Court Opinion

ID: 7132992
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:20:56.518399+00
Date Added: 2024-06-11T16:14:31.840588
License: Public Domain

JUDGE HAZELRIGG
delivered the orwrioi.' or the court.
In January, 1887, the appellees, E. II., J. S. & Kenner Taylor, formed a partnership under the name of E. H. Taylor, Jr., & Sons, and began the manufacture of whisky at what had theretofore been known as the “ J. S. Taylor Distillery,” in Woodford County, Ky. They at once changed the name of their distillery to the “ Old Taylor” distillery, and before the end of the year had discontinued the use of the name, “J. S. Taylor,” in connection with the distillery or the whisky manufactured there, branding, advertising and selling their product as “ Old Taylor” whisky. They devised a brand which was put on barrels, bottles and other packages and used in their advertisements, circulars, letter-heads, etc., consisting of the words “ Old Taylor Hand-made Sour Mash Whisky, E. H. Taylor, Jr., Distiller, Frankfort, Ky,” arranged in a circle; and underneath this appeared the inscription, “E. IT. Taylor, Jr., & Sons,” in few simile of the handwriting of E. IT. Taylor, Jr. They branded other of their whiskies, later on, “ Old Taylor,” and underneath these words placed the inscription, “E. IT. Taylor, Jr., & Sons,” in the autograph of E. H. Taylor, Jr. They continued without interference to operate the distillery .and transact business as whisky merchants, with office *658and headquarters at Frankfort, some seven or eight miles distant from their distillery, until the early part of 1889,' when, as we learn from their petition, the appellants began to manufacture whisky at their distilleries, knowu as the “O. F. 0.” and “Carlisle” distilleries, near Frankfort, and to imitate the brands of the appellees, use the autograph signature of E. H. Taylor, Jr., and otherwise interrupt and injure their business. On the 16th of October, 1889, they brought this- action to prevent the appellants from further using the brands and script in question and for damages.
The appellants asserted the right to use the disputed brands, including Taylor’s autograph, and set up by way of counterclaim that the appellees had themselves wrongfully appropriated the brands, trade-marks, labels, etc., of the appellants, for which they asked damages. They based their claims upon a state of case growing out of E. H. Taylor’s connection with themselves in operating the “0. F. C.” and “Carlisle-” distilleries prior to the formation of the partnership of E. II. Taylor, Jr., & Sons in January, 1887.
Upon hearing, after an elaborate preparation of the case, the chancellor determined the issues of fact and of law adversely to the appellants, and enjoined them from using the words “E. II. Taylor, Jr., Distiller,” and the autograph signature of E. H. Taylor, Jr., upon any whiskies produced at their “ O. F. C.” and “ Carlisle” distilleries since January 1, 1887; ordered an account taken of profits on the whiskies manufactured by the appellant since January, 1887, on which the script autograph had been used, and dismissed their counterclaim.
The controlling questions are, has E. II. Taylor, Jr., so. *659complicated himself with the business of the appellants during the years prior to January, 1887, as to deprive himself and his associates of the use of the firm name, E. H. Taylor, Jr., & Sons, and as to confer on the appellants the right to use against his will the autograph signature of E. H. Taylor, Jr. And have the appellants in connection with E- H. Taylor, Jr., or otherwise, so appropriated the name, “ Old Taylor,” for the whiskies theretofore made at the “ O. F. C.” and “ Carlisle” distilleries as to preclude the appellees, E. H. Taylor, Jr., & Sous, from such use as a trade-mark or brand ?
In 1868, or 1869, E. H. Taylor, Jr., became the owner of and began to operate a distillery in Franklin County, near Frankfort, to which he gave the name of “ O. F. C.” Distillery, and to the product of which he gave the name of “ O. F. C. "Whisky.” He put upon his packages of whisky, and used upon labels and in advertisements, a brand, in circular form, consisting of the words “ O. F. C. Hand-made Sour Mash Whisky, E. H. Taylor, Jr., Distiller, Frankfort, Ely.”
Taylor continued to operate the distillery in this way until about May, 1877, when he failed, and was forced by his creditors into bankruptcy. In December, 1877, a composition was effected with his creditors at twenty cents on the dollar, and Gregory, Stagg & Co., St. Louis whisky merchants, and lai’ge creditors of Taylor, agreed to furnish the funds necessary to effectuate the composition — an arrangement being made alike profitable to both parties. In pursuance of this arrangement, the O. F. C. distillery property was, by order of the United States District Court, reconveyed to Taylor, who, with his wife, conveyed the property to Geo. T. Stagg. Taylor then *660assigned to Stagg the O. E. C. trade-mark, and Stagg, Gregory, Stagg & Co. uniting with him, leased to Taylor the O. E. C. distillery property with the right to use the O. F. C. trade-mark. Taylor continued the business in his own name, the “ O. F. C.” whisky, in the meantime, attaining a phenomenal reputation, until the fall of 1879, when, for reasons not disclosed in the record, a corporation was organized and created of the style of “ The E. H. Taylor, Jr., Company.” To that corporation Stagg, in October, 1879, conveyed the distillery property and also assigned the trade-mark. As this trade-mark or brand is, to an important extent, the subject-matter of this litigation, we turn to the registration made of it by Taylor in the patent office in 1872, and to its reregistration in the same office by Geo. T. Stagg as assignee of Taylor, made shortly before its assignment to the E. H. Taylor, Jr., Co. The specification filed by Taylor is as follows: “ The whisky made by me is hand-made sour mash whisky, and as such is known in the market. The trade-mark consists of the letters ‘ O. F. C.’ and is used with or without the words ‘ Hand-made Sour Mash "Whisky, E. H. Taylor, Jr., Distiller, Frankfort, Ky.,’ or words to like effect. It is branded on the heads of the barrels or packages containing said whisky, and, therefore, mostly used in black color, though it may also, in suitable tint, be printed on labels that apply to bottles, and on show-cards, or notices that advertise the same to the public.” Stagg, in 1878, thus described it:
“My trade-mark consists of the letters ‘0. F. C.,’ the same being an arbitrary symbol. This trade-mark has generally been arranged as shown in the accompanying fac simile, to-wit, in connection with the words ‘Hand*661made Sour Mash Whisky, E. EL Taylor, Jr., Distiller, Frankfort, Kentucky; ’ but the said words may be transposed, some of them omitted, or other words substituted, as may be found most convenient for the purpose intended, without materially changing the character of my trademark, the essential feature of which is the symbol consisting of the letters ‘ O. F. C.’ ” Again, in October, 1881, the E. H. Taylor, Jr., Co. registered this trade-mark in the patent office in substantially the language employed by Stagg some three years before.
At this point in the history of the case we may state our conclusion to be, that the trade-mark thus coming to the ownership of the corporation, E. H. Taylor, Jr., Co., consisted, so far as it was exclusively distinctive in its character,-only of the letters “0. F. C.” The other words were appropriately grouped about these letters to indicate the general character of the whisky and that E. H. Taylor, Jr., was the distiller. We do not suppose these words, “ hand-made ” and.“sour mash,” are such as can properly be claimed and used exclusively as a trademark, and we suppose the name “ E. H. Taylor, Jr.,” was one for which another name was to be “ substituted,” as “ Distiller,” when occasion demanded it, which would be when Taylor ceased to be the distiller of the “ O. F. C.” whisky. But be this at it may, the intention of the parties adopting this trade-mark, as expressed in its repeated registration, is to the effect that the symbolic letters, “ O. F. C.,” alone constituted the trade-mark.
Npon the organization of this corporation Stagg became its president and E. H. Taylor, Jr., its vice-president, the stock being owned and controlled by them, with all distilling operations under Taylor’s management. It *662erected at once another distillery adjacent to the “ O. E. C.,” and to it gave the name of the “CarlisleDistillery,” and upon all packages of whisky manufactured at this distillery the company placed a brand consisting of the words, “ Carlisle Standard Sour Mash Whisky, E. H. Taylor, Jr., Co., Distiller, Erankfort, Ky.” There was ' no registration of this brand as a trade-mark, but the fair inference is that its “essential feature” was intended by the parties to be the word “Carlisle.” The words “ Standard Sour Mash Whisky ” were not so intended, even if they could have been so used, and for the name of the distiller in the brand there was to be substituted, as we must suppose, the name of the person of whom it could be truthfully said, he was the “ distiller.”
In the operation of these distilleries — the “ O. E. C.” and the “Carlisle” — the distiller was E. II. Taylor, Jr. That it was deemed important to indicate to the trade that he was the distiller is shown by the conduct of all the interested parties. He had been engaged in distilling for more than twenty years, and had given the “ O. E. C.” whisky a reputation equal to any made in Kentucky. Its superior quality was attributed largely to his skill as a distiller, and the intelligent and careful superintendency he gave to the methods of distillation. In one of the E. II. .Taylor Co.’s circulars (and we use it as a sample of many others of the same- import), it is said: “ Mr. Taylor’s long experience in distilling and his intelligent acquaintance, theoretically and practically, with the* arcana of fermentation and distillation, together with his known pride in excelling in the quality of product, are guaranty of that quality.”
In 1880, or 1881, to still further impress on the public *663and the trade the personal connection of E. H. Taylor, Jr., with the manufacture of its whiskies, for the somewhat impersonal designation “ E. H. Taylor, Jr., Co., Distillers,” was substituted the words “ E. H. Taylor, Jr., Co., .Distillers,” in the well-known and striking autograph signature of E. H. Taylor, Jr., with a “caution” to the trade that such script was the test of the genuineness of “ O. E. C.” and “Carlisle” whiskies in the market. "Was this autograph of E. H.. Taylor, Jr., whether in the form of the individual name of “ E. H. Taylor, Jr., Distiller,” or of the corporate name of “E. H. , Taylor, Jr., Co.” a part of the trade-mark of the “0. E. C.” and “ Carlisle” whiskies ? In this connection it is interesting to notice the origin of the adoption of this script as shown by the testimony. Stagg says that on an occasion when Taylor was in St. Louis, the latter noticed a striking script signature on packages of imported brandy and was impressed with the idea that the signature of the company, as written by him, would be appropriate and look well on a barrel. Taylor suggested it, Stagg agreed with him, and it was done.
It is not pretended that the corporation purchased from Taylor the right thus to appropriate his personal signature, or that he was compensated therefor by any one in any way, or to any extent. Taylor contends that it was a mere fancy with him, and was intended to show his personal identification with the distillery operations of the company.
That such was the intention seems clear enough, and such was doubtless the effect of the use of the script. The combination of Taylor’s name and the fac simile of his striking signature would easily and necessarily raise *664the inference that he was not only personally connected with the company, but was in fact its “ distiller. ” It seems doubtful that such use could have been made of this autograph after Taylor withdrew from the concern and ceased to be its distiller, even if in express terms he had attempted to sell it to the corporation or to Stagg. As aptly said by counsel, “public policy and common honesty would forbid any such transaction.” Be that as it may, there has been no such transfer or attempted sale. The claim of appellants, through the E. H. Taylor, Jr., Co., to the continued use of this autograph is based on an inference merely, arising out of Taylor’s consent to-its use while he was identified with the business. It was not a part of the original trade-mark, but is claimed as a sort of adjunct thereto. Considering the circumstances of its adoption, that it was inspired by the mere fancy of Taylor, that there was no consideration for its use, that there was no agreement- or contract connected with its use, and not overlooking .the fact that its use pointed out Taylor as the distiller of the concern for the-time being and identified him therewith as much so as-his physical features would have done, and that a continuance of this misleading feature would he axi imposition on the public, we are convinced that even after the-adoption of this script, the trade-marks of the company, axxd those claiming thereundex-, consisted of the symbol “O. F. C” and the name “Carlisle.” These were the “ essential features,” and the factthat the other.words might be “ omitted” as shown by the specification of the O. F. O. trade-mark in the patent office, shows that these other-words were uot regax’ded as a part of the trade-mark. (See. similar registration in Harris Drug Co. v. Stucky, *66546 Federal Reporter, 624.) In 1882, the E. II. Taylor, Jr., Co. purchased a third distillery, situated about six miles from Frankfort, in Woodford County, which had theretofore been owned and operated by J. S. Taylor. They operated this distillery in the-name of J. S. Taylor, using the brand he had theretofore used, viz.: “J. S. Taylor’s Hand-made Sour Mash Whisky, Woodford Co., Ky.,” and in addition thereto used the name, “ J. Swigert Taylor” infac simile of his handwriting.
The company continued to operate these three distilleries, and to do so successfully, until in December, 1886, when, in pursuance of a written contract to that effect, Stagg and the E. H. Taylor, Jr!, Co. conveyed to E. H. Taylor, Jr., the J. S. Taylor distillery in Woodford County, in consideration of which Taylor relinquished all interest in and to the effects and business of the company and retired therefrom. Upon obtaining the J. S. Taylor-distillery, Taylor at once associated his sons with himself in business as E. H. Taylor, Jr., & Sons, and, as we have seen, began the manufacture of whisky at the J. S. Taylor distillery. The withdrawal of E. H. Taylor, Jr., from the company left Geo. T. Stagg the sole owner of .the stock' of the company, and the “ O. F. C.” distillery was run by him in the name of the company until July,.1887. From that date until January, 1889, both the Carlisle and the O. F. C. distilleries remained idle, as the Carlisle distillery had remained from the beginning of the year 1887. Tlje “ Geo. T. Stagg Co.” was organized in November, 1887, and thereupon the E. H. Taylor, Jr., Co. surrendered its distilleries, warehouses, dwelling-houses, grain elevators, cattle-pens, and other properties and its goodwill, trade-marks, brands, etc., to the Geo. T. Stagg Co., *666and that company leased these properties to the appellant, Stagg. Upon the organization of the Q-eo. T. Stagg Co., the purpose of which organization was to. operate distilleries, manufacture, purchase and sell whiskies, buy, feed and sell cattle, etc., the trade and public were notified by circulars. The apparently defunct E. H. Taylor, Jr., Co., notifying the “trade ” that it had transferred to “the Q-eo. T. Stagg Company, of Louisville, Ky., the O. E. C. and Carlisle distilleries, situated near Erankfort, together with the brands, trade marks, good-will, etc., of the business,” and directing “ holders of warehouse receipts for O. E. C. and Carlisle whiskies, stored in bonded or free warehouses,” to hand in their receipts to that company when wishing to withdraw their goods.
The Qeo. T. Stagg Co., in the same circular, stated to the public, among other things, “ that in methods of manufacture and character of materials used,” they would omit nothing to sustain the reputation of the products of the celebrated O. E. C. and Carlisle whiskies. The company also placed in large letters on its office doors in Louisville, the words “ The Qeo. T. Stagg Company, Distillers of O. F. C. and Carlisle "Whiskies.”
These circumstances, and others we need not stop to discuss, induce us to believe that it was the intention of all the parties, at the time of the withdrawal of Taylor from his business association with Stagg, that the corporation, E. H. Taylor, Jr., Co., was to cease all active business operations. It deliberately advertised itself as going out of business and as having turned over its possessions, good-will, etc., to another. The Qeo. T. Stagg Co. stepped into its place, and so notified the public. It may be true that Stagg, who owned all its stock, found it *667■convenient to retain the name merely for purposes connected with certain governmental regulations. As a matter of law it stood suspended so far a,s the public was concerned. (Louisville Banking Company v. Eisenman, &c., 94 Ky., 83.) We do not believe, and this is the point in considering the facts just enumerated, that it was incompatible with business integrity on the part of Taylor, or violative of any of the legal rights of Stagg or the Geo. T. Stagg Company, that Taylor should, in connection with his sons, assume the partnership name of E. H. Taylor & Sons, though similar in appearance to the corporate name “ E. H. Taylor, Jr., Co.” W e think rather that it was the expectation of all the parties concerned that the name of E. H. Taylor, Jr., as a part of the cor-, porate name of a defunct corporation should, within a reasonable time, entirely disappear. That it was the ambitious purpose of Geo. T. Stagg to substitute his own name, or that of the corporation bearing his name, as the distiller and proprietor of the famous O. E. C. and Carlisle distilleries and their accompanying brands of whisky, we do not doubt. He made no complaint of the use of that firm name by the Taylors when they assumed it, but, on the contrary, sold them, as such firm, some twenty-odd thousand dollars worth of J. S. Taylor whisky in the spring of 1887.
It follows, from what we have said, that upon their resumption of business in 1889, the Geo. T. Stagg Co. and Stagg could not lawfully use the autograph signature of E. H. Taylor, Jr., as it might appear in-the corporate name E. H. Taylor, Jr., Co., or otherwise, or. advertise Mm as the distiller of théir O. E. C. or Carlisle whiskies, *668as they claimed they had the right to do, and, in some instances, did.
Nor do we think the appellants can justly complain of the use by the appellees of the trade-mark, “Old Taylor” whisky. While there is abundant proof that the O. F. O. and Carlisle whiskies were frequently called by dealers-O. F. C. (Taylor) or Taylor’s O. F. C., Taylor Carlisle or Carlisle (Taylor), etc., yet the parties interested and who alone had the right to name their whisky and adopt its trade-mark as a distinguishing feature, did not so call it or brand it “Taylor” or “Old Taylor” whisky, or in anywise associate the name Taylor with it, save in the use of the signatures heretofore discussed ; though at the time the suit was instituted the proof conduces to show that the appellants began to apply to the O. F. C. whisky the name of Taylor whisky. We conclude, therefore, that the chancellor properly enjoined the appellants from advertising E. PI. Taylor, Jr., as the “ Distiller” of their “ O. F. C.” or “ Carlisle ” whiskies, save when such statements were in fact true. The words E. H. Taylor, Jr., constituted no part of their trade-mark and their use was an imposition on the public, save when they could be truthfully used. (Mattingly v. Stone, 12 Ky. Law Rep., 76; Browne on Trade-Marks, secs. 57 and 437.)
That the appellants were also properly enjoined from the use of the fac simile of the autograph signature of E. H. Taylor, Jr., save as to goods made before January, 1887; and this is true, whether used with or without the additional word “ Company.” The effect is the same and was intended to indicate the continued personal connection of Taylor with the O. F. C. and Carlisle whiskies. The autograph can not be used to effectuate such an intention, *669and such was the manifest design and would be the necessary result of such use by the appellants. (Symonds v. Jones, notes to, 17 Am. St. Rep., 485; Browne, Trade-Marks, sec. 208.)
The judgment is also to be approved in denying to the appellant the use of the words “ Taylor ” or “ Old Taylor ” as brands for their whiskies, and in confirming such uáe to the appellees, and in dismissing the counterclaim of the appellants.
But the decree directs an accounting of profits, and that, too, from January 1, 1887, when there was no complaint until in 1889. If can hardly be claimed that this is proper even if damages are recoverable at all in this case. There has been no judgment or final order on this branch of the case, but the order of reference to the master indicates the basis for a further judgment. It does not seem to us that the appellees are entitled to an account of profits. The proof does not show any fraudulent intent on the part of the appellants, or those under whom they claim. It is shown that they used no other brands, labels, advertisements, etc., than they had always used or supposed themselves entitled to use, and this they did under color at least of title and conveyance from Taylor. During the whole of the years 1887 and 1888, for a portion of which time at least the appellants manufactured whisky, there was no complaint. In the conclusions reached we have adopted the theory of the appellees, that the use of the name of E. H. Taylor, Jr., and his autograph by the appellants was in the nature of a license or permit, and we do not see that this has been abused or extended unreasonably. Relief in the way of damages is frequently refused by courts of equity, even when the *670right of the party to an injunction is acknowledged. (McLean v. Fleming, 96 U. S., 245; Cox’s Am. Trademark Cases, 675-717.) This order of reference, however, is merely interlocutory, and the future conduct of the case in this behalf will, doubtless, be based on correct legal principles.
’ Perceiving no error in the judgment, it is affirmedL