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to exclude them, without prejudice, however, [ Such occupancy and use constituted a most to the government's right to obtain an in- important consideration and were rightly junction against their disclosure upon proper expected to yield larger public benefits than proof of an intention to use the devices in the small required payment of one dollar proceedings supplemental to this action or and a quarter per acre. in an independent action. Hitchman Coal & Coke Co. v. Mitchell, 245 U. S. 229, 262, 38 Sup. Ct. 65, 62 L. Ed. 260, L. R. A. 191SC, 497, Ann. Cas. 1918B, 461.

The decree is modified as stated, and, as modified, affirmed.

Affirmed.

The CHIEF JUSTICE dissents.

Decision of this cause requires us to consider the meaning and validity of section 4 of the Act (R. S. § 2296 [Comp. St. 1916, § 4551]), which provides:

"No lands acquired under the provisions of this Act shall in any event become liable to the satisfaction of any debt or debts contracted prior to the issuing of the patent therefor."

Plaintiff in error made preliminary homeMr. Justice McREYNOLDS took no part state of Idaho August 6, 1903; submitted stead entry of designated land within the in the consideration or decision of the case.

(248 U. S. 104)

RUDDY v. ROSSI. (Submitted Nov. 13, 1918.

1918.) No. 17.

final proofs October 4, 1909; obtained *final receipt and certificate November 12, 1909; final patent issued August 26, 1912. In 1914 two judgments were obtained Decided Dec. 9, against him; the first upon indebtedness incurred prior to November 12, 1909; the second upon debts contracted subsequent to that date and prior to patent. Executions were issued and levied upon the homestead; and thereupon the original proceeding was begun to declare asserted liens invalid and the first judgment unenforceable against a cloud upon the title. The court below held the land since it represented indebtedness which accrued prior to final entry. It furso enforced as it was based upon debts conther held the second judgment could be tracted after final entry, at which time the homesteader became legally entitled to his patent. 28 Idaho, 376, 154 Pac. 977.

1. PUBLIC LANDS 7 LANDS OF UNITED
STATES-POWER OF CONGRESS.
Under Const. U. S. art. 4, § 3, cl. 2, Con-
gress has power to dispose of public lands of the
United States, and they may be leased, sold, or
given away on such terms and conditions as the
public interests require.

2. PUBLIC LANDS 140 EXEMPTION OF HOMESTEAD LANDS FROM LIABILITY FOR DEBTS.

Under Const. U. S. art. 4, § 3, cl. 2, Congress, in exercise of its discretion in disposal of public lands, had power, by Rev. St. § 2296 (Comp. St. 1916, § 4551), the fourth section of the Homestead Act, to restrict alienation of homestead lands after conveyance by United

States in fee simple, by providing no such lands

shall become liable to satisfaction of debts contracted prior to issuance of patent.

Mr. Justice Holmes, dissenting.

In Error to the Supreme Court of the State of Idaho.

Action by Charles F. Ruddy against Herman J. Rossi. From a judgment for plaintiff, defendant appealed to the Supreme Court of Idaho, which modified and affirmed (28 Idaho, 376, 154 Pac. 977), and plaintiff brings error. Reversed, and cause remanded.

Messrs. Charles E. Miller and Carlton Fox, both of Wallace, Idaho, for plaintiff in er

ror.

find no adequate reason for thinking that it The language of section 4 is clear and we fails precisely to express the lawmaker's intention.

Did Congress have power to restrict alienation of homestead lands after conveyance

by the United States in fee simple? This which we are not disposed to minimize. In question undoubtedly presents difficulties Wright v. Morgan, 191 U. S. 55, 58, 24 Sup. Ct. 6, 48 L. Ed. 89, a similar point was suggested but not decided.

[1] The Constitution (article 4, § 3, cl. 2) declares:

"The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belong

*Mr. Justice McREYNOLDS delivered the ing to the United States." opinion of the Court.

And it is settled that Congress has plenary By "An act to secure homesteads to actual power to dispose of public lands. United settlers on the public domain," approved States v. Gratiot et al., 14 Pet. 526, 537 (10 May 20, 1862 (12 Stat. c. 75, p. 392), Congress L. Ed. 573). They may be leased, sold or prescribed the conditions under which citi-given away upon such terms and conditions zens could acquire unappropriated public as the public interests require. Instead of lands in tracts of not exceeding 160 acres. granting fee simple titles with exemption A manifest purpose was to induce settlement from certain debts, long leases might have upon and cultivation of these lands by those who, five years after proper entry, would become owners in fee through issuance of patents. The great end in view was to convert waste places into permanent homes.

been made or conditional titles bestowed in such fashion as practically to protect homesteads from all indebtedness.

"The sound construction of the Constitution must allow to the national Legislature that dis

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

*107

cretion, with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it, in the manner most beneficial to the people. Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional." Me Culloch v. Maryland, 4 Wheat. 316, 421 (4 L. Ed. 579).

as any other land might be attached for a debt that Rossi had a right to collect, after the United States had left the premises. I ask myself what the United States has to do with that. There is no condition, no reserved right of reentry, no reversion in the United States, saved either under the Idaho law as any private grantor might save it, or by virtue of antecedent title. All interest of the United States as owner is at an end. It is a stranger to the title. Even in case of an escheat the land would not go to it, but would go to the State. Therefore the statute must operate, if at all, purely by way of leg

[2] Acting within its discretion, Congress determined that in order promptly to dispose of public lands and bring about their permanent occupation and development it was proper to create the designated exemp-islation, not as a qualification of the grant. tion; and we are unable to say that the conclusion was ill-founded or that the means were either prohibited or not appropriate to the adequate performance of the high duties which the Legislature owed to the pub

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If section 2296 is construed to apply to this case, there is simply the naked assumption of one sovereignty to impose its will after whatever jurisdiction or authority it had has ceased and the land has come fully under the jurisdiction of what for this purpose is a different power. It is a pure attempt to regulate the alienability of land in Idaho by law, without regard to the will of Idaho,

which we must assume on this record to authorize the levy if it is not prevented by an act of Congress occupying a paramount place.

I believe that this Court never has gone

Mr. Justice HOLMES (dissenting). This case involves a question of theory that may be important and I think it desirable to state the considerations that make me doubt. The farther in the way of sustaining legislafacts needing to be mentioned are few. On tion concerning land within a State than to August 26, 1912, the United States conveyed uphold a law forbidding the enclosure of land in Idaho to Ruddy in fee simple, in pur- public lands, which little, if at all, exceeded the rights of a private owner, although it suance of a homestead entry by Ruddy on August 6, 1903, final proof on October 4, 1909, was construed to prevent the erection of and final receipt of the purchase price on fences upon the defendandants' own property November 12, 1909. In September 1912, aft- manifestly for the sole purpose of encloser the conveyance, Rossi began suits against ing land of the United States. Camfield v. Ruddy, attaching this land, and in June, United States, 167 U. S. 518, 17 Sup. Ct. 864, 1914, levied executions upon the same. 42 L. Ed. 260. At most it was a protection The debts for which the *suits were brought were of the present interests of the United States incurred before the issue of the patent and under a title paramount to the State. On the the present proceeding is to prevent Rossi other hand, it is said in Pollard v. Hagan, 3 from selling the land to satisfy the judg-How. 212, 224, 11 L. Ed. 565, that no power ments. The question arises under Rev. St. § 2296 (Comp. St. 1916, § 4551), providing that no lands acquired under that chapter shall in any event become liable to the satisfaction of any debt contracted prior to the issuing of the patent therefor. The Supreme Court of Idaho narrowed the issue to the case of debts contracted after final proof, but that distinction is not important to the difficulty in my mind.

My question is this: When land has left the ownership and control of the United States and is part of the territory of a State not different from any other privately owned land within the jurisdiction and no more subject to legislation on the part of the United States than any other land, on what ground is a previous law of Congress supposed any longer to affect it in a way that a subsequent one could not? This land was levied upon not on the assertion that any lien upon it was acquired before the title passed from the United States, but merely

in the nature of municipal sovereignty can be exercised by the United States within a State; that such a power is repugnant to the Constitution. This case was referred to in Withers v. Buckley, 20 How. 84, 15 L. Ed. 816, and it was decided that the act of Congress authorizing the formation of the State of Mississippi and providing that the Mississippi River should be forever free "could have no effect to restrict the new State in any of its attributes as an independent sovereign government," and both these cases were cited upon this point with approval in Ward v. Race Horse, 163 U. S. 504, 511, 512, 16 Sup. Ct. 1076, 41 L. Ed. 244. See also Shively v. Bowlby, 152 U. S. 1, 27, 14 Sup. Ct. 548, 38 L. Ed. 331. In Irvine v. Marshall, 20 How. 558, 15 L. Ed. 994, where it was held that the laws of a territory abolishing constructive trusts were ineffectual to protect the holder of a certificate from the United States against the establishment of such a trust, it was said that "when the subject,

and all control over it, shall have passed | lence. When the Act of 1862, now Rev. St. from the United States, and have become § 2296, was passed the United States owned vested in a citizen or resident of the terri- territories to which it could be applied with tory, then indeed the territorial regulations full scope. Irvine v. Marshall, 20 How. 558, may operate upon it," and later in the deci- 15 L. Ed. 994. The greater part of the public sion there is cited a passage from Wilcox v. land was in those territories. Without stopJackson, 13 Pet. 498, 517, 10 L. Ed. 264, to ping to suggest other possibilities of conthe same effect-a passage also cited and re-struction this fact is enough to explain and lied upon by the four justices who dissented give validity to the Act when passed. There and held that the territorial laws governed is no need to import to it the intent to aneven them. It has been repeated ever since. ticipate the future and to reach the States McCune v. Essig, 199 U. S. 382, 390, 26 Sup. that were still in the bosom of time. Ct. 78, 50 L. Ed. 237; Buchser v. Buchser, 231 U. S. 157, 161, 34 Sup. Ct. 46, 58 L. Ed. 166.

Of course the United States has power to choose appropriate means for exercising the authority given to it by the Constitution. But I see no sufficient ground for extending that authority to a case like this. It is not the business of the United States to determine the policy to be pursued concerning privately owned land within a State. According to all cases in this Court, so far as I know, when the patent issued its authority was at an end.

this case a question which nothing that I have heard as yet appears to me to answer— I think it worth while to mention my misgivings, if only to show that they have been

Coming to the precise issue, the question of the power of the United States to restrict alienation of land within a State after it had conveyed the land in fee was left open in Wright v. Morgan, 191 U. S. 55, 58, 24 Sup. Ct. 6, 48 L. Ed. 89, but it was said that the clearest expression would be necessary before it would be admitted that such a restriction was imposed. In Buchser v. BuchI am aware that my doubts are contrary ser, 231 U. S. 157, 34 Sup. Ct. 46, 58 L. Ed. to manifest destiny and to a number of de166, it was held that the laws of the United cisions in the State Courts. I know also that States did not prevent homestead land bewhen common understanding and practice coming community property at the moment that title was acquired, and it was said that, have established a way it is a waste of time the acquisition under the United States law to wander in bypaths of logic. But as I have being complete, that law had released its a real difficulty in understanding how the control. The statement in Wilcox v. Jack-Congressional restriction is held to govern son, supra, that when the title has passed the land "like all other property in the State is subject to state legislation" was repeated. In Alabama v. Schmidt, 232 U. S. 168, 34 Sup. Ct. 301, 58 L. Ed. 555, following Cooper v. Roberts, 18 How. 173, 15 L. Ed. 338, it was held that land conveyed to the State by the United States for the use of schools could be acquired by adverse possession under state law, and that the trust, although as was said in the earlier case "a sacred obligation imposed on its public faith" imposed only an honorary obligation on the State. Northern Pacific Ry. Co. v. Townsend, 190 U. S. 267, 23 Sup. Ct. 671, 47 L. Ed. 1044, was distinguished as having been de cided on the ground that in the grant to the Railway there was an implied condition of reverter in case the company ceased to hold the land for the purpose for which it was granted, a ground, which, as I have said, is absent here.

It is said that where a statute is susceptible of two constructions, by one of which grave constitutional *questions arise and by the other of which they are avoided, our duty is to adopt the latter. United States v. Delaware & Hudson Co., 213 U. S. 366, 408, 29 Sup. Ct. 527, 53 L. Ed. 836. I am aware that this principle like some others more often is invoked in aid of a conclusion reached on other grounds than made itself the basis of decision, but it seems to me that it properly

considered and are not shared.

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(248 U. S. 90)

UNITED DRUG CO. v. THEODORE
RECTANUS CO.
(Argued March 12 and 13, 1918. Decided
Dec. 9, 1918.)

No. 27.

1. COURTS -382(1) CERTIORARI AND AP-
PEAL DISMISSAL OF APPEAL-STATUTE.
Under Judicial Code, § 128, as amended by
Act Jan. 28, 1915, § 2 (Comp. St. 1916, § 1120),
where plaintiff in trade-mark infringement suit
was allowed appeal from decree of Circuit Court
of Appeals, and brought certiorari, and pursuant
to stipulation, transcript of record filed for pur-
poses of appeal was treated as return to writ,
termined on writ of certiorari.
appeal must be dismissed, and cause will be de-

2. TRADE-MARKS AND TRADE-NAMES 31-
CHARACTER OF RIGHT.

A trade-mark right is not a right in gross, or at large, like a statutory copyright or a patbeing but a part of the broader law of unfair ent for an invention, the law of trade-marks competition, for the right to a particular mark grows out of its use in trade, not its mere adoption, and the owner of a trade-mark may not, like the proprietor of a patented invention, make a negative and merely prohibitive use of it

should govern here. It might without vio- as a monopoly.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

31-, tucky corporation, together with certain individual citizens of the latter state, to restrain infringement of trade-mark and unfair competition.

3. Trade-Marks and Trade-NAMES PROTECTION IN ADVANCE OF EXTENSION OF TRADE.

Adoption of trade-mark in connection with proprietary medicine sold in New England States did not, in absence of valid legislation, project adopter's right of protection in advance of extension of her trade, or operate as claim of territorial rights over areas into which it was thereafter advisable to extend trade, as Kentucky, where New England adopter was subject to rights of subsequent user of name, who had been a prior user in the Kentucky field. 4. TRADE-MARKS AND TRADE-NAMES 23-A. 301. An appeal was allowed by one of the

-LAWS OF STATES.

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The principles of the common law obtain in Kentucky.

6. TRADE-MARKS AND TRADE-NAMES 42REGISTRATION-STATE STATUTE-EXTRATERRITORIAL EFFECT.

A Massachusetts statute for the registration of trade-marks could have no extraterritorial

effect.

7. TRADE-MARKS AND TRADE-NAMES PRIORITY OF APPROPRIATION.

The general rule is that, as between conflicting claimants to the right to use the same trade-mark, priority of appropriation determines the question; the underlying reason being that purchasers have come to understand the mark as indicating the origin of the wares. 8. TRADE-MARKS AND TRADE-NAMES ENJOINING INFRINGEMENT-CONSCIOUS IN

[1] The District Court granted an injunction against the corporation defendant pursuant to the prayer of the bill. 206 Fed. 570. The Circuit Court of Appeals reversed the decree and remanded the cause with directions to dismiss the bill. 226 Fed. 545, 141 C. C.

judges of that court, and afterwards we allowed a writ of certiorari. Pursuant to a stipulation, the transcript of the record filed for the purposes of the appeal was treated as a return to the writ. Under section 128, Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1133), as amended by Act of January 28, 1915 (38 Stat. 803, c. 22, § 2; Comp. St. 1916, § 1120), the appeal must be dismissed, and the cause will be determined on the writ of certiorari.

*The essential facts are as follows: About the year 1877 Ellen M. Regis, a resident of Haverhill, Mass., began to compound and distribute in a small way a preparation for 21-medicinal use in cases of dyspepsia and some other ailments, to which she applied as a distinguishing name the word "Rex"-derived from her surname. The word was put upon the boxes and packages in which the medicine was placed upon the market, after the 97-usual manner of a trade-mark. At first alone, and afterwards in partnership with her son FRINGEMENT-FRAUDULENT IMITATION. The rule that, where proof of infringement under the firm name of "E. M. Regis & Co.," of trade-mark or trade-name is clear, equity she continued the business on a modest scale; will not ordinarily refuse injunction for future in 1898 she recorded the word "Rex" as a protection of proprietor, even where his acqui-trade-mark under the laws of Massachusetts escence and laches disentitle him to accounting for profits, applies in cases of conscious infringement or fraudulent imitation, not to cases of good-faith use of mark or name.

On Writ of Certiorari to and Appeal from the United States Circuit Court of Appeals for the Sixth Circuit.

Suit by the United Drug Company against Theodore Rectanus Company. From a decree of the District Court for plaintiff (206 Fed. 570), defendant appealed to the Circuit Court of Appeals, which reversed and remanded the cause, with directions to dismiss the bill (226 Fed. 545, 141 C. C. A. 301), and plaintiff appeals and brings certiorari. Decree affirmed.

Messrs. Lawrence A. Janney, of Chicago, Ill., and Frederick L. Emery, of Boston, Mass., for petitioner and appellant.

(Acts 1895, p. 519, c. 462, § 1); in 1900 the firm procured its registration in the United States Patent Office under the Act of March 3, 1881 (21 Stat. 502, c. 138); in 1904 the Supreme Judicial Court of Massachusetts sustained their trade-mark right under the state law as against a concern that was selling medicinal preparations of the present petitioner under the designation of "Rexall Remedies" (Regis v. Jaynes, 185 Mass. 458, 70 N. E. 480); afterwards the firm established priority in the mark as against petitioner in a contested proceeding in the Patent Office; and subsequently, in the year 1911, petitioner purchased the business with the trade-mark with its other business, which consists in the right, and has carried it on in connection manufacture of medicinal preparations, and their distribution and sale through retail

Mr. Clayton B. Blakey, of Louisville, Ky., drug stores, known as "Rexall stores," situfor respondent and appellee.

ate in the different states of the Union, four

*Mr. Justice PITNEY delivered the opinion of them being in Louisville, Ky.

of the Court.

This was a suit in equity brought September 24, 1912, in the United States District Court for the Western District of Kentucky by the present petitioner, a Massachusetts corporation, against the respondent, a Ken

Meanwhile, about the year 1883, Theodore Rectanus, a druggist in Louisville, familiarly known as "Rex," employed this word as a trade-mark for a medicinal preparation known as a "blood purifier." He continued this use to a considerable extent in Louisville

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
39 SUP.Cr.-4

*94

and vicinity. spending money in advertising 19, 39, 21 Sup. Ct. 7, 45 L. Ed. 60; Saxlehner and building up a trade. so that-*except for whatever effect might flow from Mrs. Regis' prior adoption of the word in Massachusetts, of which he was entirely ignorant-he was entitled to use the word as his trade-mark. In the year 1906 he sold his business, including the right to the use of the word, to respondent; and the use of the mark by him and afterwards by respondent was continuous from about the year 1883 until the filing of the bill in the year 1912.

Petitioner's first use of the word "Rex" in connection with the sale of drugs in Louisville or vicinity was in April, 1912, when two shipments of "Rex Dyspepsia Tablets," aggregating 150 boxes and valued at $22.50, were sent to one of the "Rexall" stores in that city. Shortly after this the remedy was mentioned by name in local newspaper advertisements published by those stores. In the previous September, petitioner shipped a trifling amount-5 boxes-to a drug store in Franklin, Ky., approximately 120 miles distant from Louisville. There is nothing to show that before this any customer in or near Kentucky had heard of the Regis remedy, with or without the description "Rex," or that this word ever possessed any meaning to the purchasing public in that state, except as pointing to Rectanus and the Rectanus Company and their "blood purifier." That it did and does convey the latter meaning in Louisville and vicinity is proved without dispute. Months before petitioner's first shipment of its remedy to Kentucky, petitioner was distinctly notified (in June, 1911) by one of its Louisville distributors, that respondent was using the word “Rex” to designate its medicinal preparations, and that such use had been commenced by Mr. Rectanus as much as 16 or 17 years before that time.

v. Siegel-Cooper Co., 179 UJ. S. 42, 21 Sup. Ct. 16, 45 L. Ed. 77. The Circuit Court of Appeals held that in view of the fact that Rectanus had used the mark for a long period of years in entire ignorance of Mrs. Regis' remedy or of her trade-mark, had expended money in making his mark well known, and had established a considerable though local business under it in Louisville and vicinity, while on the other hand during the same long period Mrs. Regis had done nothing, either by sales agencies or by advertising, to make her medicine or its mark known outside of the New England States, saving sporadic sales in territory adjacent to those states, and had made no effort whatever to extend the trade to Kentucky, she and her successors were bound to know that, misled by their silence and inaction, others might act, as Rectanus and his successors did act, upon the assumption that the field was open, and therefore were estopped to ask for an injunction against the continued use of the mark in Louisville and vicinity by the Rectanus Company.

The entire argument for the petitioner is summed up in the contention that whenever the first user of a trade-mark has been reasonably diligent in extending the *territory of his trade, and as a result of such extension has in good faith come into competition with a later user of the same mark who in equal good faith has extended his trade locally before invasion of his field by the first user, so that finally it comes to pass that the rival traders are offering competitive merchandise in a common market under the same trade-mark, the later user should be enjoined at the suit of the prior adopter, even though the latter be the last to enter the competitive field and the former have already established a trade there. Its application to the case is based upon the hypothesis that the record shows that Mrs. Regis and her firm, during the entire period of limited and local trade in her medicine under the Rex mark, were making efforts to extend their trade so far as they were able to do with the means at their disposal. There is little in the record to support this hypothesis; but, waiving this, we will pass upon the principal contention.

There was nothing to sustain the allegation of unfair competition, aside from the question of trade-mark infringement. As to this, both courts found, in substance, that the use of the same mark upon different but somewhat related preparations was carried on by the parties and their respective predecessors contemporaneously, but in widely separated localities, during the period in question-between 25 and 30 years-in perfect good faith; neither side having any knowledge or notice of what was being done [2] The asserted doctrine is based upon the by the other. The District Court held that, fundamental error of supposing that a tradebecause the adoption of the mark by Mrs. mark right is a right in gross or at large, Regis antedated its adoption by Rectanus, like a statutory copyright or a patent for petitioner's right to the exclusive use of an invention, to either of which, in truth, it the word in connection with medicinal prepa- has little or no analogy. Canal Co. v. Clark, rations intended for dyspepsia and kindred 13 Wall. 311, 322, 20 L. Ed. 581; McLean diseases of the stomach and digestive or- v. Fleming, 96 U. S. 245, 254, 24 L. Ed. 828. gans must be sustained, but without account- There is no such thing as property in a ing for profits or assessment of damages for trade-mark except as a right appurtenant to unfair trade, citing McLean v. Fleming, 96 U. an established business or trade in connecS. 245, 24 L. Ed. 828; Menendez v. Holt, 128 tion with which the mark is employed. The U. S. 514, 9 Sup. Ct. 143, 32 L. Ed. 526; Sax- law of trade-marks is but a part of the lehner v. Eisner & Mendelson Co., 179 U. S. broader law of unfair competition;

the

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