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398, 25 L. Ed. 231; Campbell v. Iron Mountain Silver Mining Co, 83 Fed. 643, 27 C. C. A. 646. Here, then, was occasion for a special saving clause, and the language of section 10 appears to have been well chosen to meet it. True, in the absence of the general saving clause, that language would be broad enough to also cover part of the ground covered by it—that is, to save such penalties, forfeitures, and liabilities as would be enforced by the continued prosecution of pending causes; but that is not a controlling guide to its meaning, in the presence of the general saving clause, for not only is the true intendrent of language often dependent upon the circumstances in which it is used, but the state of the law when a statute is enacted is always an important factor in its interpretation. As before indicated, the special saving clause does not contain any term or expression which bears directly upon the effect of the repealing portions of the act upon existing penalties, forfeitures, and liabilities; nor does it contain anything which was not reasonably appropriate to the occasion, if Congress, mindful of the existence of the general saving clause and satisfied to leave it in undisturbed operation, was solicitous merely that the amendments bearing directly upon the jurisdiction and procedure of the courts of the United States should not affect causes then pending therein. In these circumstances we are persuaded that the special saving clause can be accorded reasonable purpose and operation by treating it as intended only to save such causes from what, in its absence and in the presence of the general saving clause, would be the effect of the amendments upon them; and we accordingly hold that, rightly interpreted, it does not cover any part of the particular subject of the general saving clause, and, therefore, does not by necessary implication manifest an intention to release or extinguish penalties, forfeitures, and liabilities for the enforcement of which no cause was then pending.
It follows that there was no error in the rulings of the District Court, and its judgment is affirmed.
MEMPHIS KEELEY INSTITUTE et al. v. LESLIE E. KEELEY CO. (Circuit Court of Appeals, Sixth Circuit. July 20, 1907.)
No. 1,619. 1. TRADE-MARKS AND TRADE-NAMES-UNFAIR COMPETITION-RIGHT TO PROTEO
TION-MISREPRESENTATION BY PLAINTIFF-EVIDENCE.
Evidence considered, and held to establish the contention that the complainant, which was the manufacturer and proprietor of a secret remedy which it sold and used for the treatment and cure of the opium, liquor, and tobacco habits, and which it claimed and represented to the public as having as its chief and most valuable ingredient chloride of gold or "double chloride of gold,” was chargeable with fraudulent misrepresentations, in that such remedy did not contain any gold or chloride of gold.
[Ed. Note.-Unfair competition, see notes to Scheuer v. Muller, 20 C. C.
A. 165; Lare v. Harper & Bros., 30 C. C. A. 376.] 2. SAME-EFFECT-FRAUDULENT REPRESENTATIONS.
The proprietor of a medicine or remedy made in accordance with a secret formula, which knowingly makes false and fraudulent representations as to the ingredients of such remedy to the public through its advertisements and labels, cannot maintain a suit in equity to protect its
business of selling or administering such remedy from invasion and injury by another [Ed. Note.—For cases in point, see Cent. Dig. vol. 46, Trade
Marks and Trade-Names, $ 94.] 3. SAME-PLEADING.
That a complainant comes into a court of equity with unclean hands, in that he is chargeable with fraudulent misrepresentations to the public in respect to the subject matter of the suit, is not, strictly speaking, a defense, and need not be pleaded, but, upon such fact appearing, it will be given effect by the court in the interest of the public by refusing to grant relief to the complainant.
[Ed. Note.For cases in point, see Cent. Dig. vol. 46, Trade-Marks and
For former opinion, see 144 Fed. 628.
Before SEVERENS and RICHARDS, Circuit Judges, and COCHRAN, District Judge.
COCHRAN, District Judge. This is the second appeal of this case. The first appeal was dismissed, and the opinion then delivered is reported in 144 Fed. 628. A reading thereof will disclose the ground of the dismissal and the nature of the controversy involved in the case. In brief, the first appeal was dismissed because the decree appealed from was not final. It was a partial dismissal of the bill. It did not dismiss the bill entirely, but only one branch of the controversy raised by it, and that a subordinate one. On the return of the cause to the lower court, it disposed of the whole controversy by a final decree. It receded from the position taken on the former hearing that the contracts between the appellee and the appellant Memphis Keeley Institute had been abandoned and rescinded before suit brought, because of which said partial dismissal of the bill, to wit, in so far as it sought a cancellation of said contracts, was made, and granted appellee the full relief which it sought. It enjoined the appellants from claiming that they had a right to, and were, in fact, administering Keeley remedies at the Memphis Keeley Institute, and adjudged a cancellation of said contracts and delivery up to appellee of the Keeley remedies in possession of the appellants on their being reimbursed the price paid for same. It is from this decree that this appeal is taken.
The main ground upon which appellants claim that the decree of the lower court should be reversed is that the appellee did not come into that court with clean hands, and therefore was not entitled to the relief it sought and that was granted to it. The position that it did not so come into court is undertaken to be maintained in this way. The business in which the appellee is engaged, to wit, administering, and selling to be administered, what are known as “Keeley remedies for the opium, liquor, and tobacco habits and neurasthenia, and which was sought to be, and by the decree is, protected from injury and invasion by appellants, has been built up and is being maintained by
certain fraudulent misrepresentations. This position was urged on the lower court, and it was claimed that because of it the bill should be dismissed. But it refused to so hold and, as stated, granted appellee full relief. This it did for two reasons: One was that the evidence did not establish the position that appellee's business had been built up and was being maintained by any such misrepresentations. The other was that, even if it did, that fact was not against appellee's right to relief. We will dispose of these two reasons in the order stated. The alleged fraudulent misrepresentations relied on are quite numerous. The main one is that gold is the principal ingredient and effective agent in said remedies. We will limit our consideration to this alleged fraudulent misrepresentation, because we are constrained to hold th he claim of appellants in regard thereto is made good by the evidence.
It is not disputed that appellee represents to the public that gold is the principal ingredient and effective agent in its remedies. So distinct, repeated, and emphatic has been and is its representation to this effect that it must be held that its business has been built up and is being maintained by this representation. The name which it has given its remedies, and by which they are known, is the “Double Chloride of Gold Cure.” There is no such substance as the "Double Chloride of Gold.” There is a chloride of gold and a chloride of sodium. The claim was that these two substances were ingredients of the remedies, and to voice the claim the short form, of “Double Chloride of Gold” was adopted. It was intended to designate that the remedies contained the two chlorides of gold and sodium. This name is printed upon the labels on the bottles containing the remedies, and is used in the circulars and other means used to advertise the business. The remedy for neurasthenia is called “Gold Neurotine.” To emphasize the claim as to the existence of gold in the remedies and its importance, the prominent portion of the lettering on the labels on the bottles is in gold. They contain a picture of the globe with a belt around it encircled by the words, “We belt the world,” and on the belt are these words, “Gold cure for opium habit, gold cure for drunkenness, gold cure for neurasthenia, gold cure for tobacco habit”—all in gold. The labels contain this statement, to wit:
“Gold is especially beneficial in its action on the mental forces. It gives the patient courage, hope, and renewed will power; and is the only medical agent that will effectually and forever relieve all craving or necessity for alcohol in any form. The remedy can in no way act injuriously on the patient."
And users are cautioned to break the bottle when empty to prevent its re-use for the sale of "spurious Gold Cure Mixtures.
In a circular or pamphlet issued by the appellee, under the name of Dr. Leslie E. Keeley, it is said:
“There is some criticism regarding my method of cure. The principal drug I use in the cure of drunkenness, the chloride of gold and sodium, or the double chloride of gold, is known throughout civilization.”
“I come now to speak of my discovery of the Double Chloride of Gold in the treatment of the disease the specific cure for drunkenness or alcoliolism.
The pathology of the disease being understood, the indications for the gold remedies is a rational one, and not empirical. The action of gold as a medicine is primarily upon the higher cerebral nerve centers, the very seat of diseased will, and of the mania for strong drink."
"The Keeley treatment consists of remedies and solutions (with the Double Chloride of Gold as a basis)."
"Many remedies have been proposed and tried with some good results and many vexatious failures, but the most effective agent yet employed is gold."
In a pamphlet so issued entitled, “A Keeley Cure Catechism,” amongst others, are the following questions and answers, to wit:
"Q. What is his remedy?
"A. With the Chloride of Gold and Sodium (the Double Chloride of Gold as a basis) he has compounded the best reconstructive nerve tonic in existence.
"Q. But does he not heal all alike?
"A. No, to quote his own words, 'the principal drug I use in the cure of drunkenness is the Double Chloride of Gold.'”
In a pamphlet so issued entitled, “Neurasthenia or Nerve Exhaustion; Its Treatment and Cure,” is this statement:
“For the condition of the system, reason, as well as science, would indicate a remedy which will have a direct and positive effect upon the nerve centers. Such an agent is found in the Double Chloride of Gold. The remarkable therapeutical virtues of gold have long been known, but its scientific and accurate application has not been understood by the profession and hence its disuse. By the special method of preparation employed by Dr. Leslie E. Keeley, the Double Chloride of Gold has become the great ethical agent which, acting promptly upon the nerve centers, gives to the worn out and diseased system renewed health, activity, and life.”
The sole question at issue in regard to this representation is as to whether it is a misrepresentation and fraudulent; i. e., intended to mislead and deceive the public. If it is untrue and known to be so, the rest follows.
The record contains positive evidence to the effect that it is untrue and known to be so. It contains no affirmative evidence that the representation is true. The appellee has contented itself with the position that the appellants have failed to make good that it is a fraudulent misrepresentation. And the case hangs here on the correctness of this position. That positive evidence consists of the testimony of a former partner of Dr. Leslie E. Keeley, and, according to his testimony, the originator jointly with Dr. Keeley of the remedies and the business, and of an analytical chemist, to whom certain bottles purporting to contain the remedies were submitted for analysis, pending this litigation. The witness first referred to is named Frederick B. Hargraves. Before his connection with Dr. Keeley, he had been a preacher in the Wesleyan Methodist Church in England, and afterwards in the Presbyterian Church, and then a lawyer. At the time when that connection began, he was state lecturer for the Illinois State Temperance League, and when he gave his testimony his occupation was that of a traveling salesman. In the spring of 1880, when both he and
Dr. Keeley were living in Dwight, Ill., each noticed independently of the other a suggestion in the same newspaper as to a remedy for the cure of drunkenness. In talking about a mutual friend who was addicted to drunkenness, this common knowledge became known to each. Subsequently Dr. Keeley told him that he had used the remedy and gotten good results from it. Hargraves doubted it, and the doctor said the matter could be easily demonstrated—that he would get Pat Conafry, a well known saloon keeper at Dwight, to take the remedy and test it, as Pat would take anything he asked him to take. The doctor fixed up a bottle, and gave it to Conafry, and in a few days he lost his desire for liquor, and could not drink any at the end of about a week. He made strong efforts to drink again, and one Sunday got a drink to stick and became gloriously drunk, and would not take any more medicine. The test, however, was sufficient for Hargraves, and that was the origin, as he terms it, of the "cure business. At first Dr. Keeley refused to become known in the matter, but shortly afterwards the medicine was used with good result on one Major John P. Campbell, of Lexington, Ky., then residing at Dwight, and thereupon the three, Keeley, Hargraves, and Campbell, embarked in the business under the firm name of “Leslie E. Keeley, M. D.” Not long after this Campbell went out of the business, and on June 1, 1881, a partnership, with the same firm name, was formed between Keeley, Hargraves, and three others, to wit, John R. Oughton, a drug clerk, one Major C. J. Judd, and Father James Halpin, a Catholic priest, all living at Dwight; the interest of Keeley being three-tenths, and of Hargraves two-tenths, and the remaining five-tenths being divided amongst the other three. The partnership was evidenced by written articles. Dr. Keeley was the dominating spirit of the firm. He had general control of the business, the determination of the duties to be performed by the working partners, being all the others except Halpin, the fixing of their wages, and the power if any partner violated the terms of the agreement, or failed to perform his duties properly, or to conduct himself in a gentlemanly or becoming manner, to terminate his connection with the business. He, however, did not push himself to the front otherwise than in the firm name. He would say:
“I am the big spider in the back office. Always throw a little mystery around me; keep me in the background.”
Oughton prepared the remedies and Hargraves was the correspondent and literary man—the advertiser–or, as he styled himself, the general publicity man. He designed the bottles, got up the labels, and prepared the literature by which the remedies and business was advertised. He wrote the partnership agreement. He continued his connection with the business until March, 1886, when he was forced to sell out because of a severe criticism of Judd for something he had done.
This history of the business, and Hargraves' connection therewith, is gathered from his testimony, and, so far as the nature of the last partnership is concerned, is confirmed by a copy of the articles filed as an exhibit. His testimony also covered the subject as to whether there was any gold in the remedies used in the business. He testified