(81 Cal. 252) SPERRY & Co. v. PERCIVAL MILLING Co. (No. 12,064.) (Supreme Court of California. Nov. 22, 1889.) TRADE-MARKS-INFRINGEMENT EVIDENCE. In an action to enjoin defendant from coun " Department 2. Appeal from superior court, Sonoma county; JOHN G. PRESSLEY, Judge. Newlands, Allen & Herrin, for appellant. Wm. B. Haskell and T. J. Geary, for respondent. to which the action relates, he may, in addition to his answer, file at the same time -or, by permission of the court. subsequently-a cross-complaint. The crosscomplaint must be served upon the parties affected thereby, and such parties may de- terfeiting certain trade-marks and labels of plainmur or answer thereto as to the original tiff, it appeared that the packages used by plaintiff complaint." It is said in De Haley v and defendant were of the same size, shape, and Haley that "an action for divorce is not material, with labels of the same size, shape, and brought on the 'contract' of marriage, but position, which were printed in the same colors, upon certain violations of duties or obliga- with the same alternations; that wherever on tions annexed to the status of matrimony." plaintiff's label there was a progressive increase of It is submitted, however, that to construe the size of letters, there was the same on defendant's label, that the sentences and pictures on the the phrase" contract upon which latter were very similar to those on the former, the action is brought," either in the strict and in some instances were the same; that the common-law sense in which an action is word "germ," used by defendant, was similar in brought "upon" a contract, or so as to sound and appearance to the word "germea," confine its operation to suits affirming the coined by the plaintiff; that the words "Tradevalidity of the contract and seeking to en- Mark Registered," in similar colors, type, and poforce it, would be to take an extremely nar- had not registered any trade-mark at the time the sition, were on both packages, though defendant row view of the provision, and to materi-action was brought, while plaintiff's labels were ally restrict its operation. A suit to re-registered several years before the infringement scind a contract, for example, would not complained of began. It further appeared that the be "upon" the contract, in the above person who prepared defendant's package and lasenses, and yet it cannot be doubted that bels had those of plaintiff before him; and one the defendant in a suit to rescind a con-witness testified that he dealt in both articles, keentract could maintain a cross-complaint for ing the packages side by side, and when asked for the plaintiff's article he had sold that of defendant. specific performance of the contract, if the Held, that plaintiff was entitled to judgment. facts of the case entitle him to specific performance. But a suit to rescind a contract is no more "upon" the contract, in the above senses, than is a suit for divorce. It may be conceded that the married state is a status. But it is a status which results from a contract. Civil Code, § 55. And when the status is dissolved the contract is certainly not left in force. If not left in force, it must be dissolved by the decree. And, if so, the suit is, at least in part, for the dissolution of a contract. This being so, may not the cross-demand be said to be one relating to *** the contract upon which the action is brought," in the sense of the statute? In an Iowa case the court held that the relief was within the meaning of the statute of that state in relation to counter-claims, saying: "The plaintiff seeks to annul the marriage contract on account of an alleged violation | of it by defendant. The defendant, upon the other hand, seeks to annul the same contract on account of violations of the same by the plaintiff. The matters alleged arise out of the contract set forth in the petition, and are connected with the sub-for mush, etc., to which they gave the coined ject of the action." Wilson v. Wilson, 40 Iowa, 233. We think, therefore, that upon principle as well as upon authority there may be a cross-complaint in an action for divorce. And the rule seems to us to apply in actions for annulment of marriage. The demurrer was to the effect that Will-in May, 1883. About a month before the iam Wadsworth, Jr., should not have been joined as a party defendant. Compare Way v. Way, 67 Wis. 662, 31 N. W. Rep. 15. But this question does not arise upon appeal by plaintiff on order refusing to set aside a judgment in favor of the defendant. We advise that the order appealed from be reversed, and the cause remanded for a new trial upon all the issues. Weconcur: BELCHER, C. C.; VAN CLIEF, C. PER CURIAM. For the reasons given in the foregoing opinion the order appealed from is reversed, and cause remanded for a new trial upon all the issues. MCFARLAND, J. Plaintiff and defendant are both corporations; and the action is to enjoin defendant from counterfeiting, etc., certain trade-marks, labels, etc., of plaintiff, and for damages. The court found certain facts, upon which it rendered judgment for defendant; and plaintiff appeals from the judgment, and from an order denying a new trial. The main contention of appellant is that the conclusions of law reached by the court below were erroneous, and that, upon the findings of fact, the judgment should have been for plaintiff. From March, 1883, to the commencement of this action-February 4, 1886-plaintiff and its assignors were engaged in manufacturing, by the roller process, and selling, a certain meal, made from wheat and used name "Germea." Down to within one month of the commencement of this action this commodity was exclusively put up by plaintiff in certain packages, with certain labels, etc., thereon, which were registered with the secretary of state as a trade-mark, commencement of the action, defendant began the manufacturing and selling of a meal made by the roller process from wheat, and put it up in packages, with labels thereon, which plaintiff avers to be an infringement of its said trade-mark. Defendant had not registered any trade-mark at the date of the commencement of the action, but did so four days afterwards. The findings consist, in addition to the above facts, mainly, of fac similes of the packages and labels of the two parties; or, rather, the actual labels are pasted into the findings, so that, by looking at the transcript, an observer can see the two packages just as they appeared to purchasers. As their | impossible to detect any material difference significance depends greatly upon the va- in the two pictures. It is not a picture of rious colors used, it would be difficult to re- defendant's mill. Below the picture are the produce them here, and we see no necessity words, in red, "Germ. Breakfast Dish." of attempting it. And we will confine our- Next come several sentences, in blue, in selves to a very brief statement of the sim-commendation of the article. Below that ilarity of, and difference between, the two is the name of the proprietors, in red; and packages. last, the words "Trade-Mark Registered," in blue. 1. The two packages were of exactly the same size, shape, weight, and color. They were each of cylindrical shape, eight inches long, and four inches in diameter, and were composed of paper bags of the same kind" Sperry's.' Immediately below, in large, and color. 5. On plaintiff's package there appears next a label, similar in size to the others, on the top of which is the word, in red, heavy, blue letters, is the word “Germea," 2. On the top of plaintiff's packages there and next below, in red, "For Breakfast." was a small, square label, with the words Then follows four sentences, in blue, con"Sperry & Co.," and underneath the word taining directions for the use of the article. "Germea." There were also a few other At the bottom, “Trade-Mark Registered," words on the label. On the top of defend-in blue. A similar label on defendant's ant's package there was also a small, package has at the top, in red, the word square, label, very similar to that of plain- Directions." Then, after the words "For tiff, but having printed on it the words using the," in small type, come the words "Golden Eagle," and underneath the word," Golden Eagle Germ," in large, heavy, blue "Germ." letters, and next below, in red, "Breakfast Dish." Then follow four sentences of directions for use,-al! in blue, except three words,-and "Trade-Mark Registered,” in blue. 3. On one side of plaintiff's package is a label, on light-brown paper, about six inches long and three inches wide, with a small red border. On the upper side are the words, printed in blue,Germea for 6. Another, and the last, label of the Breakfast." Next below are the words, in plaintiff has at the top the word, in red, blue, "Ask your grocer for." Immediately"Germea;" and immediately below it is a below this are the words, in blue also, and picture of a child eating mush out of a in a large type, "Sperry's New Process," bowl, all in blue. Below the picture are and below that, in still larger type, and in the words, in red, "For Breakfast;" and blue, the words "Patent Flour." On the next the words, in blue, "No soaking reend of the label, and outside of the red bor- quired." Below that are the words, in red, der, are the words, in blue, "Trade-Mark Registered." On a similar side of defendant's package there is a label of a similar size and paper to that of plaintiff; having, also, a sinall, red border, and with all the words, also, printed in blue. On the upper side are the words "Golden Eagle Germ," and immediately below, "Breakfast Dish.' Immediately below that are the words "Ask Your Grocer for;" then, next below," Germ;" and then, below, in red, "Breakin large type, "Percival's New Process;" and last below, in still larger type," Patent Flour." At the end, also, outside the red border, are the words, "Trade-Mark Registered." Cooks thoroughly in a few minutes;" and then the figure and word, in blue, "4 Pounds." And then, after the names and place of business of the proprietor, come the words, in red," For sale by all the grocers," with the final "Trade-Mark Registered," in blue. On a corresponding label of defendant there is at the top, in red, "Golden Eagle;" next, below, in red, fast Dish." Immediately below that is a picture, in blue, of two children eating mush out of a bowl. Next below are the words, in red, “Cooks thoroughly in a few minutes:" and below that, in blue, "4 Pounds." Then follows the name and place of business of the defendant; and next below, in red, "For sale by all the grocers;" followed by the inevitable "Trade-Mark Registered," in blue. And during all this time the defendant had no “Trade-Mark Registered.” 4. On plaintiff's package, next to the above label, was another label, of similar size and paper. On the top of the label there is the word "Germea" printed in red letters; and immediately below this word Is a picture of plaintiff's mill, in blue color. It represents a main building, five stories high, with a flag-staff and flag on top, and The above descriptions do not create in lower wings on either side. Below this are the mind an entirely accurate notion of the several sentences, commending the com- similarity of appearance presented by the modity as nutritious and agreeable food. two packages. It sufficiently appears from All these sentences are printed in blue, ex- them, however, that the two packages cept the word "Germea," which, whenever were of the same size and shape, and of the it is used, is printed in red. The name of same kind of paper; that the labels were plaintiff is then given in red, and the words of the same size and shape, and placed on Trade-Mark Registered" at the bottom, the packages in the same manner; that on in blue. At the same place on its package the labels the same colors were used, and the defendant had a label of the same size that the alternations of the colors were the and kind of paper. On the top were the same; that wherever there is a progress> words "Golden Eagle," in red; and im-ive increase of the size of letters and words mediately below these words there is also in plaintiff's labels, there is a similar proa picture, in blue, of a building almost ex-gressive increase in the labels of defendactly like the one of plaintiff's label. It ant; that the word "germ" used by derepresents a main building, five stories high, with a flag-staff and flag on top, and tower wings on either side. It is almost fendant is very similar in appearance and sound to the word "germea," coined by plaintiff; that the sentences printed on de fendant's labels are very similar to those on plaintiff's labels, and in many instances (see subdivision 6 of this opinion) exactly the same; that the words "Trade-Mark Registered" are on each package, in the same type and color, and at the same place, -outside the red border; that the two pictures of plaintiff (of the mill and the child) are copied by defendant, the one literally, and the other nearly so; and that the two packages, as above described, would pro-ities to the same point. And it clearly apduce on the eye of a purchaser a similar impression. And, when we view the two packages, shown as entireties in the transcript, their close similarity is unquestionable. In our opinion, upon the facts found, the judgment should have been for plaintiff. pearance of the alleged infringer's device, is such as to be likely to mislead one in the ordinary course of purchasing goods, and induce him to suppose that he was purchasing the genuine article, then the similitude is such as entitles the injured party to equitable protection." We have quoted from these two cases because the language employed in the opinions aptly expresses the true rule. There are numerous authorpears that in the case at bar the defendant did the precise thing which the authorities declare an infringement. The testimony shows that the person who prepared the bags and labels of defendant had the bag and label of plaintiff before him; and the witness Siegelken,-the only witness who testified directly on the point,-after stating that he was a grocer, said: "I have sold, right along, Germea' and 'Germ,' and am familiar with both packages. I have had both brands, and sold them. When customers have asked for 'Germea,' I have handed them out 'Germ.' I have them side by side." But this testimony was not necessary to show either the intent or its fulfillment. Both clearly appear upon the face of the packages, as they are The rule governing such cases is that if the imitation of a trade-mark is intentionally so close as to deceive an ordinary purchaser, the defendant is liable; and the fact that an attentive inspection will disclose differences in even many respects between the two articles will not shield him. In Lockwood v. Bostwick, 2 Daly, 521, the suit was for an injunction to restrain the defendants from using a label bearing the name "Bovina," on the ground that it was an imitation of a label used by plain-presented in the findings. tiffs, bearing the name "Boviline;" the la- These views make it unnecessary to nobels having also, otherwise, a close resem- tice other points raised by appellant. It is blance to each other. Judgment for plain- proper to say, however, that there are no tiff was sustained, and the court, in its grounds for granting respondent's request opinion, uses language which clearly ex- to strike out the transcript or dismiss the presses the correct rule, and is also directly appeal; and, as the appellant waives all applicable to the case at bar. The court, claims for damages, and all relief asked for speaking of the two labels, says: “The de- under paragraphs 2, 3, and 4 of the prayer sign, evidently, was to depart from the of the complaint, there is no necessity of other sufficiently to constitute a difference a new trial. The judgment and order are when the two were compared, and yet to do reversed, with directions to the court beit so skillfully that the difference would not low to render a judgment for plaintiff, debe detected by an ordinary purchaser, un-creeing an injunction as prayed for in the less his attention was particularly called first paragraph in the complaint, with to it, and he had a very perfect recollection costs, but without damages, or other relief of the other label. The design was to de- prayed for. ceive, and to obtain, in the manufacture and sale of the article, any berefit or advantage that might be gained by its being purchased for another article of the same description, which was known and distinguished by a particular trade-mark. There could be no other motive, and it was done with the shallow expectation that the law would not see through the motive, but pronounce that the two labels were not the same, by simply distinguishing the points of difference between them." In Mc-prima facie evidence of neglect of duty on his Lean v. Fleming, 96 U. S. 245, the supreme court of the United States says: "What degree of resemblance is necessary to constitute an infringement is incapable of exact definitioa, as applicable to all cases. All that courts of justice can do in that regard is to say that no trader can adopt a trade-mark so resembling that of another trader as that ordinary purchasers, buying with ordinary caution, are likely to be misled. Much must depend, in every case, upon the appearance and special characteristics of the entire device; but it is safe to declare, as a general rule, that exact similitude is not required to constitute an infringement or to entitle the complaining party to protection. If the form, marks, contents, words, or the special arrangement of the same, or the general ap We concur: THORNTON,J.; SHARPSTEIN,J. (3 Cal. Unrep. 162) (No. 13,139.) Nov. 20, 1889.) NEGLECT OF In re MOORE'S ESTATE. DUTY. The fact that an administration has not been completed, though 14 years have elapsed since the appointment of the administrator, is part, and, in the absence of satisfactory explanation of the delay, supports a finding that the administrator has wrongfully and willfully neglected the estate, and has unnecessarily, willfully, and wrongfully prolonged its administration, to its great detriment, and justifies his removal, and the revocation of his letters of administration. Department 2. Appeal from superior court, Santa Clara County; PHIL W. KEYSER, Judge. This proceeding to obtain the removal of Thomas W. Moore as administrator of the estate of William H. Moore, deceased, was instituted in the superior court of Santa Cruz county by W. H. Moore, a son and heir at law of the decedent, but was subsequently removed to the superior court of Santa Clara county. Hall & Rodgers, (Warren Olney, of coun sel,) for appellant. Charles B. Younger, for | The case was submitted in the court below respondent. upon an agreed statement of facts, and judgment was given for plaintiff as prayed PER CURIAM. This appeal is from an or- for in his complaint. The appeal is from der removing appellant, and revoking his the judgment, and rests on the judgment letters of administration, as administrator roll. The facts of the case, as they were of said estate. Said order is based upon a agreed to and found by the court, are as finding that "the said Thomas W. Moore follows: In September, 1880, the Pittsburg has wrongfully and willfully neglected Gold Mining Company was a corporation, said estate, and has unnecessarily, willful-organized under the laws of this state, for ly, and wrongfully prolonged the adminis- the purpose of mining, and having its office tration of said estate, and to the great det- and principal place of business at the city riment thereof." The question whether the and county of San Francisco. The capital finding is justified by the evidence is the only stock was $10,000,000, divided into 100,000 one which we shall now consider. shares; and of this stock during the said It clearly appears that appellant was ap- month of September, and until long after pointed and entered upon the discharge of the commencement of this action, the his duties as administrator of said estate plaintiff was the owner and holder of 230 in the early part of the year 1873, and the shares. On the 18th day of September, petition for his removal was filed July 14, 1880, the defendants were duly elected di1887. Between the appointment and the rectors of the said corporation, and from filing of the petition more than 14 years thence until the time of the commencehad elapsed. This was prima facie evidence ment of this action, and for a long time of neglect, and we fail to find any satisfac- thereafter, were and remained the duly tory explanation of this long delay consist-elected, qualified, and acting directors thereent with the duty of the administrator to of. The corporation also had a president wind up the administration within a rea- and secretary, who were duly elected, sonable period. The power of removal for qualified, and acting as such. During the the cause specified is vested in the superior month of October, 1880, work was being court; and "with the exercise of this pow-prosecuted in the mine held and owned by er, so necessary to the protection and secu- the corporation, and ore was being extractrity of estates, an appellate court should ed and taken from the mine, and sent to not interfere, unless it be clearly shown mill for reduction, and bullion was obtained that there had been a gross abuse of dis- therefrom. The corporation also received cretion by the probate court. The facts of and disbursed during the month considerathis case, as disclosed by the record, estab-ble sums of money, and incurred indebtedlish no such abuse of discretion." Deck's Estate v. Gherke, 6 Cal. 666. Order affirmed. (81 Cal. 231) SCHENCK V. BANDMANN et al. (No. 12,386.) (Supreme Court of California. Nov. 20, 1889.) CORPORATIONS-Directors-Duty TO POST STATE MENTS. ness and liabilities which were existing on the first Monday of November following. The defendants, as such directors, did not make or post, or cause to be made or posted, on the first Monday of November, 1880, or at any time prior to the 19th day of that month, the itemized account or balance-sheet, or any account or balance-sheet whatever, for the previous month of October, as required by the act of the legislature above referred to. The defendants, as such directors of the corporation, and the pres and secretary thereof, did not, nor did either or any of them, obtain the information necessary to the making of the itemized account or balance-sheet for the month of October, 1880, required by the said act, prior to the 15th day of November, 1880; but on the 19th day of that month, and the day before the commencement of this action, an itemized account or balance2. The statute being mandatory as to the time sheet for the previous month of October, in when the account is to be made and posted, the substance and form as required by the statpenalty attaches on the failure to do so on the first ute, was made, verified, and posted in a Monday in the month; and a complaining stock-conspicuous place in the office of the corpoholder may recover for the failure, though the ac ration by the president and secretary therecount is made and posted before the beginning of the action. 1. Under St. Cal. 1880, p. 134, providing that on failure to make and post, on the first Monday of each month, an itemized account of all disburse-ident ments and receipts during the preceding month, the directors of a mining corporation shall be lia' ble to any stockholder complaining thereof in the Bum of $1,000 liquidated damages, negligence on the part of the directors appears on showing their failure to make and post the account on the first Monday in the month, though it is admitted that they did not have the necessary information to make it, and the burden is on the directors to show exculpatory circumstances. Commissioners' decision. Department 2. Appeal from superior court, city and county of San Francisco; JAMES G. MAGUIRE, Judge. J. F. Cowdery, for appellants. E. F. Swortfiguer, for respondent. of. It is contended for appellants that the conclusion of law drawn by the court from the foregoing facts, that plaintiff was entitled to judgment, was not warranted, and that the judgment should therefore be reversed. The argument is that, while it does not appear why the defendants failed on the first Monday in November to have BELCHER, C. C. The plaintiff commenced the information necessary to enable them this action to recover judgment against to comply with the law, still all presump the defendants for $1,000 liquidated dam- tions must be indulged in their favor. The ages, with costs of suit, under the provis- | presumptions invoked are declared in sublous of an act of the legislature of this state, approved April 23, 1880, (St. 1880, p. 134.) divisions 1, 15, 20, 28, 33, § 1963, Code Civil Proc., and are that a person is innocent of crime or wrong; that official duty has been the account in time, seems to present simregularly performed; that the ordinary ply a case of neglect or disregard of duty. course of business has been followed; that It may be that, under possible circumthings have happened according to the or- stances, the directors of a corporation, dinary course of nature, and the ordinary when they have failed to comply strictly habits of life; that the law has been obeyed. with the law, should be held excused. For It is said the law never exacts impossibil- example, the president or secretary, or both ities; and, it being admitted that defend- of them, might be taken sick or die, renderants did not have the necessary informa- ing it impossible for the account to be tion before the 15th of November, the bur-made, verified, and posted in time. But, if den was cast upon the plaintiff to show so, the facts must be within the knowledge negligence on their part. On the other of the directors, who are sued, and should hand, it is contended for respondent that the statute is arbitrary in its requirements; that if defendants had any cause or excuse for their failure to obtain the necessary information, other than their own negligence, the burden was upon them to show it; and that, in the absence of such showing, they were rightly held to have incurred the penalty imposed by the statute, and must bear the consequences. be set forth and proved. Under the circumstances shown in this case, we fail to see how the presumptions invoked by appellants can be held applicable to the case. They were not charged with a criminal wrong, but with neglect to perform a duty enjoined by statute; and it is evident that their official duty in this respect was not regularly performed, and that the law was not obeyed. The act of the legislature under which It is further claimed for appellants that the respondent asserts his right to recover they ought not to be made to pay the penapplies only to corporations formed under alty imposed upon them, because the acthe laws of this state for the purpose of count required was in fact made and postmining; and the portions of it necessary ed the day before the action was comto be considered are found in sections 1 menced. But we find nothing in the statute, and 3, and are as follows: "Sec. 1. It shall or in the supposed reason for its passage, be the duty of the directors, on the first to warrant such a defense. The statute Monday of each and every month, to cause seems to be as mandatory in regard to to be made an itemized account or balance- time as it is in other respects; and the first sheet for the previous month, embracing a Monday of the month, and not the comfull and complete statement of all disburse- mencement of the action, is the time after ments and receipts, showing from what which the penalty attaches. If the theory sources such receipts were derived, and for of appellants is right, then, though the diwhat and to whom such disbursements or rectors of a corporation should delay makpayments were made, and for what object ing out and posting the account for six or purpose the same were made; also all in- months or a year, they could still escape the debtedness or liabilities incurred or existing consequences of their negligence if they at the time, and for what the same were in- should succeed in getting in ahead of the curred, and the balance of money, if any, on complaining stockholder by a day, or even hand. Such account or balance-sheet shall an hour. We do not think this theory can be verified under oath by the president and be maintained. In Loveland v. Garner, 71 secretary, and posted in some conspicuous Cal. 544, 12 Pac. Rep. 616, the court, speakplace in the office of the company." "Sec. ing of the same statute, said: "The plain3. In case of the failure of the directors to tiff is entitled to recover, i he has alleged have the reports and accounts current made and can prove the defendants to have been and posted as in the first section of this act guilty of failure on the first Monday of any provided, they shall be liable, either several- one month to have the reports and acly or jointly, to an action by any stock-counts current made and posted, as in the holder in any court of competent jurisdic- first section of this act provided."" The tion complaining thereof, and, on proof of cases cited for appellants do not meet the such refusal or failure, such complaining case. We find nothing in the record to jusstockholder shall recover judgment for tify a reversal of the judgment, and there$1.000 liquidated damages, with costs of fore advise that it be affirmed. suit." The requirement of the statute is clear that the account or balance-sheet | must be made and posted on the first Monday of the month. No exceptions are provided for. The appellants failed to comply with this requirement. This is alleged and admitted. The corporate powers, business, and property of the corporation were exercised, conducted, and controlled by the appellants. Section 305, Civil Code. They knew, or ought to have known, at all times, the condition of the business and property under their control; and what they ought to have known they must be presumed to 1. A testator devised to his wife one-half "of have known, unless they were negligent in all my property of which I may die possessed," and the discharge of their duties. Nothing was to his children the remaining half. Held, that as required to be set out in the account except to community property the devise to the wife was what, as directors, they were expected to of one-half of his moiety. 2. Evidence of what the testator said, just beknow. The admission, therefore, unex-fore his death, to his executor, as to what was inplained, that they lacked the information tended by the will, and who wrote it, the declaranecessary to enable them to make and post tions having been made five years after the mak We concur: HAYNE, C.; VAN CLIEF, C. PER CURIAM. For the reasons given in the foregoing opinion the judgment is af firmed. (81 Cal. 240) in re GILMORE'S ESTATE. (No 13.163.) (Supreme Court of California. Nov. 21, 1889.) WILLS CONSTRUCTION - DECLARATIONS OF TES- |