Court Opinion

ID: 5180730
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:41:47.05704+00
Date Added: 2024-06-11T08:26:33.667204
License: Public Domain

Patterson, J. (dissenting):
This is an appeal from an order made at the Special Term-adjudging that Oscar A. De Long, the appellant, has disobeyed an injunction contained in a decree entered'in the action above entitled, and further adjudging' that such violation and-disobedience- were deliberate and intentional, and that by reason -thereof the said Oscar A. De Long is in contempt of this court and imposing upon him a fine for the indemnity of. the plaintiffs for the loss sustained by reason of the misconduct of said- Oscar A. De Long, and directing a reference to ascertain what damages, costs and expenses the plaintiffs have sustained by reason of the acts of the appellant adjudged to have been in disobedience of the decree referred to. It appeared before the court, on the plaintiffs’ application to punish the appellant for contempt, that on the 8th day of January, 1895,, a decree was entered in the action above mentioned, by which the defendant therein, the De Long Hook and Eye Company, was “ enjoined from using, *41in selling, or placing upon the market in connection with hooks and eyes the word or name ‘ De Long/ alone or with other words in any manner which may produce deception or confusion in the public mind as to the identity of the goods sold by the plaintiffs and the defendants respectively.” Oscar A. De Long was the president of the defendant, the principal stockholder, the manager of its business, and substantially, according to his own statement, all there was of the corporation. An appeal was taken to the General Term of the Supreme .Court from the decree made at Special Term, and that decree was modified so that its restraining clause was limited by the following words, which were directed to be inserted in the Special Term decree, namely, “ but nothing herein shall operate to prevent the defendant from manufacturing and selling hooks and eyes put up in any form which shall not violate the trade mark of the plaintiffs or have the effect to induce the ordinary purchaser to buy defendant’s goods, believing them to be manufactured by the plaintiffs.” As the action in which the decree was entered was one between the plaintiffs and the corporation, the restraint in the Special Term decree ran also against the corporation, its clerks, servants, workmen, agents, attorneys and all persons claiming under or through the defendant. Of such persons, Oscar A. De Long was one. After the entry of the order of the General Term modifying the decree of the Special Term, Oscar A. De Long ajiparently separated himself from the corporation of which he was the president, and undertook the business of manufacturing and selling hooks and eyes ostensibly on "his own account, and not in connection with the defendant corporation. It does not appear that that corporation really retired from business, but it doés clearly appear that all the acts of Oscar A. De Long brought to. the attention of the court in this proceeding and considered as being in contempt of the decree, are individual acts of Oscar A. De Long. He attempts to justify them on two grounds: First, that as an individual he was not prohibited by the decree from engaging in the business of selling hooks and eyes of the general character of those made for and sold by the De Long Hook and Eye Company; second, that as matter of fact, he has not made and sold goods of such a character, or put up in such a' way as would constitute a fraudulent and unlawful competition in business *42with the plaintiffs, or induced the public to buy goods sold by him in the belief that they were the product of the plaintiffs’ manufacture.
It must be admitted that the decree of the Special Term-, as modified by the General Term, really-contains no prohibition, upon Oscar 'A. De Long carrying on business in selling hooks and eyes in a lawful way and in his own proper name-. The inhibition contained, in the Special Term decree of the use of the name De Long, in any form or in any combination of words does not go to that extent. It was not,intended by that adjudication to deprive Oscar A. De Long of the right to use his name in the conduct of his own business, whether it be that of selling hooks and eyes or any other legitimate business in which he might be engaged, but it was intended that the defendant corporation and its servants, and those who were acting under or for it should not engage in the manufacture or sale of hooks and eyes put up in any form' which would violate the trade mark of the plaintiffs, or induce the ordinary purchaser to buy such goods, believing them to be manufactured by the plaintiffs. The claim now made on the part of Oscar A. De Long substantially is that, although he was the president of the defendant corporation, and although. he was enjoined as connected with that corporation from doing those things prohibited by the- decree, yet that he may sever his connection with that corporation and continue individually the business which it had conducted and from doing which it had been enjoined, and acquire -absolute immunity for all his acts and compel the plaintiffs to institute a new action and seek a new decree against him for whatever wrong he may personally commit, and thus evade the consequences of his disobedience of the decree of the court, which was plainly intended to reach and operate upon every person who, in any capacity, might be found to have been connected with the wrongful acts of the defendant corporation, and who had caused or contributed to, or profited by, the acts enjoined, and who came, by notice or knowledge, within the operation -of the terms of the decree. Oscar A. De Long, by changing his coat, could not change his condition. He was still bound by the decree. Being enjoined as a corporate officer from perpetrating a wrong he cannot be permitted, as an individual, to continue to perpetrate the same wrong. The purpose of the decree was to act upon every individual who had notice of. the injunction *43and to stop him as well as the artificial entity, the corporation, which only acted through such individuals. It would open the door to the successful evasion of all injunctions of this character against corporations, if its members or officers were to be permitted by device of any kind to say that'they have separated themselves from the corporation, and as individuals are carrying on the business which they were prohibited from doing under the corporate form. This question was raised and disposed of in the case of Morton v. Superior Court of Tulare County (65 Cal. 496). In that case, by decree of the court, a corporation organized for irrigation purposes, was required to remove a certain dam, and it and its officers, agents and employees and all persons acting under it were enjoined from continuing or maintaining the same. The dam was removed pursuant to the requirements of that mandatory decree. The president, of the corporation enjoined resigned his office, transferred all his. stock and entered into an arrangement with a third party for the purchase of the land upon which the dam had stood, rebuilt it and claimed the right to keep it there because neither he nor the person from which he bought the, land were parties to the suit. This act was held by the court in which the decree was rendered to be a contempt. An application was made by petition to the Supreme Court, for a writ of certiorari to review the decision of the court below,, and it was held by the Supreme Court that the petitioner had full notice and knowledge of the issuance and service of the injunction • that an officer of a corporation undoubtedly has a right to sever' his. connection with the corporation, but he will not be permitted to exercise his right for the mere purpose of treating with contempt the orders and decrees of a court which he is bound to respect. A quotation is made from the case of People ex rel. The Mayor, etc., v. Pendleton (64 N. Y. 622) that “injunction orders must be fairly and honestly obeyed, and hot defeated by subterfuges and tricks on the part of those bound to obey them; that they might be violated by aiding, countenancing and abetting others in violation thereof as well as doing it directly; and that courts would not look with, indulgence upon schemes, however skillfully devised, designed to. thwart its orders.”
In the case at bar it is conceded that if Oscar A. De Long, separating himself altogether from the De Long Hook & Eye Com*44pany, and without any intent or design upon his part to carry on as an individual that same business which under the ■ corporate form and guise he had been' substantially carrying on for himself before, went into the market with his manufactured goods, exposed them for sale in such a way as would not lead purchasers to believe they were the manufactures of the plaintiffs, kept himself free from any deception or imposition, and merely used his own name in liis own business, as he had a perfect right to do, there would be no reason for the interference of the court to maintain any right secured to the plaintiffs by the decree. But that'is exactly what Oscar A. ■ De Long, as the court below held, did not do. The learned' justice found, and found upon sufficient. evidence, that the whole of the ■conduct of Oscar A. De Long subsequent to the entry of the order of the General Term .modifying the decree of the Special Term was nothing -but a fraudulent evasion. of the decree; that finding that the door to illegitimate competition with the plaintiffs was closed to the corporation, he resorted to a trick and device to open another, and that through that he entered into the- same forbidden field of unlawful competition. The learned judge below held, as his written opinion states, that the mere inspection of the packages of goods sold by Oscar A. De Long will exhibit the continuance by him of the fraudulent acts perpetrated by the corporation and enjoined by the decree, and that. he still imposed goods upon the public as the manufactures of the plaintiffs, by having them made up in such ftirm and in such a way that they would still appear to be those of the plaintiffs. There was an abundance' of evidence before the court to convict Oscar A. De Long of this wrong. The affidavit of Sidonia 0. Thurn, an importer of children’s cloaks and dresses, who used a great many hooks, bought, after the making of the decree, at Lord & Taylor’s store certain hooks and'eyes which she had sent for as De Long hooks and eyes, intending to purchase those made by plaintiffs. They were brought to her and she sent them to her workrooms for use. Subsequently she was informed by one of her workwomen that the hooks were not the Same as those she supposed she was buying as De Long hooks; that after close inspection she discovered that they 'were not the same, although, they bore the name “ Oscar A. De Long’s Hook.” Mr. Conklin, a buyer for the bouse of Stern Brothers, swore that he had. examined the cards of. *45Oscar A. De Long hooks with the words “ Oscar A. De Long Hook printed on the cards, and he would say without hesitation that the purchasing public would be deceived into the belief that they were the hooks and eyes manufactured by the plaintiffs. And to the same effect is the affidavit of Wilson, a buyer for Altman & Co., and Soloman, a buyer for Wechsler & McNulty, and Rebecchini a buyer for Ehrich Brothers of New York city. There were,, it is true, affidavits presented on the part of Oscar A. De Long to-the contrary of those just mentioned, but the court below believed the affiants named, and so doing properly found that Oscar A. De Long was still continuing the deception ; was still selling goods, put up and prepared in such a way that even experienced persons, would be led to believe, without the closest inspection, that Oscar A. De Long’s goods were those of the plaintiffs. Here the fraud and the deception are continuous, carried on by a person who was. enjoined and who cannot throw off responsibility by saying, I have changed my form, I have ceased to act for a corporation, I am now an individual and I will defy the court because I have thus changed my outward appearance.
The order of the court below was right and should be affirmed,, with costs.
Order reversed, with ten dollars costs and disbursements, and the. motion denied, with ten dollars costs.