L.E. Waterman Co. v. Standard Drug Co.

• Decision Date: 11 January 1913
• Docket Number: 2,270.
• Citation: 202 F. 167
• Court: U.S. Court of Appeals — Sixth Circuit
• Parties: L. E. WATERMAN CO. v. STANDARD DRUG CO.

202 F. 167

L. E. WATERMAN CO. v. STANDARD DRUG CO.

No. 2,270.

United States Court of Appeals, Sixth Circuit.

January 11, 1913

John A Chamberlain and T. H. Bushnell, both of Cleveland, Ohio, for appellee.

Before WARRINGTON and DENISON, Circuit Judges, and McCALL, District judge.

WARRINGTON Circuit Judge.

This is an appeal from an order made in the court below November 9 1911, dismissing a rule theretofore entered against appellee and one Sol. Teller, as its alleged agent, to show cause why a writ of attachment should not issue against them 'as and for contempt of court' for violating an injunction order previously granted in the cause. The injunction had been granted nearly two years before upon bill of appellant and proofs of infringement of complainant's trade-names and trade-marks and of unfair competition; and these matters form the subject of the controversy. The order enjoined defendant, a corporation, 'its officers, agents, servants, employes, and all persons taking or holding, under, from, or through it, from' infringing complainant's trade-mark 'Waterman's Ideal Fountain Pen, N.Y.,' also its trade-mark 'Waterman's,' as stated in four paragraphs. Paragraphs 3 and 4 are relied on and are as follows:

'(3) Using the name of 'A. A. Waterman & Co.,' or any corporate name containing the word 'Waterman' or 'Waterman's' or 'Watermans's' in connection with the manufacture, or sale, of fountain pens, unless accompanied by words which conspicuously, clearly, and unmistakably distinguish such corporate name from that of the complainant.

'(4) Selling, representing, or advertising in any manner whatsoever fountain pens (other than fountain pens of complainant's manufacture), as 'Waterman Pens,' 'Waterman's Pens,' 'Watermans's Pens,' 'Waterman Fountain Pens,' 'Waterman's Fountain Pens,' 'Watermans's Fountain Pens,' or using any other words which would indicate that the fountain pens so sold represented or advertised are fountain pens of complainant's manufacture.'

The application made under the original bill was for a temporary injunction, but counsel for the present appellee admittedly stated to counsel for the present appellant:

'That defendant would have no further affidavits or evidence upon a hearing to be had later and that the matter of a temporary injunction might be considered upon hearing as for a permanent injunction.'

The order of injunction as made commences thus:

'A motion for a writ of permanent injunction this day by consent coming on to be heard upon the bill of complaint,' etc.

The order remains in full force and effect; no appeal or other steps having been taken to review it. It was treated below by Judge Killits as a consent order; but we interpret the consent to have been meant and considered as a submission to final hearing, and not as admitting complainant's right to the injunction.

The question demanding ultimate consideration is whether the true legal relation between the appellee Drug Company and Sol. Teller places the latter fairly within the language of the order enjoining the Drug Company, 'its officers, agents, servants, employes, and all other persons taking or holding, under, from, or through it. ' Stated shortly: Is Teller an agent or employe of the company? The proceeding for contempt was heard and disposed of upon affidavits and exhibits. The acts claimed to have been violative of the order of injunction were committed within the Euclid Avenue store of the Drug Company in Cleveland. The defenses made in substance are: (1) That the relation between the Drug Company and Teller was at the date of the injunction, and still is, that of landlord and tenant; and (2) that Teller was not a party to the original suit. The learned trial judge, who dismissed the rule to show cause, did not find it necessary to determine the true relation that existed between the Drug Company and Teller. This was because of a ruling made in L. E. Waterman Co. v. Modern Pen Co., 183 F. 119, 105 C.C.A. 408 (C.C.A. 2d Cir.), that the third paragraph of the injunction order there involved was erroneous; the court below holding in the instant case:

'The facts do not connect the Standard Drug Company with the transaction unless it may be said that they are responsible for the acts of Sol. Teller, their tenant. In fact, there is at most here nothing more than a technical contempt, or a technical violation of an order which it is quite plain the court would not now grant under the same circumstances and which we are very clear the court granting it would not have granted had it been contested.'

Judge Hand has since interpreted the decision of the Court of Appeals in the case just cited to mean that 'there should be no absolute injunction against the name 'A. A. Waterman & Co.' on the showing made,' but he did not understand the rule to forbid placing a limitation upon the use of the name. (D.C.) 193 F. at 248. Apart from that case, however, it is clear that the order of injunction, which Judge Tayler had entered at a previous term, was not open to modification on the rule to show cause. Loeser v. Savings Deposit Bank & Trust Co., 163 F. 212, 213, 89 C.C.A. 642 (C.C.A. 6th Cir.); Bronson v. Schulten, 104 U.S. 410, 26 L.Ed. 797; Barrell v. Tilton, 119 U.S. 637, 643, 7 Sup.Ct. 332, 30 L.Ed. 511; Turner v. Railway Co., 24 Fed.Cas. 367. The only power residing in the court below, or in this court, in respect of such an order of injunction, is to construe and enforce it. It was admitted that, although Teller was not a party by name to the original suit, when the order of injunction was served on the Drug Company, it was either shown or read to Teller, and that he 'agreed not to sell the pens marked A. A. Waterman & Co. while tenant of defendant. ' This is hardly consistent with a total absence of control in the Drug Company. Both Teller and a saleswoman in charge of the business carried on by him stated in substance in affidavits that they sold 'A. A. Waterman & Co.' pens, and that the pens were so marked, but that they in each instance orally stated to the purchaser that they were such pens, and that she also stated that they were not the L. E. Waterman pens.

Thus Teller's agreement 'not to sell the pens marked A. A Waterman & Co.,' before mentioned, was confessedly not kept. It is equally clear that, if the relation between the company and Teller is in legal effect that of principal and agent, both the Drug Company and Teller violated the order of injunction. Estes v. Worthington (C.C.) 30 F. 465, 466; Dadirrian v. Gullian (C.C.) 79 F. 784, 787; Featherstone v. Ormonde Cycle Co. (C.C.) 53 F. 111; Cramer v. Fry (C.C.) 68 F. 201, 205. The injunction forbade the Drug Company to use the name 'A. A. Waterman & Co.,' or to use 'any corporate name containing the word 'Waterman," in connection with the sale of fountain pens, 'unless accompanied by words which conspicuously, clearly, and unmistakably distinguish such corporate name from that of the complainant. ' If we regard...