advertising, and selling their product as Old Taylor Whisky. They devised a brand, which was put on barrels, bottles, and other packages, and used in their advertisements, circulars, letters heads, etc., consisting of the words, "Old Taylor Handmade Sour-Mash Whisky. E. H. Taylor, Jr., Distiller, Frankfort, Kentucky," arranged in a circle; and underneath this appeared the inscription, “E. H. Taylor, Jr., & Sons," in fac simile of the handwriting of E. H. Taylor, Jr. They branded other of their whiskies, later on, "Old Taylor," and underneath these words placed the inscription, "E. H. Taylor, Jr., & Sons," in the autograph of E. H. Taylor, Jr. They continued, without interference, to operate the distillery, and transact business as whisky merchants, with office and headquarters at Frankfort, some seven or eight miles distant from their distillery, until in the early part of 1889, when, as we learn from their petition, the appellants began to manufacture whisky at their distilleries known as the O. F. C. and Carlisle Distilleries, and to imitate the brands of the appellees, use the autograph signature of E. H. Taylor, Jr., and otherwise interrupt and injure their business. On the 16th of October, 1889, they brought this action to prevent the appellants from further using the brands and script in question, and for damages. The appellants asserted the right to use the disputed brands, including Taylor's autograph, and set up, by way of counterclaim, that the appellees had themselves wrongfully appropriated the brands, trade-marks, labels, etc., of the appellants, for which they asked damages. They based their claims upon a state of case growing out of E. H. Taylor, Jr.'s, connection with themselves in operating the O. F. C. and Carlisle Distilleries prior to the formation of the partnership of E. H. Taylor, Jr., & Sons, in January, 1887. Upon hearing, after an elaborate preparation of the case, the chancellor determined the issues of fact and of law adversely to the appellants, and enjoined them from using the words, "E. H. Taylor, Jr., Distiller," and the autograph signature of E. H. Taylor, Jr., upon any whiskies produced at O. F. C. and Carlisle Distilleries since January 1, 1887, ordered an account taken of profits on the whiskies manufactured by the appellants since January, 1887, in which the script autograph had been used, and dismissed their counterclaim.

The controlling questions are: Has E. H. Taylor, Jr., so complicated himself with the business of the appellants during the years prior to January, 1887, as to deprive himself and his associates of the use of the firm name, E. H. Taylor, Jr., & Sons, and as to confer on the appellants the right to use, against his will, the autograph signature of E. H. Taylor, Jr.? And have the appellants, in connection with E. H. Taylor, Jr., or otnerwise, so appropriated the name Old Taylor for the whiskies theretofore made at the O. F. C. and Carlisle Distilleries as to pre

clude the appellees, E. H. Taylor, Jr., & Sons, from such use as a trade-mark or brand?

In 1868 or 1869, E. H. Taylor, Jr., became the owner of, and began to operate, a distillery in Franklin county, near Frankfort, to which he gave the name of O. F. C. Distillery, and to the product of which he gave the name of "O. F. C. Whisky." He put upon his packages of whisky, and used upon labels and in advertisements, a brand, in circular form, consisting of the words. "0. F. C. Handmade Sour-Mash Whisky. E. H. Taylor, Jr., Distiller, Frankfort, Ky." Taylor continued to operate the distillery in this way until about May, 1877, when he failed, and was forced by his creditors into bankruptcy. In December, 1877, a composition was effected with his creditors at 20 cents on the dollar, and Gregory, Stagg & Co. (St. Louis whisky merchants, and large creditors of Taylor) agreed to furnish the funds necessary to effectuate the composition, an arrangement being made alike profitable to both parties. In pursuance of this arrangement the O. F. C. Distillery property was, by order of the United States district court, reconveyed to Taylor, who, with his wife, conveyed the property to George T. Stagg. Taylor then assigned to Stagg the O. F. C. trade-mark, and Stagg (Gregory, Stagg & Co. uniting with him) leased to Taylor the O. F. C. Distillery property, with the right to use the O. F. C. trade-mark. Taylor continued the business in his own name, the O. F. C. whisky in the meantime attaining a phenomenal reputation, until the fall of 1879, when, for reasons not disclosed in the record, a corporation was organized and created, of the style of the E. H. Taylor, Jr., Company. To that corporation, Stagg, in October, 1879, conveyed the distillery property, and also assigned the trade-mark. As this trademark or brand is, to an important extent, the subject-matter of this litigation, we turn to the registration made of it by Taylor in the patent office in 1872, and to its re-regis tration in the same office by George T. Stagg, as assignee of Taylor, made shortly before its assignment to the E. H. Taylor, Jr., Company. The specification filed by Taylor is as follows: "The whisky made by me is handmade sour-mash whisky, and as such is known in the market. The trade-mark consists of the letters O. F. C.,' and is used with or without the words, 'Handmade SourMash Whisky. E. H. Taylor, Jr., Distiller, Frankfort, Ky.,' or words to like effect. It is branded on the heads of the barrels or packages containing said whisky, and therefore mostly used in black color, though it may, also, in suitable tint, be printed on labels that apply to bottles, and on show cards, or notices that advertise the same to the public." Stagg, in 1878, thus described it: "My trade-mark consists of the letters 'O. F. C.,' the same being an arbitrary symbol. This trade-mark has generally been arranged as shown in the accompanying

fac simile, to-wit, in connection with the words Handmade Sour-Mash Whisky. E. H. Taylor, Jr., Distiller, Frankfort, Kentucky;' but the said words may be transposed, some of them omitted, or other words substituted, as may be found most convenient for the purpose intended, without materially changing the character of my trade-mark, the essential feature of which is the symbol consisting of the letters O. F. C.,'" Again, in October, 1881, the E. H. Taylor, Jr., Company registered this trade-mark, in the patent office in substantially the language employed by Stagg some three years before. At this point in the history of the case, we may state our conclusion to be that the trade-mark thus coming to the ownership of the corporation E. H. Taylor, Jr., Company consisted, so far as it was exclusively distinctive in its character, only of the letters "O. F. C." The other words were appropriately grouped about these letters to indicate the generic character of the whisky, and that, E. H. Taylor, Jr., was the distiller. We do not suppose these words "handmade" and "sour-mash" are such as can properly be claimed and used exclusively as a trademark, and we suppose the name "E. H. Taylor, Jr.," was one for which another name was to be substituted as distiller when accasion demanded it, which would be when Taylor ceased to be the distiller of the O. F. C. whisky. But, be this as it may, the intention of the parties adopting this trademark, as expressed in its repeated registration, is to the effect that the symbolic letters "O. F. C." alone constituted the trademark.

Upon the organization of this corporation, Stagg became its president, and E. H. Taylor, Jr., its vice president, the stock being owned and controlled by them, with all distilling operations under Taylor's management. It erected at once another distillery, adjacent to the O. F. C., and to it gave the name of the Carlisle Distillery, and upon all packages of whisky manufactured at this distillery the company placed a brand consisting of the words, "Carlisle Standard Sour-Mash Whisky. E. H. Taylor, Jr,. Co., Distiller, Frankfort, Kentucky." There was no registration of this brand as a trade-mark, but the fair inference is that its essential feature was intended by the parties to be the word "Carlisle." The words "Standard Sour-Mash Whisky" were not so intended, even if they could have been so used; and for the name of the distiller, in the brand, there was to be substituted, as we must suppose, the name of the person of whom it could be truthfully said he was the distiller. In the operation of these distilleries,-the O. F. C. and the Carlisle.-the distiller was E. H. Taylor, Jr. That it was deemed important to indicate to the trade that he was the distiller is shown by the conduct of all the interested parties. He had been

Its

engaged in distilling for more than 20 years, and had given the O. F. C. whisky a repu tation equal to any made in Kentucky. superior quality was attributed largely to his skill as a distiller, and the intelligent and careful superintendency he gave to the methods of distillation. In one of the E. H. Taylor Company's circulars (and we use it as a sample of many others of the same import), it is said: "Mr. Taylor's long experience in distilling, and his intelligent ac quaintance, theoretically and practically, with the arcana of fermentation and distillation, together with his known pride in excelling in the quality of product, are guaranty of that quality." In 1880 or 1881, to still further impress on the public and the trade the personal connection of E. H. Taylor, Jr., with the manufacture of its whlskies, for the somewhat impersonal designation, "E. H. Taylor, Jr., Co., Distillers," was substituted the words, "E. H. Taylor, Jr., Co., Distillers," in the well-known and striking autograph signature of E. H. Taylor, Jr., with a caution to the trade that such script was the test of the genuineness of O. F. C. and Carlisle whiskies in the mar ket. Was this autograph of E. H. Taylor, Jr., whether in the form of the individual name of E. H. Taylor, Jr., Distiller, or of the corporate name of E. H. Taylor, Jr., Co., a part of the trade-mark of the O. F. C. and Carlisle whiskies? In this connection. it is interesting to notice the origin of the adoption of this script, as shown by the testimony. Stagg says that on one occasion, when Taylor was in St. Louis, the latter noticed a striking script signature on packages of imported brandy, and was impressed with the idea that the signature of the company, as written by him, would be appropriate, and look well on a barrel. Taylor suggested it. Stagg agreed with him, and it was done. It is not pretended that the corporation purchased from Taylor the right thus to ap propriate his personal signature, or that he was compensated therefor by any one, in any way or to any extent. Taylor contends that it was a mere fancy with him, and was intended to show his personal identification with the distilling operations of the company. That such was the intention seems clear enough, and such was doubtless the effect of the use of the script. The combination of Taylor's name and the fac simile of this striking signature would easily and necessarily raise the inference that he was not only personally connected with the company, but was in fact its distiller. It seems doubtful that such use could have been made of this autograph, after Taylor withdrew from the concern, and ceased to be its distiller, even if, in express terms, he had attempted to sell it to the corporation or to Stagg. As aptly said by counsel, "Pub lic policy and common honesty would forbid any such transaction." Be that as it may, there has been no such transfer or

attempted sale. The claim of the appellants through the E. H. Taylor, Jr., Company, to the continued use of this autograph, is based on an inference merely arising out of Taylor's consent to its use while he was identified with the business. It was not a part of the original trade-mark, but is claimed as a sort of adjunct thereto. Considering the circumstances of its adoption,-that it was inspired by the mere fancy of Taylor, that there was no consideration for its use, that there was no agreement or contract connected with its use,-and not overlooking the fact that its use pointed out Taylor as the distiller of the concern for the time being, and identified him therewith (as much SO as his physical features would have done), and that a continuance of this misleading feature would be an imposition on the public, we are convinced that even after the adoption of this script the trademarks of the company and those claiming thereunder consisted of the symbol "O. F. C." and the name "Carlisle." These were the essential features, and the fact that the other words might be omitted, as shown by the specification of the O. F. C. trade-mark in the patent office, shows that these other words were not regarded as a part of the trade-mark. See similar registration in Drug Co. v. Stucky, 46 Fed. 624. In 1882 the E. H. Taylor, Jr., Company, purchased a third distillery, situated about six miles from Frankfort, in Woodford county, which had theretofore been owned and operated by J. S. Taylor. They operated this distillery in the name of J. S. Taylor, usIng the brand he had theretofore used, viz. “J. S. Taylor's Handmade Sour-Mash Whisky, Woodford Co., Ky.," and in addition thereto used the name "J. Swigert Taylor," in fac simile of his handwriting. The company continued to operate these three distilleries, and to do so successfully, until in December, 1886, when, in pursuance of a written contract to that effect, Stagg and the E. H. Taylor, Jr., Company, conveyed to E. H. Taylor, Jr., the J. S. Taylor Distillery, in Woodford county, in consideration of which Taylor relinquished all interest in and to the effects and business of the company, and retired therefrom. Upon obtaining the J. S. Taylor Distillery, Taylor at once associated his sons with himself in business as E. H. Taylor, Jr., & Sons, and, as we have seen, begun the manufacture of whisky at the J. S. Taylor Distillery. The withdrawal of E. H. Taylor, Jr., from the company, left George T. Stagg the sole owner of the stock of the company, and the O. F. C. Distillery was run by him in the name of the company until July, 1887. From that date until January, 1889, both the Carlisle and the O. F. C. Distilleries remained idle, as the Carlisle Distillery had remained from the beginning of the year 1887. The George T. Stagg Company, was organized in November, 1887, and thereupon the E. H. Taylor, Jr., Compa

ny surrendered its distilleries, warehouses, dwelling houses, grain elevators, cattle pens. and other properties and its good will, trademarks, brands, etc. to the George T. Stagg Company, and that company leased these properties to the appellant Stagg. Upon the organization of the George T. Stagg Company, the purpose of which organization was to operate distilleries, manufacture, purchase, and sell whiskies, buy, feed, and sell cattle, etc., the trade and public were notified by circulars; the apparently defunct E. H. Taylor, Jr., Company notifying the trade that it had transferred to "the George T. Stagg Company, of Louisville, Kentucky, the O. F. C. and Carlisle Distilleries, situated near Frankfort, Kentucky, together with the brands, trade-marks, good will, etc., of the business," and directing "holders of warehouse receipts for O. F. C. and Carlisle whisky stored in bonded or free warehouses" to hand in their receipts to that company when wishing to withdraw their goods. The George T. Stagg Company, on the same circular, stated to the public, among other things, "that in methods of manufacture, and character of material used," they would omit nothing to sustain the reputation of the products of the celebrated O. F. C. and Carlisle whiskies. The company also placed, in large letters, on its office doors in Louisville, the words, "The George T. Stagg Company, Distillers of O. F. C. and Carlisle Whiskies." These circumstances, and others we need not stop to discuss, induce us to believe that it was the intention of all the parties, at the time of the withdrawal of Taylor from his business association with Stagg, that the corporation E. H. Taylor, Jr., Company was to cease all active business operations. It deliberately advertised itself as going out of business, and as having turned over its possessions, good will, etc., to another. The George T. Stagg Company stepped into its place, and so notified the public. It may be true that Stagg, who owned all its stock, found it convenient to retain the name merely for purposes connected with certain governmental regulations. As a matter of law, it stood suspended, so far as the public were concerned. Banking Co. v. Eisenman (Ky.) 21 S. W. 531, 1049. We do not believe-and this is the point, in considering the facts just enumerated-that it was incompatible with business integrity on the part of Taylor, or violative of any of the legal rights of Stagg, or the George T. Stagg Company, that Taylor should, in connection with his sons, assume the partnership name of E. H. Taylor, Jr., & Sons, though similar in appearance to the corporate name of E. H. Taylor, Jr., Co. We think, rather, that it was the expectation of all the parties concerned that the name of E. H. Taylor, Jr., as a part of the corporate name of a defunct corporation, should, within a reasonable time, entirely disappear. That it was

the ambitious purpose of George T. Stagg to substitute his own name, or that of the corporation bearing his name, as the distiller and proprietor of the famous O. F. C. and Carlisle Distilleries, and their accompanying brands of whisky, we do not doubt. He made no complaint of the use of that firm by the Taylors when they assumed it, but, on the contrary, sold them, as such firm, some twenty-odd thousand dollars' worth of J. S. Taylor whisky in the spring of 1887. It follows from what we have said that upon their resumption of business, in 1889, the George T. Stagg Company and Stagg could not lawfully use the autograph signature of E. H. Taylor, Jr., as it might appear in the corporate name E. H. Taylor, Jr., Company, or otherwise, or advertise him as the distiller of their O. F. C. or Carlisle whiskies, as they claimed they had the right to do, and in some instances did. Nor do we think the appellants can justly complain of the use by the appellees of the trade-mark Old Taylor Whisky. While there is abundant proof that the O. F. C. and Carlisle whiskies were frequently called by dealers "O. F. C. (Taylor)"or "Taylor's O. F. C.," "Taylor Carlisle," or "Carlisle (Taylor)," etc., yet the parties interested, and who alone had the right to name their whisky, and adopt its trademark as a distinguishing feature, did not so call it, or brand it "Taylor" or "Old Taylor" whisky, or in any wise associate the name Taylor with it, save in the use of the signatures heretofore discussed, though at the time the suit was instituted the proof conduces to show that the appellants began to apply to the O. F. C. whisky the name of "Taylor Whisky."

We conclude, therefore: That the chancellor properly enjoined the appellants from advertising E. H. Taylor, Jr., as the distiller of their O. F. C. or Carlisle whiskies, save when such statements were in fact true. The words, "E. H. Taylor, Jr.," constituted no part of their trade-mark, and their use was an imposition on the public, save when they could be truthfully used. Mattingly v. Stone (Ky.) 12 S. W. 467; Browne, Trade-Marks, §§ 57, 437. That the appellants were also properly enjoined from the use of the fac simile of the autograph signature of E. H. Taylor, Jr., save as to goods made before January, 1887; and this is true whether used with or without the additional word "company." The effect is the same, and was intended to indicate the continued personal connection of Taylor with the O. F. C. and Carlisle whiskies. The autograph cannot be used to effectuate such an intention, and such was the manifest design, and would be the necessary result, of such use by the appellants. Symonds v. Jones (Me.) 19 Atl. 820, notes to 17 Am. St. R. 485; Browne, Trade-Marks, § 208.

The judgment is also to be affirmed in denying to the appellants the use of the words

"Taylor" or "Old Taylor" as brands for their whiskies, and in confirming such use to the appellees, and in dismissing the counterclaim of the appellants.

It

But the decree directs an accounting of profits, and that, too, from January 1, 1877, when there was no complaint until in 1889. It can hardly be claimed that this is proper, even if damages are recoverable at all in this case. There has been no judgment or final order on this branch of the case, but the order of reference to the master indicates the basis for a further judgment. does not seem to us that the appellees are entitled to an account of profits. The proof does not show any fraudulent intent on the part of the appellants, or those under whom they claim. It is shown that they used no other brands, labels, advertisements, etc., than they had always used, or supposed themselves entitled to use; and this they did under color, at least, of title, and conveyance from Taylor. During the whole of the years 1887 and 1888, for a portion of which time, at least, the appellants manufactured whisky, there was no complaint. In the conclusions reached, we have adopted the theory of the appellees that the use of the name of E. H. Taylor, Jr., and his autograph, by the appellants, was in the nature of a license or permit, and we do not see that this has been abused or extended unreasonably. Relief in the way of damages is frequently refused by courts of equity, even when the right of the party to an injunction is acknowledged. McLean v. Fleming, 96 U. S. 245; Cox, Am. Trade-Mark Cas. 675-717. This order of reference, however, is merely interlocutory, and the future conduct of the case in this behalf will doubtless be based on correct legal principles. Perceiving no error in the judgment,

it is affirmed.

O'CONNOR et al. v. HENDERSON BRIDGE
CO.1
HENDERSON BRIDGE CO. v. O'CONNOR
et al.

(Court of Appeals of Kentucky. June 16, 1894.) ACTION ON CONTRACT-JURY TRIAL EQUITY JURISDICTION RIGHT TO CLOSING ARGUMENT JUDGMENT FOR PART OF CLAIM-WHEN PROPER. 1. In an action for damages on a contract, the court ruled that the burden of proof was on defendant, and required him to produce his evidence, under Civ. Code, § 317, subsec. 3, requiring the party sustaining the burden of proof to first produce his testimony. After his evidence was all in, the court adjourned for 24 days; and, when plaintiff had concluded, the court changed its ruling, and gave plaintiff the right to the closing argument. Held, that defendant was entitled to a new trial.

2. An action for damages on a contract involving the value of tools and plant in use, and not paid for; the value of materials on hand or delivered, or ready for delivery subsequent to a given date; the reasonable value of unestimated work done after that date; the amount of 15 per cent. earnings retained; interest from date of breach; and whatever profits plaintiff would have earned, had he been permitted to 1 For opinion on rehearing, see 27 S. W. 983.

complete the work under the contract,-may be transferred to equity, and referred to a special commissioner, without violation of Const. art. 13, § 8, guarantying the right to trial by jury.

S. Where the supreme court decides that, in any event, plaintiffs are entitled to a certain part of their claim, the amount of which is undisputed, refusal to enter judgment therefor on return of the case to the lower court is error, Civ. Code, § 380, providing that, if only part of a claim be controverted, judgment may at any time be rendered for the part not controverted.

4. The right to annul a contract for nonperformance of its terms by the contractors, is lost, where the employers are in default, by failure to estimate and pay for work done and materials furnished by the contractors.

5. No action lies against a contractor for failure to comply with a contract which provides that in case of noncompliance the owner may annul such contract, and forfeit the unpaid part of the work.

Appeals from Louisville law and equity court.

"To be officially reported."

Action by O'Connor & McCulloch against the Henderson Bridge Company for damages for breach of contract. There was a judgment for plaintiffs, from which both parties appeal. On appeal of defendant the judgment is affirmed, and on appeal of plaintiffs the judgment is reversed.

Humphrey & Davie, for plaintiffs. Helm & Bruce, for defendant.

LEWIS J. This action was instituted in August, 1884, by O'Connor & McCulloch, to recover of Henderson Bridge Company damages for an illegal attempt to annul a contract made in December, 1881, between the parties, for building foundations and piers of a railroad bridge across the Ohio river, at Henderson, and forcibly driving plaintiffs from the work while engaged at it. Upon trial of the case, in December, 1886, the jury found a verdict in favor of plaintiffs for $86.805.73, and interest thereon from April 9, 1881, when they were forced to quit the undertaking. But upon appeal this court, for errors of law alone, and without determining issues of fact involved, reversed the judg ment rendered in pursuance of that verdict, and remanded the case for new trial. See SS Ky. 303, 11 S. W. 18, 957. January 24, 1890. another jury found a verdict in favor of plaintiffs for $148,633.61; being principal sum, and interest thereon to that date. But upon motion and grounds filed the lower court, September 29, 1890, set aside that verdict, and ordered a new trial. On the same day, however, an order was made, transferring the case to equity; and subsequently the chancellor referred it to a special commissioner, to inquire and report as to matters specifically mentioned in the order of reference, being governed by stenographic record of evidence heard and instructions given on the preceding jury trial. November 30, 1891, the commissioner reported, as his conclusion from evidence and instructions, that plaintiffs were entitled to recover the prin

cipal sum of $104,427.88, and interest to that date, making aggregate of $153,168.51. But exceptions to the report were sustained, to extent of reducing the principal sum to $61,536.55, for which, with interest from April 7, 1892, judgment was, July 7, 1892, rendered. Both plaintiffs and defendant have appealed from that judgment, the latter superseding it.

It is contended in behalf of the former that not only the judgment, but also the order setting aside the verdict of January 24, 1890, should be reversed, the effect of which would be revival of the verdict, and entry of judgment for amount of it. But it seems to us the lower court did not err in setting aside the verdict and granting a new trial; for, without referring to other grounds filed, the order of proceeding in the trial was directly contrary to subsection 3, § 317, Civ. Code, which provides that "the party on whom rests the burthen of proof in the whole action must first produce his evidence; the adverse party will then produce his evidence." For the court first ruled that defendant had the burden of proof, and should first produce its evidence, which was done, but at the conclusion of the whole evidence changed its ruling so as to give plaintiff's the benefit of concluding the argument to the jury. We think the burden of proof in the whole case was on plaintiffs, and there could be no question of their right to conclude the argument, nor any ground of complaint by defendant that it was awarded to them, if the court had, as required by the Civil Code, ruled them to first produce their evidence. But in view of the very large amount of complicated and contradictory testimony produced by the respective parties, and unusual length of the trial, the diverse rulings mentioned must be regarded as, in the meaning of section 340, such "irregularity in the proceedings of the court" as prevented defendant having a fair trial; for it appears that after defendant had produced its evidence, which required the time from December 12th, when the tral began, to the 19th, and two days had been used by plaintiffs, the court took a recess for about 24 days, the jury being in the meantime dispersed. So that on January 17, 1890, when plaintiffs' evidence, that had consumed the three preceding days, was concluded, it had been more than three weeks, and when the verdict was rendered, January 24th, it had been more than a month, since any of defendant's evidence in chief was heard by the jury. To force a party, under such circumstances, to first produce his evidence, and yet deprive him of the benefit of the conciuding argument to the jury,-which is a great advantage in such a case as this,-is not giving him a fair trial.

Though counsel for plaintiffs below contend it was error to sustain exceptions to the report of the special commissioner, the principal reason urged in argument for reversal