217 S.W.2d 216 | Ky. Ct. App. | 1948
Affirming in first and second case and affirming in part and reversing in part on cross-appeal.
For over one-hundred years T.W. Samuels Whiskey was distilled, bottled, and sold by the Samuels family. The business originated under the ownership of T.W. Samuels, deceased, the great grandfather of T. William Samuels, who resides in Nelson County.
In the year 1933, T. William Samuels together with his father and others formed a corporation styled T.W. Samuels Distillery. All the properties of the business were transferred to the corporation, which commenced *263 and continued to operate in the same manner the family had operated previous to the organization of the corporation.
On December 5, 1933, in consideration of the issual to him of certain stock in the corporation, Leslie B. Samuels, father of T. William, transferred to the corporalion the "T.W. Samuels" brand for whiskey owned by him. On that date at a meeting of the Board of Directors, Leslie B. was elected a member of the Executive Committee and Vice President and General Manager of the corporation, and T. William was elected Assistant General Manager. In the year 1935, T. William, by purchase from the corporation, acquired a substantial number of shares of the capital stock. On February 11, 1936, Leslie B. transferred to T. William approximately one-half of the number of shares owned by him, and upon Leslie's death February 17, 1936, T. William, the only heir at law, inherited the remainder of Leslie's holdings.
On December 30, 1938, the corporation increased its capital stock, and T. William, by subscription, increased his holdings in the company. In the meantime he had been elected a Director of the corporation to succeed his father, and at the same time was elected Vice President and General Manager, all of which offices and position he held continuously until July 30, 1943, when he resigned, and sold all of his stock. In the meantime to wit, January 6, 1942, the Articles of Incorporation were amended changing the name of the corporation to Country Distillers Products, Incorporated.
On January 14, 1942, pursuant to the provisions of Sec. 199b — 1, 3, 4, Carroll's Kentucky Statutes, now KRS
Whilst the above history of appellant corporation may not be complete, it is sufficient for the purpose of determining the issues involved in this case. We now will give a brief resume of the history of the corporate appellees.
Approximately six weeks after T. William Samuels sold his stock in appellant corporation, he, his wife, and Honorable Ernest N. Fulton, as incorporators, filed Articles of Incorporation in the County Court Clerk's office of Nelson County, and the Secretary of State's office in Frankfort, to incorporate both appellees, "T.W. Samuels, Incorporated" and "Old Samuels Distillery, Incorporated," each having an authorized capital stock of $3,000. Each of the above named incorporators subscribed to five shares amounting in the aggregate to fifty per centum of the common stock of each of the corporations. At the date of the filing of the petitions here in none of the subscriptions had been paid in full or in part, and neither corporation had attempted to function as such because (1) of the recent World War, in which T. William Samuels participated, and (2) the institution of these suits. The Articles of Incorporation of each of appellees permit them to engage in the manufacture, transportation, blending, and sale of whiskey, and other distillery products, and to engage in all activities and pursuits incident thereto. It appears from the record that each of the appellees at the termination of this litigation will commence operation in accordance with its Articles of Incorporation, but the name or names of the brand or brands of whiskey it owns or under which it intends to market its products does not appear in the record. The parties to both actions have stipulated that each of the appellees will cause to be placed under its corporate name, wherever it may appear, the following phrase: "not connected with Country Distillers Products, Incorporated."
These actions, consolidated in this Court, were instituted seeking to enjoin appellees from (1) using the names "T.W. Samuels, Incorporated," "Old Samuels Distillery, Incorporated," or any similar name as part *265 of their corporate names; (2) from using the names, "T.W. Samuels, Incorporated" or "Old Samuels Distillery, Incorporated," as a trade mark or brand name for its products or any of them; and, (3) from using the name, "T.W. Samuels, Incorporated," "Old Samuels Distillery, Incorporated," or any similar name in any connection with their trades or businesses.
In the judgment appealed from in the case first above styled the chancellor declared the appellee to be entitled to use the corporate name, "T.W. Samuels, Incorporated" and to cause to be placed on its labels, "manufactured, bottled, or blended by T.W. Samuels, Incorporated;" provided it causes to be placed under the corporate name or adjacent thereto the words "not connected with Country Distillers, Incorporated." The judgment further provides that the corporate name, "T.W. Samuels, Incorporated," should be of type comparable in size to that customarily used by other distributors on the bottom of whiskey labels designating the name of the distillery at which the products shall have been manufactured, bottled, or blended; that appellee shall not use the words, "T.W. Samuels" as a brand name or a trade name; and that appellant shall have the exclusive right to use the brand name of "T.W. Samuels."
The judgment in the second styled case is identical with the one in the first styled case except the words, "Old Samuels Distillery, Incorporated," was substituted for the words, "T.W. Samuels, Incorporated." In addition thereto the judgment provides that appellant has the exclusive right to the use of the brand name "Old Samuels," despite the fact that neither of the parties to these actions nor any third party, so far as this record discloses, has ever asserted ownership of, or the right to use, the words "Old Samuels" as a brand name for whiskey.
On these appeals appellant contends that the Court erred in refusing to grant it an injunction prohibiting appellees from using the words T.W. Samuels and Old Samuels in their corporate names, because the use of such names in the manner complained of amounts to unfair competition to appellant. On the cross appeal, appellee, Old Samuels Distillery, Incorporated, contends *266 that the Court erred in adjudging appellant to be the sole owner of, and entitled to, the exclusive use of the brand name of "Old Samuels." In support of this contention, appellee argues that there never was a brand for whiskey known as "Old Samuels," therefore, no one can assert the right of ownership, or exclusive use, of it. Both appellees contend that the Chancellor was without authority to designate the size type they may use on their whiskey labels.
The precise question heretofore has not been presented to this Court. In E.H. Taylor, Jr., and Sons Company v. Taylor,
In Frazier et al. v. Dowling et al., 39 S.W. 45, 18 Ky. Law Rep., 1109, the infringement alleged was upon the trade-mark "Waterfill Frazier" which was a brand registered with the United States Government, and which registry gave appellees the right to its exclusive use. The appellants in that case ordered labels and were threatening to use the identical brand. The Court held it to be an unlawful infringement, although appellants' right to use their names in their trade-marks was recognized. In Churchill Downs Distilling Company v. Churchill Downs, Incorporated,
More nearly in point with the questions herein presented *268
is National Distillers Products Corporation and Old Taylor Distilling Company, Incorporated, v. K. Taylor Distilling Company, Incorporated,
We are of the opinion that the restrictions imposed on appellees by the Chancellor sufficiently meet the test expressed in the above styled authorities, when by his judgment he requires appellees to place under their corporate names the words "not connected with Country Distillers Products."
We think the Chancellor did not abuse his discretion in requiring appellees to print their corporate names on their labels in type comparable in size to that used by other distilleries. By enlarging its type on its labels each appellee would be giving undue prominence to a name it is entitled to use only "reasonably, honestly, and fairly." But we are of the opinion that the Chancellor exceeded his authority in declaring that the appellant has the exclusive right to use the brand name "Old Samuels," which neither by pleading nor by evidence it has asserted a right to use. The only place that the brand name "Old Samuels" appears in this record, is in the judgment.
Wherefore, the judgment in the case of Country Distillers Products, Incorporated, v. T.W. Samuels, Incorporated is affirmed on both the original and cross appeals; and the judgment in the case of Country Distillers Products, Incorporated, v. Old Samuels Distillery, Incorporated is affirmed on the original appeal, and affirmed in part and reversed in part on the cross appeal *271 with directions that another be entered in conformity with this opinion.
It is the contention of the appellant in its petition for rehearing that the decision of this Court constitutes a taking of property without due process of law and is therefore violative of the due process and equal protection clauses of the Fourteenth Amendment of the Constitution of the United States. With this contention we cannot agree.