J. I. Case Plow Works v. J. I. Case Threshing Machine Co.

162 Wis. 185 | Wis. | 1916

Tbe following opinion was filed December 7, 1915:

WiNsnow, C. J.

Tbis is a contest over tbe right to use a proper name as a trade-name. It is unique in tbat it is a struggle between two corporations for tbe exclusive right to use tbe name of their common founder upon certain products which both make. It is not' tbe too frequent case of barefaced trade piracy, where one who happens to bear tbe same name as tbat borne by a successful manufacturer goes into tbe same business and endeavors to appropriate to himself tbat which be has done nothing to create, namely, tbe business good will attached to tbe name as tbe result of tbe ability and efforts of tbe first manufacturer. In a word, it is not tbe case of tbe business parasite.

Each of tbe great corporations engaged in tbis struggle possesses tbe name of Jerome I. Case as a part of its own corporate name and rightfully so, because Mr. Case long ago endowed them with tbat name with tbe full consent of all who were then interested in either corporation. Tbe idea doubtless was to give each corporation all tbe prestige which tbat name bad acquired in farming and industrial circles as tbe result of tbe successful manufacture of threshing machines for many years. It was not then supposed tbat there would ever be business rivalry between tbe two corporations. Each bad its own field, and tbe thought unquestionably was tbat each would reap no small degree of profit from tbe use of tbe founder’s name.

: Undoubtedly, also, both of these corporations have contributed, each in its own field, to increase the value of the name as a business asset; both are honest in their claims, and it is certain that both are very much in earnest.

The fundamental principles which govern a case of this nature are not numerous nor are they difficult of abstract statement; the principal difficulty consists in applying them to a concrete case. That difficulty is greater in the present case than it ordinarily is because of the fact that each party has an undoubted right to the advantages of the name in its own special sphere of business activity and that these spheres seem to impinge upon each other. This exceptional difficulty can hardly be said to be the fault of either party, yet it is a difficulty resulting from deliberate and voluntary action of the founder of the two corporations and his business colleagues, through whom both of the parties here must trace their rights. None could have reasonably anticipated this ■difficulty at the time the foundation for it was laid, but it has ■come naturally and almost inevitably as the result of the development of the tractor as a motive power.

The solution of the difficulty should be sought by both parties, not with ill-feeling or rancor, but in good temper with that broad vision and desire' to deal fairly and honestly with ■each other which ought always to characterize the acts of men of large affairs who are intrusted with the management of great business interests and who aspire to lead in the industrial world.

The legal principles which are controlling here are simply the principles of old-fashioned honesty. One man may not reap where another has sown nor gather where another has strewn. A man may manufacture and sell unpatented articles and use his own name in doing so, but if another has previously and rightfully made that name valuable as a trade-name descriptive of the same kind of goods he has created a property right therein which may not be appropriated by a subsequent manufacturer, even though he bear the same name; and, if necessary to prevent that result, conditions and limitations upon the use of the name will be enforced by the courts, which will preserve to the first manufacturer the fruits of his industry and prevent the public from being misled. The extent of these conditions and limitations varies according to the circumstances of the case and is limited only by their sufficiency to accomplish the result named. Much more might be said, but little would be gained thereby which would be helpful in the present case. Fish Bros. W. Co. v. La Belle W. Works, 82 Wis. 546, 52 N. W. 595; Phoenix Mfg. Co. v. White, 149 Wis. 287, 135 N. W. 891; Russia C. Co. v. Le Page, 147 Mass. 206, 17 N. E. 304; Singer Mfg. Co. v. June Mfg. Co. 163 U. S. 169, 16 Sup. Ct. 1002; Herring-Hall-Marvin S. Co. v. Hall’s S. Co. 208 U. S. 554, 28 Sup. Ct. 350; Waterman Co. v. Modern Pen Co. 235 U. S. 88, 35 Sup. Ct. 91; Guth C. Co. v. Guth, 215 Fed. 750.

There can be no doubt here that the plaintiff has a right to the use of the name “Case” or “J. I. Case” as a trade-name descriptive of plows, and that such right is a valuable right which it is the duty of the court to protect.

The plaintiff and its predecessor (to whose rights it has succeeded) commenced to make plows in 1876, has been making them ever since, and has built up a large business. These plows have become favorably known to the trade and to farmers generally as the “Case” plows. Beginning with the simple walking plow, the plaintiff soon began to manufacture single sulky plows and sulky gang plows, and still later to manufacture gang plows to be drawn by tractors or engines. These engine-drawn gang plows presented some differences in details of construction and in arrangement of levers. They were just as truly plows, however, as was the walking horse plow which the plaintiff first made, or as was the simple tool laboriously hammered out by the village blacksmith two centuries ago. The claim that the engine-drawn plow outfit is a separate and distinct composite tool and hence cannot be said to be in competition with plows, cannot be entertained for a moment. A plow is a plow however drawn..

The contention is further made that because some part of the public had no exact knowledge as to what institution or company manufactured the “Case” plow, and because many supposed it to be made by the same institution or a branch of the same institution which made the threshing machines, therefore the Plow Works have no property right in the trade-name “Case.” This claim is very plainly untenable. The important fact is that the name “Case,” as applied to plows, has become a valuable thing, i. e. that it is well known that some institution has been making the “Case” plow for many years and has made it a success, and hence that the purchasing public is inclined to buy it rather than a plow which has no such history behind it.

The institution which has stood behind the plow and, by its energy and business sagacity, has endowed it with its history and its success is the institution which is entitled to profit by that history now, even though its identity has not always been understood by its patrons.

No claim can be successfully made that the defendant T. M. Company ever made or attempted to make plows and put them upon the market until the experiment with the so-called “steam-lift” plow in the spring of 1910, which experiment proved a failure and was abandoned the following year. The first real plow competition began with the making of the “Case-Sattley” contract in January, 1912, and as soon as this step was brought to the plaintiff’s attention protest was made, followed a few months later by the commencement of this action. Even should the experiment of 1910 be considered as an entry by the T. M. Company into the plow business using the trade-name “Case,” there can be no claim made that the T. M. Company has acquired any additional rights thereby. There is no showing of laches after that date, and the fact remains that even then the right to use the name “Case” as a trade-name for plows bad been tbe property of tbe plaintiff for many years.

It is clear, therefore, that tbe defendant T. M. Company cannot be allowed to nse tbe name, either alone or in combination with other words, as a trade-name upon any plows or in advertising any plows which it sells, whether such plows be walking plows, or sulky plows, or gang plows to be drawn by horse or engine power; and the word “plows” as used in this .sentence covers plow bottoms, beams, levers, and any other incidental parts necessary to the operation of the implement which do not form a part of the attachment next to be spoken of. Whether they should be allowed to use their corporate name or their corporate trade-mark thereon is to be considered later.

It appears that in order successfully to operate engine-drawn gang plows there must be a connecting structure or platform of triangular shape which may be utilized for carriage of fuel as well as for the furnishing of the necessary diagonal beam with hooks to which the plows themselves are attached. This so-called attachment has been made and sold by the T. M. Company since 1902 and has had the name “Case” as a trade-name stenciled in large letters on its side in addition to the corporate name of the company. The plaintiff does not claim to have made any such device, at least until very recently,'or to have acquired any right to use the word “Case” as a trade-name thereon.

The plaintiff claims, however, that, because this attachment is generally, if not universally, sold with the plows as a part of a single complete outfit or tool, the use of the name “Case” as a trade-name thereon is fully as misleading as the use of that name upon the plows themselves; and this seems entirely reasonable and accords with the conclusions reached by the trial court. If the attachment is sold with plows attached thereto, we are satisfied that it should not bear the name “Case” as a trade-name or any combination of words containing that name. The ordinary purchaser would certainly not be apt to differentiate, between the attachment and the plows themselves, and the name “Case” blazoned on the side of the attachment would be quite as likely to carry to his mind the idea that the plows attached were the original Case plows as if it were placed on the plows themselves. It follows that the prohibition against the use of the trade-name on the attachment should be just as sweeping when it is sold with plows attached as the prohibition against its use on the plows themselves. As to the use of the corporate name or trademark thereon, that subject will be considered a little later.

The foregoing propositions concerning the use of the trade-name as such upon the plows and the attachments seem clear and simple. Complications arise, however, when the question as to the use of the corporate name and trade-mark upon these articles is considered. On the part' of the plaintiff it is claimed that inasmuch as the name “J. I. Case” occurs in the defendant’s name and mark as well as in the corporate name and mark of the plaintiff, the same misleading and prejudicial consequences will result if the T. M. Company be allowed to use its name and mark, or either of them, upon the plows or attachments as would result from the use of the single word as a trade-name. On the other hand it is claimed that the defendant cannot be deprived of the use of its lawful name or trade-mark upon its products which it has the right to manufacture and sell.

It seems fairly clear from the wording of the findings and judgment that the trial court agreed with the plaintiff’s contention so far as the plows themselves are concerned and prohibited the T. M. Company entirely from placing its corporate name or trade-mark thereon, but as to the attachment the conclusion seems to be that trade-name, corporate name, and trade-mark might be used if plows were not sold with it, being accompanied by a clear statement that it is not manufactured by the plaintiff. We confess to some difficulty in ■understanding just wbat conclusion the court reached with reference to the marking of the attachment when sold with plows attached as well as with reference to the advertising of plowing machinery. Subdivision (4) of the findings has been specially difficult of interpretation and we are not sure that we fully understand it now. The fault may well be ours. Our difficulty suggests, however, that others may be troubled in the same way, and as it is of the utmost importance that the judgment should be so clear and unequivocal in its terms that no two constructions are possible, it seems that it would be well to modify the judgment and recast a number of the provisions so that there may be no possible doubt as to the meaning.

As we construe the judgment it holds (1) that both parties are entitled to make plows; (2) that plaintiff is entitled to the exclusive use on plows and in advertisements thereof of the name “Case” or “J. I. Case;” (3) that the defendant T. M. Company is forbidden to use the said trade-name alone or in combination with other words or its corporate name or trade-mark on plows; (4) that it is also forbidden to use the trade-name, corporate name, or trade-mark in advertising plows, except that it may advertise them under a trade-name so different that persons of ordinary care will understand when they buy plows of the T. M. Company that they are not acquiring a Case or J. I. Case plow {Query. Does this mean that the defendant may use its corporate name and trademark in plow advertisements provided it'gives the plow itself a different name, such as “Badger” or other arbitrary name?); (5) that the T. M. Company may sell the attachment without plows and put the trade-name “Case” thereon as well as its trade-mark, attaching also words clearly showing that it is not manufactured by the plaintiff, but if it sells the same with plows, then it is subject to the prohibitory provisions of the fourth clause; (6) that the defendant T. M. Company is prohibited from representing in any way that tbe plows wbicb it sells are tbe plaintiff’s product or are tbe original Case plows.

Tbe first clause of tbe judgment is nnappealed from, bence it is tbe law of tbe case so far as it goes and need not be considered..

Tbe second clause agrees entirely with tbe conclusions already reached and stated in tbis opinion and needs no further discussion.

Consideration of tbe third clause brings us squarely to tbe question whether tbe defendant ought to be prohibited from placing its corporate name or its trade-mark on tbe plows themselves.

On tbis question tbe defendant T. M. Company urges that it rightfully bears tbe name “Case” as a part of its corporate name and that it has rightfully acquired a property right in a trade-mark wbicb embodies its corporate name, and it claims that it cannot be deprived of tbe usé of its name or trademark upon its goods whatever tbe consequences may be to tbe plaintiff. There may be found many cases wbicb say in substance that a man cannot be deprived of the right to use bis name in a lawful business by reason of tbe'fact that tbe same name has become a trade-name owned by another, and tbis is undoubtedly true, but tbis does not mean that it may be used at all times or on all surfaces or in all possible ways; in a word, it does not mean that tbe use may not be^ubjected to such conditions as are adequate to protect tbe public against deception and business competitors against unfair competition. It does mean, of course, that tbe right to use a proper name is not to be interfered with except so far as it may be necessary to accomplish tbe purposes mentioned.

Is it necessary here ? Tbe plaintiff answers in tbe affirmative because of tbe special circumstances wbicb make confusion more than probable, namely, the fact that both tbe corporate name and tbe trade-mark of tbe defendant embody tbe name “J. I. Case” prominently displayed, and thus in a measure perform tbe same function and are to all intents and purposes as misleading to tbe average person as tbe trade-name alone. Tbis argument is certainly forceful; nevertheless we are not convinced tbat there should be a complete denial of tbe right of tbe defendant to affix its corporate name to its product. We do not say tbat tbis might not be done if there were no other way to prevent unfair competition and fraud, but we do say tbat it seems tbat it should be done only as a last resort.

We do not deem it necessary in tbis case. We think tbat the third clause of the judgment should be modified by adding at tbe end thereof an exception to tbe effect that there may be placed at some place on tbe plow or beam a statement tbat it is manufactured by tbe J. I. Case T. M. Company of Ha-cine, but if tbis be done there shall also be placed in plainly legible letters on tbe beam or other equally noticeable place on tbe plow, and so conspicuously displayed as to readily attract the attention of tbe ordinary observer, tbe words “NOT the original Case plow,” or, at defendant’s option, tbe words “NOT the Case plow made by J. I. Case Ploiu Worles/' tbe word “NOT” in either case to be in capitals.

It seems to us that tbis plan will afford very complete protection to tbe plaintiff. It means tbat neither tbe trade-name nor tbe trade-mark are to bo used on plows, and only tbe corporate name in connection with á statement of manufacture; but if tbis be done, one of tbe above warnings must accompany it. Tbis applies equally to plows sold singly or in gangs or as part of an engine-drawn plowing outfit.

Tbe fourth clause, as before remarked, is tbe one which has impressed us as being likely to be misunderstood or construed differently by different minds. Tbis we think should be recast and devoted to tbe advertising feature alone, because tbe matter of tbe marking of tbe plows themselves will be fully covered by tbe third clause as modified. It is very evident tbat in tbe matter of advertising there are some considerations applicable to that feature alone. The T. M. Company makes many and varied articles of machinery, and upon most if not all of them (excepting plows) it apparently is entitled to use the name “Case” as a trade-name as well as to use its corporate name and trade-mark as it may choose. It would not be reasonable to hold that it may not advertise and catalog its plows and plow machinery (which it rightfully makes and sells) in connection with its other products, and if it does so it follows that the trade-name, corporate name, and trade-mark will necessarily be capable of being used in more or less close proximity thereto. The better method here is doubtless to amend and modify the fourth clause so as to provide that whenever and wherever the defendant T. M. Company advertises or catalogs or makes public other printed matter relating to plows, plowing outfits, or plowing machin- ■ ery, it must not use in immediate connection with the printed matter relating to plows or plowing machinery the trade-name “Case” or “J. I. Case” alone or in combination with other words nor the trade-mark. It -may state directly or inferentially that it manufactures the plows, but there must be conspicuously inserted in and as a part of each such advertisement or catalog or collection of printed matter, in conspicuous type and style which will necessarily arrest the attention of the ordinary person interested in the subject, the words “Our plows are"not the original Case plows,” or, at its option, “Our plows are not the Case plows made by the J. I. Case Plow 'Works’3 It may, of course, give its plows an arbitrary name which has not already been appropriated by another plow maker, and may catalog and advertise them under that name, but even in that event the warning above given must be displayed in connection With the advertisement or descriptive matter in the catalog.

The fifth clause relates to the triangular attachment before spoken of. This clause also seems to us to be liable to be misunderstood, and we therefore think it should be modified and recast entirely so as to provide that tbe defendant T. M. Company is authorized to make and sell the attachment either alone or with the tractor or with the tractor and plows as a complete outfit. If sold without plows attached, whether with or without tractor, it may be sold with the trade-name “Case” or “J. I. Case” thereon or its corporate name or trademark or with all of them, ,but in either event there must be placed thereon, in close proximity and in conspicuous lettering so as to attract the attention of the ordinary observer, the words “Not made by the J. I. Case Plow Works.” In case, however,'it is sold -with plows attached as a plowing unit, the said defendant is prohibited from placing said trade-name, corporate name, or trade-mark thereon, but may state only thereon that the same is manufactured by the J. I. Case T. M. Company,. and in immediate connection therewith, conspicuously displayed so as to be noticed by the ordinary observer, the words “Plows attached are not the original Case plows,” or, at its option, the words “Plows attached are not the Case plows made by the J. I. Case Plow Works.”

The sixth clause is a general clause which does not require modification or attention.

The seventh division of the judgment, embracing several clauses, relates entirely to the matter of the reception and disposal o'f the imperfectly addressed mail. The difficulty here is unquestionably a real one, but one for which no one now in the active management of either concern can be held to be responsible. Its foundation was laid by Mr. Case when he gave his name to the corporations located in the same city and engaged in manufacturing articles closely allied in their uses and appealing to the same general body of consumers. This difficulty also should be met by the men who have thus inherited it with fairness and an earnest attempt to solve it in a manner just 'to both companies. In a word, they should meet'it like gentlemen, not like angry boys.

The judgment of the'court below provides in substance that all defectively addressed mail shall go from the postoffice to the T. M. Company and be opened by a representative of that company at 11 o’clock a. m. and at 6 o’clock p. m. in the presence of a representative of the Plow Works, that the distribution of the mail shall be determined by the representa-* tive of the T. M. Company, but that the representative of the Plow Works shall have full opportunity to examine and take notes from any disputed mail matter so that the court may be applied to for an order as to its disposition.

’ We see no valid legal objection to this portion of the judgment. Whether it will prove satisfactory in practical operation may be a more serious question. It does not conflict in any way with the determination of the postoffice department, but grasps the situation after the postal authorities have completed their work. At this point the court exerts its authority over the persons of the parties and directs what shall be done by each to insure to the other equitable and fair treatment of a troublesome and doubtful question. There is no interference with personal liberty or with the right of privacy, nor is there any violation of the constitutional provision against unreasonable searches. These ideas are mere hobgoblins conjured up by an overwrought imagination.

The case is this: The name of the addressee upon a piece of mail is a name not borne by any person or corporation. Two corporations, however, rightfully bear names very much like it. No one can tell which one the writer intended to name. The postoffice department directs that it shall be delivered to the elder institution and it is so delivered. The court, having both parties before it, pow directs that after such delivery it shall be opened by the representative of the elder institution in the presence of the representative of the younger institution in order that both parties may be advised at once of the contents, and that application may be made to the court for relief in cáse the letter is assigned to the firm for which it was not intended. If a court of equity cannot deal effectively with sncb a situation when it is involved in and is really a part of an equitable controversy of wbicb it already bas jurisdiction, it would seem to be impotent indeed. We bold tbat it can, and so bolding we arrive at tbe conclusion tbat tbis subdivision of tbe judgment needs-no modification.

After thus providing for tbe treatment of defectively addressed mail tbe court dismissed tbe cross-complaint of tbe T. M. Company except tbat it perpetually enjoined tbe newly organized corporation (tbe J. I. Case Company) from acting as selling agent of tbe Plow Worles in tbe sale of tractors and' tractor-drawn plows, and from selling tbe same on its own account. Tbis latter provision is complained of by tbe said J. I. Case Company in a brief filed in its bebalf altbougb tbat company took no appeal. Tbis right is claimed under sec. 3049a, Stats, (sec. 8, cb. 219, Laws 1915), by wbicb it is provided tbat any respondent may bave a review of rulings-of wbicb he complains by serving on tbe appellant, before the-case is set down for argument, a notice stating in wbat respect be asks for review, reversal, or modification. Tbis act went into effect September 1st of tbe present year and tbe respondent served its notice September 10, 1915, while tbe case-had been set down for argument in tbe preceding August. It seems, therefore, tbat we might well refuse to consider the-question, but wc bave deemed it best to give it examination to tbe end that there may be no ground for saying that consideration has not been given to all phases of the controversy.. Tbe contention of the J. I. Case Company, so called, does not make a strong appeal to tbe mind which is striving to look at the whole matter fairly and impartially. Tbe company was-, organized hurriedly as an expedient to prevent tbe T. _ M. Company from changing its name and assuming tbe name of' tbe J. I. Case Company. It was evidently intended also to-serve as a means of adding still greater confusion to tbe mail situation and reaping, if possible, tbe benefit of tbe confusion in tbe public mind as to tbe identity of tbe two senior corporations.

These objects can bardly be approved of or beld to be consistent witb anything like a high code of business ethics.

In view of our statute (sub. (2), sec. 1172, Stats.), which provides that tbe name assumed by a corporation “shall be such as to distinguish it from any other corporation organized under the laws of this state,” it may well be considered as-doubtful whether, under the circumstances of confusion in the public mind here present, the name J. I. Case Company could lawfully be adopted by any corporation. Is it such a name as will distinguish the corporation adopting it from any other corporation ? Is it not, on the other hand, a name that will inevitably confuse the corporation adopting it with one, if not two, existing corporations ?

These questions are. not presented so that they can be authoritatively answered in this case, but we suggest them as questions for the serious consideration of all parties to this litigation.

The court was evidently of opinion that it would be unfair competition in trade for the newly organized subsidiary company, called the J. I. Case Company,■ to act as selling agent for the plaintiff in selling tractors and engine-drawn plows, and in this conclusion we concur. So far as the tractor itself is concerned, the T. M. Company had a perfect right to make and sell it under its corporate name and trade-mark and even under its trade-name “Case.” The plaintiff company never made a tractor, and it is clear that it had no right in equity to launch a subsidiary corporation bearing a name which would at once be mistaken by the public for the defendant’s name, and embark it in the tractor business as the plaintiff’s agent in direct competition with the defendant. This is doing, by indirect means, just what the plaintiff claims that the T. M. Company bas done with, reference to plows. “He who seeks equity must do equity” is just as good a rule now as it ever was.

There are a number of lesser contentions made which we do not deem it necessary to treat specifically. They are overruled without comment but not without having received attention.

The trial court directed in the findings that the plaintiff should recover costs against the T. M-. Company in a sum not exceeding $500. In the judgment, signed by the trial judge himself a few days later, it was adjudged that the plaintiff recover of the T. M. Company “its costs which are limited to five hundred dollars ($500) and its legal disbursements made or incurred herein, amounting together to - dollars.” Three weeks later costs were taxed by the clerk at the sum of $290.88 for attorneys’ fees and $858.87 for disbursements, amounting to $1,149.75 in all, and these sums inserted in the judgment. No appeal was taken from the taxation of costs.

It is now claimed that the entry of the judgment, being a ministerial act, must follow the order for judgment, which, as it is claimed, limited the costs, including disbursements, to the sum of $500.

“Costs” in its exact sense includes disbursements (sec. 2921, Stats.; Emerick v. Krause, 52 Wis. 358, 9 N. W. 16), but the word is not infrequently used as meaning attorneys’ fees in contradistinction with disbursements, and it is very clear by the wording of the judgment’in this case, signed by •the judge himself, that he understood that he had used the word in this latter sense in the order for judgment. It is quite certain that the parties so understood it, for we are not informed by the appellant that any objection was made to the taxation or any review 'thereof asked in the trial court. When it is evident that the court used the word in this inexact but colloquial sense and that all parties understood that it was so used, we see no objection to so construing it.

By the CouH. — Judgment modified as indicated in this-opinion and as so modified affirmed, without costs, except that appellant is to pay the fees of the clerk of this court to be taxed.

The following opinion was filed February 1, 1916:

Pee Cueiam.

A motion in the nature of a motion for rehearing is made by the appellant asking that the language of the opinion be slightly changed in one particular. The opinion provides in effect that when the appellant sells or offers for sale a plow it may, under certain conditions, place, at some place on the plow or on its beam a statement that it is manufactured hy the J. I. Case Threshing Machine Company. The appellant calls attention to the fact that it has. on hand a stock of plows manufactured for it by the Eacine-Sattley Company and is under contract to purchase more, plows of the same company, and that it cannot truthfully mark such plows as manufactured “hy” it, and hence that, unless it be permitted to mark them “manufactured for” it,, there can be no marking placed upon them at all.

It seems clear that the appellant should have the privilege-suggested. The opinion is therefore amended so as to provide that the statement of manufacture above referred to may read “manufactured for the J. I. Gase Threshing Machine Company” in case such be the fact. In no other respect is-any change made in the opinion.