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2 F.(20) 079 his duties under the order of said court, not be assented to. It must be conceded without the consent of such court; that said that the District Courts of the United States court has exclusive jurisdiction to hear and have paramount and exclusive jurisdiction determine all matters pertaining to the ad- in the administration of bankrupt estates, ministration of the estate by the petitioner and especially is this true with respect to as trustee; and that the suit instituted in the allowance or rejection of claims which the state court in behalf of the state was may become either primarily or ultimately begun without the consent or permission of a charge against the assets of the bankrupt the District Court in bankruptcy.
estate. Undoubtedly the District Court itThe prayer invokes the ancillary jurisdic- self cannot yield this jurisdiction to another tion of the bankruptcy court in aid of its tribunal. U. S. F. & G, v. Bray, 225 U. S. original jurisdiction, where the bankrupt- 205, 32 S. Ct. 620, 56 L. Ed. 1055. Therecy proceedings are pending, and fur- fore it cannot be questioned that the Disther prays for injunction restraining the trict Court has the inherent power to proAttorney General and the President of the tect itself in the full exercise of its jurisdicState Board of Convict Supervisors, the tion, even though the interference be atAmerican Surety Company, and the Union tempted by state officers, acting or assuming Indemnity Company from the prosecution to act in the name or on behalf of the state. of the suits until the further orders of this If officers of the state should, under the court.
guise of the discharge of their duties, instiThe application having been set down for tute suit in the name of the state to recover hearing, all the parties to the petition were the possession of property in the custody present. Davis and Boyd, respondents, op- or under control of the federal District posed the granting of the injunction and Court, would it be contended that such court moved the court to dismiss the petition or would be impotent to protect its jurisdicbill upon several grounds, in substance, that tion? The mandate here sought of this petition is a suit against the state, without court would adjudicate no rights against the the consent of the state, and therefore not state, nor would there be any attempt to dewithin the jurisdiction of this court; that termine the merits of the controversy bethe petition is brought to compel the state tween the state and the trustee; but such without its consent to become a defendant mandate would merely restrain the persons in a suit, contrary to the provisions of the assuming to act in the name of the state Constitution of the United States; and that from a course which directly involves matthis court is without jurisdiction in the ters and things over which the bankruptcy premises, and that said petition or bill of court has exclusive or paramount jurisdiccomplaint is without equity.
tion. Ex parte Tyler, 149 U. S. 164, 13 S. The respondents Davis and Boyd move to Ct. 785, 37 L. Ed. 689. dismiss the petition, and object, upon the  The situation here is analogous to grounds stated, to the issuance of the in- the now well-settled principle that officers junction restraining them from the prosecu- assuming to act in their official capacity, tion of the suit in the state circuit court. though in the name of the state, may be re
strained from the prosecution of suits or the Nesbit & Sadler, of Birmingham, Ala., enforcement of demands under statutes and Steiner, Crum & Weil, of Montgomery, which are violative of constitutional rights Ala., for petitioner.
or obnoxious to or in contravention of paraHarwell G. Davis, Atty. Gen., of Ala- mount authority. In such aspect this suit bama, for respondents.
or petition by the trustee is not in any
proper sense a suit against the state. PoinCLAYTON, District Judge (after stating dexter v. Greenhow, 114 U. S. 270, 5 S. Ct. the facts as above). The jurisdiction of 903, 962, 29 L. Ed. 185; Reagan v. Farmthis court is invoked as ancillary to the pro- ers' L. & T. Co., 154 U. S. 362, 14 S. Ct. ceedings in bankruptcy in the bankruptcy 1047, 38 L. Ed. 1014; Tindal v. Wesley, court of original jurisdiction; the defend- 167 U. S. 204, 17 S. Ct. 770, 42 L. Ed. 137. ants residing within this, the Middle, district It is true the trustee is not a party to of Alabama. Progressive Bldg. & Loan the suits in the state circuit court, the proseCo. v. Hall, 220 F. 45, 135 C. C. A. 613; cution of which is here sought to be reMusica v. Prentice (5th C. C. A.) 211 F. strained; but by operation of law he, and 326, 127 C. C. A. 575.
consequently the estate in his custody, must  The chief insistence of the defend- ultimately respond to the sureties for whatants is that this is a suit against the state, ever they are made to pay. The suits are and therefore not maintainable. This can- predicated upon the contract made by the trustee in the course of the administration fendant had abandoned use of plaintiff's tradeof the bankrupt estate, and by and with the mark, and that there was no reasonable ground
for apprehension on part of plaintiff of further approval and under the authority of the infringement by defendant. bankruptcy court, and rights arising in fa- 3. Trade-marks and trade-names and unfair vor of the state, as well as individuals, in
competition 79 – Bill for accounting
against infringer of trade-mark cannot be such circumstances, must of necessity be sustained. determined by the bankruptcy court, or in A bill in equity, for a naked accounting for such other tribunal or proceedings as the profits and damages against infringer of trade
mark, cannot be sustained; the reinedy at law bankruptcy court may expressly authorize. being complete and adequate. Any other rule would result in chaos in the
4. Injunction 223(1) - Manufacturers held administration of the trust estate. Porter not in contempt for violation of injunction v. Sabin, 149 U. S. 473, 13 S. Ct. 1008, 37 against infringement because of actions of
dealer, L. Ed. 815; Hershy Choc..Co. v. Sharpe,
Manufacturers of heating apparatus could 199 Ala. 21, 74 So. 33; Berman v. Smith not be held in contempt for violation of in(D. C.) 171 F. 735. Manifestly, the trustee, junction against infringement of trade-mark in the administration of the trust confided they had manufactured, with such trade-mark to him, is an officer of the court, and is en- attached thereto, where manufacturers had no titled to its protection.
control over dealer, and after his actions were
brought to their attention they forwarded new Under the undisputed facts the demand plates with other name thereon to be placed sought to be recovered in the suit in the upon the furnaces. state court should be presented to and adjųdicated by the court of bankruptcy in which In Equity. Suit by the Tubular Heating the estate of the Montevallo Mining Com- & Ventilating Company against the Mt. pany is being administered, or leave be ob- Vernon Furnace & Manufacturing Comtained to proceed elsewhere. I think what pany and another, in which a temporary inhas been said is decisive of the motion of junction was issued. Defendants discharged the defendants to dismiss the petition of the from rule to show cause why they should trustee, as well as determinative of the de- not be adjudged in contempt, injunction fendants' objection to injunction restrain- dissolved, and bill dismissed. ing them from the prosecution of the suit
The plaintiff brings suit against the dein the state circuit court.
fendant corporation and one of its officers, By appropriate order the prayer of the alleging that on or about November 1, 1918, petition is granted, and Harwell G. Davis, it adopted the word symbol "Master" as a the Attorney General of Alabama, L. A. trade-mark for warm air furnaces, and Boyd, President of the State Board of Con- thereafter used the same continuously, so vict Supervisors, the American Surety Com- that it has become of great value; that on pany, and the Union Indemnity Company, or about November 29, 1920, the defendant and all other persons who may have knowl- corporation adopted the name for the same edge of such order, are enjoined from the purpose, and has since continued to use it, further prosecution of said suit in the cir- filing in the United States Patent Office, on cuit court of Montgomery county, Ala.
January 4, 1921, application for registration of the trade-mark; that the Commissioner of Patents registered said trade-mark
June 21, 1921; that on March 22, 1923, TUBULAR HEATING & VENTILATING CO. plaintiff made application for cancellation V. MT. VERNON FURNACE & MFG.
of said trade-mark, and that on May 7, CO. et al.
1924, the Examiner of Interferences ren(District Court, E. D. Illinois. December 4, dered a decision, holding that plaintiff had 1924.)
proved its exclusive ownership of the tradeNo. 2185.
mark, and canceling defendant's registra1. Trade-marks and trade-names and unfair tion; that the defendant was at the time of competition Om 81-Injunction not appropriate remedy for past infringement of trade.
the beginning of said suit infringing upon mark.
plaintiff's rights, and threatening to conInjunction is not appropriate remedy for tinue to do so, to the great damage of the past infringement, and will lie only to prevent further injury when actually threatened.
plaintiff. The bill seeks an injunction 2. Trade-marks and trade-names and unfair against the alleged infringement, and an accompetition Cm93(3)-Evidence held to war. counting. rant conclusion that defendant had aban. The defendants admit the allegations doned use of plaintiff's trade-mark.
In suit to enjoin infringement of trade, which bear upon their adoption and use of mark, facts held to warrant conclusion that de. the word “Master," and the registration and
2 F.(20) 982 cancellation thereof, and, without admitting May 24, 1924, defendants' witnesses claim, or denying the alleged priority of plaintiff, they told plaintiff's officers that they would set out various acts of the defendants just dismiss their appeal then pending, and take prior to and after June 1, 1924, whereby it immediate steps to abandon the trade-mark is claimed they abandoned the use of the "Master.” word “Master," and substituted in lieu there- Promptly upon the return of defendant's of, as a trade-mark for their product, the officers to Mt. Vernon, defendants did cerword "Vernois." Defendant corporation tain specific things to carry out said ex. avers that it has done everything within its pressed intention. They immediately adoptpower to show its good faith in abandoning ed as a new name for the furnaces sold by the word which plaintiff claims to be its them the fanciful name "Vernois”; directed property, and in adopting and using the sub- their then attorney, by letter, to dismiss the stitute, and denies that it has at any time appeal from the Examiner of Interferences; since June 1, 1924, manufactured or sold after June 1st neither manufactured nor any product bearing the trade-mark "Mas- sold any more furnaces with the word "Master," but avers that on the contrary it has ter” upon them; and directed their travelnotified the trade, its dealers, traveling sales- ing salesmen to discontinue selling any furmen, and the public generally, by telegrams, naces bearing the word "Master," and so to letters, and advertising in trade journals, advise the trade. They ordered rubber that the substitution has been made, and the stamps and stickers for use in connection former trade-mark abandoned. It denies with the literature, stationery, circulars, and that it intends to use the former trade-mark, catalogues, whereby they could and did and asks that the bill be dismissed for want change the name "Master" to "Vernois”; of equity.
furnished copy to 'the trade journals for It appears from the evidence that the
new advertising, giving notice to the trade plaintiff first adopted the said trade-mark in that the word "Master” had been abandonthe fall of 1918, and first sold furnaces with ed; procured for their own use, and the use the same applied to them in January, 1919. of the trade, cuts of their furnaces, showIt has continued using said name in connec- ing thereon the name “Vernois”; advised tion with its product, and applied for and their dealers and the trade journals of the obtained cancellation of the registered trade- change in names, and requested that all old mark of defendants upon the date mention- cuts be returned, so that the change might ed in the bill. The defendant corporation be made thereon without expense to the prayed an appeal to the Commissioner of trade; and, by letter, advised the plaintiff Patents, and said appeal was still pending of these various acts, stating that the letter at the time of the filing of the bill of com- was intended as evidence of the defendants' plaint.
good faith, and that there would be no deTwo of the defendant corporation's offi- viation upon defendants' part in the actual cers went to the place of business of the discontinuation of the use of the word “Masplaintiff in Philadelphia, in the latter part ter.” The plaintiff made no reply to this of May, 1924. They stated that they had letter, but, after receiving the same, filed its taken an appeal, but were desirous of set- bill of complaint. tling the controversy. Plaintiff's officers The then trade-mark attorney for the detold them they must cease using the trade- fendants, without their knowledge, instead mark "Master," and compensate plaintiff of complying with the defendants' request to for such damages as it had incurred by the dismiss the appeal, allowed it to lie without wrongful use of the trade-mark by defend- action, and, a short time subsequent to the ants, Some discussion was had as to the filing of the bill, the Assistant Commissioncatalogues and literature of the defendants, er of Patents affirmed the decision of the which contained the name "Master.” De-Examiner of Interferences; no appearance fendants' witnesses claim that the plaintiff's being made on behalf of either party. Subofficers told them that they might use the sequent to the filing of the bill, while the said literature by substituting, by rubber attorneys were engaged in taking deposistamps and stickers, for the word "Master," tions in the city of Philadelphia, the plainthe word “Vernois,” in their catalogues, tiff learned that a certain dealer in Philadelstationery, invoices, bill heads, circulars, and phia had on hand some 70 furnaces, manuother literature. Plaintiff's witnesses claim factured by the defendant corporation, béarthey made no such statement. Defendants ing the name "Master,” which the said dealhad prepared a written contract, which the er was offering for sale. The attorney for plaintiff would not execute. Thereupon, on the plaintiff conferred with the dealer, and later an officer and the attorney of the de- the word “Master," and that it had substifendant corporation conferred with him. tuted therefor the word "Vernois,” and it The testimony is in direct conflict as to placed in the trade journals full-page adverwhat transpired at the conferences, but it tisements, stating the same facts, and giving appears in evidence, without any question, the reason for such action. It not only that this dealer had purchased the furnaces abandoned the word "Master," but it immein the winter and spring of 1924, that the diately began to endeavor to create good last shipment had been made by the defend- will and value in the trade-name "Vernois." ant to the dealer in March, and that no new True it is that the then attorney for the defurnaces had been shipped or sold to this fense did not at once dismiss the appeal, but dealer after March, 1924. After discover the correspondence between the attorney and ing that these furnaces were still on hand the defendant shows, beyond peradventure, at the time in question, in October, 1924, de- that he had been told to dismiss the appeal, fendant shipped to the said dealer name and the defendant's officers believed that he plates bearing the name “Vernois,” to re- had done so, and had no knowledge to the place the plates on the furnaces bearing the contrary until after the decision of the Exname "Master.” The plaintiff has filed a aminer had been affirmed by the Assistant petition for citation against the defendants, Commissioner of Patents. asking that they show cause why they should Had the plaintiff believed that the appeal not be adjudged in contempt of court in vio- was being prosecuted, it might have had lation of the temporary injunction issued some reason to believe that further infringeherein.
ment was intended. But it was advised in
writing of the defendants' various acts, Glennon, Cary, Walker & Murray, of Chi- which were not possibly consistent with any cago, Ill., and Arthur E. Paige, of Philadel- intention other than the absolute and final phia, Pa., for plaintiff.
abandonment of the trade-mark "Master." Luke E. Hart, of St. Louis, Mo. (Hart
The fact that a dealer in Philadelphia & Hart, of St. Louis, Mo., on the brief), for
may have claimed the right to sell furnaces defendants.
bought from the defendant under the name
"Master" was not discovered by plaintiff LINDLEY, District Judge (after stating until after the bill was filed. Furthermore, the facts as above).  An injunction is it was shown that the defendants had no not the appropriate remedy for past in- control over said dealer, and that, as soon fringement of a trade-mark, and is to be as his actions were brought to their attenused only for the prevention of further in- tion, they forwarded new plates with the jury, when such injury is actually threat- name “Vernois” to be placed upon said furened. If a defendant has in good faith naces. The court therefore is inevitably ceased infringement before suit brought, driven to the conclusion that, at the time the and the plaintiff has had full opportunity present bill of complaint was filed, there to learn of said action, and if the court is was no infringement being committed by the convinced that further infringement is not defendants, no threat of further infringeintended, or is not reasonably to be appre- ment, and no reasonable ground for apprehended, it should refuse the injunction, and hension upon the part of the plaintiff that dismiss the bill. Kennicott Water Softener there would be further infringement. ThereCo. v. Bain, 185 F. 520, 107 C. C. A. 626 fore there was no irreparable injury. Un(C. C. A. 7th Circuit).
der the case cited above and numerous deci The only question in the present case sions, this bill cannot be retained for the is whether, assuming that the trade-mark of purpose of granting an injunction. the plaintiff is valid, that the defendants  The plaintiff seeks also an accounting have infringed and that the infringement for damages, but a bill in equity for a naked had ceased before the bill was filed, which is accounting for profits and damages against clearly proved, the plaintiff, when the bill an infringer cannot be sustained. Root v. was filed, did have any reasonable ground to Railway Co., 105 U. S. 189, 26 L. Ed. 975. believe that the infringement would be re- If plaintiff has suffered damages by action peated. The defendant corporation left noth- of defendant, there is a complete and adeing undone that a reasonably prudent person quate remedy at law. Van Raalt v. Schneck might have done to show that it had actual- (C. C.) 159 F. 249, affirmed by C. A. A. ly abandoned the use of the word “Master," for the 7th Circuit, 170 F. 1021, 95 C. C. and intended never to use the same again. A. 672. It advised its traveling men, its dealers, and  It appears from what has been said the public generally, that it had abandoned that the defendants have been guilty of no
2 F.(20) 985 contempt of court by any violation of the for reclamation of property under conditemporary injunction heretofore issued. tional sale contracts. Affirmed. The actions of the dealer in Philadelphia
Kinkead, Ellery & Henderson, of Cheywere not the actions of the defendants, and
enne, Wyo., for claimant. the defendants had no control over him.
Reid & More, of Torrington, Wyo., for They are discharged from the rule, the tem
trustee. porary injunction is dissolved, and the bill is dismissed for want of equity.
KENNEDY, District Judge. This proceeding is before the court upon a petition for review of the referee's order denying a
claim of the International Harvester ComIn re DOUGLAS LUMBER CO.
pany for the return of property based upon
conditional sale contracts between it and the (District Court, D. Wyoming. May, 1924.)
bankrupt. The record discloses substantialNo. 718.
ly the following facts: 1. Bankruptcy Om 184(2)-In case of condi
On September 3, 1920, the International tional sale contract, trustee has status of Harvester Company entered into a contract judgment creditor.
with the bankrupt for the delivery of cerUnder Comp. St. Wyo. 1920, 4713, pro- tain farm machinery during the year 1921; viding that no conditional sale shall be valid as against any purchaser or judgment creditor of on November 22, 1921, a similar contract the vendee without notice, unless the contract for the sale and delivery of property during is recorded as therein provided, the trustee in bankruptcy of the vendee, by virtue of Bank- the year 1922; and on August 19, 1922, for ruptcy Act, $ 47a (2), as amended June 25, the sale and delivery of similar property 1910 °(Comp. St. § 9631), has the status of a during the year 1923—all of which contracts judgment creditor.
provided that the title should remain in the 2. Bankruptcy Om. 184 (2)--Notice to all credi. vendor until the full purchase price had tors is notice to trustee.
been paid. These .contracts were not placed Actual notice to all creditors of a bankrupt of a conditional sale contract is notice to upon the records of the county clerk of the the trustee, who represents them.
county in which the Douglas Lumber Com3. Bankruptcy w 303(1) - Burden rests on
pany was doing business until the 2d of trustee to prove want of actual notice by October, 1923, when all of the aforesaid concreditors of conditional sale contract.
tracts were filed in the office of the county Under a state statute making unrecorded clerk of Converse county, with an affidavit conditional sale contracts void as against certain creditors of the vendee without notice, the attached to the so-called 1921 contract, reburden rests on the trustee of the vendee to citing that the title to the machinery enubring himself within the statute by showing that he represents creditors who were without merated in the three contracts was in the notice.
vendor until the purchase price enumerated 4. Sales 474(2)-Record of conditional sale
therein had been paid in full. On Novemcontracts held not constructive notice under ber 27, 1923, the Douglas Lumber Company Wyoming statute.
filed in this court its petition in bankruptcy, Under Comp. St. Wyo. 1920, 4713, pro- with schedules attached, in which schedules viding that a conditional sale shall be invalid as against certain creditors of the vendee without the conditional sales contracts are set out. notice, unless a copy of the contract, with an Some time thereafter, in the due course affidavit of the vendor attached, shall be recorded, a contract without such affidavit at
of the administration of the bankruptcy protached is not entitled to record, and its record, ceeding, the trustee was selected, all propthough with another similar, but separate, contract between the same parties, is not con
erty, including that in controversy, taken structive notice.
into his possession, and a claim for the re
turn of the machinery covered by the condi5. Bankruptcy w 184(2)-Listing of condi. tional sale contracts in schedules is not no
tional sales contracts was filed with the reftice to affect rights of trustee.
eree by the International Harvester ComUnder Bankruptcy Act, $ 47a(2), as amended June 25, 1910 (Comp. Sť. $ 9631), a trustee
pany. The trustee filed objections to such is vested with the rights of a judgment creditor claim, and a hearing was had before the refas of the date of the filing of the petition, and eree upon the issue thus raised. The claim the fact that conditional sale contracts are list- set forth the specific machinery in the hands ed in the schedule in a voluntary petition does not constitute notice to the trustee which can of the trustee, which was claimed under the affect his rights with respect to such contracts. contracts, none of which claimed machinery,
however, was included in the 1921 contract, In Bankruptcy. In the Matter of the but was either under the 1922 or 1923 conDouglas Lumber Company, bankrupt. On tract. The parties entered into a stipulation review of order of referee denying petition to the effect that some of the creditors of