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poses to sell a picture for a big price, and to give a quantity of spurious money as inducement to the purchase; or where, as in some cases that arose in this district, the wrongdoer offers a worthless town lot as a gift, and charges ten prices for putting the deed on record. The payment of money or something of value for the spurious coin or "green articles” is essential to the fraud in respect to which the mails are not to be used, and, plainly enough, the person practicing the fraud is to receive the payment, whatever it may be. There is, therefore, in the offense defined in the statute, the element of loss to the person deceived, and also the element of gain to the offender. The statute is not limited to the particular deceits mentioned in it, such as the “sawdust swindle" and the "counterfeit money fraud,” for the first clause embraces "any scheme or artifice to defraud"; but these words must be taken to mean any scheme or artifice of the general character of those specified in the act. The general language of the act must be limited to such schemes and artifices as are ejusdem generis with those named. Bish. St. Crimes, par. 245. We have discovered that the schemes and artifices named in the act are of the kind which are gainful to the wrongdoer, and thereupon we must declare that no scheme or artifice which lacks this intent can be within the prohibition of the act. The conduct of the prisoner, charged in the indictment, was abundantly harmful to the prosecutor, but it was not gainful to the prisoner, except in the matter of malice and ill will, of which he is not in need; but malice is not the intent specified in the statute. The indictments will be quashed.

BURT et al. v. SMITH.
(Circuit Court of Appeals, Second Circuit. December 17, 1895.)


The mere use by defendants of their own firm initials, “B. & S.," upon articles sold by them, is not an infringement of a registered trade-mark

for the two letters, "S. B.," arranged in that order. 2. FEDERAL JURISDICTION-FRAUD ON PUBLIC.

The fact that the similarity between goods manufactured by defendants and complainants is such as to show an intent by the latter to deceive the purchasing public is not ground for the assumption by the federal court of jurisdiction of a suit to restrain defendants.

Appeal from the Circuit Court of the United States for the Northern District of New York.

Suit by William. W. Smith against Alfred H. Burt and another. From an order granting a preliminary injunction restraining them from continuing the alleged infringement of the trade-mark rights of complainant, defendants appeal. Reversed.

Noris Morez, for appellants.
Seward Davis, for appellee.
Before WALLACE, LACOMBE, and SHIPMAN, Circuit Judges.


LACOMBE, Circuit Judge. Complainant is a citizen of Poughkeepsie, N. Y., doing business under the name of Smith Bros. He is the successor of the original firm of that name, comprising himself and his brother, Andrew Smith, who died in October, 1894. The business of the firm and of the complainant has been and is the manufacture and sale of cough drops. For 18 years last past the cough drops manufactured and sold by them have been of uniform size, color, and form, stamped on one side with a star, and on the other side with the letters “S. B.," with a bar above and below the letters. These cough drops have during the same period been put up and offered for sale in a uniform style of box or package, of a certain size and shape. On the top of the box appear two bust portraits of male figures, representing the members of the original firm, one portrait opposite the other. Over the top of these vignettes are printed the words "Smith Brothers," and between the vignettes the letters "S. B.," with a line beneath them, the words “Cough Drops," and the statement that “S. B.” is stamped on each drop; also, the words "Poughkeepsie, New York," and on a lower line the word “Trade-Mark.” The letters "S. B." are the initials of the firm name, “Smith Brothers.” On the bottom of the box is printed a statement of the merits of the compound, and directions for use. The form, size, color, and markings of the drops, and the shape, style, lettering, and ornamentation of the packages, are claimed to be the trademark or designation of the articles manufactured by complainant. On January 28, 1892, the original firm applied to the patent office for registration of portions of their trade-mark, and obtained registration therefor by patents No. 20,907, March 29, 1892, and No. 22,294, January 3, 1893. The first of these contains a fac simile of the top of the box, with a full description thereof. Then follows the statement that “all of the matter, with the exception of the portraits, may be omitted, and other matter substituted, * * * without materially altering the character of the trade-mark, the essential feature of which * * * consists of two bust portraits of male figures, representing the Smith Brothers, the registrants,The other patent of registration, No. 22,294, in like manner sets forth a fac simile, and a full description, of the top of the box. Then follows the statement that “the name Smith Brothers, the portraits, the words 'Cough Drops,' and the matter following the words 'Cough Drops, may be omitted, and other matter substituted, without materially altering the character of the trade-mark, the essential feature of which * * * consists of the letters 'S. B.'” The defendants, Alfred H. Burt and Joseph J. Sindele, are citizens of New York, carrying on business as partners at Buffalo, in that state, under the firm name of Burt & Sindele. They are confectioners, and manufacture and sell cough drops which they mark "B. & S.," and offer to the public in packages or boxes upon which the letters "B. & S.” are prominently printed. No bust portraits appear on their packages, and complainants, therefore, have sued them for infringement, not of registered trade-mark No. 20,907, but of No. 22,294.

The trade-mark statute (act of March 3, 1881) provides in its third section that no alleged trade-mark shall be registered which is merely

the name of the applicant; and defendants contend that this provi. sion forbids the registration, as a trade-mark, of letters which are merely the initials of such name. It is unnecessary to pass upon such contention in this case, for it seems too plain for argument that if the trade-mark registered is only for the two letters "S. B.," arranged in that order, it is not infringed by the mere use of the combination “B. & S.”

Complainant seeks to rely upon other facts than the mere use by defendants of their own firm initials, "B. & S.” He points out similarities in the form, size, and color of the drops, in the arrangement of the package, in the text and style of the directions for use, and other details tending, as he claims, to show an intent to deceive the purchasing public. It is apparent from the opinion of the judge who heard the case in the circuit court that it was these similarities which induced him to grant the motion for preliminary injunction. But these matters are immaterial to the question presented in this suit for the determination of a federal court. The complainant and defendants are all citizens of the same state. The federal court can take jurisdiction, therefore, only of the question whether the registered trade-mark declared upon has been infringed, and that trademark solely for the two letters “S. B.,” without any designation of style or type, position on the cover, or association with other elements of dress or decoration. The order appealed from is reversed, with costs.



Complainant acquired the right to manufacture and sell in this country “Johann Hoff's Malt Extract,” under labels and trade-marks long used in Germany. This compound had been known for many years in this country both as "Johann Hoff's Malt Extract” and as “Hoff's Malt Extract," and was dealt in under the latter name quite as much as under the former. Afterwards defendant acquired the right to import and sell here “Leopold Hoff's Malt Extract,” which is made by an alleged different formula at Hamburg. Held, that defendant had no right to sell this compound in bottles having a label bearing conspicuously, at the top, the words "Hoff's Malt Extract,” although on a different part of the label and on a separate label the fact was stated that it was made by Leopold Hoff in Hamburg; and that defendant should be enjoined from using those words, unless preceded by the word “Leopold," so as to read “Leopold Hoff's Malt Extract.”

This was a bill by Johann Hoff against Tarrant & Co. to restrain unfair competition and the use of misleading labels.

Charles G. Coe, for complainant.
Fisher A. Baker, for defendant.

COXE, District Judge. The complainant is a West Virginia corporation engaged in manufacturing at Newark, N. J., and selling throughout the United States, a fluid known as "Johann Hoff's Malt Extract." The complainant was incorporated May 27, 1891. The

defendant is a New York corporation engaged in the wholesale drug business in the city of New York. Among other things it sells a malt extract made at Hamburg in Germany by one Leopold Hoff.

The complainant contends: First, that the defendant has no right to sell Hoff's malt extract at all. Second, if permitted to sell, the court should compel the defendant to sell under a label so distinct in character that the public will not be deceived in purchasing the defendant's extract believing that it is the complainant's.

The defendant insists: First, that it has a right to import and sell malt extract from Hamburg, as it has done for the last 26 years, and that its label and bottle are so distinctive in character that the public cannot possibly be misled. Second. That the complainant does not own the right to make Johann Hoff's malt extract and that its title to the labels, trade-marks, good will, and business secrets, alleged in the bill, is defective. Third. That the complainant is not here with pure hands, having deceived the public by inducing it to believe that complainant's extract is an imported German product and having made various false representations regarding its own and defendant's merchandise.

In 1881 the complainant's predecessor commenced an action in this court against this defendant praying, substantially, for the same relief as in the present suit. The history of the malt extract in controversy and the relation of the parties existing at that time are fully set out in the opinion in that cause and need not be again stated. The bill was dismissed April 7, 1886. Since then the contract of 1869 between Johann B. Hoff, Leopold Hoff and the de. fendant has expired, having been limited to the term of 20 years. Johann B. Hoff died in 1887. Marcus Hoff died in 1885. Leopold Hoff is the son of Marcus. On the expiration of the 1869 contract in July, 1889, the defendant, who for years had been importing malt extract from Leopold Hoff, of Hamburg, made a new contract with Leopold and about the same time changed its labels in the following particulars: The name "Johann” was omitted, the name “Tarrant's" was substituted for the words “Beer of Health.” The line “Princi. pal Manufactories Berlin and Hamburg” was omitted and the line "Manufactured only at Hamburg” put in its place. Changes were also made in the medal line, medals alleged to have been granted to Leopold being substituted for those theretofore used. Later there were printed in large red letters diagonally across the face of the new labels, the words "Made in Germany." On the right of all of the labels used by the defendant is a small supplementary label, the lettering being at right angles with the large label, containing the words "Manufactured by Leopold Hoff, Hamburg." These changes were followed almost immediately by a circular from the complainant presenting a fac-simile of the old and new labels side by side and pointing out the changes which had been made. The circular stated that the object of the suit before alluded to had been practically accomplished, the changes being a victory for the complainant and that further prosecution of the suit was unnecessary.

Shortly afterwards the suit, which had been appealed to the supreme court of the United States, was discontinued. During the former litigation, on the 6th day of January, 1882, Johann B. Hoff, Marcus Hoff and Leopold Hoff entered into an agreement which was first disclosed to the defendant on the trial of this action. By the terms of this agreement the firm of M. Hoff, Hamburg, was permitted to sell “Johann Hoff's Malt Extract” in the following countries: “Hamburg and belongings; Lubeck; Schleswig; Holstein; Denmark and its islands; Sweden, Norway; Great Britain and Ireland; in the British colonies and in the state of Buenos Ayres.” The firm of Johann Hoff was given the privilege to sell "in all the other European and American states, countries and cities, as well as in all other parts of the world.” The contract also contained the following provision:

"It is reserved for Mr. Leopold Hoff, no matter whether he is the superintendent, partner or owner, of the firm of M. Hoff or not, to continue the business done by him in sending his malt preparations to America under the firm name of Leopold Hoff; it is understood, however, that in the making of his preparations, he must not use any of the essence of Johann Hoff's."

The history of Johann's malt extract is involved in obscurity and doubt. It is not covered by a patent either for the product or the process. Anyone who knows the secret is free to make it. That many members of the Hoff family did know the process is found as a fact in the decision of 1886 and is fully sustained by the proof. By the 1882 contract Leopold is not permitted to use the Johann Hoff essence. How far the defendant is bound by this secret contract to which it was not a party and of the existence of which it was ignorant until 1894, it is, perhaps, unnecessary to determine for the reason that Leopold says, that he does not use the Johann essence from Berlin and there is nothing to contradict his testi. mony. He was in express terms given the right to continue his business with the defendant, but, irrespective of the 1882 contract, it would seem that he has the right to make a malt extract of his own provided it is not the Johann Hoff extract.

When it is attempted to define with exactness all the rights of the parties and to settle all the questions presented by the briefs the court is confronted by an almost impossible task. But from the mist which envelopes a quarter of a century of wrangling over matters of substance and matters of detail a few prominent facts emerge which enable the court to decide the present controversy upon equitable principles and with justice to all. First. The complainant has the right to sell in the United States “Johann Hoff's Malt Extract-Beer of Health" under the old labels and trademarks used in Germany for many years. The secret of making this extract was imparted to one of the complainant's officers. If there were no question of contract and assignments in the case the fact that the complainant has built up a large business in the United States under a distinctive label entitles it to protection. It has a valuable good will which should be defended from unfair assaults. The court is, however, inclined to think that the transfers in evi. dence vest in the complainant the right to use the labels, trade

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