Lawrence Manuf Co v. Janesville

• Citation: 34 L.Ed. 1005,138 U.S. 552,11 S.Ct. 402
• Decision Date: 02 March 1891
• Docket Number: COTTON-MILLS
• Parties: LAWRENCE MANUF'G CO. v. JANESVILLE
• Court: United States Supreme Court

138 U.S. 552

11 S.Ct. 402

34 L.Ed. 1005

LAWRENCE MANUF'G CO. v. JANESVILLE COTTON-MILLS.

March 2, 1891.

The Lawrence Manufacturing Company filed its bill against the Janesville Cotton-Mills on the 1st day of June, 1886, in the United States circuit court for the western district of Wisconsin, claiming that the letters 'LL' upon sheetings of the third class, running four yards to the pound, belonged to it as a trade-mark; and averring that defendant had been recently organized, and was in law and in fact the successor of the Janesville Cotton Manufacturing Company, having succeeded to and having acquired all the assets and property and good-will of the latter, and that the defendant was owned and officered (with one exception) by the same persons as the Cotton Manufacturing Company, and that the defendant had advertised itself to the public as the successor in all respects of the Cotton Manufacturing Company. That early in 1886, appellant exhibited in the same court a bill of complaint containing the allegations set forth in this bill in respect to the use of the letters 'LL, against the Cotton Manufacturing Company, and that thereafterwards the appellant and the Cotton Manufactuing Company entered into a stipulation in the case, bearing date March 30, 1886: 'That the said Lawrence Manufacturing Company hereby by consents that the suit commenced in the circuit court of the United States for the western district of Wisconsin against said Janesville Cotton Manufacturing Company be dismissed without costs to said Janesville Cotton Manufacturing Company, and also hereby waives all claims to damages against the said Janesville Cotton Manufacturing Company; and the said Janesville Cotton Manufacturing Company hereby agrees not to use the label or trade-mark 'LL' on any goods of its manufacture after the 1st day of July, A. D. 1886; and it is further stipulated that a consent decree discontinuing said suit without the right of appeal shall be entered in accordance with the terms thereof.' The bill further alleged that with the stipulation there was submitted to the Cotton Manufacturing Company a release proposed to be executed by appellant to said company, and also an agreement proposed to be executed and delivered by the company to appellant, which agreement bound the Cotton Manufacturing Company, and its successors in said corporation and in said business, and its assigns, not to use the label or trade-mark 'LL' on any goods of its manufacture after the 1st day of July, 1886; and that the stipulation, release, and agreement were adopted by the board of directors of the Cotton Manufacturing Company on the 3d of April, 1886, and appellant was so notified by defendant, and, pursuant to the action of the board of directors and the agreement, stipulation, and contract, a consent decree was entered in that cause in the words and figures following, to-wit: 'This cause coming on to be heard, Messrs. Raymond & Rainey appearing for the complainant, and Mr. George G. Sutherland appearing for the defendant, and confessing the said bill of complaint and consenting to this final finding and decree, the court doth order, adjudge, and decree as follows, the same being in accordance with the stipulation of the parties heretofore herein filed, to-wit: First. That the total cost heretofore and now incurred herein shall be paid by the complainant. Second. That a perpetual injunction issuing out of and under the seal of this court against the said defendant, the Janesville Cotton Manufacturing Company, commanding it and each and every of its officers, agents, servants, and employes that from and after the first day of July, A. D. 1886, they and each of them shall desist and refrain from directly or indirectly using said letters 'LL' upon any sheetings of their manufacture, as in said bill of complaint is mentioned.' To which was attached the following, signed by counsel for the respective parties: 'We hereby assent to the foregoing form of decree, the same being in accordance with the terms of a stipulation of the parties hereto, heretofore filed herein.' That, notwithstanding the premises, the defendant being the successor in law and in business of the Cotton Manufacturing Company, issued the circular letter attached, a part of which, under the heading of 'Dissolution and Reorganization,' is as follows: 'The corporation known as the 'Janesville Cotton Manufacturing Company' has been dissolved by mutual consent of the stockholders, and all of its property, consisting of two thoroughly equipped cotton-mills, together with its franchises and good-will, has been sold and transferred to the Janesville Cotton-Mills, a new corporation, organized for the purpose of continuing the manufacture and sale of the justly celebrated 'Badger State Sheetings.' The new corporation purpose to make these three grades of sheeting known to the trade as 'Badger State,' 'R,' 'R R,' and 'LL,' under a distinct trade-mark and stamp of their own, consisting of a diagonal bar across the letters 'R & L,' with or without the word 'double,' to-wit: 'Badger State, R, Dou R ble, Dou L ble."

That appellant demanded at once that defendant should withdraw the circular letter, and cease preparations to use the capital letter'L' with the word 'double' written across it, and should not use the same; but defendant declined to comply with the demand, and threatened and proposed to use the capital letter 'L' with the word 'double' written across it as its stamp upon sheetings of the third general class, on and after July 1, 1886. Plaintiff averred that such a use would be a fraud upon the public and a fraud upon itself, and a violation of the stipulation of the contract and of the consent decree, and of the injunction ordered in the prior suit, and would cause irreparable injury. Plaintiff therefore prayed for answer, for a temporary injunction, and for general relief. Affidavits were filed with the bill, and a restraining order entered, and a day assigned for a hearing of the motion for a preliminary injunction. The defendant answered, denying that plaintiff had the exclusive right to use the letters 'LL,' and admitting that it was organized in April, 1886, but denying that it was the successor of the Cotton Manufacturing Company in any others sense than that it purchased the property of that company, and some of its stockholders and officers were the same as those of the Cotton Manufacturing Company. The answer admitted that in the month of February, 1886, the plaintiff exhibited the bill of complaint set forth in the bill in this case, and that the Cotton Manufacturing Company did not defend against that bill, but entered into the stipulation set forth in this bill, and that the decree therein set forth was entered; but defendant averred that that decree was not in accordance with the stipulation, which provided that the suit should be discontinued without the right of appeal; and defendant denied, upon information and belief, that the Cotton Manufacturing Company executed or agreed to execute the agreement mentioned and referred to in the bill of complaint. The answer further alleged that the Cotton Manufacturing Company at the time of the stipulation and agreement was about to go into liquidation and wind up its affairs, and would have no further occasion to use the letters 'LL' after July 1, 1886 that it had since disposed of all its property, rights, and privileges to defendant, and abandoned the business of manufacturing cotton sheetings: had wound up its affairs, and been dissolved; and that defendant was a wholly distinct and separate corporation from the Cotton Manufacturing Company; was not a party to the prior suit; and was not bound by the stipulation or decree, or by any other stipulation, agreement, or obligation entered into or assumed by the Cotton Manufacturing Company. Upon hearing upon the pleadings and proofs, a decree was entered dismissing plaintiff's bill of complaint with costs, and thereupon the cause was brought to this court by appeal.

The evidence established that on the 30th of March, 1886, the stipulation above given was made out and signed by the Lawrence Manufacturing Company, and, with duplicates, handed to the attorney for the Cotton Manufacturing Company, together with copies of an agreement to be executed under the authority of the board of directors of the Cotton Manufacturing Company by the president and secretary, and under the seal of the company, and a letter of plaintiff's solicitor reciting these facts, and stating that he had no doubt that the Lawrence Company would authorize the settlement, and, if so, would be glad...