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(273 F.) an exclusive vendor for the sewing machines, parts, and attachments of the party of the second part within a given territory. A breach of the contract was alleged and proven on the trial of the action. The Supreme Court held that in the use of that term, and in the clause of the contract which prohibited him from soliciting trade directly or indirectly in the territory "of other agents," the relationship of principal and agent existed, requiring the fidelity which is imposed by reason of such relationship. It was said:

“So far as the company's power of revocation is concerned, the case is not materially different from what it would be if the plaintiff had agreed to sell such machines as were delivered to him at the established retail prices, receiving, as compensation for his services, the difference between those prices and the amount he agreed to pay for them under the contract of 1874. In either case, his relation to the company would be one of agency, that could be terminated at its will or by renunciation upon his part, at least after 1875. Of course, the revocation by the principal of the agent's authority could not injuriously affect existing contracts made by the latter under the power originally conferred upon him.” 141 U. S. 637, 12 Sup. Ct. 97, 35 L. Ed. 882.

We think that the court erred in charging as it did and refusing to charge as requested by defendant.

[10] The court charged the jury that the contract gave the plaintiff exclusive foreign selling rights of the J-D and Ajax special brand and Lodge plugs. These were not a part of the Champion line. The court also admitted evidence that the defendant had sold these plugs for export, on the theory that such sale was a violation of the contract. We think these rulings constituted error. At the time the contract was entered into, the only spark plugs which the defendant was manufacturing and selling was the Champion line. It was subsequent to the making of the contract that the defendant became the owner of the other lines of spark plugs. It was upon the theory that, by the contract, the plaintiff obtained "exclusive and sole right to sell and distribute the products of the first party known as spark plugs," the plaintiff became the sales agent and distributor of subsequently acquired lines of spark plugs. But it will be observed that in a later paragraph of the contract the types and sizes of the plugs are specifically mentioned. No reference is made in the contract to subsequently acquired makes of spark plugs which the defendant might manufacture or control or offer for sale in the market.

Particularly is it to be noted that no reference is made to lines of the different types or trade-names than the Champion. The Champion was a registered trade-mark owned by the defendant, and its mechanical features were protected by patents. It was only through the purchase of competitors in September, 1914, that the defendant became the owner of the J-D. spark plug. After such purchase, and in placing this product upon the market, the plugs were prominently marked with the letters "J-D.” Its construction was along different lines than that of the defendant's own plugs. It does appear that in order to take advantage of some feature which possessed special value by two of the J-D plugs, they were renamed "Champion sparks in water" and "Champion magneto." These were permanently incorporated in Cham

273 F-6

pion lines, and were considered by the defendant to come within the plaintiff's agency, and duly recognized as such. However, the others were sold as a separate line and could hardly be said to be in competition with the Champion plugs. They were listed separately, with a mark well displayed in the circulars and upon the articles. Full opportunity was given to the plaintiff to handle these goods on the same basis as every other exporter, and the record does not disclose that any better price was offered to any other exporter. Nor is it disclosed that the plaintiff suffered a loss in its sale of the Champion plugs, due to any alleged competition of the J-D's.

Later the defendant purchased the Star Specialty Manufacturing Company, with its line of Ajax plugs. We think the same rule applied as to these plugs. They were separately marked and sold under this trade-name. The J-D Company manufactured and sold special brand plugs, which constituted a make of plugs made to order stamped with the customer's name or brand. This business was continued by the Champion Company, and evidence was permitted to show damages sustained by the plaintiff by reason of the failure to give exclusive agency for such sale to the plaintiff. We think it was error to admit this evidence, and to enhance the profits of the plaintiff by such admission. Such sales were not part of the Champion line, and were not covered by the contract between the parties.

[11] The claim of the plaintiff that sales were made by foreign shipments to the Lodge Spark & Plug Company, of England, the Fiat Company, and the Berrardo Company, and that this was a breach of the contract, was waived by the plaintiff's correspondence and its acceptance of commissions for these shipments. The proof quite conclusively establishes that commissions were paid to the plaintiff upon their demand, and were received by the plaintiff with full knowledge of all the facts. By receipt of such commissions, the plaintiff relinquished all right of action which it is claimed to have had by reason of this alleged breach of the contract. Further we believe that the shipments which were made to the Lodge Company were spark plugs which were not included in the contract between the parties, and the plaintiff was not entitled to commissions therefor.

[12] Error was also committed by the judge below in charging the jury on the question of damages for breach of contract. The jury was instructed that the plaintiff might recover, if at all, for loss of prospective retail profits of the spark plugs, because of nondelivery of the plugs ordered before the final breach. These were summarized in 13 separate claims, amounting to $270,475.15. The plaintiff was obligated to minimize the damages by buying plugs in the market and claiming the difference between the price paid and the price agreed upon. There are exceptions to this general rule, as where the injured buyer is allowed to recover special damages as resale profits, which loss he has suffered by reason of the breach on the seller's part. If there be no market value for the goods which were purchased under the terms of the contract, or which substantially answer the purpose of such goods, and the buyer suffers damages because of the failure of the seller to deliver, such damage can be recovered.

(273 F.) (13] If the buyer has made a contract in advance and for the resale of the goods, and that fact has been disclosed and is known to the vendor, and the latter undertakes to furnish the goods and deliver at the time specified in the contract according to the terms of the contract, so that the buyer may fulfill his contract of resale, then, if the vendor fails to deliver the property, he will be liable for damages on the basis of profits the vendee would have realized on his contract for such resale. This record, however, discloses the existence of no resale contracts having been brought to the attention of the defendant at the time of its orders.

There is some proof contained in correspondence with reference to the 100,000 plugs sold to Morris Russell, but the recora discloses that 50 per cent of these plugs so ordered were intended for stock, and as to those which were sold to Morris Russell's order it appears that there was no difference between the contract and the market price. To be entitled to resale profits, it must appear that the buyer had an existing contract for resale at the time of the purchase, and the purchase must be made for the purpose of enabling the buyer to perform the obligations of his contract of resale, and such facts must be made known, clearly, to the seller. And the theory then is that the contract by the seller has been entered into to enable the buyer to perform his obligations under the contract of resale. Setton v. Eberle-Albrecht Flour Co., 258 Fed. 965, 169 C. C. A. 625; Holloway & Bro. v. White Shoe Co., 151 Fed. 216, 80 C. C. A. 568, 10 L. R. A. (N. S.) 704. Spark plugs of other makes were obtainable in the market, which could have been purchased by the defendant, and the loss minimized, examples of which were the Mosler plug. In many instances in which orders were filled by the plaintiff, it did so by substitution of other makes. We find nothing in this record which would require us to depart from the usual rule of damages. Vulcan Iron Works Co. v. Roquemore, 175 Fed. 11, 99 C. C. A. 77; Parsons v. Sutton, 66 N. Y. 92.

(14] An item of damage claimed and proven was for alleged sales made by the defendant to the Ford Company in foreign territory, both before and after the date of the alleged breach of contract, and it was claimed that it would have resulted in profit to the plaintiff of $151,669.18. It was contended by the plaintiff that it might be inferred that all sales made by the defendant and the Ford Company would have been made by the plaintiff, except for the breach of contract. There was no proof, however, to show that the plaintiff had lost any orders by reason of such sale. We think this evidence was inadmissible, and was not an element of damages which the jury might consider. The selling and distribution of the spark plugs was the obligation of the plaintiff under the terms of the contract, and, in the absence of some proof showing that the defendant interfered with or sold to the customers of the plaintiff, proof of this character was inadmissible and was prejudicial to the defendant.

It would be against the most elementary rules in respect of damages for breach of contract to allow the plaintiff the profits of a sale which he did not make, and which there is no reason to believe he would have made. The plaintiff, if it made out its right to recover, was en

titled to any actual damages sustained by reason of its being obliged to purchase spark plugs in the market at the market value and at a price above the contract price, thus resulting in loss to the plaintiff. Cincinnati, etc., Gas Co. v. Western, etc., Co., 152 U. S. 200, 14 Sup. Ct. 523, 38 L. Ed. 411.

[15] The trial court, as an element of damages, permitted the plaintiff to offer proof as to estimates of profits it would have made if the contract had continued to be performed down to the date of its termination, July 15, 1918. In estimating what this loss sustained would be, due regard must be had for cost of carrying on the business of the plaintiff, its cost of selling. This is a subject which should be a matter of proof, and not an estimated loss of profits. Damages for the interruption or destruction of established business may be recovered; but the plaintiff must do so by establishing, with reasonable certainty and by competent proof, what the amount of his loss actually was. This character of proof was not offered.

For the errors assigned, the judgment below is reversed.

SMITH-KLINE & FRENCH CO. v. AMERICAN DRUGGISTS SYNDICATE.

(Circuit Court of Appeals, Second Circuit. April 27, 1921.)

No. 237.

1. Trade-marks and trade names Om60_Red band with initial held not in

fringed by red parallelogram with different initials.

Plaintiff's trade-mark for aspirin which, as registered, consisted of a red band around the box, on which band plaintiff's initials were printed, the representation of the box being expressly disclaimed as part of the trade-mark, is not infringed by defendant's trade-mark for aspirin, which consisted of a red parallelogram on which the name of the drug was printed and above the center of which was a red half circle containing

defendant's initials. 2. Trade-marks and trade-names Fm17_Color of paper alone cannot be

claimed as trade-mark.

One cannot have a trade-mark monopoly in the color of paper alone. 3. Trade-marks and trade-names Ow70 (4)—Unfair competition held not

shown by use of somewhat similar package.

That, while plaintiff was using a flat paper box on which its red band trade-mark was placed, defendant adopted as a container for the same drug a green enameled tin box, on which its red parallelogram trade. mark was placed does not show unfair competition by defendant, after plaintiff had begun to use a container similar to defendant's, though there was evidence that on occasions when red band aspirin, by which name plaintiff's product had been known, was asked for, defendant's

product was sold. Appeal from the District Court of the United States for the Eastern District of New York.

Suit by the Smith-Kline & French Company against the American Druggists Syndicate for infringement of a registered trade-mark and for unfair competition. Decree for plaintiff, and defendant appeals. Reversed. For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(273 F.) Hauff & Warland, of New York City (John C. Tomlinson and William E. Warland, both of New York City, and James Hamilton Lewis, of Chicago, Ill., of counsel), for appellant.

Julian S. Wooster, of New York City (Frank B, Fox, Henry N. Paul, Jr., and Joseph C. Fraley, all of Philadelphia, Pa., of counsel), for appellee.

Before WARD, HOUGH, and MANTON, Circuit Judges.

MANTON, Circuit Judge. On the 19th of December, 1918, the appellee filed in the Patent Office of the United States, an application for a registered trade-mark for aspirin tablets, and on September 23, 1919, a certificate of registration, No. 126,617, was granted. The mark adopted and used was a red colored band with initials. The representation of the box formed no part of the mark. In the affidavit, the trade-mark is said to have been used continuously since March 1, 1917. The trade-mark is applied and affixed to the packages containing the goods by placing thereon a printed label, on which the mark is shown with the initials “S. K. & F." across the red band.

On October 24, 1916, the appellant obtained a certificate of registration, No. 113,541, of its trade-mark. It was registered in the same class as the appellee's. The mark consists of a label, a semicircle; there being printed on the label the letters "A. D. S.” in white. The appellant and appellee are manufacturers of and dealers in drugs and pharmaceutical supplies. Among the variety of goods which each manufactures and sells are aspirin tablets. The claim of infringement and unfair competition arises from the use of the mark on the box or package which is used by the appellant in marketing its goods. The appellant adopted its label in 1907, and has continuously used it on many of its goods ever since. The body of the label so used was in white, or a color approaching white, with the name of the article printed in the same color upon a red background, consisting in some cases of a rectangle, and in some others of a red band or stripe, and over the center of this red block was a red semicircle, upon which was printed in the same colors as the lettering on the band, the letters “A. D. S.” Such labels were used on a great variety of its products, and the sales between the vear 1912 and the date of the trial of this action amounted to S4.300.000, or about 2,500,000 dozen packages.

On February 27, 1917, the Bayer patent on aspirin expired, and both the appellant and appellee entered the field in the manufacture and sale of aspirin tablets. The appellee marketed its aspirin tablets in a paper box with a solid red band around it. The record is clear that, when it did so, it knew of the extensive use of the label by the appellant. It was prior to January, 1919, when the appellant decided to put aspirin on the market in small retail tin containers. It then contracted for such tin packages with the Metal Package Corporation. The trade-mark of the appellant is substantially the same as that which has been used by it on its labels for a long period prior. The box came on the market June 5, 1919. In either March or April, 1919, the appellee decided to use a package of similar size, duplicating what had previously been

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