Walter Baker & Co. v. Slack

• Decision Date: 12 April 1904
• Docket Number: 955.
• Citation: 130 F. 514
• Parties: WALTER BAKER & CO., Limited, v. SLACK.
• Court: U.S. Court of Appeals — Seventh Circuit

130 F. 514

WALTER BAKER & CO., Limited, v. SLACK.

No. 955.

Circuit Court, Of appeals, Seventh Circuit.

April 12, 1904

[Copyrighted Material Omitted] decree, so that it enjoined the defendant from using the name 'Baker' alone, but required the insertion of the full name,W. H. Baker,' and also required to be placed upon each package, in type as prominent as the title, the words 'W. H. Baker is distinct from the old chocolate manufactory of Walter Baker & Company. ' Walter Baker & Company, Ltd., v. Baker (C.C.) 77 F. 181. In the suit in the Southern District of New York a like injunction was granted, and enlarged by the United States Circuit Court of Appeals. Walter Baker & Co., v. Sanders, 80 F. 889 26 C.C.A. 220. The effect of these decisions is to require a differentiation of the packages of the two manufacturers, and to require William Henry Baker to place in prominent type on the face of the packages the announcement that 'W. H. Baker is distinct from the old chocolate manufacturer, Walter Baker & Comp any. ' Thereafter William Henry Baker, so far as the record discloses, complied with these decrees, continuing the business and using the labels and names as sanctioned by the decrees. His chocolate is put up in half-pound cakes, wrapped in blue, and bearing a lighter blue label, and his cocoa in half-pound and one-fifth pound tins, all displaying prominently the name 'W. H. Baker,' with the announcement required by the decrees and above stated.

The appellee, Slack, is a retail grocer in Chicago. For a long time he had handled and dealt extensively in the products of the appellant, selling them, and them only, in response to requests for 'Baker's Chocolate' and 'Baker's Cocoa,' and advertising them by those names. In December, 1898, he commenced to deal in the products of William Henry Baker, purchasing chocolate and cocoa in packages labeled as authorized and required by the courts in the suits above stated. Early in the year 1900 he began advertising William Henry Baker's products in the Chicago papers as 'Baker's Premium Best Cooking Chocolate' and 'Baker's Best Cocoa,' and this continued up to the time of the institution of this suit. After July 1, 1900, the appellee advertised 'W. H. Baker's Premium Chocolate,' but the advertisement contained no information discriminating between the two kinds. There is evidence to show that his customers asking for 'Baker's Cocoa' or 'Baker's Chocolate' were supplied with articles of William Henry Baker's manufacture, the profit of which was a few cents a pound more than on the sale of the product of the appellant; but in case Walter Baker's chocolate or cocoa was asked for, customers received that; and that after this suit his salesmen were instructed to say that the chocolate of W. H. Baker was not made by Walter Baker & Co., and that, when 'Baker's Chocolate' and 'Baker's Cocoa' was asked for, the salesmen would ask what brand, saying, 'We have two Bakers. Which do you want, W. H. or Walter Baker? ' But 9 out of 10 would not know the difference, saying, 'Which is best? Give me the best. ' And the salesmen would then give them W. H. Baker's.

This bill was filed July 23, 1900, to enjoin the alleged unfair trade. The prayer of the bill as amended was for a decree as follows: 'That a writ of injunction, temporary until hearing and perpetual thereafter, may issue out of and under the seal of this court against the said Charles H. Slack, restraining him, his agents and employes, from advertising, selling, or causing to be sold any cocoa or chocolate other than that made by your orator as or under the names 'Baker's Cocoa' or 'Baker's Chocolate,' or in response to requests for 'Baker's Cocoa,' or 'Baker's Chocolate;' and also from using the word 'Baker,' 'Bakers,' or 'Baker's' alone on packages, boxes, labels, show cards, or in advertisements, or orally, or in any manner in connection with powdered cocoa or chocolate other than that made by your orator; and from using as aforesaid the word 'Baker,' Bakers,' or 'Baker's' (whether the same be or be not coupled with other names or initials) in such a collocation with the words Cocoa' or 'chocolate' (whether the same be or be not coupled with some further descriptive word or words) as to indicate that such cocoa or chocolate is a variety of 'Baker's Cocoa' or 'Baker's Chocolate,' but the defendant may indicate thereon in appropriate language by or for whom the cocoa or chocolate in question is made or prepared; and nothing herein shall prohibit defendant from selling the cocoa and chocolate of William Henry Baker, of Winchester, Va., wrapped and labeled in the manner described by the United States Circuit Court for the Western District of Virginia in the suit referred to in the bill of complainant.' On April 3, 1901, the court entered an interlocutory decree enjoining the defendant as follows: 'That the defendant, Charles H. Slack, his agents, servants, and employes, be, and they hereby are, perpetually enjoined from selling, or causing to be sold, any cocoa or chocolate other than that made by Walter Baker & Co., Limited, in response to requests for 'Baker's Cocoa' or 'Baker's Chocolate,' unless prior to such sale the purchaser is actually notified that the cocoa or chocolate about to be furnished is not manufactured by the old chocolate manufactory of Walter Baker & Co., and that a writ of injunction issue to that effect;' but refused to enter any decree with respect to the advertising by the defendant. The complainant below excepted to the action of the court in refusing to award a perpetual injunction in accordance with the prayer of the amended bill. The matter was referred by the decree to a master to ascertain the profits which the defendant had made since May 1, 1900, and, to the action of the court in limiting the accounting to a period since that date, the complainant below also excepted. The master reported the gross profits to be $128.48, and deducted therefrom the average cost of operating the general business of the defendant, 24.27 per cent. of the gross sales, being $113.11, leaving as a net profit to the defendant on the sale of the infringing goods $15.37. Upon that report the final decree was entered on the 13th day of June, 1902, enjoining the defendant as in the interlocutory decree stated, overruling the exceptions to the master's report, confirming the same, and awarding judgment for $15.23 profits and for the costs of the action, from which decree, upon due assignment of errors, this appeal is taken.

Frank F. Reed and W. L. Putnam, for appellant.

A. B. Melville, for appellee.

Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.

JENKINS Circuit Judge, after stating the facts as above, .

The appellee sold the product of William Henry Baker in the exact form of package and style of label sanctioned by the decrees of the courts referred to in the statement of facts. He had purchased from William Henry Baker the product in the form and style which those courts had authorized Baker to make and sell. To that extent the appellee, we are disposed to hold was justified. It must not, however, be overlooked that the word 'Baker,' as applied to chocolate and cocoa manufactured by the appellant, had in the course of years come to represent to purchasers the product of Walter Baker & Co., and was so generally known to the trade. The appellee had largely dealt in those products, and was well informed of those facts, prior to the time when he undertook the sale of the product of William Henry Baker's manufacture. It must also not be overlooked that William Henry Baker instituted his business and applied the name of 'Baker' to his products fraudulently, with the expectation of profiting by the trade-name of 'Baker,' and in the hope of diverting to himself some part of the trade which legitimately belonged to Walter Baker & Co., Limited. We must therefore deal with the conduct of the appellee in the marketing of this product of William Henry Baker in the light of these circumstances. He had the right, as we assume, to sell that product, but honesty and good faith required that he should not palm it off as the product of Walter Baker & Co.; that he should not represent it as 'Baker's Chocolate' or 'Baker's Cocoa,' for that meant to the purchaser that it was the product of Walter Baker & Co., Limited. We need not be diligent to assemble the many instances which the record discloses of wrongful imposition upon...