L.E. Waterman Co. v. Modern Pen Co.

• Decision Date: 25 January 1912
• Citation: 193 F. 242
• Parties: L. E. WATERMAN CO. v. MODERN PEN CO.
• Court: U.S. District Court — Southern District of New York

193 F. 242

L. E. WATERMAN CO. v. MODERN PEN CO.

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

January 25, 1912

Samuel S. Watson, for complainant.

Alexander S. Bacon, for defendant.

HAND District Judge.

The Circuit Court of Appeals (183 F. 118, 105 C.C.A. 408) has decided that there should be no absolute injunction against the name 'A. A. Waterman & Co.,' on the showing made. It is not therefore necessary to consider the question whether under any circumstances the court should altogether forbid a man from using his surname in a given business, and whether there may be cases where no accompanying phrase can prevent the result that the business of the first in the field will suffer by the competition of the second. Certainly the general rule is that such damage as so arises the victim must bear as an incident of competition. Further, the decision upon the preliminary injunction determined that upon the proof there presented the agreement of June 12, 1905 upon which the defendant depends, was not a mere sham, but was a reasonable part of the reorganization of the business of Fraser & Geyer Company, and it also determined that the old corporation of Fraser & Geyer Company with its attendant firm of A. A. Waterman & Co. had Waterman's right to use his name in the business. The testimony upon the final hearing is conceded to be substantially like that in the affidavits, with two exceptions: First, the decree of the Italian court in the suit of this complainant against the Chapmans and Cambrini; and, second, the testimony of the assignment to Rhodes Lockwood of Waterman's business on February 1, 1899.

The first question is therefore of the effect of the Italian decree. Regardless of what should be its scope, it does not make an estoppel at all, because it is not a final decree and only such a decree effects an estoppel by our law, even in the case of a domestic judgment. Brush Electric Co. v Western Electric Company, 76 F. 761, 22 C.C.A. 543; Ogden City v. Weaver, 108 F. 564, 47 C.C.A. 485; Australian Knitting Co. v. Gormly (C.C.) 138 F. 92; Hills & Co. v. Hoover (C.C.) 142 F. 904.

It is true that the reason for this rule is not perfectly plain but apparently it is that no judgment should be treated as an estoppel until the court that renders it has finally parted with control over the decision. Per Lacombe, J., Walter Baker & Co. v. Sanders, 80 F. 889, 890, 26 C.C.A. 220.

Thus, if a final decree be entered pendente lite, it is enough (Bradley Mfg. Co. v. Eagle Mfg. Co., 57 F. 980, 6 C.C.A. 661) and possibly, if appeal be taken, and the interlocutory judgment be affirmed (Bissell Carpet Sweeper Co. v. Goshen Sweeper Co., 72 F. 545, 19 C.C.A. 25).

If the rule is to be taken literally, it is enough that the Italian decree is confessedly interlocutory; if, on the other hand, the rule means that any decree is a good estoppel if the court that rendered it has finally parted with the power to revise it, then proof is lacking here, for the complainant must show that it is such a decree. The proof is silent upon that point. I do not forget that Accetta gave considerable testimony showing that, so far as concerned the right to use the name 'Waterman,' the decree was 'final'; but so it would be 'final' pro tanto in this country. That only means, I take it, that the court has disposed of that part of the dispute, and is retaining the cause for the incidental assessment of damages. It does not mean, at least in the United States it would not mean, that the court did not still retain power to recall the decree, just as indeed it has power till the term be passed, even over a final decree. That the Italian court could not revise the decree is not even suggested in the testimony, the whole of which concerned quite a different matter, i.e., whether the decree was a mere preliminary application analogous to a motion for a preliminary injunction, or whether it was the last action of the court necessary to a decision of the parties' rights. I have no doubt that the decree is the last judicial act necessary upon that branch of the case, but under our law that is not enough. I therefore lay aside the Italian judgment.

The remaining question is whether the new testimony of the assignment to Rhodes Lockwood affects the defendant's right to the use of the name 'A. A. Waterman & Co.'

In 1897 Waterman left the complainant's employ, and soon after formed a partnership with one Gibson. They did business under the name of the 'A. A. Waterman Pen Company' and 'A. A. Waterman & Co.' On September 3, 1898, the complainant procured an injunction against the use of the first of these names, but not the second. The firm at about this time entered into a somewhat vague relation with one Rhodes Lockwood, a pen dealer, and, eventually becoming financially embarrassed, they assigned the whole business, good will and name included, to Lockwood, to whom they were heavily indebted. Gibson became Lockwood's employe, and Waterman continued in a small way in business for himself under the name of 'A. A. Waterman, Maker,' from February, 1899, to June, 1899, when he took into partnership one Dewey, with whom he continued to do business as 'A. A. Waterman & Co.' for about 18 months, until the partnership of Fraser & Geyer. As the assignment to Lockwood of February 1, 1899, is lost, just what he got is uncertain; still he never attempted to use the name 'A. A. Waterman & Co.,' except upon pens or parts of pens which were already partly made on the day of the assignment. In short, he used his rights only to finish up the goods which he bought. Furthermore, he knew that Waterman was making pens under his own name, and actually supplied him with pens so marked. Thus it appears that, whatever the exact words of the lost agreement, the parties treated it as in no sense giving Lockwood an exclusive right to use Waterman's name. I can only treat it as in fact giving such rights as the parties eventually accorded each other. Waterman continued the partnership with Dewey until January, 1901, and there is no suggestion in the record that during that time they did not do a real business under the name 'A. A. Waterman & Co.,' making it prosper as much as they could.

Now, so far as Lockwood is concerned, Waterman, who certainly had the right to use his name, could have given another as good a right to use the name as he had himself, as an incident of the sale of the business. When a business is sold with its old name, the right to keep on using it is perfectly well established, though the significance of the continued use of the name must perhaps be stated in rather general language. Kidd v. Johnson, 100 U.S. 617, 620, 25 L.Ed. 769. It is basis enough for some recognition of the right to continue the use of the name that the public believes that, though a business changes hands, there may be a continuity of the old habits, a likelihood of persistence in fair dealing, or in the same good standard of wares, which gives assurance to them, and is of value to its possessor. Perhaps the value comes from a tacit recognition of the inertia of original honest practices; perhaps, like 'good will,' it arises from the mere suggestibility of new customers and the fixed habits of old, who will buy upon a well-known name without more. But, whatever it be, the same does truthfully indicate some continuity, and that is not a deceit, though the actual person is gone whose name appears, and whose personality originated the very...