Mathews Conveyor Co. v. Palmer Bee Co.
Decision Date | 15 October 1941 |
Docket Number | No. 927.,927. |
Citation | 41 F. Supp. 401 |
Parties | MATHEWS CONVEYOR CO. v. PALMER BEE CO. |
Court | U.S. District Court — Western District of Michigan |
COPYRIGHT MATERIAL OMITTED
Harold Olsen, of Chicago, Ill. (Whittemore, Hulbert & Belknap, of Detroit, Mich., of counsel), for plaintiff.
Bodman, Longley, Bogle, Middleton & Farley, of Detroit, Mich., for defendant.
1. Plaintiff, Mathews Conveyor Company, is a Pennsylvania Corporation. Defendant, Palmer-Bee Company, is a Michigan Corporation.
2. For convenience and clarity, this litigation, based on a lengthy and complicated complaint, will be considered under four divisions, viz.:
A. An accounting for profits derived from a sale made by the defendant at the time the plaintiff claims the defendant was acting as its agent. The amount involved in this controversy exceeds the sum of three thousand ($3,000) dollars, exclusive of interest and costs. Jurisdiction is based upon diversity of citizenship.
B. Unfair competition. The amount involved in this controversy exceeds the sum of three thousand ($3,000) dollars, exclusive of interest and costs, and jurisdiction is based upon diversity of citizenship.
C. Copyright infringement of portions of two of the plaintiff's catalogs.
D. Infringement of the following United States patents:
1,720,255, issued to Charles A. Adams, July 9, 1929.
1,876,534, issued to Charles A. Adams, September 13, 1932.
2,023,718, issued to Charles A. Adams, December 10, 1935.
2,077,188, issued to H. M. Rishel, April 13, 1937.
Throughout the trial, for convenience, these patents were referred to as the "255 patent", "534 patent", "718 patent", and the "188 patent".
3. The defendant filed a motion for a summary judgment in accordance with the provisions of Rule 56 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c. After an extended hearing, this motion was overruled.
4. In accordance with the custom in force in this court for some time, both parties were asked to prepare and file proposed findings prior to the pre-trial hearing, as provided for in Rule 16 of the Rules of Civil Procedure. Both parties complied with this request, and at the pre-trial hearing, the parties reached an agreement and a formal order was entered providing that at the time of the trial no further proof need be taken as to the agreed facts.
Findings 5 to 49, both inclusive, are based directly upon this pre-trial order, dated October 23, 1939.
5. Plaintiff, Mathews Conveyor Company, is a manufacturer of conveyor equipment of the type known as "Gravity Roller Conveyors", such as are widely used in industrial plants for conveying articles from one place to another.
6. Plaintiff's predecessor in business, Mathews Gravity Carrier Company, engaged in the manufacture of Gravity Roller Conveyors as early as 1905.
7. Defendant, Palmer-Bee Company, is a manufacturer and jobber of elevating and power transmitting machinery, mill supplies, and structural steel.
8. Defendant, as early as 1915, and continuing up to the present time, has sold, distributed and installed plaintiff's products.
9. On or about May 1, 1920, the plaintiff and defendant entered into an oral contract, the terms of which were later reduced to writing in a letter dated May 4, 1920, written by the defendant company by its president and general manager, William E. Bee.
10. The letter referred to in Finding No. 9, reads as follows:
11. Acting under this understanding, the Mathews Company did supply defendant with advertising material, some of which listed the Palmer-Bee Company by name under the heading, "Branch Offices and Representatives", and some of which merely contained a list of cities under the name of the Mathews Company. On the latter a Palmer-Bee Company sticker was affixed either by plaintiff or defendant.
12. During the years from 1920 until September, 1937, when plaintiff cancelled the agreement, the defendant sold over one million dollars worth of plaintiff's products.
13. During the existence of the socalled agreement referred to in Finding Nos. 9 and 10, the Palmer-Bee Company dealt directly with its customers in securing orders and delivering and installing the Mathews products. It issued its purchase order to the Mathews Company, specifying the goods and the price to be paid therefor. If the goods were to be shipped to the customers, rather than the Palmer-Bee Company, Palmer-Bee Company tags, packing lists, and bills of lading were used. The goods so ordered were invoiced by the Mathews Company to the Palmer-Bee Company, f. o. b. Ellwood City, Pennsylvania, and the Palmer-Bee Company paid the Mathews Company direct. Palmer-Bee Company, in turn, billed the customer directly in its own name for the goods, assumed the credit risk for payment, obtained full title upon the shipment by the Mathews Company, and exercised complete control over the goods, including all liability incident to the installation and erection thereof.
14. During the period, May 1, 1920, to September 1, 1937, the defendant received from the plaintiff a commission upon all sales it made of the plaintiff's products.
15. During the period, May 1, 1920, to September 1, 1937, the defendant sold plaintiff's products at prices established by plaintiff and departed from such prices only upon approval by the plaintiff at the defendant's request.
16. During the period, May 1, 1920, to September 1, 1937, defendant held itself out to the public as the representative or jobber of the plaintiff in the State of Michigan.
17. During the period, May 1, 1920, to September 1, 1937, the defendant was engaged in its own behalf in procuring business for the plaintiff's products.
18. From about 1924 to this date, the defendant has distributed to the trade and is still distributing to the trade a catalog known as Catalog No. 40, which upon pages 555 to 566, inclusive, illustrates and describes the products of the plaintiff under the plaintiff's name. In this catalog defendant announced to the public on pages 4 and 5 that it conducts an extensive jobbing business and under the heading "As Jobbers" lists the name of the plaintiff along with twenty-seven other manufacturers. The catalog, in addition to illustrating and describing the plaintiff's products under the plaintiff's name, similarly illustrates and describes the products of the twenty-seven other manufacturers and all the products of the defendant's own manufacture.
19. From December, 1927, to and including June, 1937, the name of the plaintiff appeared in the Detroit telephone directories under the same address and with the same telephone number as the defendant.
20. It was well known to the trade and the purchasing public during the period May 1, 1920, to September 1, 1937, that the defendant represented the plaintiff in the State of Michigan and the trade and purchasing public ordered plaintiff's products from the defendant, sometimes addressing such orders to the plaintiff at the defendant's address and at other times addressing such orders directly to the defendant.
21. In 1937 defendant learned that the Chevrolet Division of the General Motors Corporation was to build a new plant at Tonawanda, New York, which would require several large installations of different types of conveyors, including gravity roller conveyors. The Palmer-Bee Company made an engineering survey of this proposed installation, and submitted a proposal for the furnishing and erection of a large part of the gravity roller conveyor, and ancillary equipment, particularly specifying Mathews equipment as to the major portion thereof.
22. The General Motors Corporation, through its Chevrolet Division, accepted the defendant's proposal and issued its purchase order to the defendant, Palmer-Bee Company, copying the latter proposal verbatim, including the specifications for Mathews equipment.
23. After the receipt of Chevrolet's purchase order, defendant's president, George A. Bee, visited the plant superintendent of Chevrolet at Tonawanda on August 11, 1937, and made a counter-proposal to fill the order for roller conveyors specified as Mathews in the purchase order with the goods of the...
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