Tuttle v. Blow

• Decision Date: 12 June 1901
• Parties: TUTTLE et al. v. BLOW et al.
• Court: Missouri Supreme Court

63 S.W. 839

163 Mo. 625

TUTTLE et al. v. BLOW et al.

Supreme Court of Missouri, Division No. 1.

June 12, 1901.

MORTGAGES — FORECLOSURE — REVIEW ON APPEAL — APPOINTMENT OF RECEIVER.

Where, in a suit to foreclose a mortgage, defendants answered over after their demurrer

to the petition was overruled, and a motion to vacate the appointment of a receiver was overruled, and no exception taken thereto, an appeal from the order refusing to vacate the appointment presents no question for determination.

Appeal from St. Louis circuit court; James E. Withrow, Judge.

Suit by E. N. Tuttle, assignee of Edward Curd, and others, against Julia W. Blow and others. From an order overruling a motion for the appointment of a receiver, defendants appeal. Dismissed.

S. H. King and Shepard Barclay, for appellants. Dawson & Garvin, for respondents.

BRACE, P. J.

This is a suit in equity to foreclose a mortgage, executed by the defendants Julia W. Blow, William T. Blow, Jr., and Benjamin E. Blow, dated the 17th day of September, 1889, conveying to the said Edwin Curd "all their right, title, and interest in a certain trade-mark for eye salve, which was duly registered in the patent office of the United States by William T. Blow, of St. Louis, Missouri, and recorded in the patent office, and declared to be in force for thirty years from the 25th of February, 1873, which said trade-mark is numbered 1,142, and is for the exclusive right for the manufacture and sale of T. L. Stephens' chemical eye salve, as also all our right, title, and interest in the patent and proprietary right in and to T. L. Stephens' chemical eye salve," to secure the payment of eight promissory notes of that date, executed by the said defendants, payable to the said Curd, seven of them each for the sum of $3,000, payable in 18 months, 2, 3, 4, 5, 6, and 7 years, respectively, and the other for $4,817.64, payable 8 years after date, all bearing interest at the rate of 8 per cent., compounded annually; and all of which, together with said mortgage, and "the secret formula or recipe according to which the said salve mentioned in the mortgage had been and was being manufactured, prepared, and sold," it is alleged in the petition, were delivered to said Curd to secure the payment of an indebtedness to him by said defendants for money loaned in the amount evidenced by said promissory notes. In the petition filed June 10, 1898, and which is very voluminous (containing a fac simile and detailed description of said trade-mark, its history, and the circumstances of its registration under trade-mark laws of the United States, which were afterwards held to be unconstitutional by the supreme court), the said mortgage is set out in full, as also a contract entered into between said defendants and James F. Ballard dated June 20, 1896, by which said salve was to be furnished him exclusively for sale by the said defendants, at certain prices, in certain quantities, within certain periods thereafter, continuing for four years after the 20th of June, 1897, under which it is alleged the same is now being manufactured, prepared, and sold, and all the consideration therefor received, by the said defendants. It is further alleged in the petition that the indebtedness evidenced by said promissory notes, except the sum of $8,940.94, paid generally thereon at the dates set out in the petition, remains due and unpaid; that no payments have been made thereon since the 16th of August, 1897; that the plaintiffs are the owners and holders of said promissory notes; that they have been informed that Frederick W. Mott and Caroline Lueders claim some interest in said trade-mark under a mortgage executed by the said Julia W. Blow in 1883; that the said William T. Blow, Jr., is a nonresident of the state of Missouri; that the said defendants, mortgagors, are appropriating all the proceeds derived under this contract with the said Ballard to their own personal use, and applying none on said indebtedness, and claim, since they have been informed of plaintiffs' intention to foreclose their said mortgage under the power therein contained or otherwise, "that by reason of said trade-mark laws of the United States in force when said attempt was made to register said trade-mark thereunder, as aforesaid, by said William T. Blow, having been declared unconstitutional and void prior to the execution and delivering of said notes and mortgage, plaintiffs' said mortgage conveys nothing as security for said debt described therein and secured thereby, and that a sale of the property rights mortgaged and pledged for the payment of said indebtedness would convey nothing to the purchaser, and threaten so to treat the same, and to continue the manufacture and sale of said salve under said formula, and to use said trade-mark thereon in so doing and otherwise after such sale." "Plaintiffs further state that said defendants last aforesaid, their mortgagors, have failed to conduct the business of manufacturing and selling said salve with the use of said trade-mark, for the uses and purposes aforesaid, in a reasonable, skillful, and prudent manner, so as to preserve the commercial value of said trade-mark so used in connection with the manufacture and sale of said salve, and of said salve manufactured according to said formula, and have, through their mismanagement and bad judgment, caused and allowed the demand for and trade in said salve, so prepared and sold with the use of said trade-mark, to greatly decrease and fall off, instead of increasing, as by proper management they would have done, and that they have failed properly and widely to advertise and to keep advertised the said salve designated and identified by said trade-mark, and to keep the same, by other methods of business push, properly and constantly before the trade and the public, to the great detriment and depreciation of the value of said property; that they are devoting the income of said business almost wholly to their own living expenses and private uses, and rely on the same wholly therefor, instead of devoting same to the keeping up of said business and the value of the said trade-mark and the satisfaction of said mortgage, and threaten to continue so to do; that they have wrongfully failed to keep down the interest accruing on said notes secured by plaintiffs' said mortgage, and have allowed the said interest so to accumulate, and the business so to run down, that the net income from said business, as conducted and applied by said defendants last aforesaid, has become less than the interest constantly accruing upon said indebtedness secured by said mortgage to plaintiffs represented by said notes still due and unpaid, and the said property has become and is insufficient security for said indebtedness secured by said mortgage, and unless said property can speedily be sold to pay off and discharge the principal and interest of said indebtedness still due and unpaid on said notes, or said property be placed under other and competent management that will keep up and extend the business, and enlarge the income by proper push, and who will apply the income to that purpose, and to the satisfaction of said mortgage indebtedness now existing to plaintiffs, the decrease in the value and income of the property and business will continue, and plaintiffs' loss will continue to increase, and the value of the security to decrease; that said defendants last aforesaid, the mortgagors, are without means, except the income of said business, and are not financially responsible, and that a deficiency of judgment against them could not be collected on execution by any process at law or in equity except out of said income, and that outside of said income each and all of said defendants, plaintiffs' mortgagors, are insolvent. Plaintiffs further state that said defendants last aforesaid will, about June 20, 1898, receive from said Ballard, under said contract, large sums of money for said salve, as in said contract provided, which plaintiffs believe and allege they will appropriate to their own use as aforesaid, as they have been doing as aforesaid, and will fail and refuse to use the same to keep up said business and the value of said trade-mark, and to pay or hold the same on account of the said mortgage indebtedness still due and unpaid, notwithstanding the filing of this bill and the commencement of this suit, and said money so to be received under said contract, and the other moneys so to be received thereunder, and the other income and profits of said business, all needed and insufficient to discharge the mortgage indebtedness to plaintiffs still due and unpaid, and all property applicable, by law and right, to the discharge of the same, after the filing of this bill, will be wholly lost for that purpose by the wrongful appropriation thereof to the private uses of said defendants last aforesaid, plaintiffs' mortgagors, unless said business be placed without delay under a different management, and the control of said business, and right to receive said moneys, income, and profits, is taken out of their hands, and placed in that of other management, pending this suit, or until the said mortgaged property is sold herein by order of this court, and unless the said defendants last aforesaid, the mortgagors, be restrained by order of this court from continuing said business, and the manufacture and sale of said salve, or of interfering therewith in any manner, and from receiving and collecting said moneys and said income and profits or any moneys arising from said business, or income or profits from the same. Plaintiffs further state that they are informed and believe that said defendants last aforesaid, their mortgagors, are about to manufacture large quantities of said salve, prepared with said trade-mark...