CHATTAN()OGA ME:DICINE CO. 11. THEDFORD.
949
CHATTAN()O(}A: MEDICINE
00.
V. THEDFORD
et 01.
(Ot7"cuU OO'Wl't, N. D. Georgta. November 11, 189L) 1'JU.DE NAJI'lI-TRANSFER_CONSTRl1CTION OJ!' CoNTRACT.
M. A. Thedford, owning a third interest in the right to make and sella compound known as "Dr. A. Q. Simmons' Liver J{edicine," formed a partnership with his two co-owners, and for a time they prosecuted the business under the name of "M. Ao 'fl\\ldford & Co." Thedtord afterwards sold his interest in the right to his co:partners, and also conveyed to them all his right to "the firm name and style of M. A. Thedford & Co.," "for the purpose of manufacturing, advertising, and selling the 'Simmons Liver Medicine,' " provided, however, that in the use of. the firm name he was not to be responsible, "it beinA' simply to be used as a trade-mark of the business." HeZd, that the grantees had the exclusive right to use the firm name in connection with the "Simmons Liver Medicine" only, and,notin connection with a medicine advertised as "K A. Thedford & Co.'sOriginaland only Genuine Liver Medicine or Black Dranght. .. !
In Equity. Bill by the Chattanooga Medicine Company against M. A. Thedford and W. J. Satterfield for an injunction. Denied. Tbis is a bill in equity. brought by complainant against defendants to enjoin the latter from manufacturing, advertising, and selling the medicine known as" M. A. Thedford's Liver Invigorator." For a proper understanding of the issues to be determined by the court iuits present decision, Which, is on the application for a temporary injnnction, a brief stateme.nt of the facts may be necessary. About the year 1840, Dr. A. Q. Simmons,a resident of north Georgia, began the manufacture and sale of what has since been known as "Dr. A. Q. Simmons' Liver Medicine," "Dr. A. Q. Simmons' Vegetable Tonic," etc. Subsequently, and about the .year 1856, Dr. Simmons transferred to his son-in-law, J. H. Thedford, therigbt to manufacture, advertise, and sell" Dr. A. Q. Simmons' Liver Medicines," by wbom, in 1872, the samewas transferred to bis son, MileaA. Thedford, one of the defendantsbere. In tbesame year, Miles A. Thedford, wbo had formerly lived in north Georgia, went to Chattanooga, and formed a partnership with Nicklin & Rawlings, a firm of druggists in that city, for the purpose of manufacturing, advertising, and selling said medicines. A few years thereafter, Miles A. Thedford went to Louisville, Ky;, where, in 1873, be formed a partnership with Ed ward Wilder and Robert L. Edgerton, under the firm name and style of Miles A. Thedford & Co., with the object of continuing to make, advertise, and Bell eaid "Simmons Liver Medicines;" using the same wrappers for their packages and bottles there that were 'used in nooga, except aato color of paper, ink, and place of manufacture. After .carrying on this business for a sbort time, Miles A. Thedford returned to Chattanooga, and on October 14, 1875, sold to William G. Smith and Charles McKnight a two-thirds interest in his right, title, and inter-est in the manufacturing,advertising, and selling "Dr. A; Q;'Simmons' Liver Medicine," at the same time forming a partnersbip with the said Smith and McKnight, under the firm name of k. Tbedf6rd & Co. .on November 26, 1876, MilesA. Tbedford conveyed to Z. C.Patten his remaining interest. in the rightto make, mix, manufacture, ad-
vertise, and sell said cCDr. A. Q. Simmons' Liver Medicine," at the time bindinK in the St\le::of the same, unless he became the owner of any part of the interest sold to Smith, McKnight, or in which event nothing in the .transfer should be construed as interfering with his right to manufacture and sell said medicine. In the same instrument M. A. Thedford transfers all his right, in and to theus,e, Of the present trl1de-mark and the firm name and style, of M. A. Thed/clrd & Co. toZ. C. Patten, W. G. for the purpose of manufacturing, advertisbig, and, selling said "Simmons Liver Medicine," the transfer ita proviso that in the use of the and firm name of M. A.Thedford.& Co. he, Thedford, was to be in noway rt:sponsible. aS,it Jo'M Qsed in the business of advertising;'iuld selling "Dr. Simmons' Liver Medicine" as a trade-mark. It also appears from the pleadings and evidence presented that com plainant have the sela right to manufacture and sell Simmons' Liver Medicine. It seems that in September, 1868, a firinof the name of Zeilin, dl: Co., of Philadelphia, acquired by purchase fro'rn a son of Dr. Simmons the right to manufacture, advertise, and sell a medicine known 8S "Dr..Simmons' Liver Medicinej"Dr. Simmonshav;ing transferred that right to his son in the same manner that he transferred the same right to his son-'in-'law, J. H. Thedford" The firm of M. A. & Co., composed of Smith, McKnight, and Patten, seemed to have been succeeded by 8 company called "Dr. A. Q. Simmons' Medicine Company.".ag/linstthis cO:\1lpany and others J. H. Zeilin & Co., in the year 1877,brought a bill ill equity in the circuit court of the United States fQrthe ejlsteI'll district of Tennessee, seeking to enjoin said companyfrom manulacturing, advertising,and selling said '4 Dr. A. Q. Simmons'Liver Metlicine,".and the result of that case was the granting of a permanent injunljltion, 8spmyed for. The present complainant is the SUPceSS\ll',through Dr.. A ·. Q. Simmons Medicine Cornpaily. to all the rights acquired by it from M. A' Thedford through Smith, McKnight, anqP!1,tten. . . J.. T. }iupton Johft,. L. HlYpki'M, f<:>r complainant. iN.J.,fp T. A. Ham'lWJ'fl.d and O. P. GtYree, for respondents· . Befo.re NEWMAN, District Judge. ..:."; , , , , , , ; 4 \
District Judge·. After .much reflection, I am satisfied that a determina,tion oftha questionbetorethe court in this case depenJjl to be given the contract of sale from ThedfOJ'\lto Patten his associates. The.eyidencel!<>es not show that the made M. Co., of Rome. is the same as to ingrt'dients8s that made the Medicine Company, and is such. ap.entire dissimilarity in labeJs·and wrappers used by the former company to thOSe by the Ja.tter, itcouJd hardly be held, if the case, tUl1ledupon,that alone, tha,t tl;lere was any intringement of complainant's rights. The case turn upon the right of the Oh,attanooga to use the n841eof "M. A. Thed-
ford & Co." as they are rio'w tisirig the same in the manufacture, tiseolent, and sale of what is called"M. A.Thedford & Co. 's> Original and Only Genuine Liver Medicine or Black Draught." Indeed, the main contention of counsel for complainant A.. Thedford is violating his contract in the use Of his Dame in the' connection with the medicine which he is preparing and offering for sale. DidThedford, 'in his contract with Patten, bind himself so that he violates his agreement in the use of his own name in connection with what he calls L. 1.1" The language of the contract,so far as material here, is as fo110ws: "I hereby transfer and convi!y to the said Z. C. Patten all rights, title, and interest whatsoever that I have been, and am now, or may hereafter become, posseslJedof in the right to manufacture, make; advertise, and sen tile said 'Simmons Liver Medicine.'"And I hereby bind of manufacturing or seUillg the said myself Dot to engage in medicine under any name or style. or to become interested in Its manufacture through aw other person whatsoever. except Ish.ould,become the owner of any part 01' interest sold to Smith, McKnight. or Patten in the man lIfact· ure and mediCine under the firm naDie style of M. A. Thedford & Co. TheD nothing in thl$ conveyance shall be cODstrued to Interfere with my right' in manufacturing and sale of said medicine. 'It is and understood that .all my right, title. claim, anll interelJt; in and to the use of the that I now own and possess, or have previously or may hereafter own and P!'Sl!ess, and the firm and the style of M. A. Thedford & Co" is hereby tranSferred to Z. C. Patten. W. G> ::lmith, and Charles McJ{it.ght, for the purpose of manufacturing;' advertising; and selling the ·Simmons Liver Medicine,' and they have the sole right to use said firm name in any manner they may see proper in the manufacturing. advertising, and selling the said A. Q. Simmons Liver Medicine, ,and to sell. lease, or transfer the same to their assigns or successors; and plates, electrotypes. and lithographing stol1es, and printed matter bearing the signature of M. A. Thedford & Co; sold and to said Patten, Smith, and McKnight, for use aforesaid. of manufacturing', selli ng, &0., sald ·Simmons Liver Medi. cine:' provided, hOwever, that inthauseof said signatutes and flrm·name of . M. A. Thedford & Co. I am in ,no way responsible, it being simply to be Ilsed asa of the buslness, lind, as such, the right to use it is to the Smith, and McKnight. aDd their successors."
It will be seen from the language used in the contract that the transfer and sale of the right to use the name ofM. A. Thedford & Co. was confined to its use in connection with the manufaoturing, advertising, and selling "Simmons' Liver Medioine," and with that alone. It seems to be perfectly plain from' the words used that the parfjies intended by the contract to restrict the right to the use of the nalUe of M. A. Thedford & Co., so that it should be used in order to hold the present business of Thedford to be in violation of his agreement; that the contraot must be given a' much broader signification than the above indicated. I am not prepared to hold, in view of the language of the parties, that Patten and his associatM acquired more byth1s contract than the right to use Thed. ford's name ih advertising and selling what is known as "Dr. Simmons' Liver Medicine." If theconstr,uction of this contraot goes beyond that indicated, 'and if the intention of the parties, as derived frorrithl'l con· tract, could be that Thedford agreed not to use his own name in the manu·
952.
FlIDERAL REPORTER,
voL 49.
facture and sale of any liver medicine, it would be questionable, at least, if the contract would not be in restraint of trade, and therefore against
public policy, a:qgvoid. It is understood, of course, that the sale of the right to and sell a compound with secret ingredients would be valid, no way violative of public policy; and that is what I 1,luqerstand that Thedford, by his contract, Justifying in any way. the contentioQof as to the right to use the firm name of.M. A. ThedJord & Co., it,is .necessary to separate the proviso which concludes the which I have made above from the contract from, tllat wqicpprecedes it, and this I do not think can fairly be done. proviso is: however, that in the use of said signature said firm name of M.:A./Tht'dford &i Co. I am in no way responsible, but this is simply to be used of the and, as such, the right to use it is transferred to tluuaid Patten, Smith, and McKnight,andtbdr successors." right to use :firm name in theprededing part of the' contract for the purpose of "manufacturing, aqvertising, and selling 'Simmons' Liver Medicine.;'" It can hardly be said by this proviso, which was intended to belleRtrictive in its effect, the parties intended to enlarge the' right to use the'p,ame beyond that which has been before Ithjnk it mRy safely be said that'the coni-twill not, in contracH'.,9f in whi,cha transfer is made; of the rights to the use ofa pl;ll;sqo's 9\vn name in husiness enterprise, extend or enlarge the operation ofi>the ,same beyond its necessary import. In the case of Zeilin &Co/:against Dr. A. Q. Simmons' Liver Medicine'Company and others. (sai& c()mpany having succeeded the firm to'which M. A.Thedford had made the sale,)' to which suit McKnight and Patten were parties defendant, a decree was entered by which the defendants were enjoined "frqw D:\aking, or offering for sale ,any medicine under the. title of ';Dr.A. Q. Simmons' Liver Medicine,' or I Dr. Simmons' Liver Regulator or Medicine,' and from using the name or word of 'Sim· mons,' or the fae trimile signature of A. Q. Simmons, in any way upon any bottles or packages of liver medicine or of medicine made, ad,'ertised,and sol4 for tbe liver." After this decree of court it became necessary to the wrappers and the use of Dr. Simmons' name it was, or·soon 'thereafter, that the name and wrapper entirely. ,. Medicine Company was adopted. now usedlby The c1aim;gf t4e here, so far as its claim is based on the contract,{thltt the decree ;in .the Zeilin suit left them the right to the preparationitsel(, and to the name of M. A. Thedford & Co., and to the picture of an old man, which. picture, as I understand it, they claim they use,provided that Dr. Simmons' name. is not anywhere used the picture. The difficulty about complainant's conin tention is transferred the right to use his name in advertisSimmons'Liver Medicine," and the complainant ing is using it, 1A ,advertise and sell M. A. Thedford's Liver Medicine, whioh appears to. me to be llo use of his name not contemplated when the contract was Ulade, or covered by its terms. Much has been said
CHATTANOOGA MEDICINE CO.'/). THEDFORD.
953
in the argument, of this case about what is claimed to be the effort of the M. A. Thedford<Medicine Company, of Rome, to convey to the public by their wrappers and advertisements, and to impress upon all readerS of their literature, the idp,a that the medicine they are selling is the same as the original Simmons' Liver Medicine. There is some force in this argument; but since the decree in the Zeilin suit complainant has no right to make what is known as "Dr. Simmons' Liver Medicine," and in the face of this decree, by which it is adjudged that it has no right to the name of Dr. Simmoos, this court cannot, at their instance, prevent other persons from using the same. In other words, so far as the name of Dr. Simmons is concerned in connection with liver medicine since the decree alluded to, it is declared that it has no right and no standing in court to assert the right to use the same. It is further said that complainant has in its labels resorted to fraudulent devices, and one calculated to deceive the public, in that it holds out to the world that the medicine it is making was discovered by M. A. Thedford, 1840, and that the arrangement of its wrappers is such as to lead the public to believe that the picture of an old man thereon is the picture of, M. A. Thedford; and in fact it says that Thedford is comparatively a young man, and that it does not itself, therefore, come into a court of equity with clean hands, and should not be allowed any relief for that reason. Complainant, on the other hand, says that defendants' conduct, especially in the matter of attempting to advertise and sell under the name of J. H. Thedford & Son,Dr. Simmons' Liver Medicine, and the conversation to which it testified, shows that M. A. Thedford has been acting in bad faith,and to avoid the effect of a contract honestly entered into, and to 'deprive the others to whom he sold, and their successors, of their distinct rights under the contract. I think it wholly unnecessary to discuss either of these contentions, in "iew of my opinion as to the constructioti' of the contract, which is really the basis of the whole matter. I conclude Firat· . Thedford only parted with the right to use his name in connection with Dr. Simmons' Liver Medicine. By reason of the decree in the Zeilin suitcompla.inant has no right to advertise or sell Dr. Simmons' Liver Medicine. Third. That complainant has no right to use Thedford's name in' connection with liver medicine otherwise than I have stated; and Thedford may use the same as he is now doing without infringing any of its . Fourth__ ! have stated that, as to any infringement of tradeimark, considered independently of· contract rights, I do not think there is such a similarity as to justify interference by the court with the defendant. . The conclusion is that injunction must be denied.
J'EDERAL
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,SMI'l'R"v".,BQUlCER.
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'of the' circuit court of the ';§lates 'f91' thesl;>uUiern district of New York, affirming pro forma 9f the cduitt' 'for said dishict. The libelants, 'De Witt Bonker ",m'iGeorge the owner of one of two scowaJost}nthe, caaes were beard together in the the libellJ,(40 Fed: Rep. 839,) and redistrict court, whhib .apondent Ontlliaappeal the court delivered its opinion in suit only,' d.isposition to be made 01 the other. 'Affirmed. , ",,¥oore $turges, for appella,nti Wing, SlWudy k PUtMm; (HarringtOrl Putna,m, of couosel,) for appelI ' " , . " , ' . "
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.. 1'41" decree for .the libelant fot tbe \'IlIue, 0.(.., scow. Scow of Bouker at anagleedprlceper day.. tp be ,transpol'tiQg abuilding from ion.locatilln ,to ",notber. use of a tug, and Smith engaged and,.crew., .While the tug ,was"towiog,tM'S(mV, be got off, and the scow,talLeij ,W', &r p}"eeof safety, a storm arose,' and the scow was t() "",' , ,, We, are satisfied is no iJ:l any .of fault .' It start upon the trip. The scow was to be taken through a channel from Rockaway iIi· let, and then()e a sl,1ort sea., It. was JptQceed wbell there was, Q,igh it 'was Jligh · water .. ; 4. .and . ble thllt if the .be too ro*gh, trip were postponec;l perhaps for several days, to permit the scow to be towed safely. Any delay consequent upon the postponement would have been at the expense of the charterer. Jaycox was interested in having such a delay, as he would get pay for his tug in the mean time; and his protests about the