Le Page Co. v. Russia Cement Co., 17.

• Decision Date: 15 September 1892
• Docket Number: 17.
• Citation: 51 F. 941
• Parties: THE LEPAGE CO. v. RUSSIA CEMENT CO.
• Court: U.S. Court of Appeals — First Circuit

51 F. 941

THE LEPAGE CO. v. RUSSIA CEMENT CO.

No. 17.

United States Court of Appeals, First Circuit.

September 15, 1892

Charles H. Drew and Payson E. Tucker, for defendant in error.

Before GRAY, Circuit Justice, and COLT and PUTNAM, Circuit Judges.

PUTNAM Circuit Judge.

The court below instructed the jury, as a matter of law, that the words, 'Manufactured by The LePage Company,' on defendant's packages, were infringements. If it was proper to instruct the jury to return a verdict for the plaintiff, it is unimportant whether the court expressed itself in that form or in the form which was actually used. We are of the opinion that the court correctly instructed the jury on this topic; and this, of course, renders unimportant all the other exceptions of the defendant below, unless so far as they may touch the question of damages.

The essential facts are the same as stated succinctly in Cement Co. v. LePage, 147 Mass. 206, 17 N.E. 304 (decided June 10, 1888,) except the last step, which was taken subsequently to that case. William M. LePage established at Gloucester the business of manufacturing and selling various kinds of glues, which he put on the market in connection with his own name, 'LePage;' and the same became known to the trade and public as 'LePage's Glues,' having been extensively advertised and sold as such at home and abroad. In 1880, LePage and his associate formed a partnership under the style of Russia Cement Company. In 1882 the partnership was incorporated as the plaintiff below, and the assets and good will of its business, including the trade-marks, were transferred to this corporation; and LePage took an active part in the business of the partnership during its existence, became treasurer of the corporation on its organization, held that office until the autumn of 1883, and continued active in the concern until February 1886, when he sold all his stock, and severed his relations thereto.

It is to be noted, therefore, that the plaintiff below has a threefold right: First. Whatever trade-marks were owned by LePage, or the partnership known as Russia Cement Company. Second. The good will which accompanied the trade-marks and the business, both by express contract and by implication of law. Menendez v. Holt, 128 U.S. 514, 9 S.Ct. 143. Third. The fundamental right which every manufacturer and trader has a common law, and independently of all questions of trade-marks or good will, to be protected against those who offer to the public products or merchandise simulated as his. Lawrence Manuf'g Co. v. Tennessee Manuf'g Co., 138 U.S. 537, 11 S.Ct. 396; Chemical Co. v Meyer, 139 U.S. 540, 547, 11 S.Ct. 625.

It is equitable that a manufacturer or dealer, who has given reputation to any article, should have the privilege of realizing the fruits of his labors by transmitting his business and establishment, with the reputation which has attached to them, on his decease to his legatees or executors, or during his lifetime to purchasers; and it is also in accordance with the principles of law, and with justice to the community, that any trade-mark, including a surname, may be sold with the business or the establishment to which it is incident; because, while it may be that individual efforts give them their value at the outset, yet, afterwards, this is ordinarily made permanent as a part of the entire organization, or as appurtenant to the locality in which the business is established, and thenceforward depends less on the individual efforts of the originator than on the combined result of all which he created. Kidd v. Johnson, 100 U.S. 617; Chemical Co. v. Meyer, 139 U.S. 540, 548, 11 S.Ct. 625; Hoxie v. Chaney, 143 Mass. 592, 10 N.E. 713; Cement Co. v. LePage, 147 Mass. 206, 17 N.E. 304.

Chadwick v. Covell, 151 Mass. 190, 23 N.E. 1068, is properly distinguished in Chemical Co. v. Meyer. Trade-marks, good will, or rights to use the names of individuals, become, when sold, the property of the person to whom transferred, and do not thereafterwards rest on mere contract; and, without any specification in the instrument of transfer, and merely as inherent to the essential rights of property, they must, with all their incidents, be protected by the courts in the hands of the transferee against all assaults and artifices. In Cement Co. v. LePage, ubi supra, the supreme judicial court of Massachusetts said (page 211, 147 Mass., and page 306, 17 N.E. Rep.) that it did not decide that LePage might not use the words 'Liquid Glue,' or other appropriate words, to describe his product, or to state in that connection that he was himself the manufacturer. We have no occasion to deal with the long line of authorities, commencing with Croft v. Day, 7 Beav. 84, and Holloway v. Holloway, 13 Beav. 209, and ending with Chemical Co. v. Meyer, ubi supra, touching the ordinary inherent right of every person to the honest use of his own surname. These do not apply when the original right has been voluntarily parted with, as in the case at bar, nor have they been extended to corporations which have appropriated surnames for use in connection with proprietary articles; while they uphold with a firm hand the fundamental doctrines of honesty and good faith as applied to this branch of the law, and have been vigilant in searching out and punishing evasions and artifices, even in connection with this primitive right. Neither are we embarrassed by Furnace Co. v. Le Barron, 127 Mass. 115. The opinion in that case was aimed at a mere question of fact, that is, whether the letters and numbers used on certain parts of stoves were any part of the trade-mark in question. The court held, as a matter of fact, that they were not. The court also ruled that, if in some instances purchasers from the vendees of the alleged infringe were deceived as to the origin of the goods, he was not responsible, using, however, the following language:

'But, as he publishes to the world the fact that he is the manufacturer of what he sells, and does not attach to his goods any label or mark apt to deceive subsequent purchasers from his vendees as to the origin of the goods, he cannot be regarded as infringing on the rights of the plaintiff.'

The case at bar will be found to turn on the facts that the label or mark used in this case, so far from being inapt to deceive subsequent purchasers, necessarily tended, under the circumstances, to mislead the public, including subsequent purchasers, and also that persons of ordinary intelligence, honestly considering the natural results, must have foreseen that they would so mislead. It is, however, the law that the fact that the immediate vendees of one who infringes are themselves not deceived is ordinarily of no consequence; and the offense is none the less because the original vendors and vendees may all be parties to the fraud. Wotherspoon v. Currie, L.R. 5 H.L. 508, 517, cited and approved in Lawrence Manuf'g Co. v. Tennessee Manuf'g Co., 138 U.S. 537, 11 S.Ct. 396.

Also we may lay aside the hypothetical case of the pursuit by LePage in Gloucester of the local manufacture of and traffic in glue, dealing with only the neighborhood, under such circumstances that no presumption of fraud or injury could arise. There being no express stipulation to the contrary, it is possible there was nothing in the case at bar, as matters stood when LePage retired from the plaintiff corporation, which would have shut him out from a local traffic as above supposed. This proposition was discussed in Hoxie v. Chaney, 143 Mass. 592, 597, 10 N.E. 713, and the retiring partner was permitted to continue the business in his own behalf; but he was subjected, however, to certain conditions which will be referred to again in another connection. While permitting this, the court (page 596, 143 Mass., and page 716, 10 N.E. Rep.) distinguished certain difficulties which might arise under a supposed state of facts which exist in the case at bar; among others, such as might occur when the business was not local in its character, but extended over a considerable region or line of travel.

The products of the Russia Cement Company are sold to customers and subcustomers throughout the United States, to more than $60,000 annually, and necessarily, on account of their very peculiar character, go into the hands, first and last, of many hundreds of thousands of persons, nearly all ignorant of the circumstances connected with their origin, except what is suggested by the word 'LePage.' This was the condition of things in existence, or contemplated, when LePage surrendered his interest in the Russia Cement Company, and therefore must be taken into consideration by the court in determining the rights of the parties. On the other hand, the products of The LePage Company, of the same general character, have also been scattered in the same way to the extent of over $50,000 annually to innumerable persons, who were necessarily likewise ignorant of their true origin.

The difference is between dealing with a local community understanding all the circumstances, and dealing with the great public, scattered throughout the United States, with no opportunities of information, except what is communicated to them by the word 'LePage' in combination with the word 'glue.'

Neither is the question in this case merely one of simulating arbitrary indications of the origin of merchandise, frequent in trade-marks. It does not appear that either the shape of the packages, the color of the labels, or the peculiar adornments put upon them, or any arbitrary designations, form essential parts of what was left behind him by LePage when he withdrew from the plaintiff corporation, or of what was transferred to it by the partnership; and as to all these the Russia Cement Company, so far as...