Prest-O-Lite Co. v. Davis

• Decision Date: 01 October 1913
• Docket Number: 6,697.
• Citation: 209 F. 917
• Parties: PREST-O-LITE CO. v. DAVIS et al.
• Court: U.S. District Court — Southern District of Ohio

209 F. 917

PREST-O-LITE CO. v. DAVIS et al.

No. 6,697.

United States District Court, S.D. Ohio, Western Division.

October 1, 1913

Dudley V. Sutphin and P. Lincoln Mitchell, both of Cincinnati, Ohio and Clarence Winter and Keyes Winter, both of New York City for complainant.

Robert H. Parkinson and Wallace R. Lane, both of Chicago, Ill James G. Stewart, of Cincinnati, Ohio, and John S. Miller and Merritt Starr, both of Chicago, Ill., for defendants.

HOLLISTER District Judge.

The complainant makes acetylene gas for illuminating purposes for use on automobiles, and sells gas in tanks of peculiar construction. The gas is known by the name 'Prest-O-Lite,' and complainant has caused that name to be registered under the laws of the United States as its trade-mark. Under that name the complainant has established a large and valuable business in its tanks filled with its gas, and, at great expense in money and effort, has built up a business system and good will of great value.

At the time of suit, the complainant, through contracts made for the purpose with dealers in automobile supplies, had depots (perhaps not agencies in the legal sense) in every town in the United States of over 2,000 inhabitants, at which the owner or user of one of its tanks originally filled with its gas could, at a nominal fixed price, exchange the same, when exhausted, for another of its tanks charged with its gas and ready for use. The purchaser of such a tank from the complainant, or from a dealer, or from the automobile maker as a part of the machine's equipment (many makers, among whom appear the names of a number of the manufacturers of the most important and best known automobiles, furnished Prest-O-Lite tanks charged with Prest-O-Lite gas as a part of the machine's equipment) had the assurance wherever he might be of an immediate exchange of his exhausted tank for a tank charged and ready for use.

The utility of a service of such general availability to the user is obvious. If illustration is needed, it may be found in the testimony of the witness Carpenter, who thought Searchlight gas the better, but insisted upon always receiving a Prest-O-Lite tank because of its value for purposes of exchange. (He thought the Searchlight gas was better than Prest-O-Lite gas because he had been told by the defendants that it was better.) The cost of the exchange was small, while the price of the original tank filled with gas was large. It is in evidence and undoubtedly true that the purchaser was willing to pay the initial price in order to participate in a system of such great usefulness to him. He knew it was to the interest of the maker and the dealer to keep him supplied with a full tank for the empty tank, and had the assurance when he bought that the exchange could be made at a small cost at almost any time or place.

It is not surprising that the complainant's sales gradually grew to enormous proportions after the establishment of this system, and that, from its practical use, there accrued to the complainant a valuable good will toward and in the gas made by it. Of course, its gas was identified by the tanks in which it was confined. The tanks were identified not only by their appearance, including particularly the valve apparatus at one end, but also by the trade-mark and trade-name etched upon them, as well as by other letters and numerals not requiring particular reference.

The makers of the acetylene gas known as 'Searchlight' gas were in competition with the complainant, the Searchlight gas being used for the same purpose as Prest-O-Lite gas; but defendants' containing tanks differed in appearance from Prest-O-Lite tanks, particularly because the location of the valve controlling the emission of the gas was not exposed o view, it being hidden in the concave bottom of the tank, and because the tank was marked to indicate its contents, Searchlight gas.

We are not now concerned with the difference in quality between Prest-O-Lite gas and Searchlight gas, if there is any difference. But it is in evidence, and is probably true, that the owner of a Prest-O-Lite tank would, when the tank was exhausted of its Prest-O-Lite gas, want and ask for Prest-O-Lite gas when he offered his empty tank in exchange for a full tank. No doubt, in many instances, such owner asks only for a full tank, but expects to get the Prest-O-Lite gas he has been using. Of course, if he were tendered a Searchlight tank he would know he was not getting what he expected if he would see what he was getting, or if, in the event it was light enough to see, he took notice of any other fact than that an exchange of tanks was being made. It is highly probable that in many, if not most, instances, the pertinent expressed desire for a full tank and the dealer's affirmative answer, either in words, or in acquiescence, silent, so far as words are concerned. It is easy to see how an exchange for one of these tanks for the other might be made without the user's present knowledge.

Howsoever far deception in this way might be practiced by an unscrupulous dealer upon the owner of a Prest-O-Lite tank which, exhausted of gas, he offered in exchange for a Prest-O-Lite tank charged with gas of that name he wanted and expected, is not directly involved in this controversy, but reflects upon the more subtle form of deception with which the defendants are charged. When to such user, whether requesting a full tank or a tank of Prest-O-Lite gas, is given by the dealer in exchange a Prest-O-Lite tank filled with Searchlight gas, the opportunities for deception are even much greater than under the circumstances referred to above. It is with deception of this very kind, as affecting its trade-mark and its trade-name and its goodwill and business system, that complainant charges the defendants in this case.

It is obvious that the purchaser of one of the empty tanks made by complainant becomes its owner with all the rights of absolute ownership, and equally obvious without paradox that, while he may use it for his own purposes or sell it or give it away, he cannot sell it charged with other gas to persons believing it to contain complainant's gas. The substance of the main charge against the defendants is that they sold and sell Prest-O-Lite tanks charged with Searchlight gas. They do not deny this, but say that complainant's contracts with the dealers come under the ban of the Sherman Anti-Trust Act, and that, in any event, having become the owners of empty Prest-O-Lite tanks, they could with propriety exchange them charged with Searchlight gas, for the user knew at the time he was getting Searchlight gas and not Prest-O-Lite.

The Sherman Law is not applicable to this case. Even if it were assumed that the contracts referred to were in any respect obnoxious to that act and that such decisions as Dr. Miles Medical Co. Case (Dr. Miles Med. Co. v. Park & Sons Co., 220 U.S. 373, 31 Sup.Ct. 376, 55 L.Ed. 502) would require a holding to that effect, it may be said that the contracts are not themselves involved in this case. They serve no other purpose here than as a description of the method through which the complainant's system of doing business was established. The case comes, therefore, within the ruling of the Circuit Court of Appeals for this circuit in Coca Cola Co. v. Gay-Ola Co., 200 F. 720, 726, 119 C.C.A. 164.

Giving due weight to the testimony of defendants' witness Gluchowsky of want of intention at any time to deceive, it is abundantly proved that acts of deception were practiced by defendants which are evidence not only of a particular instance, but tend to show a course of conduct in defendants' dealings. The facts disclosed by the witnesses Camm, Ross, and Coughlin, relative to complainant's tanks Nos. 241920 and 45716, are of too circumstantial a character in connection with other evidence in the case, actually disclosed, or with some certainty to be inferred, to be dealt with as were the facts in the Gorham Silverware Case (Gorham Mfg. Co. v. Emery, etc., Co., 104 F. 243, 43 C.C.A. 511). These tanks were obtained by Camm as Prest-O-Lite tanks filled with Prest-O-Lite gas. They were in fact charged with Searchlight gas, and there was nothing about them or the statement of the defendants' clerk to even suggest the contrary. They were dealt with by defendants' clerk as and for genuine Prest-O-Lite tanks; that is to say, Prest-O-Lite tanks charged with Prest-O-Lite gas. Complainant's trade-mark and trade-name was on them. These tanks were part of a shipment to defendants by the Searchlight Gas Company of Prest-O-Lite tanks charged by the Searchlight Company with Searchlight gas. The tanks so charged were hidden by defendants, lest the Prest-O-Lite representative in Cincinnati should see them. These tanks were presumably charged with Prest-O-Lite gas, and there was nothing about them to indicate the contrary.

After suit was brought, but continuing to sell Prest-O-Lite tanks charged with Searchlight gas, the defendants, apparently because they saw or suspected the manifest impropriety of using old Prest-O-Lite tanks ('bottles'), took off of the Prest-O-Lite tanks the name plate of complainant, formerly used to designate the tanks and their contents, and adopted the label Exhibit L, to which further reference will be made.

It is established by the evidence beyond a doubt that, after the contract relations between the complainant and defendants had come to an end and dealings between them had stopped, the defendants had advertised largely and professed to deal in both Prest-O-Lite and Searchlight...