Nelson v. J.H. Winchell & Co., Inc.

• Citation: 203 Mass. 75,89 N.E. 180
• Parties: NELSON v. J. H. WINCHELL & CO., Inc., et al.
• Decision Date: 24 June 1909
• Court: United States State Supreme Judicial Court of Massachusetts

203 Mass. 75

89 N.E. 180

NELSON v. J. H. WINCHELL & CO., Inc., et al.

Supreme Judicial Court of Massachusetts, Essex.

June 24, 1909

COUNSEL

Boyd B. Jones, for appellants.

Alex. P. Browne and Geo. W. Mathews, for appellee.

OPINION

SHELDON J.

The plaintiff seeks by this bill to restrain the defendants from using a trade-mark and to recover from them the profits which it is claimed they have realized through its wrongful use. The action is brought against the surviving partner of the firm of J. H. Winchell & Co. and a corporation of the same name which has succeeded to the former firm's business. But the defendants agree that for the purposes of the case they are to be treated as joint parties, and hereafter they will be spoken of as the defendants without any discrimination.

The case was heard on the merits by a single justice, who filed a statement of the facts found by him. The evidence taken before him also has been reported. It appeared that before October 1, 1900, the plaintiff was doing business on his own account, under the name of the Washington Shoe Company. He did not himself manufacture any shoes, but bought his goods from manufacturers, largely from the defendants. He had put upon the market shoes stamped with the name 'Washington,' and a portrait of George Washington which shoes were manufactured for him and under his direction, by the defendants. Through his efforts, these shoes had become well and favorably known to the trade and the public under the name of the 'Washington Shoe,' and that had become a valuable trade-mark. In April, 1899, he caused the word 'Washington' and said portrait to be registered in the office of the Secretary of the commonwealth, as a trade-mark used by himself under the style of the Washington Shoe Company. St 1895, p. 519, c. 462, § 1; St. 1899, p. 319, c. 359, § 1; Rev. Laws, c. 72, § 7. In October, 1900, he entered into the defendants' employ under a verbal agreement, and they took over the business which he had carried on, and have since manufactured and sold shoes stamped with his trade-mark and known as the 'Washington Shoes,' he having charge of this part of their business as long as he remained in their employ. Subsequently, they caused the trade-mark to be registered in the Patent Office at Washington in their name. But this was done without any authority from the plaintiff, and he did not know of it until shortly before he brought this suit. He did not assign the trade-mark to them; he did not abandon his right to it; there was no understanding that it was to become the property of the defendants, and their only right was to use it as his licensees so long as he remained in their employ upon mutually satisfactory terms; and it was so understood by the parties. He left their employ in February, 1903, on account of a disagreement as to his compensation; and their subsequent use of his trade-mark or label was illegal and without right.

On these facts, the single justice ruled that the plaintiff was entitled to have the defendants restrained from continuing this unlawful use; and by an interlocutory decree they were so enjoined, and the case was sent to a master to take an account, and to determine the damages and the profits, if any, to which the plaintiff was entitled, but reserving consideration of the plaintiff's right to claim profits as such until the coming in of the master's report. The case was heard at length before the master, and he reported that the net profits obtained by the defendants from the sale of shoes bearing the label were $12,563.66, but that the plaintiff's damages were only the nominal sum of $1. Numerous exceptions to this report were overruled; a motion made by the defendants for a revision of the findings of the justice at the hearing on the merits was denied; and a final decree was entered perpetually enjoining the defendants from using the plaintiff's trade-mark or label, with certain exceptions not now material, and ordering them to pay to him the total amount of profits and damages found by the master. The case now comes before us upon the defendants' appeal from the interlocutory and final orders and decrees.

1. In the opinion of a majority of the court, the plaintiff, although not himself the manufacturer of the shoes which he sold, could under the circumstances create a valid trade-mark upon them. He was a jobber, and not strictly a manufacturer. But the shoes were manufactured by the defendants especially and solely for him and in accordance with his directions. He was to be himself responsible to purchasers as if he had been the manufacturer. He dictated the stock to be used and the way in which he wished the shoes to be made, and went to the defendants' factory to see that his ideas were carried out. He determined the design, the material and the workmanship of the shoes. In short, as he put it in his testimony, he controlled the manufacture of the shoes upon which his label was to be put. We see no reason to doubt the validity of his trade-mark. Burt v. Tucker, 178 Mass. 493, 59 N.E. 1111, 52 L. R. A. 112, 86 Am. St. Rep. 499; Meriden Britannia Co. v. Parker, 39 Conn. 450, 12 Am. Rep. 401. The use of a trade-mark does not necessarily and as matter of law import that the articles upon which it is used are manufactured by its user. It may be enough that they are manufactured for him, that he controls their production, or even that they pass through his hands in the course of trade, and that he gives to them the benefit of his reputation, or of his name and business style. Weener v. Brayton, 152 Mass. 101, 102, 25 N.E. 46, 8 L. R. A. 640; McLean v. Fleming, 96 U.S. 245, 253, 24 L.Ed. 828; Menendez v. Holt, 128 U.S. 514, 520, 9 S.Ct. 143, 32 L.Ed. 526; Godillot v. Harris, 81 N.Y. 263, 366; In re Australia Wine Importer, 41 Ch. D. 278, 280, 281; Major Brothers v. Franklin [1908] 1 K. B. 712. It was so assumed in Ullman v. Lenba [1908] A. C. 443. And this was not a personal trade-mark, but one connected with the business carried on by him under the name of the Washington Shoe Company. It could be assigned and made to pass with a transfer of that business and that name. Burt v. Tucker, 178 Mass. 493, 53 N.E. 1111, 52 L. R. A. 112, 86 Am. St. Rep. 499; Hoxie v. Chaney, 143 Mass. 592, 10 N.E. 713, 58 Am. Rep. 149; Warren v. Warren Thread Co., 134 Mass. 247; McMahan Pharmacal Co. v. Denver Chemical Manuf. Co., 113 F. 469, 474, 475, 51 C. C. A. 302. As the absolute property in it could have been so assigned a limited interest by way of license, to continue either for a fixed period or while license fees were paid, or while the plaintiff should continue in the employment of the defendants, could also be created. Kidd v. Johnson, 100 U.S. 617, 25 L.Ed. 769; Batcheller v. Thomson, 93 F. 660, 35 C. C. A. 532; Greacen v. Bell (C. C.) 115 F. 553; Martha Washington Co. v. Martien (C. C.) 44 F. 473, and 37 F. 797; Filkins v. Blackman, 13 Blatchf. 440, Fed. Cas. No. 4,786. Of course the plaintiff's temporary disuse of the trade-mark during the period of such license would not necessarily operate an abandonment of his rights. Burt v. Tucker, 178 Mass. 493, 501, 59 N.E. 1111, 52 L. R. A. 112, 86 Am. St. Rep. 499.

2. But it is claimed that the plaintiff, even before he entered the employ of the defendant, represented to the dealers to whom he made sales in the name and style of the Washington Shoe Company, that that company, which then consisted solely of himself, was the manufacturer of the shoes which he sold with this label. He was known to the trade as a manufacturer and not as a jobber. His letter heads read: 'Washington Shoe Co., Manufacturers of Specialties. Men's, Boys' and Youth's Shoes.' The defendants contend that this conduct of the plaintiff was the practice of a fraud upon his customers, and that for this reason, although the trade-mark was itself valid, he should have no relief in equity. And it is true that equity will not lend its aid against the infringers of a trade-mark which contains a material false representation adapted to deceive purchasers of the article sold with it, or which is made the basis of material false representations in carrying on that business in which it is used. Connell v. reed, 128 Mass. 477, 35 Am. Rep. 397; Messer v. The Fadettes, 168 Mass. 140, 46 N.E. 407, 37 L. R. A. 721, 60 Am. St. Rep. 371; Hoxie v. Chaney, 143 Mass. 592, 593, 10 N.E. 713, 58 Am. Rep. 149; Manhattan Medicine Co. v. Wood, 108 U.S. 218, 2 S.Ct. 436, 27 L.Ed. 706; Pidding v. How, 8 Sim. 477; Perry v. Truefitt, 6 Beav. 66; Flavel v. Harrison, 10 Hare, 367; Cheavin v. Walker, 5 Ch. D. 850; Leather Cloth Co. v. American Leather Cloth Co., 4 De G., J. & S. 139, and 11 H. L. Cas. 523. This is but an application of the common maxim that he who seeks equity must come into court with clean hands. If his case discloses fraud, deception or misrepresentation on his own part, relief will be denied to him. California Fig Syrup Co. v. Putnam, 69 F. 740, 16 C. C. A. 376, and (C. C.) 66 F. 750; Krauss v. Peebles Co. (C. C.) 58 F. 585; Prince Manuf. Co. v. Prince's Metallic Paint Co., 135 N.Y. 24, 31 N.E. 990, 17 L. R. A. 129; Hobbs v. Francais, 19 How. Prac. 567; Palmer v. Harris, 60 Pa. 156, 100 Am. Dec. 557; Kenny v. Gillet, 70 Md. 574, 17 A. 499; Solo Cigar Co. v. Pozo, 16 Colo. 388, 26 P. 556, 25 Am. St. Rep. 279.

But this defense was not set up in the answer of the defendants and does not appear to have been taken at the hearing before the single justice. Their position was that they and not the plaintiff had originated and owned the trade-mark, or that they had become its owners under the agreement by which he entered into their employ. The justice found against them on this issue, and the evidence clearly justified his finding. The claim now...