Shaver v. Heller & Merz Co.

• Decision Date: 29 April 1901
• Docket Number: 1,474.
• Citation: 108 F. 821
• Parties: SHAVER et al. v. HELLER & MERZ CO.
• Court: U.S. Court of Appeals — Eighth Circuit

108 F. 821

SHAVER et al. v. HELLER & MERZ CO.

No. 1,474.

United States Court of Appeals, Eighth Circuit.

April 29, 1901

(Syllabus by the Court.)

This is an appeal from a decree which enjoins the appellants, Isaac H. Shaver, Frederick H. Shaver, James E. Blake, and Ella Bever-Blake, co-partners as Shaver, Blake & Co., from using the brands or names 'American Ball Blue' and 'American Wash Blue' to palm off bluing made by parties other than the appellee, the Heller & Merz Company, a corporation, as the bluing made and sold by that corporation. 102 F. 882. The chief objection assigned to the decree is that it forbids the appellants to use the word 'American' to deceive the public and to defraud the appellee, while the latter has no proprietary interest in that word, or in its exclusive use.

Charles K. Offield (Henry S. Towle, Charles C. Linthicum, and U. C Blake, on the brief), for appellants.

Edmund Wetmore (Archibald Cox, on the brief), for appellee.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

SANBORD Circuit Judge, after stating the case as above, .

May a court of equity lawfully enjoin one from using the word 'American' to sell the goods of one manufacturer as those of another to the damage of the latter and the deceit of the purchasers? This is the real issue which this case presents. It arises out of this state of facts: The appellee is a corporation which succeeded in 1889 to the business of manufacturing and selling blueing which had been established in the state of New Jersey by Heller & Merz in 1869. In 1872 the predecessors of the appellee put upon the market bluing of their manufacture in small round balls under the name 'American Ball Blue,' and from that time until 1898 they continued to make and sell this form of bluing under this name. By energy, enterprise, and perseverance they established a large demand for, and a lucrative trade in this specific article of their manufacture. In 1898 there were many different names used to distinguish the form of balls. Among these were the 'American Ball Buel' of the appellee, the 'National Ball blue,' the 'Royal Ball Blue,' 'Sauer's Ball Blue,' and 'Fischer's Ball Blue.' The article made by the appellee became known to the trade by its name, quality and character, and it was generally ordered, bought, and sold by its title 'American Ball Blue.' No one but the appellee had ever made or sold any bluing under this name, and the appellee's use of it had been continuous, notorious, and exclusive. In 1897 the appellants bought the business of a firm of soap makers at Cedar Rapids, in the state of Iowa, styled G. M. Olmsted & Co. Olmsted & Co. had for many years purchased of the appellee bluing of its manufacture styled 'American Wash Blue,' but they had never bought or sold the American ball blue. In the early part of the year 1898 the appellants bought bluing made by others than the appellee, and very properly issued notices to the trade that after May 1, 1898, the 'American Wash Blue' which their predecessors, Olmsted & Co., had been selling, would be succeeded by the 'Salome Laundry Blue.' But in July of that year, after an effort to sell the Salome blue for two months, their cupidity seems to have overcome their honesty, and they proceeded to solicit purchasers, and to make sales of bluing not made by the appellee at greatly reduced prices, under the names 'American Ball Blue' and 'American Wash Blue.' In their correspondence they called these names their brands, and styled themselves 'Manufacturers of American Ball Blue, American Wash Blue,' although they never made any bluing of any kind, and never purchased any of these articles which they pretended to sell. Upon the packages in which they shipped the articles which they sold they placed their own names and their residence, Cedar Rapids, Iowa, and by colors and in other ways differentiated the dress of their goods from that of those manufactured by the appellee. But, as the appellee's bluing was generally ordered and sold by correspondence and by its names, these differences in the dresses of the packages did not prevent, and cannot prevent, the fraud and deceit which the appellants perpetrate by the use of these names, and by soliciting orders for and selling their goods under them. The result of this course of action on the part of the appellants was that they diverted to themselves a large portion of the trade of the appellee in the West, and reaped the benefit of the established reputation of its goods.

The history of the American wash blue differs to some extent from that of the American ball blue. The predecessors of the appellee applied the former name in 1874 to bluing of their manufacture in the form of lozenges packed in small cylinders, and proceeded to sell it. From 1878 to 1897 the predecessors of the appellants, Pomeroy & Olmsted and G. M. Olmsted & Co., purchased this article from the appellee and from its predecessors, and sold it from their place of business at Cedar Rapids, in the state of Iowa. They advertised this article of bluing in connection with their advertisements of the soaps they were selling, and at their request the manufacturers of the bluing, in addition to putting upon the packages their trade-mark, which was the letter 'U' surrounded by a triangle and the name of their factory, 'American Ultramarine Works,' placed the names of Pomeroy & Olmsted and G. M. Olmsted & Co. thereon. During five years of this term G. M. Olmsted & Co. bought the American wash blue of the Consolidated Ultramarine Company, Limited, but that company was a distributer for the appellee and other manufacturers, and the bluing was made and packed by the appellee or its predecessors during all this time. The customers who purchases of Pomeroy & Olmsted and of G. M. Olmsted & Co. knew the bluing, its character, and its name, but they did not know who manufactured it, and supposed Pomeroy & Olmsted or G. M. Olmsted & Co. to be its manufacturers. When the appellants purchased the business of G. M. Olmsted & Co., they bought its good will, and they insist that they thereby became entitled to use the name 'American Wash Blue' upon any bluing which they may buy and sell, whether it is manufactured by the appellee or not. The facts which condition this claim were stated more at length and were carefully considered by the court below in its opinion in Heller & Merz Co. v. Shaver, 102 Fed.,at pages 882, 886. That court came to the conclusion that the appellants had no better right to use the name 'American Wash Blue' to palm off the goods of other manufacturers as those made by the appellee than G. M. Olmsted & Co. had, and that the latter firm stood in such a fiduciary relation to the appellee that they could not be permitted to take such action. It held that the good will of the business established under the name 'American Wash Blue' was the property of the appellee. These conclusions are, in our opinion, well founded in fact and in law. The brand 'American Wash Blue, was conceived and applied to their manufacture by the predecessors of the appellee. The excellence of the article, and the introduction which the appellee gave it or induced Olmsted & Co. to give it, by the character and price of the bluing it furnished, established the trade in it, and gave that trade its value. Purchasers in the trade and the public came to know, to demand, and to buy the appellee's manufacture by this brand. The inevitable result is that the good will of this trade became the appellee's property, which neither Olmsted & Co. nor their successors could lawfully lead away from it by fraud or falsehood. One does not lose the good will of his trade in an article of his manufacture by placing upon it the names of his customers who are engaged in selling it, nor by the fact that the consumers know only the name and excellence of the article, and neither know nor care who makes it. Brewery Co. v. Powell (1897) App. Cas. 710, 716; Lichtenstein v. Goldsmith (C.C.) 37 F. 359.

The conclusions which must be drawn from the facts of this case, therefore, are that by industry and energy the appellee has built up an extensive and lucrative trade in the specific articles of its manufacture, which have become known to the trade and the public as 'American Ball Blue' and 'American Wash Blue'; that these articles are ordered, bought, and sold by mail and telegraph by their names or brands, without a view of the packages in which they are inclosed; that the appellants have put these names or brands on goods made by other manufacturers, have offered these goods to the public at reduced prices, and have solicited purchasers to buy them under these names, for the purpose and with the intent of selling these goods as the manufactures of the appellee; that they succeeded in this way in deceiving purchasers and defrauding the appellee of a portion of its trade; and that these brands cannot be used as the names of the products of other manufacturers than the appellee without creating confusion in the trade and purloining the latter's custom.

In this state of the case the appellants have been enjoined from using these names, and one of their loudest complaints is that the goods they sell are made in America, and that they are forbidden to use the word 'American' to notify the public of this fact. There are two answers to this objection: (1) That the injunction does not prohibit the appellants from using the word for that purpose, and (2) that they neither need nor seek so to use it, but their only object in trying to make use of it is to filch the good will and trade of the appellee. The injunction restrains them only from 'holding themselves out to the public as the owners of the names or brands 'American Ball Blue' and 'American Wash Blue,'...