Hanover Star Milling Company v. Metcalf No 23 Allen Wheeler Company v. Hanover Star Milling Company No 30

• Citation: 60 L.Ed. 713,240 U.S. 403,36 S.Ct. 357
• Decision Date: 06 March 1916
• Docket Number: Nos. 23 and 30,s. 23 and 30
• Parties: HANOVER STAR MILLING COMPANY, Petitioner, v. D. D. METCALF. NO 23. ALLEN & WHEELER COMPANY, Appt. and Petitioner, v. HANOVER STAR MILLING COMPANY. NO 30
• Court: United States Supreme Court

240 U.S. 403

36 S.Ct. 357

60 L.Ed. 713

HANOVER STAR MILLING COMPANY, Petitioner,

v D. D. METCALF.

NO 23.

ALLEN & WHEELER COMPANY, Appt. and Petitioner,

v. HANOVER STAR MILLING COMPANY.

NO 30.

Nos. 23 and 30.

Argued May 7 and 10, 1915.

Decided March 6, 1916.

[Syllabus from pages 403-405 intentionally omitted] Messrs. Henry Fitts, Edgar L. Clarkson, James E. Morrisette, and John London for petitioner in No. 23, and appellee and respondent in No. 30.

Messrs. Edward Everett Longan and J. Fred Gilster for respondent in No. 23.

Messrs. Edward Everett Longan, J. Fred Gilster, and L. O. Whitnel for appellant and petitioner in No. 30.

Mr. Justice Pitney delivered the opinion of the court:

These cases were argued together, and may be disposed of in a single opinion.

In No. 23, the Hanover Star Milling Company, an Illinois corporation engaged in the manufacture of flour in that state, filed a bill in equity on March 4, 1912, in the United States district court for the middle district of Alabama, against Metcalf, a citizen of the state of Alabama and a merchant engaged in the business of selling flour at Greenville, Butler county, in that state, to restrain alleged trademark infringement and unfair competition. The bill averred that for twenty-seven years last past complainant had been engaged in the manufacture of a superior and popular grade of flour, sold by it at all times under the name of 'Tea Rose' flour, in a wrapping with distinctive markings, including the words 'Tea Rose' and a design containing three roses imprinted upon labels attached to sacks and barrels; that this flour had been marketed thus by complainant in the state of Alabama for the preceding twelve years, during which time, by maintaining a high and uniform quality, by expensive advertising, and by diligent work of its representatives, it had built up a large and lucrative market, with annual sales of more than $175,000 of Tea Rose flour in that state, and had established a valuable reputation for the name 'Tea Rose' and the distinctive wrappings in Alabama and other states, particularly Georgia and Florida; that until shortly before the commencement of the suit complainant's Tea Rose flour was the only flour made, sold, or offered for sale under that name in Butler county or elsewhere in the state of Alabama, and the name 'Tea Rose' had represented and stood for complainant's flour; and that recently the Steeleville Milling Company, of Steeleville, Illinois, had, through Metcalf's agency, been marketing in Alabama, and particularly in Butler county, flour of its manufacture, in packages and wrappings substantially identical with complainant's and bearing a design containing three roses and the name 'Tea Rose' upon the labels, in a manner calculated to deceive and in fact deceptive to purchasers, thereby threatening pecuniary loss to complainant exceeding $3,000 in amount, and destroying the prestige of complainant's 'Tea Rose' flour, and damaging its trade therein.

Defendant's answer denied all attempts to deceive purchasers, and further denied complainant's right to the exclusive use of the words 'Tea Rose' or the picture of a rose as a trademark; averred that long prior to complainant's first use of it, and as early as the year 1872, the name had been adopted, appropriated, and used as a trademark for flour by the firm of Allen & Wheeler, of Troy, Ohio, and used by it and its successor, the Allen & Wheeler Company, continuously as such; and alleged that the Steeleville Milling Company had used its 'Tea Rose' brand for more than sixteen years last past, and as early as the year 1899 had sold flour in Alabama under that label.

Upon consideration of the bill and answer and affidavits submitted by the respective parties, the district court granted a temporary injunction restraining Metcalf from selling flour labeled 'Tea Rose,' manufactured by the Steeleville Company or any person, firm, or corporation other than the Hanover Company, at Greenville, or at any other place in the middle district of Alabama. Upon appeal, the circuit court of appeals for the fifth circuit reversed this decree and remanded the cause, with directions to dismiss the bill. 122 C. C. A. 483, 204 Fed. 211. A writ of certiorari was then allowed by this court.

In No. 30, the Allen & Wheeler Company, a corporation of the state of Ohio, manufacturing flour at the city of Troy, in that state, filed a bill against the Hanover Star Milling Company on May 23, 1912, in the United States district court for the eastern district of Illinois, averring that in or before the year 1872 the firm of Allen & Wheeler, then engaged in the manufacture of flour at Troy, adopted as a trademark for designating one of its brands the words 'Tea Rose,' and from thence until the year 1904 continuously used that trademark by placing it upon sacks, barrels, and packages containing the brand and quality of flour designated by that term and sold throughout the United States; that in 1904 the Allen & Wheeler Company was incorporated and took over the mills, machinery, stock, trademark, and good will of the firm, since which time the corporation had continued to use the trademark upon flour of its manufacture, and had distributed and sold such flour in the markets of the United States, whereby the words 'Tea Rose' had become the common-law trademark of the Allen & Wheeler Company; that recently it had learned that the Hanover Star Milling Company had adopted the words 'Tea Rose' as designating a brand of flour manufactured by it, and, notwithstanding notice of complainant's rights, was persisting in the sale of its flour under that name and threatening to continue so to do; and that defendant had sold large quantities of Tea Rose flour, particularly in the markets of the states of Alabama, Florida, and Mississippi, with large gross sales, and profits approximating $5,000 per year for the past five years, causing damage and loss to complainant in excess of $3,000. An injunction and an accounting of profits were prayed. Upon this bill, a demurrer filed by the Hanover Company, and affidavits presented by both parties, the district court granted a temporary injunction restraining the use of the words 'Tea Rose' as a trademark for flour, without territorial restriction. The circuit court of appeals for the seventh circuit reversed this decree, and remanded the cause to the district court for further proceedings not inconsistent with its opinion. L.R.A. ——, ——, 125 C. C. A. 515, 208 Fed. 513. An appeal was taken to this court, and a writ of certiorari was subsequently granted. The appeal must be dismissed for want of jurisdiction, and the case will be disposed of under the writ of certiorari.

No question is raised respecting the propriety of passing upon the questions at issue on a review of decisions rendered upon applications for temporary injunction. Both district courts granted such injunctions, and both circuit courts of appeals reversed upon grounds that went to the merits. These courts differed upon fundamental questions, and it was because of this that the writs of certiorari were allowed, the situation being such that it was deemed proper to allow them before final decrees were made, notwithstanding the general rule to the contrary. American Constr. Co. v. Jacksonville, T. & K. W. R. Co. 148 U. S. 372, 378, 384, 37 L. ed. 486, 489, 491, 13 Sup. Ct. Rep. 758; The Three Friends, 166 U. S. 1, 49, 41 L. ed. 897, 913, 17 Sup. Ct. Rep. 495; The Conqueror, 166 U. S. 110, 113, 41 L. ed. 937, 939, 17 Sup. Ct. Rep. 510; Denver v. New York Trust Co. 229 U. S. 123, 133, 57 L. ed. 1101, 1120, 33 Sup. Ct. Rep. 657.

In both cases it was shown without dispute that the firm of Allen & Wheeler adopted and used the words 'Tea Rose' as a trademark for one kind or quality of flour manufactured by it as early as the year 1872, and continued that use until the year 1904, when the Allen & Wheeler Company was incorporated and took over the mills, machinery, stock, trademark, and good will of the firm and succeeded to its business. But there is nothing to show the extent of such use or the markets reached by it, except that in the year 1872 Allen & Wheeler sold three lots of 25 barrels each to a firm in Cincinnati, Ohio, and one lot of 100 barrels to a firm in Pittsburgh, Pennsylvania; that in the early 70's another firm in Pittsburgh was a customer for this brand; and that in the later 70's a firm in Boston, Massachusetts, was a customer for the same brand. As to the Allen & Wheeler Company, there are affidavits stating in general terms that since its incorporation in 1904, and 'continuously down to the present time,' the company has used the brand 'Tea Rose' for flour; but there is a remarkable absence of particular statements as to time, place, or circumstances; in short, no showing whatever as to the extent of the use or the markets reached. There is nothing to show that the Allen & Wheeler 'Tea Rose' flour has been even advertised in Alabama or the adjoining states, and there is clear and undisputed proof that it has not been sold or offered for sale or known or heard of by the trade in Alabama, Mississippi, or Georgia. In No. 30, there is uncontradicted proof that the Allen & Wheeler Company is selling flour in Alabama and Georgia, but under the brands 'Eldean Patent' and 'Trojan Special.'

In both suits, the Hanover Star Milling Company introduced affidavits fairly showing that shortly after its incorporation in the year 1885 it adopted for one of its brands of flour the name 'Tea Rose,' and adopted for the package or container, whether sack or barrel, a label bearing the name 'Tea Rose' and the design already referred to; and that this trademark was adopted and used in good faith without knowledge or notice that the name 'Tea Rose' had been adopted or used by the Allen & Wheeler firm, or by anybody else. In 1904 the Hanover Company began and has since prosecuted a vigorous and expensive campaign of...