296 F. 387 | 2d Cir. | 1924
The court below granted an order on the appellees’ application, restraining the appellant from selling or dls
On July 31, 1911, a contract was entered into which provided for'the assignment of the trade-marks and for the continuation of the contract theretofore existing as long as Francis R., John W. and Daniel H. Arnold were connected with the firm of the appellees. This contract was entered into between the appellant and the Welles Trading Company, a Connecticut corporation, whose officers were the members of the appellees’ firm, as was also the sole proprietor of the appellant. The reason for this substitution of the Connecticut corporation in the contract in place of the appellees was said to be solely a personal one between the parties, and it was the intent and purpose of all the parties that the appellees were intended to be the real parties in interest in the contract and the sole distributors of the Dorin products in the United States. After the execution of this agreement, the appellees advertised and otherwise represented themselves to be the sole distributors of the appellant’s products in the United States, and all products were so imported and distributed. The Welles Trading Company never imported any products and never intended to import any Dorin products, and its sole and only interest in said products was to receive from the appellees 5 per cent, of the purchase price of all the goods so imported. This profit was distributed among the officers and stockholders by way of salaries and dividends. The Welles Trading Company dissolved in 1920 for reasons immaterial here, and a new company was incorporated under the laws of Delaware. This corporation took over all the assets and liabilities of the dissolving Connecticut corporation. Commissions were paid to it and dividends were declared.
This suit was brought by the appellant (1) for cancellation of the registration of a certain trade-mark “Dorind’or” registered by the appellees for compact powders and rouges in the United States Latent office; (2) cancellation of the registration by the appellees of the trade-mark “La Dorine” for powder puffs and powder pads registered by the appellees in the United States Patent Office; (3) an injunction enjoining the appellees from using “Dorind’or” and “La Dorine,” except to designate the original and genuine Dorin products; and (4) a decree declaring that the contract of July 31, 1911, be rescinded, canceled, and terminated. _
The answer denies the material allegations of the complaint, and in a counterclaim alleges that with the consent and approval of the appellant, and for its benefit, and without profits to themselves, they registered the trade-mark “La Dorine” for powder puffs and powder pads, to prevent the said trade-mark from being registered by outsiders, and that they sold and distributed, using this trade-mark solely in connection with the appellant’s products after advertising the same, and that they had never used or applied “Dorind’or” to any articles other than the metal boxes containing Dorin rouges and powders, with the full knowledge and consent and approval of the appellant. They allege full performance of all the terms and conditions of the contract o'f July 31, 1911, and ask for a dismissal of the complaint, and for affirmative relief directing the appellant to assign to them the trade-marks, and en
After issue was joined, the motion resulting in the order appealed from was made by the appellees. The order in effect keeps the parties in statu quo until final hearing. It was alleged that irreparablé damage would be done the appellees if this status -was not maintained. The right to the appellees’ temporary injunction is challenged: (1) Because it is said that the appellees have been manufacturing powder puffs under the trade-mark “La Doriné,” which were manufactured in the United States, and that such action on their part is a fraud and deception on the public, to the damage of the app'ellant, because the buying public in the United States would buy said pads under the impression that they were the products of the appellant; (2) that the appellees have been advertising and offering- for sale certain bath crystals, bath soap, and bath dusting powder under the name of “Fracy,” and that the-similarity of this name to the registered trade-mark “Fraisia,’bunder which Dorin sells one of its products, is such that the appellant has been and will be damaged by the appellees’ acts; (3) that the appellees have sold gilt boxes labeled “Dorind’or,”' and that this is a fraud upon the public; (4) that the appellant never consented to the appellees registering the trade-marks “Da Dorine” and “Dorind’or,” or any .other names, and that no one connected with the appellant knew that they had been so registered until August, 1923. What the appellees are charged with having done represents a course of business conduct which had been carried on for a great many years, and seems to have won the approval of and profit to the appellant heretofore. It is fitting that the parties should remain in statu quo until the truth or falsity of these claims are determined at final hearing.
As a further reason, it is argued that the dissolution of the Welles Trading Company was not completed until eight days after the defendants’ answer and counterclaim were interposed, and that it has interests under the contract of July 31,1911, and that the appellees have no interest such as to maintain their claim pleaded in the answer. But the appellant did not make the Welles Trading Company a defendant. It was familiar \vith the organization and purposes of this corporation. In the case of a litigant seeking the rescission of a contract, it should be found before a tribunal of equity as fulfilling its obligations under the contract, unless there be a clear breach thereof by the other icontractor. Selling through another, such as the distribution through Levy, together with the refusal to fill the orders of the appellee's, are circumstances which might well indicate a desire on the part of the appellant to avoid Its obligations under the contract.
The granting or refusing of a preliminary injunction ordinarily rests in the sound discretion of a trial court. The review thereof by an appellate court is limited to an inquiry as to whether there is an abuse of discretion in granting the order, and it is based largely upon the consideration of the object and purposes of the preliminary injunction. If it preserves the existing state of things until the rights of the par
We are satisfied that irretrievable damage would result to the appellees to allow others to sell and distribute products of the appellant, and thus destroy the good will which has been in the making for some 40 years. Their work in originating new types of rouges and other toilet preparations, together with the aid of advertising, has created a good will and a market reputation which should not be wrecked prior to a trial, unless good cause be shown therefor. The appellees have offered to carry out, pending the trial, their obligation to buy and sell from the appellant as the contract provides, and it is fully established that it is well able to meet the obligations of payment.
The order is affirmed.