Lawrence Manufacturing Co. v. Janesville Cotton Mills , 11 S. Ct. 402 ( 1891 )

138 U.S. 552 (1891)

LAWRENCE MANUFACTURING COMPANY
v.
JANESVILLE COTTON MILLS.

No. 102.

Supreme Court of United States.

Argued December 2, 3, 1890. Decided March 2, 1891. APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE WESTERN DISTRICT OF WISCONSIN.

Mr. J.H. Raymond and Mr. W.B. Hornblower for appellant.

Mr. I.C. Sloan and Mr. J.C. Sloan for appellee.

MR. CHIEF JUSTICE FULLER, after stating the case, delivered the opinion of the court.

We have already held in Lawrence Manufacturing Company v. Tennessee Manufacturing Company, ante, 537, that plaintiff is not entitled to the exclusive right to use the letters "LL" as a trademark on sheetings running four yards to the pound, and that no case was made there for relief on the ground of actual fraud; and that decision is controlling here so far as those questions can be considered as involved. But it is insisted that the appellee, by virtue of a contract with and decree against the Janesville Cotton Manufacturing Company, is estopped from the use of the letters "LL," or any imitation thereof, and that a decree accordingly should go against it. The bill is not framed upon the theory, nor do we understand counsel so to contend, that plaintiff is entitled to relief upon the agreement alone, but that it is to be taken with the decree which was entered perpetually enjoining the Cotton Manufacturing Company from the use of the letters "LL" after July 1, 1886. Defendant denied, and it was not shown that the written agreement was ever executed by the president and secretary of the Cotton Manufacturing Company, although this was authorized to be done as soon as the release from damages was furnished, as it afterwards was, but only as part of a settlement of the pending suit, under which that suit was to be dismissed without costs to the company.

This proposed agreement provided that in consideration of the discontinuance of the plaintiff's suit, then pending, and of a release of all claims for damages, in accordance with the stipulation in the cause then made, the Cotton Manufacturing Company covenanted and agreed "for itself, its successors, both in said corporation and in said business, and for its assigns," "not to use the label or trademark ``LL' on any goods of its manufacture after the first day of July, A.D. 1886." By the consent decree subsequently entered, the case was not discontinued, but, on the contrary, a perpetual injunction was decreed against the Cotton Manufacturing Company, its officers, agents, servants and employés, restraining them and each of them, after July 1, 1886, from, directly or indirectly, using the letters "LL" upon any sheetings of their manufacture as mentioned in the bill of complaint. It was, however, provided that the total costs of the suit should be paid by the plaintiff; and no damages were awarded. This decree, then, was in accordance with the stipulation in respect of damages and costs, but not as to the discontinuance, in place of which an affirmative decree in plaintiff's favor was substituted. And this change, made with the written assent of counsel for the respective parties as the record shows, dispensed with the occasion for a covenant on the part of the Cotton Manufacturing Company not to use the letters "LL" on goods of its manufacture after July 1, 1886, for such was the restraint decreed. But the decree did not in terms enjoin the successors of the Cotton Manufacturing Company, as a corporation and in business, and its assigns, according to the letter of the proposed agreement.

This, in plaintiff's view, left that decree incomplete, and therefore it seeks in substance to have it pieced out and then enforced under the prayer for general relief. There is no prayer in the bill that the preliminary injunction be made perpetual, but that would result if plaintiff succeeded, by a decree under the general prayer, in subjecting this defendant to the operation of the prior decree. But where a party returns to a court of chancery to obtain its aid in executing a former decree, it is at the risk of opening up such decree as respects the relief to be granted on the new bill. Hence, even if it be assumed upon the evidence that the decree against the old corporation bound the new one, yet this being in effect, in one of the two aspects, and, perhaps, the sole aspect, in which it is framed, a bill to carry the former consent decree into execution, the Circuit Court was not obliged to do so if it believed that decree erroneous; and that it was erroneous we have already decided. Inasmuch as plaintiff came into a court of equity to have the benefit of the former decree, the court was at liberty to inquire whether circumstances justified the relief. Mitf. Ch. Pl. 96. Indeed, it would seem to have devolved upon it to show that the decree was a right decree. Such is the language of Lord Redesdale in Hamilton v. Houghton, 2 Bligh, 169, 193, and of Lord Chancellor Sugden in O'Connell v. McNamara, 3 Dr. & War. 411, 412. The same principle was announced as early as 1700 by the Lord Keeper in Johnson v. Northey, Finch's Precedents in Chancery, 134. See also Lawrence v. Berney, 2 Rep. in Ch. *127; Adams Eq. *416; 2 Dan. Ch. Pr. (4th ed.) 1586. This rule was much considered and applied in Wadhams v. Gay, 73 Illinois, 415, and approved by this court in Gay v. Parpart, 106 U.S. 679. The prior decree was the consequence of the consent and not of the judgment of the court, and this being so, the court had the right to decline to treat it as res adjudicata; Wadhams v. Gay, Gay v. Parpart, supra; Jenkins v. Robertson, L.R. 1 Sc. App. 117; Brownsville v. Loague, 129 U.S. 493, 505; Texas & Pacific Railway v. Southern Pacific Co., 137 U.S. 48, 56; Edgerton v. Muse, 2 Hill Eq. (So. Car.) 51; Lamb v. Gatlin, 2 Dev. & Batt. Eq. 37; Bean v. Smith, 2 Mason, 252.

As, therefore, if the old company had defended the suit against it, it would have prevailed, the decree of the Circuit Court, being correct upon the merits, is also correct in that the court refused to be constrained by the previous erroneous consent decree, to decree contrary to the right of the cause.

Affirmed.

MR. JUSTICE BLATCHFORD did not sit in this case or take any part in its decision; nor did MR. JUSTICE BROWN, who was not a member of the court when the case was argued.