National Biscuit Co. v. Pacific Coast Biscuit Co.

91 A. 126, 83 N.J. Eq. 369, 13 Buchanan 369, 1914 N.J. Ch. LEXIS 69
CourtNew Jersey Court of Chancery
DecidedJune 4, 1914
StatusPublished
Cited by10 cases

This text of 91 A. 126 (National Biscuit Co. v. Pacific Coast Biscuit Co.) is published on Counsel Stack Legal Research, covering New Jersey Court of Chancery primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Biscuit Co. v. Pacific Coast Biscuit Co., 91 A. 126, 83 N.J. Eq. 369, 13 Buchanan 369, 1914 N.J. Ch. LEXIS 69 (N.J. Ct. App. 1914).

Opinion

Walker, Chancellor.

The object of tliis bill is to restrain unfair competition in trade.

The complainant and defendant companies are corporations organized under the laws of this state. Both are engaged in the same line of trade — the manufacture and sale of bakery products. The business of the defendant company is confined to the Pacific coast states and adjacent territory, while the field of activity of the complainant company is nation-wide. The complainant’s , career commenced in 1898, when it acquired some of the leading bakery plants in the counhw, with which it began operations. It already had a market for its goods, brought to it by these plants^ and by the exercise of a superior order of scientific and mechanical intelligence and of commercial acumen and industry, acquired a wide and enviable reputation for the high quality of its products. A market for these wares was established in the defendant’s territory shortly after the complainant started business in 1898.

The principal innovation made in the bakery line by the complainant is that of housing and transmitting to the ultimate consumer bakery products with a minimum of deterioration, and [371]*371practically as they leave the ovens. This is accomplished by the use of paper cartons. Up to the complainant’s advent, shipments were mainly in “bulk” — that is, in barrels and wooden boxes. Paper cartons, oE the shoe-box style, with loose paper lining, and hermetically sealed tin boxes, were also used, but only to a very limited extent. The tin boxes were commercially too costly and the shipment in bulk was objectionable because of the tendency of the contents to absorb moisture and deleterious and offensive odors, and to breakage. Uncleanliness in the handling by the retailer was also to be reckoned with.

The paper cartons adopted by the complainant were much smaller than those theretofore used and were of a size to permit of sales at popular prices — five and ten cents per package. These cartons.are constructed by superimposing upon the carton blank, made of cardboard, a sheet of wax paper of the size and shape of the blank, which, when folded, form a unit box, and, it is said, possess the quality and capacity of preserving the contents equal to the hermetically sealed tin box. The cartons are of various sizes and shapes, adapted to the forms of the proposed contents; and to identify the contents as its products, and to distinguish the same from those of other dealers, the complainant adopted a trade mark and a variety of trade names for its various products, and peculiar and distinctive labels and wrappers to envelope the cartons, all of which, it is daimed, the defendant fraudulently simulated, to the injury and damage of the complainant’s trade.

The alleged infringement of fifteen widely different styles of cartons and carton wrappers and applied trade names, for as ' many kinds of crackers or biscuits; the methods of construction of the carton, and of the form of bundle package of assembled cartons, as well as the trade mark, is involved in this litigation.

The law relating to fraudulent or unfair competition between traders is so firmly established and has been so lucidly illustrated and defined by the courts of England and of this country, that exteiided citation of. authorities will be profitless. The underlying principle that no man' has a right to palm off his wares as those of another, thereby cheating the purchasing public and filching the business of a rival, is so essentially an element of natural justice and so solidly imbedded in our jurisprudence, [372]*372that all that is necessary to quicken a court of equity, is to show that in the particular instance the offence has been committee!. The eases cited by counsel in their briefs exemplify the illimitable conditions and circumstances under which this simple doctrine requiring men to be honest towards each other may be invoked.

The case of Wirtz v. Eagle Bottling Co., 50 N. J. Eq. 164, is a striking example of the adaptation of the principle to unfair competition in the use of imitative labels and wrappers. The opinion in that ease so fully covers the whole scope of the law applicable to the facts presently to be considered, and furnishes so clear a guide, that I am persuaded to quote from it in extenso. The complainant, in that' case, by his industry and fair dealing, had built up a large and valuable trade as a bottler of beer and-identified his goods by a peculiar and distinctive label, which label the defendant substantially copied. Vice-Chancellor Van Fleet, in granting a preliminary injunction, subsequently made perpetual (at p. 166), said:

“If we speak with accuracy, these labels cannot bo called trade marks, but they serve substantially the same purpose. They are the marks by which the complainant’s goods are distinguished in the market from all like goods, put upon the market by other persons, and are, for that reason, according to many decisions, just as much under the protection of the law as trade marks are. The law protects them for the same reasons and in precisely the same way that it does trade marks. The leading principle of the law on ibis subject is, that no man should be permitted to sell his goods on the reputation which another dealer has established in the market for his goods, and this principle applies with equal force to the case where the goods oE such other dealer are known in the market- by a label as it does to the ease where they are known by a mark which is strictly a trade mark. Fo dealer can lawfully adopt the label of another dealer, or one so near like it as to lead the public to suppose that the article to which it is affixed was put upon the market by such other dealer. Miller Tobacco Manufactory v. Commerce, 45 N. J. Law 18, 24. The reasons upon which this rule rests were stated by Mr. Justice Knapp, in the ease just cited, substantially as follows: While [373]*373the markets are open and free to all, and fair competition should be encouraged, still every dealer must be required for the protection of the public and to promote fair dealing, to depend for his success upon his own reputation and the quality of his own productions. If he were allowed to deal under false colors and sell his productions for those of others, the result would he that he would not only cheat the public, but also defraud him whose right place in the market he filled rvith spurious goods. Such competition would not be fair competition — it would be closer akin to piracy.
“The defendant’s labels were prepared under the direction of its general manager. * * * He further says, that in designing the defendant’s labels he had no purpose or design of palming off the defendant’s goods for those of the complainant. Admitting all this to be true, it is manifest it constitutes no defence. The vital question in cases of this kind is not what did the defendant mean, but what has he done ? The legal quality of an act, resulting in injury, must be decided not by the motive with •which it was done, but by the consequences which have necessarily resulted from it. The law, in civil cases, does not attempt to penetrate the secret motive which induced the act brought in judgment, but judges of its legal quality solely by the consequences which have actually and necessarily proceeded from it. It is no less a dictate of justice, than of sound reason, that ever]'’ person must be understood to have intended to do just what is the natural consequence of his act deliberately done.

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Bluebook (online)
91 A. 126, 83 N.J. Eq. 369, 13 Buchanan 369, 1914 N.J. Ch. LEXIS 69, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-biscuit-co-v-pacific-coast-biscuit-co-njch-1914.