Slike stranica

the trade-mark, and commenced this litigation. There is evidence from which it may be inferred that the plaintiff corporation was formed for the very purpose of starting this lawsuit. It had little or no business, employees, machinery, or equipment. There is evidence from which it may also be inferred that Rockowitz after two unsuccessful attempts to carry on the corset business had abandoned the use of the trade-mark "Madame X." The second company of which a receiver was appointed in 1916 had no good will; it was gone. Nothing was left except the trade-mark, which the receiver apparently did not sell, simply because there was no market for it. If he could have sold it, it was his duty to dispose of it, for such were his orders from the court which appointed him. The

trade-mark was not used in connection with any business conducted by Rockowitz or his brother, Joe Rockowitz, from that time until the day of trial. No attempt was made by them to use it. The next we hear of it in their connection is when the plaintiff is formed, and this lawsuit is brought. No user of the trade-mark has been made by the plaintiff or its organizers.

[2] This brief outline of the case is sufficient, I think, to indicate that there was at least a question of fact to be determined as to the abandonment of the trade-mark by Rockowitz, if he owned it, or by Joe Rockowitz, if he were the person entitled to it. There being this question of fact to be determined or inferences which might reasonably

be drawn in favor of the defendants from the facts, we can go no further, but must affirm the judgment below.

To constitute an abandonment, there must not only be nonuser, but an intent to abandon. In Baglin v. Cusenier Co., 221 U. S. 580, 597, 31 S. Ct. 669, 674 (55 L. Ed. 863), the court held:

"But the loss of the right of property in trade-marks upon the ground of abandonment is not to be viewed as a penalty either for nonuser or for the creation and use of new devices. There must be found an intent to abandon, or the property is not lost; and while, of course, as in other cases, intent may be inferred when the facts are shown, yet the facts must be adequate to support the finding."

See, also, Hanover Star Milling Co. v. Metcalf, 240 U. S. 403, 36 S. Ct. 357, 60 L. Ed. 713; Beech-Nut Packing Co. v. Lorillard Co., 273 U. S. 629, 47 S. Ct. 481, 71 L. Ed. 810; Glen & Hall Mfg. Co. v. Hall, 61 N. Y. 226, 19 Am. Rep. 278. In the Beech-Nut Case, supra, the finding was the reverse of what it is here; that is, that there had been no abandonment of the trade-mark because of nonuser for five years. The Supreme Court, however, dealt

with it as a question of fact, as can be gathered from the following quotation:

it could be said to have destroyed the right as "The mere lapse of time was not such that matter of law. A trade-mark is not only a symbol of. an existing good will, although it commonly is thought of only as that. * * Therefore the fact that the good will once associated with it has vanished does not end at once the preferential right of the proprietor to try it again upon goods of the same class with


improvements that renew the proprietor's hopes. * Both courts having found for the de-. fendant, we see no ground upon which it can be said that they were wrong as matter of law."

The same may be said here. The Appellate Division has held that abandonment was a question of fact and has sent the case back for a new trial. This is the same as saying that there was evidence of an intention to abandon the trade-mark as well as evidence of its nonuser for eight years and more. The appellant is in the position of asking us to find that as matter of law there was no intent to abandon.

[3] The litigation over the S. O. S. Corset Company and the right to the name "Madame X" resulting in the finding that Joe Rockowitz, and not Abraham Rockowitz, owned the trade-mark; the appointment of a receiver of the corporation to sell the trade-mark; the employment of Joe thereafter as an automobile driver and Abraham by other corset concerns; the fact that no attempt was made to take the trade-mark out of the hands of the receiver until 1924, constituted some evidence from which a court might reasonably infer an intent to abandon. Anyhow, under all

the facts in this case, we could not hold, as matter of law, that there was no intent to abandon or relinquish the trade-mark. There was no evidence that either Joe or Abraham Rockowitz attempted to buy the trade-mark from the receiver, or force its sale, or raise money for the purpose of purchasing the trade-mark. The right, if any, was left dormant for eight years, and then at the end of that time the trade-mark was purchased from the receiver and turned over to a corporation formed by the Rockowitz brothers after they had discovered the profitable use of the name by others.

"Mere lapse of time does not per se warrant the conclusion of abandonment. The circumstances of the case, other than mere lapse of time, almost always give complexion to the delay and either excuse or give it a conclusive effect." Browne on Trade-Marks, § 681.

[4] Again, it must be remembered that a trade-mark is a species of property to be used in connection with a going business. It has

(162 N.E.)

no value in and of itself. In United Drug Co. v. Theodore Rectanus Co., 248 U. S. 90, 97, 39 S. Ct. 48, 50 (63 L. Ed. 141), the court said:

"There is no such thing as property in a trade-mark except as a right appurtenant to an established business or trade in connection with which the mark is employed. The law of trade-marks is but a part of the broader law of unfair competition; the right to a particular mark grows out of its use, not its mere adop

tion; its function is simply to designate the goods as the product of a particular trader and to protect his good-will against the sale of another's product as his; and it is not the subject of property except in connection with an existing business."

[5] Registration does not create a trademark. It is not essential to its validity. Pulitzer Pub. Co. v. Houston Printing Co. (D. C.) 4 F.(2d) 924. And in Hanover Star Milling Co. v. Metcalf, 240 U. S. 403, 414, 36 S. Ct. 357, 361 (60 L. Ed. 713), it was said:

"In short, the trade-mark is treated as merely a protection for the good-will, and not the subject of property except in connection with an existing business."

This court likewise said in Falk v. American West Indies Trading Co., 180 N. Y. 445, at page 450, 73 N. E. 239, 240 (1 L. R. A. [N. S.] 704, 105 Am. St. Rep. 778, 2 Ann. Cas. 216):

"A trade-mark is not a piece of property that passes from hand to hand by assignment separate from the business of the owner of the trade-mark or of the article which it may serve to distinguish. Generally, it passes only with the business and good will of which it is an inseparable part."

The plaintiff's predecessor had no business in which to use a trade-mark. It hung in the air for eight years.

I have not discussed the relations of the defendants to the plaintiff. The Weil Corset Company was the manufacturer; the Thompson-Barlow Company, Inc., the distributing merchants. These matters become unimportant, if I am right in my conclusions that there is some evidence from which an intent to abandon and an abandonment may be inferred.

For these reasons the order below should be affirmed, and judgment absolute ordered against appellant on the stipulation, with costs in all courts.



Ordered accordingly.

(248 N. Y. 280)


In re OAKES. Court of Appeals of New York. May 29, 1928. 1. Internal revenue 8 (2)-Taxation -State tax is on transfer of donees' separate interests and payable severally; federal tax is on transfer of whole estate (Revenue Act 1919, § 408 [U. S. Comp. St. § 63363⁄441]).

fer of separate interests passing to donees or legatees, and is payable by them severally in proportion to value of gifts, while the federal tax is laid on transfer of estate as whole and is, primarily at least, a charge on the residue, under Revenue Act Feb. 24, 1919, § 408 (U. S. Comp. St. § 63363⁄4i).

The New York transfer tax is laid on trans

2. Internal revenue 8(13)—Federal transfer tax must be computed on net value of aggregate of gifts causa mortis and testamentary (Revenue Act 1919, § 408 [U. S. Comp. St. § 63363⁄4¡]).

Gifts in contemplation of, or to take effect on, donor's death, though made by separate instruments, are to be consolidated with those passing under will for federal transfer tax purposes and tax payable by executor computed according to net value of aggregate under Revenue Act Feb. 24, 1919, § 408 (U. S. Comp. St. § 633641).

3. Internal revenue 8(2)-Federal transfer tax is on interest which ceased because of death, not that passing to survivor (Revenue Act 1919, § 408 [U. S. Comp. St. § 6336341]).

Federal transfer tax is laid, not on interest to which some person succeeds on another's death, but on the interest which ceased by reason of death, under Revenue Act Feb. 24, 1919, § 408 (U. S. Comp. St. § 63363⁄4i).

4. Internal revenue 27 (2)-Burden of transfer tax held not shifted from estate to donee by escrow condition that delivery of stock certificates be withheld until payment of tax (Revenue Act 1919, § 408 [U. S. Comp. St. § 6336341]).

Incidence of transfer tax burden, imposed on donor's estate by Revenue Act Feb. 24, 1919, § 408 (U. S. Comp. St. § 633641), held not changed by conditions of escrow that delivery of stock certificates by trustees to donee be withheld until tax was paid and trustees relieved of liability, so that donee did not impliedly assume payment of tax in exoneration of residue by accepting gift; terms of escrow not imposing a lien, nor creating a liability, which are to be measured by law.

5. Evidence 450(1)—Wills 488-Extrinsio evidence is admissible to explain ambiguity in escrow and will as to whether transfer tax burden is shifted from estate to donee (Revenue Act 1919, § 408 [U. S. Comp. St. § 63363⁄4¡]).

Extrinsic evidence may be used to explain ambiguity in escrow and will as to whether incidence of transfer tax burden imposed by Revenue Act Feb. 24, 1919, § 408 (U. S. Comp.

St. § 63364) has been shifted from donor's which it is unnecessary to state. The donor estate to donee.

6. Taxation 891-Will speaking of delivery of stock on conditions stated in escrow postponing delivery until payment of transfer tax held not to modify construction thereof as not shifting burden from estate to donee (Revenue Act 1919, § 408 [U. S. Comp. St. § 6336341]).

Will speaking of delivery of shares of stock on conditions stated in escrow paper signed by testator, which provided that delivery of stock certificates to his son after his death be withheld until payment of tax, held not to modify construction thereof as not shifting burden of federal transfer tax to donee from estate, on which imposed by Revenue Act Feb. 24, 1919, § 408 (U. S. Comp. St. § 633641); such conditions being imposed on trustees, not donee. Andrews and Kellogg, JJ., dissenting.

retained the right to vote upon the stock, and to enjoy its profits and dividends, during life. A will, executed the same day, confirmed the delivery in escrow upon the conditions stated in the writing, and bequeathed to the son "any right, title and interest in and to the stock in said company that I may have and which is not otherwise effectually disposed of."

[1-3] Upon the death of Oakes, Sr., the executor, Francis J. Oakes, Jr., paid out of his own moneys the tax assessed upon the transfer of the shares under the statutes of New York. He paid out of the residuary estate the tax due upon the transfer of the shares under the revenue act of Congress. The New York transfer tax is laid upon the transfer of the separate interests passing to the donees or legatees, and is pay.

Appeal from Supreme Court, Appellate Di- able by them severally in proportion to the vision, First Department.

In the matter of the judicial settlement of the account of Francis J. Oakes, Jr., individually and as executor of the last will and testament of Francis J. Oakes, deceased. From so much of an order of the Appellate Division (220 App. Div. 758, 222 N. Y. S. 864) as affirmed a part of a decree of the Surrogate Court (127 Misc. Rep. 779, 217 N. Y. S. 638), surcharging the executor's account with the amount of the federal estate tax on 1,510 shares of the capital stock of the Oakes Manufacturing Company and interest thereon, he appeals. Order and decree reversed as to such part, and proceeding remitted to the Surrogate Court.

Archibald R. Watson, and John Lehman, both of New York City, for appellant.

H. Lewis Brown, and Charles S. Day, Jr., both of New York City, for respondent.

CARDOZO, C. J. Francis J. Oakes, the owner of 1,510 shares of stock of the Oakes Manufacturing Company, made delivery of his certificates to be held in escrow for the benefit of his son. Delivery was accompanied by a writing which described the conditions of the escrow as follows:

"I, Francis J. Oakes, hereby deliver irrevocably the certificates of stock of the Oakes Manufacturing Company owned by me for 1,510 shares of the stock of said company, to John D. Kernan and Archibald R. Watson in escrow, to be delivered by them or the survivor of them upon my death to my son Francis J. Oakes, Jr.,, subject to all state and national taxes thereon being paid, and said Kernan and Watson, or the survivor of them, being fully indemnified and protected against the same."

If the son died before the father, the certificates were to be held upon other conditions

value of the gifts. The federal tax, on the contrary, is laid upon the transfer of the estate as a whole, and, primarily at least, is a charge upon the residue. Matter of Hamlin, 226 N. Y. 407, 124 N. E. 4, 7 A. L. R. 701. Gifts in contemplation of death or to take effect upon death, though made by separate instruments, are for that purpose to be consolidated with those passing under the will, and the tax payable by the executor is to be computed according to the net value of the aggregate. Farmers' Loan & Trust Co. v. Winthrop, 238 N. Y. 488, 144 N. E. 769; Y. M. C. A. v. Davis, 264 U. S. 47, 44 S. Ct. 291, 68 L. Ed. 558. What is taxed is "not the interest to which some person succeeds on a death, but the interest which ceased by reason of death." Nichols v. Coolidge, 274 U. S. 531, 537, 47 S. Ct. 710, 712 (71 L. Ed. 1184, 52 A. L. R. 1081).

[4] The question to be determined here is the incidence of the federal tax as between the donee of the shares, who was also the executor, upon the one hand, and the legatees of the residuary estate, upon the other. There can be no doubt that the executor was justified in discharging the tax out of the residue unless the incidence of the burden has been changed by the conditions of the escrow. The surrogate (disapproving the report of a referee to the contrary) and the Appellate Division found that such a change had been wrought, and that the donee by the acceptance of the gift had assumed by implication the payment of the tax in exoneration of the residue. We hold a different view.

The command of the statute is explicit as to the incidence of the burden. "If the tax or any part thereof is paid by, or collected out of that part of the estate passing to or in the possession of, any person other than the executor in his capacity as such, such

* *

(162 N.E.) transfer subject to a described mortgage may preclude a grantee from contesting the existence of the mortgage lien. Bennett v. Bates, 94 N. Y. 354, 371. On the other hand, a transfer subject to "any and all liens and incumbrances thereon," without other definition, will leave the privilege of contest open. Purdy v. Cbar, 109 N. Y. 448, 453, 17 N. E. 352, 4 Am. St. Rep. 491. So here. If taxes, state or national, were specific charges on the gift, the donee acquired a title subordinate thereto. If taxes, state or national, were not specific charges on the gift, but primary charges on the residuary estate, the donee did not assent by the mere acceptance of the gift to a shifting of the burden. Acceptance was submission to all existing liens. It was not a recognition and assumption of nonexisting liens.

person shall be entitled to reimbursement out of any part of the estate still undistributed or by a just and equitable contribution by the persons whose interest in the estate of the decedent would have been reduced if the tax had been paid before the distribution of the estate, it being the purpose and intent of this title, that so far as is practicable and unless otherwise directed by the will of the decedent the tax shall be paid out of the estate before its distribution" 40 Stat. 1096, 1100, c. 18, § 408, Revenue Act of Feb. 24, 1919 [Comp. St. § 633641]; Farmers' Loan & Trust Co. v. Winthrop, supra, page 497 (144 N. E. 771, 772). The incidence of the burden, thus fixed by the statute in terms so unmistakable, has not been modified by the will. We think the evidence is insufficient to give support to a finding that it has been modified by agreement.

The trustees were directed by the terms of the escrow to make delivery of the gift upon the death of the donor. If this had stood alone, they might have been involved in liability or the claim of liability to some agency of government, state or federal, as the result of a delivery without deduction of the tax. The absolute command was, therefore, qualified by the condition that delivery might be withheld until the tax had been paid and the trustees relieved of liability therefor, The escrow does not say by whom the tax is to be paid. It does not change the incidence of the burden as determined by the statute. As soon as the tax is paid by any one, whether the donee or another, the condition is fulfilled. Part of the burden was a state tax. For this the donee was liable, and presumably would pay it. So, in fact, he did. Part

of the burden was the federal tax. For this, the executor was liable and presumably would pay it. The terms of the escrow do not impose a lien nor create a liability. Liens and liabilities are to be measured by the law.

Analogies are invoked by the respondents from the law governing conveyances, but they point the other way. The rule is well settled that one who accepts a conveyance "subject" to a lien or claim does not assume by such acceptance the obligation to discharge the lien or satisfy the claim. Schwartz v. Cahill, 220 N. Y. 174, 178, 115 N. E. 451. He does not even estop himself from asserting that the lien or claim is without validity, unless the form of the conveyance is such that submission and recognition are impliedly exacted. Thus, a 162 N.E.-6

[5] We have considered the documents themselves without reference to extrinsic evidence. Our reading of them brings us to the conclusion that the incidence of the burden has not been shifted from the estate to the donee. If this conclusion were to be rejected, however, the most that could fairly be said for the respondents is that the meaning is uncertain. In that event, extrinsic evidence may be used to explain the ambiguity. Resort to such evidence confirms our reading of the documents. The clause as to the taxes was inserted in the escrow upon the suggestion of one of the trustees that without it they might become involved in personal liability, and the donor was so informed.

[6] We find nothing in the terms of the will that has a tendency to modify the construction of the deed. The will speaks, it is true, of the delivery of the shares "upon the conditions stated in the paper" signed by the testator. The conditions are not obligations laid on the donee. They are conditions of the escrow imposed on the trustees.

The order of the Appellate Division and the decree of the Surrogate Court so far as appealed from should be reversed, and the proceeding remitted to the Surrogate's Court for the entry of a decree in accordance with this opinion.

[blocks in formation]

(248 N. Y. 286)

act was intended to be amusing. Plaintiff

TANTILLO v. GOLDSTEIN BROS. AMUSE- and his two young companions, as well as oth


Court of Appeals of New York. May 29, 1928.

1. Theaters and shows 6-Patrons of the ater are entitled to protection against acts which by their nature might cause menace to safety.

Patrons of a theater are entitled to protection against acts which by their nature might cause a menace to safety, since one who collects a large number of people for gain or profit must be vigilant to protect them.

2. Theaters and shows 6-Boy granted free entrance to theater for purpose of partici

pating in vaudeville act held entitled to recover against theater for resulting injury.

Where boy, after purchasing ticket for admission to theater, was induced to return ticket, and thereafter entered theater without paying admission for purpose of going on stage and participating in a vaudeville act, he was entitled to recover against theater for injury resulting from his participation therein, since having been admitted to theater by order of manager he cannot fairly be regarded as possessing rights lesser in degree than those of a patron.

ers among the spectators, were each encircled by a leather belt to which a rope was attached, and then they mounted a machine similar to a treadmill. They trotted on the machine and caused it to move like a treadmill. The faster they trotted, the more rapidly it revolved. While so engaged, some one, either a member of the troupe or an employee of the theater would jerk the rope, pull the performer from the machine, and cause him to fall upon a mat. This operation was supposed to furnish the comedy and to raise a laugh among the spectators. consisted in catching the performer as he was catapulted from the treadmill. While in the act of attempting to catch plaintiff, Brown slipped and falling, broke plaintiff's arm. He has recovered judgment which has been affirmed against the theater. Brown also

Brown's part

was made a defendant but was never served

and did not appear as a party or as a wit


We think that plaintiff's right to the theater's protection ought not to be distinguished from that of an ordinary patron. Concededly he did not pay admission, but the circumAppeal from Supreme Court, Appellate stances under which payment was waived by Division, Fourth Department.

Action by John Tantillo, an infant, by Frank Tantillo, his guardian, against the Goldstein Brothers Amusement Company and another. Judgment for plaintiff was affirmed by the Appellate Division, Fourth Department (220 App. Div. 745, 221 N. Y. S. 912), and defendant named appeals. Affirmed.

Earle C. Bastow, of Utica, for appellant. Willard R. Pratt, of Utica, for respondent.

O'BRIEN, J. This case was tried upon the theory of negligence. In it is involved a principle important to proprietors and operators of theaters to which the general public is invited.

Plaintiff, 14 years of age, accompanied by two other boys, visited defendant's theater at Utica and bought tickets for admission. Before entering the auditorium, they were accosted by a man unidentified either as an employee of the theater or of the troupe then performing. At his suggestion the three boys returned their tickets, had their money refunded, passed the ticket taker without paying, and entered the auditorium with the unknown man. He provided them with seats and later induced them to go upon the stage and to participate in a vaudeville act then in progress. This act was played by a troupe known as George Brown & Co., who had been secured by the theater management through a booking agency and paid by appellant. The

the theater invest him with a status different from that of a guest. The evidence makes clear that he was given free entrance for no purpose other than to promote the interests of the theater and those of Brown. Both shared in the success added by plaintiff's presence on the stage and his propulsion, intended to be ludicrous, from the treadmill. If the spectators' amusement at this treadmill act were heightened by plaintiff's performance, the theater's monetary receipts on occasions when the act was to be repeated might be enhanced. The man who procured admission for plaintiff and, for such a consideration, induced him to perform for the theater's benefit, is unidentified. From the evidence, no inference can be drawn that he was employed by the theater rather than by Brown. It was the theater, however, and not Brown, who admitted him. No free admissions were allowed by the ticket taker except upon orders by the theater's manager.

The relation between Brown and the theater does not distinctly appear. The evidence does not warrant the conclusion that he was an independent contractor. Even if he were proved to be such, the evidence is of a nature to justify submission to the jury of the issue of fact relating to negligence by the theater. If its responsible agent allowed the performance on its stage of an act which was inherently dangerous and passively consented to participation in it by its invitees, it is liable.

« PrethodnaNastavi »