Marshall Engine Co. v. New Marshall Engine Co.

• Decision Date: 21 October 1909
• Citation: 89 N.E. 548,203 Mass. 410
• Parties: MARSHALL ENGINE CO. v. NEW MARSHALL ENGINE CO. et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

203 Mass. 410

89 N.E. 548

MARSHALL ENGINE CO. v. NEW MARSHALL ENGINE CO. et al.

Supreme Judicial Court of Massachusetts, Franklin.

October 21, 1909

COUNSEL

L. W. Griswold and F. J. Lawler, for appellants.

F. L Greene and Walter H. Bond, of the New York Bar, for appellee.

OPINION

LORING J.

The parties to this suit are the same as those to the suit reported in 199 Mass. 546, 85 N.E. 741. This suit was begun about a year after the bill in the other suit was filed. Both suits are founded on the agreement of September 15, 1902 between the defendant F. J. Marshall and the plaintiff corporation, by which Marshall assigned to the plaintiff corporation (1) a certain patent 'and all improvements thereon,' and (2) 'the good will of the business carried on by the vendor under the firm name of 'F. J. Marshall,' the head office being located at 309 Broadway, New York City, together with the exclusive use of any and all words indicating that the business is carried on in succession or continuation thereof and trade-names connected therewith.' The other suit was brought to obtain an assignment of a patent for an improvement. This suit is brought to secure the rights to which the plaintiff was entitled as the assignee of the good will of the business assigned to it by Marshall in that agreement.

The suit now before us was referred to a master. Exceptions to his report were taken by both parties. Two of the exceptions taken by the plaintiff were sustained. The others taken by it and all those taken by the defendants were overruled. The report so modified was confirmed, and on May 15, 1909, a final decree was entered in favor of the plaintiff. The case is before us on an appeal by the defendants from the decree confirming the master's report with the modifications above stated, and from the final decree.

On July 17, 1909, some two months after the entry of the final decree, the plaintiff moved to have that decree vacated and a decree entered which added a clause to the fourth paragraph of it. This was denied, and an appeal was taken by the plaintiff from the order and decree denying this motion. After the entry of a final decree in a suit in equity the court has no power to vacate it. The jurisdiction of the court is at an end. Lakin v. Lawrence, 195 Mass. 27, 80 N.E. 578, and cases cited. For this reason the plaintiff's appeal was not well taken.

It appears from the master's report, as amended by the superior court, that in 1886 a patent was granted to F. J. Marshall for reducing wood pulp to paper. Shortly after the granting of these letters patent Marshall formed a partnership which caused engines to be manufactured for it by others under this patent, and called them the 'Marshall perfecting engines.' This business of the partnership was done at Turners Falls, Mass. In 1888 and 1896 sales were made by the several partners which resulted in F. J. Marshall's becoming in 1897 the sole owner of the business. The master finds that 'a considerable number' of these engines were placed upon the market and put in use by the partnership up to 1897. In 1897 a Massachusetts corporation was formed, with a capital of $60,000, of which the master found that Marshall acquired 'the principal part.' The name of this corporation was 'the Marshall Engine Company.' The office of the corporation was at Turners Falls. It manufactured the 'Marshall perfecting engine' until 'some time in the summer of 1902.' The words 'Marshall Perfecting Engine' were cast upon all engines so manufactured. There was also placed upon these engines the words 'Patented June 1st, 1886, by Frank J. Marshall, built by Marshall Engine Company, Turners Falls, Massachusetts.' The master finds that during this period also 'a considerable number of these engines were placed upon the market and put to use in different mills.'

Later, at a time not stated by the master, 'until the incorporation of the plaintiff in September, 1902,' the business was carried on by F. J. Marshall alone, under the name of the Marshall Engine Company.

'During all this time, from 1886 to September 15, 1902, the said Frank J. Marshall was active in the management of the business, traveling to a greater or less extent in its interests, carrying on the correspondence, making and arranging contracts of different kinds for advertising and selling engines and in promoting the business, and he was practically the business man and principal factor in carrying on the business, and it did not appear that any other person was actively engaged during any substantial portion of time in developing and promoting the business of building and selling these engines. In the early part of 1902 and for several months prior to the incorporation of the plaintiff, the said Frank J. Marshall carried on business himself at 309 Broadway, New York City, in an office in connection with the Marshall Paper Company.'

On September 13, 1902, the plaintiff corporation, called the Marshall Engine Company, was incorporated in New Jersey. Its capital stock was $50,000, $5,000 being preferred and $45,000 common. All the common stock was issued to F. J. Marshall for the assignment of the patent and all improvements thereon, and the good will of the business under the agreement of September 15, 1902, which is the foundation of this and the other suit. The office of the plaintiff corporation, from the time of the incorporation until October 12, 1904, was at 309 Broadway, New York City. The plaintiff manufactured and sold nine or ten Marshall perfecting engines, and did 'considerable repairing.' Some agents were sent out by it to solicit business. On October 12, 1904, the office of that company was closed. From the time of the closing of the office of the plaintiff at 309 Broadway on October 12, 1904, until June 13, 1905, when the receiver was appointed as hereinafter stated, Marshall, on his own account and with his own funds, did 'certain business in connection with the Marshall perfecting engine' at Turners Falls, Mass., consisting of repairs and furnishing of fillings for engines then in use. By a decree of the Court of Chancery for New Jersey, dated June 15, 1905, the plaintiff corporation was decreed to be insolvent and a receiver was appointed to take over its affairs. Later the same person was appointed a receiver in Massachusetts.

Eight days afterward, to wit, on June 21, 1905, F. J. Marshall caused the 'New Marshall Engine Company' to be incorporated in Massachusetts, with a capital of $50,000, $45,000 being common stock. Marshall 'received the entire common capital stock of the corporation, consisting of 450 shares, except 1 share.' It appears from the master's report as amended by the superior court that this was done with intent to injure and defraud the plaintiff. It does not appear that any of the preferred stock has been issued. It is found by the master that 'Marshall received the money of the company and paid the bills and kept the accounts upon a slate, which he afterwards erased.'

It further appears from the master's report that from 1886 to the incorporation of the Marshall Engine Company of Massachusetts in 1897 the Marshall perfecting engine always had been advertised in trade journals and in papers published in connection with the paper trade; that after the incorporation of the Marshall Engine Company of Massachusetts in 1897 'the advertising of these 'Marshall perfecting engines' continued in many trade journals and papers for considerable lengths of time, and more or less extensively. Cuts of this machine were published, and the advertising appeared upon the stationery and bill heads, and one of these engines was placed on exhibition at the World's Fair in Chicago in 1893.' 'The letter heads and bill heads used under date of 1902 and before the incorporation of the plaintiff, were headed: 'Marshall Engine Co., Manufacturers of F. J. Marshall's Perfecting Engine, 708 Mutual Reserve Building, No. 309 Broadway, New York. Factory at Turners Falls, Mass. F. J. Marshall, Treas.' In reference to trade-names it appeared that * * * these engines had always been advertised, in trade journals and in papers published in connection with the paper trade, by letter headings, bill headings and otherwise, as 'Marshall Engines,' 'Marshall Perfecting Engines,' 'New Marshall Perfecting Engine,' and were well known to the public and to the trade as such.'

The master ruled as matter of law on the facts and evidence set forth in his report 'that the words, 'Marshall Perfecting Engine,' and 'Marshall's Perfecting Engine,' as used in connection with said business carried on under said patent of June 1, 1886, became trade-names or trade-marks, and became the property of the plaintiff under said assignment; that the trade-names and trademarks and the good will attached thereto and to the business, embraced in said assignment, were not limited in operation to the life of the patent of June 1, 1886, and were not, as to the defendants, surrendered up to the general benefit of the public upon the expiration of said patent, and that the business carried on by the said defendants Frank J. Marshall and the New Marshall Engine Company at Turners Falls, after the incorporation of said New Marshall Engine Company, June 21, 1905, was in derogation of the grant to the plaintiff by said assignment, without right, and in violation of the legal rights of the plaintiff, and that the plaintiff is entitled to an injunction restraining the same,' and this is the foundation of the final decree in this suit.

We are of opinion that this ruling is not correct. Not only that but we find as a fact, on the facts stated in the master's report, that the words 'Marshall perfecting engine' and 'Marshall's perfecting engine' are words designating the...