PURITY CHEESE CO. v. FRANK RYSER CO. et al.
No. 8760.
Circuit Court of Appeals, Seventh Circuit.
Jan. 25, 1946.
Of course, we are not permitted to disturb a finding of the Commission if it is supported by substantial evidence. The principal reason for this rule is that the Commission, or its Examiner, has the opportunity of observing the demeanor of witnesses and thus has a better opportunity of passing upon the credibility of such witnesses, an opportunity which is not given to the reviewing court, and this is as it should be. Duvall et al. v. Barry, 7 Cir., 103 F.2d 653. In this case neither the Commission nor its Examiner had that opportunity with respect to most of the witnesses. The reason for the rule has failed in this case, however, if the ruling of the Commission stands this court is still bound by the rule. We think there was error in the ruling.
Respondent insists that there is no constitutional right to the benefit of demeanor evidence; that it is no more than a secondary and dispensable advantage of the rule of confrontation. In support of this contention it relies upon Wigmore on Evidence (3rd Ed.) §§ 1395, 1396. These sections do not support that contention. That author states that the process of confrontation has two purposes. The first is to secure for the opponent the opportunity of cross-examination, the second is to have the personal appearance of the witness before the judge and jury, from which they are enabled to obtain the elusive and incommunicable evidence of a witness’ deportment while testifying. In § 1396 the author states: “Nevertheless, the secondary advantage, incidentally obtained for the tribunal by the witness’ presence before it—the demeanor-evidence—is an advantage to be insisted upon whenever it can be had. No one has doubted that it is highly desirable, if only it is available.” The author concludes that the rule may be dispensed with in cases of unavailability. Here there is no claim by anyone that the witnesses were unavailable, and counsel has cited no decision of our Supreme Court which in any way abrogates the ruling in the Ohio Bell Telephone Company case, and the Morgan case, supra, both of which cases hold that a failure in this respect would amount to a failure of due process. So long as these cases stand, neither we nor the Commission can ignore them.
Other questions are presented concerning which we intimate no opinion. The Commission‘s order is set aside and the cause is remanded to the Commission for further proceedings not inconsistent with this opinion.
MAJOR, Circuit Judge, dissenting.
S. L. Wheeler, of Milwaukee, Wis., for appellant.
Louis Quarles, of Milwaukee, Wis., and Richard Russell Wolfe, of Chicago, Ill. (Carlson, Pitzner, Hubbard & Wolfe, of Chicago, Ill., and Lines, Spooner & Quarles, of Milwaukee, Wis., of counsel), for appellees.
Before SPARKS, MAJOR, and KERNER, Circuit Judges.
KERNER, Circuit Judge.
Plaintiff filed its complaint against defendants for infringing its registered trademark “May-Bud” and for unfair competition. Defendants move for summary judgment. The District Court sustained the motion and entered a judgment for costs against plaintiff. From that judgment, this appeal is prosecuted.
The complaint and bill of particulars alleged that since July 12, 1940, plaintiff has used its trade-mark in connection with dairy products and more particularly cheese; that from September, 1939, to June, 1942, defendants acted as sales agents for plaintiff and as such agents sold plaintiff‘s cheese under its trade-mark “May-Bud“; that on September 1, 1942, plaintiff licensed
The court‘s decision in our case was based upon the view that the complaint and bill of particulars disclosed “such unclean hands as to disentitle it [plaintiff] to relief in the premises.”
To sustain the judgment defendants contend that when plaintiff permitted the United Cheese Company to use its trade-mark on cheese manufactured by others, it was party to a fraud committed against the public and that it now is in no position to invoke the aid of a court of equity to protect that trade-mark.
In our view the question presented is whether the complaint and particulars, standing alone, furnished adequate factual basis for a summary judgment of dismissal.
In considering a motion for summary judgment, the pleadings upon which the motion is based are to be liberally construed in favor of the party opposing the motion, Wyatt v. Madden, 59 App.D.C. 38, 32 F.2d 838, and the facts alleged must be taken as true. Art Metal Construction Co. v. Lehigh Structural Steel Co., 3 Cir., 116 F.2d 57; Galbreath v. Metropolitan Trust Co., 10 Cir., 134 F.2d 569. The motion should be sustained only where there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.
In the instant case the pleadings do not disclose the nature of the license issued to plaintiff‘s distributor or the circumstances
A trade-mark may be assigned, licensed, or lent, as long as it remains associated with the same product or business with which it has become associated in the public mind, E. F. Prichard Co. v. Consumers Brewing Co., 6 Cir., 136 F.2d 512, and this court has held that there appears to be no legal obstacle either to a retailer assigning his trade-mark to the manufacturer of the article sold by the retailer or to a manufacturer assigning his trade-mark to one who sells the goods of the manufacturer. Corral, Wodiska y Ca. v. Anderson, Thorson & Co., 7 Cir., 95 F.2d 11, 14. It has recognized the right of a sales agent to use the manufacturer‘s trade-mark, United States Ozone Co. v. United States Ozone Co. of America, 7 Cir., 62 F.2d 881. See also Smith v. Dental Products Co., 7 Cir., 140 F.2d 140; Hicks v. Anchor Packing Co., 2 Cir., 16 F.2d 723, Morand Bros., Inc. v. Chippewa Springs Corp., 7 Cir., 2 F.2d 237. The fact that plaintiff was not the actual manufacturer of the cheese upon which its distributor was permitted to place the label in question, does not deprive plaintiff of the right to be protected in the use of its trade-mark. Menendez v. Holt, 128 U.S. 514, 520, 9 S.Ct. 143, 32 L.Ed. 526. Moreover, there is a presumption that plaintiff‘s hands are clean. L. P. Larson, Jr., Co. v. Lamont, Corliss & Co., 7 Cir., 257 F. 270, 273.
Hence, under the circumstances here appearing, we think the court erred in sustaining the motion for a summary judgment.
The judgment of the District Court is reversed and the cause is remanded for further proceedings. It is so ordered.
MAJOR, Circuit Judge (dissenting).
It seems to me that the majority opinion is based upon what plaintiff contends it would show at a trial, rather than upon what was disclosed by the pleadings upon which summary judgment was entered. In fact, that is the manner in which plaintiff‘s counsel in its brief approaches the question here. This is evidenced by a recital of what plaintiff now “offers to prove.”
Plaintiff in response to a motion for further and better particulars stated: “On or about September 1, 1942 plaintiff licensed its distributor United Cheese Co. of Chicago, Illinois to use the trade-mark ‘May Bud’ on labels of its own design bearing the name United Cheese Co. Chicago-Distributors, and some cheese sold under the resultant label (plaintiff‘s Exhibit B), has been manufactured elsewhere, but plaintiff has no knowledge by whom.” In other words, according to this admission, plaintiff permitted its trade-mark to be used upon a product not manufactured by it, not even by its distributor, but manufactured by some unknown party. Thus the trade-mark was used without regard to the source or origin of the product.
As was stated in Hanover Star Milling Company v. Metcalf, 240 U.S. 403, 412, 36 S.Ct. 357, 60 L.Ed. 713: “The primary and proper function of a trade-mark is to identify the origin or ownership of the article to which it is affixed. * * * Courts afford redress or relief upon the ground that a party has a valuable interest in the goodwill of his trade or business, and in the trade-marks adopted to maintain and extend it. The essence of the wrong consists in the sale of the goods of one manufacturer or vendor for those of another.”
Without citing or discussing the authorities further, it is my view that when the owner of a trade-mark permits its use upon a product the origin or source of which is unknown, the reason for its recognition ceases to exist. Under such circumstances the trade-mark no longer furnishes any protection to the owner. Such use also permits a deception and fraud upon the public who are entitled to rely upon it as signifying the origin and source of the product to which it is attached.
The reasoning of the majority and the cases cited in support thereof, in my opinion, evade the issue. None of these cases, as I read them, stand for the proposition that the owner of a trade-mark can permit its use upon goods of an unknown origin without forfeiting its right to enjoin some other party from its use. I agree with the opinion of the District Court, 57 F.Supp. 102, that the plaintiff under its own admission had no standing in a court of equity. I would affirm the judgment.