Tuttle v. Blow

• Citation: 176 Mo. 158,75 S.W. 617
• Parties: TUTTLE et al. v. BLOW et al.
• Decision Date: 20 June 1903
• Court: United States State Supreme Court of Missouri

75 S.W. 617

176 Mo. 158

TUTTLE et al. v. BLOW et al.

Supreme Court of Missouri, Division No. 1.

June 20, 1903.

MORTGAGES—PROPRIETARY MEDICINE—RIGHT TO MANUFACTURE—RECEIVERSHIP PENDENTE LITE.

1. Where, in a suit to foreclose a mortgage upon the right to manufacture and sell a certain trade-marked article, made according to a secret formula, plaintiffs alleged that the security was insufficient, that the mortgagors disputed the validity of the mortgage and were using the subject thereof so as to anticipate and discount its income, and that one of them had threatened to disclose the secret formula, it was proper to appoint a receiver pending suit.

2. A mortgage described the mortgaged property as a certain trade-mark for an eye salve, which was duly registered in the Patent Office on a certain date, and also all the mortgagor's right, title, and interest in the patent and proprietary right in and to a certain named eye salve, and with the mortgage the mortgagee received a sealed parcel containing the secret formula of the preparation, to be used in case

it became necessary to foreclose the mortgage. Subsequently the act under which the trademark was registered was held unconstitutional. Held, that nevertheless the right to manufacture and sell the preparation under the trade-name and according to the formula was conveyed by the mortgage, and was a tangible right, capable of being so incumbered.

3. An instrument purporting to be a mortgage on a certain trade-mark, described it as "certain letters patent for a certain trade-mark," etc., giving the number and date of registration, and stating that the right to manufacture a certain eye salve was thereby granted to the mortgagor, his heirs, etc. Held, that though no such right was granted by the certificate of registration, referred to as "letters patent," to the mortgagor, yet, as he had that right independent of the certificate, the mortgage was sufficient to cover the right to manufacture and sell the eye salve in question.

Appeal from St. Louis Circuit Court; H. D. Wood, Judge.

Suit by E. N. Tuttle and others against Julia W. Blow and others. From a decree for plaintiffs, certain defendants appeal. Affirmed.

S. H. King, for appellants. Dawson & Garvin, for respondent Tuttle. Noble & Shields and W. H. Ludwig, for respondent Lueders.

VALLIANT, J.

This is the second appeal in this case. It is a suit to foreclose a mortgage, and, ancillary to the main object, the equity powers of the court are invoked to preserve the property by placing it in the hands of a receiver pending the suit, and enjoining the defendants from taking certain action calculated to impair the value of the security. Upon the filing of the petition a receiver was appointed and an injunction granted. There were motions by defendants to vacate the order appointing the receiver and to dissolve the injunction, which motions were overruled, and an appeal taken. Upon the hearing in this court that appeal was dismissed, and the cause was remanded to the circuit court, with directions to proceed to final hearing on the merits, first affording defendants leave to file an amended answer. This court on that appeal held that the only question presented by the record in its then condition was, did the circuit court have jurisdiction to make the orders complained of? and the judgment was that it did have such jurisdiction. Tuttle v. Blow, 163 Mo. 625, 63 S. W. 839. When the cause was returned to the circuit court, defendants answered, and a trial on the merits was had, which resulted in a decree for plaintiffs, from which some of the defendants again appeal.

The mortgage which the plaintiffs seek to foreclose was executed by the defendants, the Blows, September 17, 1889, to secure eight notes made by them of that date, aggregating $25,817.64, bearing 8 per cent. interest, maturing in series running from 18 months to 8 years, payable to the order of Edwin Curd, who is the plaintiffs' assignor. The property mortgaged is thus described in the granting clause of the instrument: "That said parties of the first part, for and in consideration [describing the notes], do by these presents sell, assign, transfer, and set over to the said party of the second part 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 25th February, 1873, which said trade-mark is numbered 1,142, and is for the exclusive right for 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: provided, always, this sale, transfer, and assignment are upon this express condition; that is to say," etc. Then follows the condition that the sale is to become void if the notes are paid; otherwise, the mortgagee is given the power to sell on 10 days' notice.

Upon the trial it was shown that William T. Blow in his lifetime owned a secret formula, according to which a proprietary medicine called "T. L. Stephens' Chemical Eye Salve" was manufactured and sold in the market. Although the sale of this article was quite extensive, and yielded the proprietor an income of $12,000 a year, yet the article itself was small, and was not of sufficient proportions to require the maintenance of a manufactory; but under the supervision of one man, Michael Fredericks, employed for that purpose, sufficient quantity of the salve to supply the trade for 12 months was made up and put into condition for sale within 6 weeks. The salve was put up in small bottles or vials, on each of which was a small label of particular design, and on each box of a dozen vials was a larger label of the same design. This label had been so long used in connection with the salve that it was well known in the market, and was a mark by which the article was known in the trade. It thus became the trade-mark of the proprietor of the compound. In 1873 Mr. Blow had this trade-mark registered in the Patent Office at Washington, and received a certificate thereof, as was contemplated in the act of Congress of 1870 relating to trade-marks. That act was afterwards declared unconstitutional by the Supreme Court of the United States, and the certificate of registration therefore became of no legal effect. Mr. Blow died in 1877, and his widow and two sons, defendants originally herein, became the owners of the title that he owned to the secret formula, the trade-mark, and the right to manufacture and sell the proprietary medicine. They continued the business as he bad done, with some variations in the business methods, and were doing so down to the time that this suit was instituted, when the receiver took the business out of their hands. Under the management of the widow and sons the business does not seem to have been as successful in yielding revenues as it had been in the lifetime of Mr. Blow, although it still yielded the proprietors a large income.

On March 1, 1883, Mrs. Blow borrowed of F. W. Mott $2,000, and of Mrs. Lueders $3,500, and to secure the same made an assignment of her right in this eye salve and trade-mark to them. In that assignment the thing conveyed was described as a patent right to manufacture and sell the salve under letters patent issued by the United States. The instrument was drawn by a man who was not a lawyer, and who, with the certificate of registration of the trade-mark before him, interpreted it to be letters patent and thus described it: "Whereas letters patent, bearing date the 25th day of ...