Corkran, Hill & Co. v. A. H. Kuhlemann Co.

Pattison, J., delivered the opinion of the Court. An injunction was1 issued by the Court below upon the bill •of the appellant restraining the appellee from using a trademark known as the “Orange Brand,” claimed by the appellant to he its property, in connection with the manufacture and sale of oleomargarine. The injunction, however, on motion of the defendant, was dissolved upon-its filing an answer to the bill. At the conclusion of the evidence, thereafter taken, the bill was dismissed by an order of the Court passed on the ⁵²⁷ 9th day of February, 1920.

It isi from that order this appeal is taken. It appears from the evidence that the predecessors of the appellant, C'orkran, Hill & Ob., so early as 1855, adopted a trade-mark known as “Orangp Brand,” which was used by them in the sale and disposition of their goods', consisting of meat, etc.; and in 1908 Streett, Cbrkran & Co., one of the appellant’s predecessor's, registered it as a trado-mark for hams and bacon. Prior to the year 1910', the predecessiors of the appellant had in no way dealt in oleomargarine, but in the spring of that year they determined to handle it with the other articles sold by them. After buying it for a short while from a party in New Jersey, they, in the fall of that year, began their dealings with the appellee, or rather with one of its predecessors, and continued to buy from it until 1913, but, for some reason, discontinued their purchases until the spring of 1914, when they resumed and continued with it until the fall of 1919.

The original dealings, as we have said, were started by the predecessors of the appellant and appellee, respectively, but as each has acquired the rights of its predecessor, w'e will hereafter1, in speaking of the parties, refer to them as the appellant and appellee, unless it bo found necessary to> do otherwise in order to be properly understood. At the beginning of their dealings in 1910, the appellant bought oleomargarine from the appellee, a manufacturer, at such times and in such quantities as its trade required, and at its own expense furnished the appellee labels designed by it, to be used by the appellee upon the oleomargarine manufactured for the appellant. One of these, a round yellow label, approved by tbe U. Si Bureau of Industry, so early as August, 1910, bad upon it the words “Orange Brand’ Oleomargarine, prepared especially for Streett, Corkran & Co., 115-117 Pratt Street, Baltimore, Maryland, H. S. Inspected and passed. Establishment No. 787.” Establishment No. ⁵²⁸ 787. was ".the. manufacturing' establishment- of the appellee.

This was placed upon the label in obedience to- a requirement of the Government, that-the place ¡where" such "article is-manufactured shall appear upon the label Other labels-, slightly differing in their wording, but all bearing the words ‘-Orange Brand,”, were, from "time to time/ designed and furnished by the'- appellant to "be used, upon the goods- bought by it. These-•labels wer-'e used only, in-connection with tire oleomargarine manufactured for the appellant, and no- oleomargarine be-al•ing said trade-mark was sold by /the ¡appellee to any other person. This course of dealing continued down to September, 1914, with the .exception of a short interval of a,: few months between the fall of ,1913 and the spring of 1914. In September, 1914, the-appellant, then the firm of Cork-ran, Hill &.

Co., following an innovation of the trade, had cartons prepared-in which , the: oleomargarine manufactured for it was to be' packed by the appellee. These cartons, in addition to tire Words.--“Orange Brand,” bo-re the symbol of a branch of an orange tree, with oranges and leaves hanging therefrom, the symbol being that which was registered in the Patent Office in 1908, and which, was being generally used by Ofcxrkran, Hill & Go. upon; other products sold by it. The labels or cartons were ordered and paid for by appellant and were delivered to appellee from time to time as needed down to September, 1916. In the summer, of 1916, the, A. H. Kuhlemann Go.,, the appellee; was1 organized and became the successor of A. H. Kuhlemann., , In September of 1916, a new agreement, changing the. course of dealings that had hitherto existed1 between; the parties,.was made by A. H. Kuhlemann Oo. and the. appellant.

This agreement is not in writing, nor are its -terms and' pro-visions., very clearly stated in- the evidence, offered. It may, however, be gathered from the record that at; such"time.it was the policy.of the newly formed company to enlarge and exp-and its business.. Herman Piel, manager of thé: appellant corporation, who-had been connected "with the appellant,: or its predecessors-, ⁵²⁹ since 1909, and wlio bad conducted the negotiations; with Mr. Kuhlemann that led to the; dealings of the parties in 1910, when asked the terms and provisions; of the agreement of 1916, s.aid, “the new arrangement was that we were- to supply the Kuhlemann Co. with raw material on the basis, of a certain profit above cost, and they in turn were to distribute through us. the oleomargarine that they manufactured, or could be sold from their factory, carrying a one-quarter cent a pound Internal Revenue Tax, with the exception of one customer which was agreed among us would stay with the Kuhlemann Co. because of reasons known between us.” The agreement, he said, included all brands of oleomaigarino manufactured by thei appellee that carried one quarter of a cent per pound Internal Revenue tax, and was. not confined to the “Orange Brand.” The witness explained that there were two; kinds of oleomargarine. One. of them carrying one quarter of a cent per pound Internal Revenue tax and. containing no artificial coloring], and the other contained artificial coloring and carried only one-tenth of a cent, per pound tax.

The license held by the appellant did not permit it to handle the colored oleomargarine, but only the white, for which reason its contract or agreement with the appellee embraced only white oleomargarine. The raw material furnished by tbe; appellant, was not manufactured by it, but bought in the open market. This., Mr. Piel said, they were not at all anxious; to do, as the profits in it were extremely small, but they did it to he assured that the appellee would have on hand at all times a, sufficient supply of finished product to meet the appellant’s, demands. The raw materials were bought by tbe appellant and charged to the appellee at a price above cost, and when the finished product was received by the appellant, it deducted the charge for the raw materials from the; amount of the purchase price of the, finished product.

The contract contained the further provision that Mr. O’Dea,, the vice-president of the appellee company, should go ⁵³⁰ upon the road, in aid of tbe sale agents of tbe appellant, in an effort to increase tbe sales of tbe oleomargarine. Tbe efforts of tbe parties were successful and tbe sales were largely increased from year to year. Hr. Kublemann, wben asked about the agreement of 1916, said: “I wanted to make it tbat tbey would take tbe whole output of tbe factory, just make tbe goods aud send it to them and have tbem as distributors.

Tbey didn’t want it, because tbey didn’t want tbe yellow goods. They didn’t want to invest in another license, and tbey agreed it would be better to distribute yellow goods from the factory, because we had the privilege of distributing it in white or' color, a quarter of a cent to ten cents, so they took the distribution of the white goods and we were to make the sales for tbem, bring tbem tbe customers and they distribute, carry the bills, collect tbe money,'etc., for one cent a pound and there was an overage to be divided between us, fifty-fifty, each a half.” Tbe appellant’s right to sell was exclusive “as far as tbej could sell tbe goods.” Kuhlemann stated tbat wben be approached Mr. Piel in 1916, be not only suggested tbat tbe appellant should take tbe whole output, thei colored as well as the white goods, but be also asked it to take stock in its new company, which was then about to be organized, but tbe appellant refused to purchase tbe stock. “It, however, took up the sale proposition, which was to sell our goods at one cent a pound profit to them/' It was about ten days thereafter that Piel offered to buy tbe raw material at a. broker’s profit, which was gladly accepted by tbe appellee. Tbe cartons used prior to.tbe agreement of 1916 were continued in use thereafter so long as tbey lasted, but when these were exhausted aud until tbe new ones tbat bad been ordered were received, labels were used tbat bad upon tbem tbe words “Orange Brand” Oleomargarine, “Always tbe Same, Tbe A. H. Kublemann Ob., Mfrs., Oorkran, Hill & Ob'., Distributors, 221-23-25-21 S’. Howard !St., Baltimore, Md., H. S. Inspected and P’assed by Department of Agriculture.

Estab ⁵³¹ lislnnent 787.” In addition to those labels, a large yellow sign was designed and used which bore the; words “Ask tor Kuhlemann’s 'Orange Brand’ Oleomargarine), Oorkran, Hill & Co., Distributors, Baltimore, Maryland.” These signs were distributed throughout the territory in which the “Orange Brand” oleomargarine was sold until the outbreak of the w7ar between this; country and Germany, when, because- of the name “Kuhlemann” appearing upon them, the signs, or at least some of them, were tom down and their use was- in a groat measure discontinued. In February, 1917, the cartons that had been ordered, months before were received, and were put in general use. They had upon them not, only the words “Orange Brand” but also the symbol o-f the branch of an orange tree with oranges and leaves hanging therefrom, that was registered in the Patent Office by the appellant for its hams and bacon. It also bore the words “Prepared for Oorkran, TIill & Co., Baltimore, Maryland,” but nowhere upon it appeared the name of the appellee.

These cartons were continued in use to the time when the relations- between Ihe parties ceased, in December, 1919. The cause that led to the breach in the dealings between the parties is not clearly defined, but it appears, from the record that in the spring or summer of 1919 the appelleecontemplated a still greater development or expansion, of its business operations;, and with this in view1 it purchased, or agreed to purchase, a site upon which a larger factory was. to be built. This required money which they did not have, and to obtain it they solicited the plaintiff to purchase from it certain preferred stock of the company, but they could not reach a satisfactory agreement in relation thereto), and the appellant declined to- purchase the; stock. Closely following this occurrence was the discovery by the appellant, that in 1917, while the parties; were operating under the agreement of 1916, the appellee, without the knowledge and consent of the appellant, had registered, in its name-, the “Orange Brand” trade-mark for the, manufacture and sale of oleomar ⁵³² garine.

This fact was learned by the appellant in obtaining* a copyright of the “Orange Brand” carton, which "was issued to it on September 30, 1919. After learning of its registry by the appellee, Mr. Biel, with Mr. Armstrong, another official of the appellant company, called upon Mr. Nuhlemann, president of the appellee company, and demanded that he should surrender and abandon such trader-mark. Mr. Finch, vice-president of the company, was also seen and a like demand made of him, but they would not surrender or abandon the use of said trade-mark. Because of the occurrences mentioned, as claimed by the appellant, it, in November*, 1916, took up. negotiations with O’Dtea, who' in the preceding summer had severed his relations with the appellee company, to organize a company for the manufacture of oleomargarine, and upon its organization the relations between the appellant and appellee were, on or about the 13th day of December, 1919, terminated.

Ther©1after the appellants continued to sell and distribute oleomargarine under the trader-mark “Orange Brand”