Stewart v. Hook

• Decision Date: 12 August 1903
• Citation: 45 S.E. 369,118 Ga. 445
• Parties: STEWART et al. v. HOOK et al.
• Court: Georgia Supreme Court

45 S.E. 369

118 Ga. 445

STEWART et al. v. HOOK et al.

Supreme Court of Georgia

August 12, 1903

Syllabus by the Court.

1. Independently of patent rights, the discoverer of a medical preparation has a property right in his discovery, in that he may keep it a secret, and those who, through confidential relations with him, gain possession of his secret, will be restrained by a court of equity from divulging it so as to make use of it to his detriment. This right may be sold as any other property.

2. One to whom the formula and right to manufacture an unpatented though secret, medical preparation has been sold by the discoverer, cannot maintain an action for damages against another to whom the discoverer has subsequently sold the same formula and right, without showing that the defendant, in the acquisition of the formula, has been guilty of a breach of confidence or of contract with the plaintiff, or has acted in fraud of the plaintiff's rights.

Error from City Court of Atlanta; H. M. Reid Judge.

Suit by James M. and P. A. Stewart against A. C. Hook and Alfred I Manson. Judgment for defendants, and plaintiffs bring error. Affirmed.

C. L Pettigrew, for plaintiffs in error.

Anderson, Anderson & Thomas, for defendants in error.

CANDLER J.

The plaintiffs, James M. and P. A. Stewart, brought suit in the city court of Atlanta against A. C. Hook and Alfred I. Manson, the material portions of the petition being substantially as follows: Both the plaintiffs and the defendants are residents of Fulton county, Ga. For several years prior to December 15, 1894, one L. F. Tilden manufactured and sold a certain cure for the opium and morphine habit, known as the "Acme Opium Cure," of which cure Tilden was the discoverer and sole owner, and by means of which he had built up a large business. The cure consisted of secret formulas and receipts for the manufacture and compounding of medicines for the cure of the opium and morphine habit, alleged to be known only to Tilden. At different times during the month of December, 1894, Tilden sold to each of the plaintiffs a one-half interest in the Acme Opium Cure, including all the formulas, receipts, and the business, and the plaintiffs became the sole owners of and partners in the said cure and business; and Tilden covenanted with the plaintiffs "that he would never sell, manufacture, offer for sale, or advertise any medicine under the name of the said Acme Opium Cure, and that he would not reveal the secret of the manufacture of the same to any person whatever, nor would he at any time sell or deal in anything with a name so similar as not to be distinguished from the cure sold to the said J. M. & P. A. Stewart." Immediately after their purchase of the business from Tilden, the plaintiffs began manufacturing, advertising, and selling the Acme Opium Cure, and soon built up a large business, from which they made a profit amounting, in round numbers, to $2,500 per year. About January 1, 1897, Tilden, in violation of the plaintiffs' rights, sold the same formulas and receipts to the defendants, and the defendants began actively to manufacture and sell the said cure under the name of the Acme Opium Cure. This was not done by public advertising, but by secret correspondence all over the country under the name of L. F. Tilden, and the defendants used "the same formulas and receipts belonging to the plaintiffs, used the same literature, and all the means known for building up the business in this line." This was unknown to the plaintiffs until July, 1902. From the time of the sale to the defendants and the manufacture and sale of the Acme Opium Cure by them, the business of the plaintiffs fell off greatly, and has been almost taken away from them. The plaintiffs were the sole owners of the Acme Opium Cure and all its appurtenances, "including the trade-name of the 'Acme Opium Cure,' and the defendants have infringed upon their said trade-name, and damaged their business, and appropriated to themselves profits belonging to the plaintiffs, and their property in said formulas and receipts." They prayed for damages in the sum of $1,000 per year from January 1, 1897, to July 1, 1902, amounting to $5,500. To this petition the defendants demurred generally and specially. The court sustained the demurrer and dismissed the suit, and the plaintiffs excepted.

While the petition alleges that the defendants have infringed the trade-name which was the property of the plaintiffs, the action as a whole does not seem to be one for damages for the infringement of a trade-mark or trade-name, and any claim which may have been made on that ground was abandoned in the argument before this court. The sole contention made in the brief of counsel for the...