Penberthy Injector Co. v. Lee

• Decision Date: 09 May 1899
• Citation: 78 N.W. 1074,120 Mich. 174
• Court: Michigan Supreme Court
• Parties: PENBERTHY INJECTOR CO. v. LEE ET AL.

78 N.W. 1074

120 Mich. 174

PENBERTHY INJECTOR CO. v. LEE ET AL.

Supreme Court of Michigan

May 9, 1899

Appeal from circuit court, Wayne county, in chancery; Oscar Adams Judge.

Suit by the Penberthy Injector Company against William O. Lee and others, partners as the Lee-Penberthy Manufacturing Company. Decree for plaintiff, and defendants appeal. Affirmed.

C. C. Yerkes, T. E. Tarsney, and W. G Fitzpatrick, for appellants.

Thomas T. Leete, Jr. (James Whittemore, of counsel), for appellee.

MOORE J.

This is an appeal by defendants from a decree entered in the court below in favor of the complainant. The written opinion by Judge Adams is sustained by the record. It states the question involved so clearly that a portion of it is quoted as a statement of the case.

"The bill in this case was filed in January, 1898, for the purpose of restraining the defendants from infringing a certain trade-mark or trade-name made use of by complainant in its business for several years. It appears from the bill and defendants' answer, and the proofs taken, that complainant is a corporation organized in April, 1886; that the original stockholders were defendants William Penberthy and Homer Pennock, and one S. Olin Johnson that the capital stock was divided into 2,000 shares, of $25 each, of which Wm. Penberthy took 1,998, and the others 1 each; that the purpose of the corporation was to make and sell injectors for injecting water into steam boilers, under a patent applied for by said Penberthy; and that, in consideration of the transfer to the company of said invention by said Penberthy, said shares of stock were issued to said Penberthy. He does not appear to have contributed any money, or anything but the invention. The name 'Penberthy Injector Company' was adopted because said Penberthy requested it and insisted upon it; and also he insisted that the name should appear on the injectors, and be advertised in connection with the business, all of which was assented to by his then associates, and carried into effect. It also appears that complainant proceeded, as soon as organized, to obtain a manufacturing plant at 228 Abbott street, in Detroit obtained tools and machinery, and proceeded to make tests and experiments, and manufactured some 2,000 injectors pursuant to said patent, in which experiments and tests and manufacturing the company expended about $5,000, but the injectors so made were a failure, and many were returned; that thereupon the company made certain improvements, which were patented in the name of the company, and known as 'Desmond's first and second patents,' and 'Sweeney's patent,' and finally obtained an injector which was satisfactory, and a success commercially, which it proceeded to manufacture and sell to a large extent, and that upon all so manufactured and put upon the market, at the request and with the consent of said Penberthy, the words 'Penberthy Injector,' in one form or another, appeared, never omitting the word 'Penberthy'; that the complainant issued large quantities of printed matter, and advertised in trade journals extensively, in all which advertising the same name 'Penberthy' appeared in connection with the injector, so that this injector became generally known throughout the United States, and even in foreign countries, as the 'Penberthy Injector,' and as such was favorably received and considered; that in such printing and advertising the complainant expended about $75,000, and by these means the word 'Penberthy,' both upon the injectors and in the advertisements and printed matter, and also as a part of the corporate name of complainant, became of very great value and importance, as a trade-mark or trade-name, to complainant. It further appears that the defendant Pennock became interested in complainant corporation as a stockholder for several years, and was at one time president of the corporation; that defendant Sweeney was the mechanical superintendent and experimenter for complainant from 1886 up to 1897, and that defendant Wm. O. Lee was employed by complainant as a traveling salesman from 1886 up to 1897, and that the defendant Penberthy was a stockholder in complainant corporation from its organization, in 1886, till 1892, when he sold his remaining stock for the sum of about $5,000, and retired from the corporation. It further appears that defendant William Penberthy in about 1892, and after selling his said stock, obtained a patent upon an injector embodying substantially the same principles, and of nearly the same general appearance, as complainant's injector (the main difference being in the use of rubber ball valves instead of hinge valves, but accomplishing substantially the same purposes, and in substantially the same way); that afterwards (in 1897, if I mistake not) defendant Penberthy, in conjunction with the other defendants, formed a co-partnership, under the name of the Penberthy-Lee Manufacturing Company or the Lee-Penberthy Manufacturing Company (both names appearing at one time or another), for the purpose of making and selling injectors under said patent of 1892; that they located their plant in the city of Detroit, and on Abbott street, and have largely advertised their said injectors in nearly the same general form, appearance, and manner as complainant's advertisements, using the word 'Penberthy,' in some form or connection, in all cases, and...