Court Opinion

ID: 3940921
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:04:42.316466+00
Date Added: 2024-06-11T13:52:46.620203
License: Public Domain

In January, 1890, and for sometime prior thereto, S.J. Flanagan was a wholesale liquor dealer, doing business under the firm name of J.F. Magale, and as such dealer he bought and sold whisky manufactured by R. Monarch  Co., of Owensboro, Ky. He devised a brand or trade mark for himself which he stamped on the barrels containing such whisky, above the brand of R. Monarch  Co. The brand was "Magale's," and when stamped on the packages would make the brand read "Magale's Monarch Whisky," or it might be applied to other brands of whisky manufactured by R. Monarch  Co. The business had been established by J.F. Magale, who afterwards died. Flanagan succeeded to the business, and himself devised the brand or trade mark. The name of "Magale" gave the whisky value because of his general reputation for integrity and honesty in his dealings with his customers and in all business transactions. About January 18, 1890, Flanagan ceased to do business, and on that date entered into a contract with Freiberg, Klein  Co. by which he undertook to assign to them said brand or trade mark in consideration of the payment by them to him at the end of each year of the sum of $250 per annum, and $4 a barrel for all of said "Monarch" whisky that might be sold in excess of 100 barrels during the year, for the term of five years, with the privilege on the part of said Freiberg, Klein  Co. to renew the contract for another period of five years, at the end of which time said brand or trade-mark should become their property. Freiberg, Klein Co. afterwards became insolvent, and about January, 1893, with the consent and approval of Flanagan, they assigned their *Page 407 
contract with him to Mayer, Kahn  Freiberg, in consideration of which the latter firm paid them the sum of $250, and agreed to pay Flanagan all sums that should become due him under the contract. Mayer, Kahn  Freiberg paid Flanagan nothing.
This suit was brought by Flanagan February 12, 1894, against both firms to recover of Freiberg, Klein  Co. the sum of $250 for the annuity of 1892, and $400 royalty on the sale of 200 barrels of whisky for that year; and of Mayer, Kahn  Freiberg the sum of $500 for the years 1893 and 1894, and $800 royalty for 300 barrels sold. But if the court should be of the opinion that Mayer, Kahn  Freiberg were not liable, they asked judgment against Freiberg, Klein  Co. for the entire amount.
The latter suffered judgment by default. Mayer, Kahn 
Freiberg, after demurring both generally and specially, pleaded under oath, that the contract was against public policy and void, as calculated to deceive the customers of Freiberg, Klein  Co. and their own and the public generally; also, that it was without consideration.
Judgment was rendered by default against Freiberg, Klein  Co. for the sum of $250, and on trial without a jury, for $250 against Mayer, Kahn  Freiberg.
The defendant in error, as the selector and seller of the whisky of R. Monarch  Co., had the right to devise and use a brand or trademark to designate to the trade such whisky purchased by him from that firm as his firm should sell. 26 Am. Eng. Encyc. Law, 361. But the primary function of a trade mark is to indicate ownership and origin, and unless this is truthfully done, it becomes a means of fraud upon the public and will not be protected. And if a trade mark is a personal one, designating a particular person and his reputation and skill, it cannot truthfully be used by any other person, and consequently cannot be assigned. 26 Am.  Eng. Encyc. Law, 371. The brand or trade mark, "Magale's Monarch Whisky," was personal to the firm of J.F. Magale, since it derived its value from the known skill, integrity and honesty of the firm of J.F. Magale in selecting good whisky and selling it without adulteration. By their use of the trade mark, the plaintiffs in error deceived their customers with the representation that the whisky upon which it was used was selected and sold by the firm of J.F. Magale, which was not the truth, and was not intended to be the truth by the contract of assignment. It would be against public policy to enforce such a contract. Again, since the defendant in error could not assign the trademark, the contract was without consideration, and could not be enforced on that account.
Since the plaintiff, Flanagan, cannot maintain his action, it is unnecessary to pass upon the other questions presented. The judgment of the court below will be reversed and judgment here rendered in favor of the plaintiffs in error.
Reversed and remanded. *Page 408 
                    ON MOTION FOR REHEARING.