Hiram Walker & Sons v. Grubman

• Decision Date: 31 March 1915
• Citation: 224 F. 725
• Parties: HIRAM WALKER & SONS v. GRUBMAN et al.
• Court: U.S. District Court — Southern District of New York

224 F. 725

HIRAM WALKER & SONS v. GRUBMAN et al.

United States District Court, S.D. New York.

March 31, 1915

These are 14 cases brought by the same plaintiff against different defendants for unfair competition in the sale of whisky. The plaintiff alleges that it is the maker of a well-known brand of Canadian whisky which has been sold in the United States for more than 25 years under the title 'Canadian Club,' a name registered in the Patent Office since 1891 and that the defendants, who are all wholesale liquor dealers in the city of New York, were engaged in putting out a whisky made in imitation of the plaintiff's under the name 'Canadian Type' whisky, which was an infringement of the plaintiff's rights, and were also selling such whisky in bulk in the wood to saloon keepers for the purpose of refilling the plaintiff's bottles in substitution for the plaintiff's whisky. The bills contain the usual prayer for an injunction and accounting. The defendants deny the allegations of wrongdoing, and allege that there is a type of whisky known as 'Canadian' which they have the right to imitate, and which they do imitate and sell under the name 'Canadian Type' whisky.

The cases were heard all together, though not formally consolidated, and upon the hearing the following facts developed:

In the United States three or four brands of whisky made in Canada have been sold for many years. By far the largest sale of these whiskies is the plaintiff's with its 'Canadian Club,' the next best known being Seagram's and Gooderham & Worsts'. Some sale was also shown of a Canadian whisky known as Wiser's of the same general character. These whiskies are all light in color, and made out of corn and rye in a many-chambered still, which eliminates a larger part of the essential oils that give flavor, rendering them milder to the palate, or as the phrase is, 'light-bodied.' No American whiskies are like these three brands in color, though some of the Bourbons approach them; none have a flavor like them, though many are not far off. There are also white Canadian whiskies of an entirely different character, which need not be considered. For many years prior to the enactment of the Pure Food Act in 1906, American whiskies were sold under the name 'Canadian,' with various suffixes, e.g., Canadian Malt, Canadian Wheat, Canadian White, some of which imitated the three brands in question either in color or 'body.' In 1906 it became illegal to sell American whisky under the name 'Canadian,' and all these whiskies had to conform to that requirement. Those American imitations of the three Canadian brands here in question thereupon changed their name an have for some 8 years or more gone under the name 'Canadian Type' or 'Canadian Style.' These are and were from the outset frank imitations of the whisky sold by the plaintiff, Seagram and Gooderham & Worsts, and their sale, which has reached very substantial quantity, is justified upon the right of the distillers to make and sell any whisky, provided they honestly disclose what it is. The largest distillers of this imitation Canadian whisky are Corning & Co., of Peoria, Ill., the National Distillers Company of New York, and Clark Bros. Corning & Co., the largest distiller, sells it in the wood to wholesalers, and furnishes them labels containing the words 'Corning's Canadian Type Whisky.' The wholesalers, or owners of what are called 'Family Liquor Stores,' sell this to customers in substantial quantities in glass, either in quart or pint bottles, and quite as large, if not larger, quantities, to saloon keepers in the city of New York. There was a good deal of testimony regarding the demand for this whisky over the bar by the drink, the plaintiff asserting that there was no demand for it by the name 'Canadian Type Whisky,' and the defendants asserting the contrary. An analysis of that testimony will be taken up in the opinion.

In May July, and August of 1913 the plaintiff employed detectives to go to the defendants' places of business and there to represent themselves as saloon keepers to make purchases of Canadian Type whisky, and to see how far the defendants would advise them to use this whisky to refill Canadian Club bottles. Nine of the cases were stipulated to abide the event in the case against Philip Goldberg, and in this case the plaintiff claims to have made four visits, the first two in May and the last two in July and August. Purchases were made in May and in July of the Canadian Type whisky in five-gallon kegs, which is the smallest amount the defendant was permitted to sell. One question, sharply litigated, was as to the talk at the time of purchase, the plaintiff's witnesses asserting that the defendants had urged them to use this whisky in refilling Canadian Club bottles and had told them how it could be done, the defendants saying that although the plaintiff's witnesses had said that they meant to use the whisky to refill, they had discouraged any such practice. Six men in all visited Goldberg's store four detectives of the Thiel Agency and two corroborating witnesses. They made reports in all cases either on the same or the next day on which the interviews took place, and these reports were sent to the agency headquarters, where they remained until shortly before the trial. In the case of the two corroborating witnesses, who were not professional detectives, the reports were not signed by them, but were written out by the daughter of one of them, a woman 30 years old, at their dictation, and at their request she signed their names. The reports with the testimony of the witnesses and the receipted bills for the purchase of the whisky constitute all the plaintiff's proofs. The defendants answer by their own oaths, admitting the purchases, but denying the incriminating advice put into their mouths.

In the other four cases which were tried, two of the detectives who appeared against Goldberg took no part. The proof consisted of the testimony of the two others and of the two corroborating witnesses. It was of the same general character, purchases of Canadian Type whisky, corroborated by documents and oral testimony that the defendants had advised them to refill bottles. The defendants in each case deny giving the advice to refill, but in most cases admit that the buyers, who represented themselves as saloon keepers, said that they purposed refilling. The testimony, so far as particular, is considered separately in the opinion.

George Gordon Battle, of New York City, and Alfred Lucking, of Detroit, Mich., for plaintiff.

Joseph M. Proskauer, Arthur L. Strasser, and Norman P. S. Schloss, all of New York City, for defendants.

LEARNED HAND, District Judge (after stating the facts as above).

The defendants had the right to imitate the plaintiff's whisky as closely as they could, in color, in flavor, in composition. What they made they might sell; the only limitation being upon the name and dress under which they sold it. Had they called it 'Imitation Canadian Club,' there could have been no quarrel; the first question is whether they might call it 'Canadian Type,' assuming that the final consumer is adequately advised that the whisky is in fact Canadian Type. That question breaks into two: First, whether there is a Canadian Type; second, and if there is not, whether consumers might be misled into drinking whisky, called Canadian Type, supposing it was Canadian Club. I think that there may fairly be said to be a Canadian type of whisky in this sense, that these three brands are all substantially alike in color, mode of manufacture, and resulting taste to the palate, and that no other whiskies made in America are so much like them as they are like one another. I base this chiefly upon the color, but color is a most important quality in a beverage; I base it also upon the testimony relating to the mildness and lack of 'body,' which was not contradicted by the plaintiff. While, therefore, there are other whiskies made in Canada which have not this color or flavor, but which are like other whiskies made elsewhere, it seems to me that it may fairly be said that the words 'Canadian Type' convey the meaning that the whisky is of the kind represented by these three Canadian whiskies. It follows that as any one may make them, he may sell them under that name if the consumer knows that he is getting the type and not the Canadian whisky itself.

So far as concerns the sale by wholesalers and retail liquor shops in the bottle, I think that a label like Corning's present one is permissible. The word 'Type' is of the same size as the other words; it is not disguised; it is in the same script. I cannot see that a wholesaler should be required to do more than advise the consumer of the contents of his bottle in that form. I do not think that the label of the Bowling Green Distilling Company is a proper one; the word 'Type' is large enough, but it seems to my eye too much like a pattern to be effective at a distance. Whether designed or not to conceal the word, the contrast between the red letters 'Canadian Whisky' upon the white background and the black letters 'Type' within the black circle are in fact likely to result in the sale of the whisky as genuine Canadian whisky, which it is not. No conceivable reason appears why the word 'Type' should have been so differentiated, unless it was to suppress it. Similarly, the Canadian Pacific label appears to me improper. The meaning of that title is not clear; it suggests either that it is the same whisky as sold to the Canadian Pacific Railroad or manufactured for it. This inference is much fortified by the shields bearing the words 'Canadian Pacific' and surmounted by the beaver, the well-known heraldic animal of Canada. There can be no doubt that the label...