corporation, the Hall Safe & Lock Company, and binds the defendants who were stockholders and officers of the corporation, and prevents them and any corporation of which they may become stockholders...