Koppel Industrial Car & Equipment Co. v. Orenstein & Koppel Aktiengesellschaft

• Decision Date: 13 March 1923
• Docket Number: 143.
• Citation: 289 F. 446
• Parties: KOPPEL INDUSTRIAL CAR & EQUIPMENT CO. v. ORENSTEIN & KOPPEL AKTIENGESELLSCHAFT et al.
• Court: U.S. Court of Appeals — Second Circuit

289 F. 446

KOPPEL INDUSTRIAL CAR & EQUIPMENT CO. v. ORENSTEIN & KOPPEL AKTIENGESELLSCHAFT et al.

No. 143.

United States Court of Appeals, Second Circuit.

March 13, 1923

Larkin Rathbone & Perry, of New York City, and Reed, Smith, Shaw &amp McClay, of Pittsburgh, Pa. (Albert Stickney, of New York City, Robert J. Dodds, of Pittsburgh, Pa., and Alfred W Kiddle, of New York City, of counsel), for appellant.

Duer &amp Taylor and Hays, St. John & Moore, all of New York City (Geo. Winship Taylor, Leland B. Duer, and Arthur Garfield Hays, all of New York City, of counsel), for appellees.

Before HOUGH, MANTON, and MAYER, Circuit Judges.

MANTON Circuit Judge.

On September 12, 1918, the Alien Property Custodian sold the American business and good will as a going concern of a German corporation known as Orenstein & Koppel-Arthur Koppel, A.G. This German corporation owned and operated in the town of Koppel, Pa., a large plant, where it manufactured smaller types of railway or industrial material and equipment. It maintained an office at No. 30 Church street, New York City, and other offices in the principal cities of the United States. It carried on a large and profitable business in the manufacture and sale of its products, and had the reputation of being the largest American manufacturer and seller of such railway and industrial material and equipment. It began business in 1897, at Koppel, Pa., and in 1909 authority was obtained from the state of Pennsylvania to transact its business under the name of the Orenstein-Arthur Koppel Company. It also organized an American subsidiary corporation, known as the Orenstein-Arthur Koppel Company, under the laws of the state of Pennsylvania; but it is denied by affidavit that this Pennsylvania corporation transacted business after its organization. It is admitted that the German corporation did business by virtue of the license granted to it by the state of Pennsylvania in the name of Orenstein-Arthur Koppel Company. The name was used in its American catalogues, its advertisements, and its trade circulars. It used a trade-mark symbol 'O A K,' which signified Orenstein-Arthur Koppel Company, and this was displayed on its catalogues and circulars. The name and the symbol identify solely the American business of the German company, as well as the business transacted in other English speaking countries.

The fact appears to be that the American catalogue No. 850 of the company-- in pre-war days and by the appellant since-- used the name Orenstein-Arthur Koppel Company with the descriptive trade mark O A K, and in other English speaking countries other than America the company was referred to as the Orenstein & Koppel-Arthur Koppel Amalgamated, and the descriptive trade-mark used was O K A k. The catalogue used in America mentioned the officers of the company located in the United States and its territory, whereas the European catalogue mentioned London as the company's headquarters and referred to various European plants of the company. The largest agency of the American branch was located at No. 30 Church street, New York City, and at the Rialto Building, San Francisco, Cal. The American business was practically independent of the German business. The works in Pennsylvania supplied the entire American trade, excepting locomotives, which were not manufactured at Koppel. This plant also supplied the West Indies, South America, and the Philippine Islands trade of the company. During the war period, it was operated independently, and was also assigned to take care of the Japanese and South American trade.

Section 12 of the Trading with the Enemy Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, Sec. 3115 1/2ff) vested the Alien Property Custodian with all the powers of the common-law trustee in respect to all property other than money which has been or shall be required to be conveyed, transferred, assigned, delivered, or paid over to him in pursuance to the provisions of the act, and it gave him power to manage such property and do any act or things in respect thereof or make any disposition thereof, or of any part thereof, by sale or otherwise, and exercise any rights or powers which may be or become appurtenant thereto or to the ownership thereof in like manner as though he were the absolute owner thereof. It provides for the sale to American citizens at public auction and to the highest bidder, after public advertising of the time and place of sale, and this to be where the property or the major portion thereof is situated, unless the President, stating the reasons therefor, in the public interest shall otherwise determine. It is provided that the proceeds be deposited in the Treasury of the United States of any such property or rights so sold by him, and at the end of the war any claim of an enemy or ally of an enemy to any money or other property received and held by the Alien Property Custodian or deposited in the United States Treasury shall be settled as Congress shall direct. The sole relief and remedy of any person having any claim to any money or other property conveyed, transferred, assigned, delivered, or paid over to the Alien Property Custodian 'shall be that provided by the terms of this act. ' In the event of sale or other disposition of property by the Alien Property Custodian, it shall be limited to and enforced against the net proceeds received therefrom and held by the Alien Property Custodian or by the Treasurer of the United States.

An executive order, under date of February 26, 1918, was made, providing that the Alien Property Custodian may sell and deliver any rights appurtenant to the ownership of corporate stock, shares or certificates of beneficial interests in cases, where such rights would lapse unless exercised within a limited time, and it provides that--

'The Alien Property Custodian may manage, conduct and operate any business belonging to or held for, by, on account of, or on behalf of or for the benefit of an enemy, in cases where the continuation of such business may seem to be necessary to prevent waste or to protect such business, and the Alien Property Custodian may sell or otherwise dispose of such business or any part thereof, or the assets or any part thereof, whenever such sale shall seem to be necessary to prevent waste or to protect such business, and in the management, operation, conduct, sale or other disposition of such business the Alien Property Custodian may exercise every right, power, and authority of the enemy.'

It was determined on June 15, 1918, by executive order, that Orenstein & Koppel-Arthur Koppel Aktiengesellschaft was an enemy within the purview of the Trading with the Enemy Act. The Alien Property Custodian on September 12, 1918, after having taken possession of all its property, offered it at public auction, and the appellant became the purchaser for $1,312,000. The deed of this conveyance from the Alien Property Custodian provided:

'All and singular, the money and property, real and personal, tangible and intangible, rights, claims, titles, interests, effects and assets of every kind and description whatsoever, wheresoever situate in the United States, as defined in the 'Trading with the Enemy Act' (excluding, however, accounts and notes receivable, claims, choses in action, money, cash and deposits in bank), and all incidents and appurtenances thereto, including the business as a going concern and the good will belonging to or owned, possessed, held and enjoyed by, in the name of, or on behalf of, the following and each of them, namely: ' Orenstein & Koppel-Arthur Koppel Aktiengesellschaft, registered under the laws of Pennsylvania as Orenstein-Arthur Koppel Company; Koppel Land Company, Beaver Connecting Railroad Company, Koppel Water Company, Pennsylvania Car & Manufacturing Company, Orenstein-Arthur Koppel Company, a corporation of Pennsylvania; Universal Railway Products Company, Koppel Sales Company."

There was conveyed the plant at Koppel, Pa., the shares of stock in the charter of the Orenstein-Arthur Koppel Company, all registered trade-marks, trade-names, and designs owned or used by any of the companies. No property of the German corporation as such was conveyed, excepting the American property, business, and good will. After such purchase at such public auction, the appellant entered upon the manufacture and the carrying on of the American business. It maintained the selling agencies in the United States which had been operated by the...