Restrictions upon the Assignment and License of Trademarks and Tradenames

Source: Columbia Law Review, Vol. 28, No. 3 (Mar., 1928), pp. 353-360
Published by: Columbia Law Review Association, Inc.
Stable URL: https://www.jstor.org/stable/1113391
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 NOTES 353

not
notbalanced
balanced
by the
byadvantages
the advantages
in the higher
in the
schedules,
higherconstituted
schedules,
hos- const
tile
tilediscrimination
discriminationagainstagainst
non-residents.
non-residents.
The use of a The
varieduse
method
of aofvaried
taxation
taxation is not
is not
in itself
in itself
objectionable,
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but it does raise
but aitdifficult
does raise
ques- a diff
tion
tionininmathematical
mathematical computation
computation
to determineto whether
determinethe result
whether
is th
discriminatory
discriminatory and ifand
so the
if further
so the problem
further whether
problemsuch discrimina-
whether such d
tion
tionis is
justified
justified
by the
bynecessities
the necessities
of the situation.
of the situation.
In
Insome
some instances,
instances,more substantial
more substantial
discrimination
discrimination
of a differ- of a di
ent
entnature
nature havehave
been been
permitted.
permitted.
Certain occupations,
Certain occupations,
such as medi- such a
cine,39
cine,39 insurance,40
insurance,40and liquor
andselling41
liquor have
selling41
been held
have
to bebeen
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held
the to be
police
police powers
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thetostate
limit to
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to residents,
pursuitwho to are
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within
within itsits
jurisdiction
jurisdiction
and subject
and tosubject
its control,
to its
in order
control,
to facilitate
in order to
state
stateregulation
regulation
and supervision.42
and supervision.42
The
Thepolicy
policy
of the
of courts
the courts
has beenhas
one been
of liberal
oneinterpretation
of liberal interpret
of
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theequal
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privileges
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neces- is
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it seemit that
seem absolute
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contemplated
wasbycontemplat
this
constitutional
constitutional provision.
provision.
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purpose of promoting
purpose cordial
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interstate
interstate relations
relations
would would
seem to seem
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and the general and the
trend
trend ofof
thethe
decisions
decisions
would seem
wouldsound
seem
in taking
sound intoinconsideration
taking into con
in each case the extent of the discrimination in connection with the
necessity for it in determining whether its aim and effect is hostile to
the interests of citizens of sister states. The more recent decisions in
the Supreme Court indicate a tendency to more definitely apply the
constitutional presumption of the constitutionality of a statute, with
the result of placing upon the non-resident the burden of showing not
only that the statute is discriminatory, but that it is also unduly prejudi-
cial to his interests.

RESTRICTIONS UPON THE ASSIGNMENT AND LICENSE OF TRADE-

MARKS AND TRADENAMES.-In trademark and tradenamel cases, it has
39State v. Green, 112 Ind. 462, 14 N. E. 352 (1887); State v. Randolph,
23 Ore. 74, 31 Pac. 201 (1892). Contra: State v. Hinman, 65 N. H. 103, 18 Atl.
194 (1889). In these cases no attempt is made to exclude non-residents, but
different qualifications are required to obtain a license.
40 La Tourette v. McMaster, supra note 27.
4 Mette v. McGuckin, 18 Neb. 323 (1885); Grazier v. Stephens, 101 Tex.
194, 105 S. W. 992 (1907).
4 The necessity for jurisdiction for the purpose of supervision was also held
sufficient in Duryea v. Muse, 117 Wis. 399, 94 N'. W. 365 (1903) (requiring an
assignee in bankruptcy to be a resident); In re Mulford, 217 Ill. 242, 75 N. E.
345 (1905) (requiring an administrator to be a resident). A different result
was reached in Shirk v. City of La Fayette, 52 Fed. 857 (D. Ind. 1892) (requir-
ing a trustee, except by will, to be a resident); Compton Co. v. Allen, 216 Fed.
537 (S. D. Iowa 1914) (requiring a non-resident selling stocks or bonds to be
licensed).
1 "A tradename is a word or phrase by which a business enterprise or business
location or specific articles of merchandise from a specific source are known to the
public, and which when applied to merchandise is generic or descriptive and hence

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354 COLUMBIA LAW REVIEW

been uniformly held that assignments and licenses in gross,

any assignments or licenses at all of those trademarks and t
which connote personal qualities,3 are inoperative to vest an
exclusive use in the assignee or licensee.4 The existence of t
has two foundations: first, as a necessary consequence of th
ing legal theories of trademarks and tradenames;5 second,
not susceptible of appropriation as a technical trademark." HOPKINS, T
(4th ed. 1924) 13. By trademark is meant a technical or common law
capable of registration; ingenious and unique. All other business name
names. In general, the principles involved in trademarks and traden
identical. Ibid., 12. Their points of divergence are treated infra. Aside
trademark cases may be cited as authority for tradename cases, and vic
aI.e., those made apart from the goodwill of the business in which
used, or from the right to make or sell the article it designates. The as
a trademark or tradename with the right to manufacture goods under le
is not an assignment in gross. Julian v. Hoosier Drill Co., 78 Ind.
Andrew Jergens Co. v. Woodbury, 273 Fed. 952 (D. Del. 1921), aff
1016 (C. C. A. 3rd, 1922). Nor in such a case need the right transfe
exclusive right to make or sell. Spieker v. Lash, 102 Calif. 38, 36 Pac.
Covell v. Chadwick, 153 Mass. 263, 26 N. E. 856 (1891). In Nelson v.
203 Mass. 75, 89 N. E. 180 (1909), the plaintiff sold shoes under a trad
sisting of a picture and the legend, Washington Shoe Co. The defenda
tured the shoes for the plaintiff under the plaintiff's direction. The p
entered the defendant's employ, permitting the defendant to use the t
shoes made by the defendant under the plaintiff's supervision. The de
spite plaintiff's objections continued to use the trademark after the plain
his employ. In a bill for an injunction, held, for the plaintiff. Althou
has been cited in support of the proposition that a trademark may be
gross it would seem, rather, to hold that a trademark or tradename ma
supervision of the process and not merely the process of manufacturin
can be assigned along with such supervision, such assignment not bein
in gross.
3Alaska Packers' Ass'n v. Alaska Imp. Co., 60 Fed. 103 (N. D. Calif. 1894),
a trademark case. There are no recent trademark cases on this point, for the
obvious reason that trademarks as a rule do not connote personal qualities today.
As to tradenames, this rule is of great importance. Messer v. The Fadettes, 168
Mass. 140, 46 N. E. 407 (1897); Bailly v. Betti, 241 N. Y. 22, 148 N. E. 776
(1925); Burrow v. Marcean, 67 Misc. 656, 124 N. Y. Supp. 810 (Sup. Ct. 1910);
Blakely v. Sousa, 197 Pa. 305, 47 Atl. 286 (1900).
4 Lane, Transfer of Trademarks and Tradenames (1910) 6 ILL. L. REV. 46.
Lea v. New Home Sewing Mach. Co., 139 Fed. 732 (E. D. N. Y. 1905); Eiseman
v. Schiffer, 157 Fed. 473 (S. D. N. Y. 1907); Macmahan Pharmacal Co. v. Denver
Chemical Mfg. Co., 113 Fed. 468 (C. C. A. 8th, 1901); The Fair v. Jose Morales
& Co., 82 Ill. App. 499 (1899); Smith v. Yost, 125 N. E. 73 (Ind. 1919); Detroit
Creamery Co. v. Velvet Brand Ice Cream Co., 187 Mich. 312, 153 N. W. 664
(1915); Rodseth v. Northwestern Marble Works, 129 Minn. 472, 152 N. W. 885
(1915); Falk v. American West Indies Trading Co., 180 N. Y. 445, 73 N. E. 239
(1905); Mayer v. Flanagan, 34 S. W. 784 (Tex. Civ. App. 1896); Holley Milling
Co. v. Salt Lake & Jordan Mill & Elevator Co., 58 Utah 149, 197 Pac. 731 (1912);
Wisconsin White Lily Butter Co. v. Safer, 195 N. W. 700 (Wis. 1923); Thorneloe
v. Hill, 1 Ch. 569 (1895). See Kidd v. Johnson, 100 U. S. 617, 620 (1879) ; United
Drug Co. v. Theodore Rectanus Co., 248 U. S. 90, 97, 39 Sup. Ct. 48, 50 (1918).
Another way of phrasing the test is whether or not any goodwill has been assigned
or licensed. See (1926) 35 YALE L. J. 496. Whether there is an assignment or
license in gross is a question to be determined under the circumstances of the cases
as they arise.
5 Smith v. Yost, supra note 4; Falk v. American West Indies Trading Co.,
supra note 4. See Kidd v. Johnson, supra note 4; Crucible Co. v. Guggenheim, 2
Brewst. 321, 339 (Pa. 1870). These cases say that trademarks and tradenames are in-
capable of ownership, as a basis for declaring transfers in gross ineffective.

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 NOTES 355

of the courts' desire to protect the public from being deceive

hood that the public will be deceived does not exist in all case
by the rule. The two types of situations in which courts
in finding likelihood of imposition upon the public are: (
which the trademark or tradename is assigned or licensed in
use in connection with an article or business, sufficiently similar
of the assignor to lead the public to believe that the trademark o
name represents the same goods or business as it did before t
fer.7 Of course, unless such.use is to be made in the same geo
market as that of the goodwill of the assignor's goods or busin
is no likelihood that the public will be deceived.8 Concretely,
the assignee's use of the trademark or tradename, had no tran
place, would have enabled the assignor to obtain injunctive r
bidding such use, a transfer in gross is likely to result in dec
public. (2) Cases involving trademarks and tradenames w
note personal skill or ability, such as the name of a photogr
artist, lawyer, musician,10 or orchestra conductor." Assignm
license of such names at all, not merely in gross, for use in
or a closely allied business, is conducive to perpetration of fr
the public, for the same reasons.l2
As to cases covered by the rule, but falling outside the abo
fication, it is asserted by those who advocate giving operative
these transfers that it is only the courts' blind adherence t
concepts which stands in the way.13 It is submitted that, al
6 Wisconsin White Lily Butter Co. v. Safer, supra note 4 at 701. By
is meant any situation in which people receive something else than that
intend to purchase under the belief, for which the second use of the tr
tradename is responsible, that they are getting the identical thing sou
injury is unnecessary and that the goods are equal in quality is irreleva
'Lea v. New Home Sewing Machine Co., supra note 4; Falk v. Am
West Indies Trading Co., supra note 4; Mayer v. Flanagan, supra not
eloe v. Hill, supra note 4.
8 It is well settled that a trademark or tradename will be protected
geographical market. United Drug Co. v. Theodore Rectanus Co., sup
Macmahan Pharmacal Co. v. Denver Mfg. Co., supra note 4; Eastern O
Co. v. Manheim, 59 Wash. 428, 110 Pac. 23 (1910). See Arnheim v. A
28 Misc. 399, 59 N. Y. Supp. 948, 950 (Sup. Ct. 1899). DAVIES, TRU
AND UINFAIR COMPETITION (1915) 437, 438. A defendant who seeks in
to steal the markets of natural expansion of the plaintiff by copying o
his trade symbols will be enjoined. See Sweet Sixteen Co. v. Sweet "
Inc., 15 F(2d) 920 (C. C. A. 8th, 1926), criticized in (1927) 12 CORN
In view of modern developments in business, the term "market" should
more comprehensive meaning, so as to include that territory embrace
tising, in which actual sales will shortly take place and where goodwill
ists.
Burrow v. Marcean, supra note 3.
0 Bailly v. Betti, supra note 3; see Blakely v. Sousa, supra note 3 at 332, 288.
U Blakely v. Sousa, supra note 3. Messer v. The Fadettes, supra note 3.
NIMS, UNFAIR BUSINESS COMPETITION (1905) 95.
13 (1926) 36 YALE L. J., supra note 4, at 499. See language used in Winsor v.
Clyde, 9 Phila. 513 (Pa. 1872). Such would seem to be the basis of the position
taken in (1925) 20 ILL. L. REV. 90.

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356 COLUMBIA LAW REVIEW

to trademarks, there is strong ground for urging tha

changed, not quite so much can be maintained for tradenames
inherent difference between them.14 Trademarks are
tributions to the language. A single case of prior approp
entitle the mark's possessor to protection against compet
use on articles similar enough to create confusion in the p
On the basis of a trademark's uniqueness, in which its v
and which is diminished whenever the trademark is use
than the owner, it has been suggested that protection ag
use be accorded, even where the use is made on non-comp
dissimilar articles.17 This would be the last step necessary
recognition of the fact that there is no valid reason wh
venting a trademark should not be entitled to an owner
it, as of a patent or copyright, including the privilege to assi
the trademark in gross, except where such transfers are
the occasion of deception of the public. Definite progress
recognition seems to have been made in the courts of one
no distinction being taken between tradenames and tradem
Tradenames, by definition, lack a trademark's unique
value is preated, as a rule, by continued use in connection
ness or article they represent to the public. It is well se
rights in a tradename are acquired as a result of mere p
propriation.19 Protection is given against unfair competit
by continued use the tradename has acquired a valuable sec
ing20 to the public in a certain geographical market, the
tending only to secondary meaning or reputation. That
another's use of the name may deprive the prior user of cust
for him, will the former's use be enjoined. In addition, p

14 Supra note 1.
5 Sweet Sixteen Co. v. Sweet "16" Shop, Inc., supra note 8.
CORN. L. Q., supra note 8.
18 In Eastman Photographic Materials Co. v. Griffith's Cycle Co
105 (1898), plaintiff's business, that of photographic materials, was h
similar to defendant's, the manufacture and sale of bicycles, to en
use of the trademark "Kodak."
7Schechter, The Rational Basis of Trademark Protection (1927) 40 HARV.
L. REV. 813.
18 See Evans v. Shockley, 58 Calif. App. Dec. 427, 430, 431, 209 Pac. 42, 44
(1922), discussed in (1923) 11 CALIF. L. REV. 134. See CALIF. POL. CODE (Deer-
ing 1923) ?? 3197, 3199. No exception seems to be made as to cases involving a
likelihood of deception of the public.
1 NIMS, op. cit. supra note 12, at 24.
0... . . while the primary and common use of a word or phrase may not be
exclusively appropriated, there may be a secondary meaning or construction which
will belong to the person who has developed it. In this secondary meaning there
may be a property right." Sartor v. Schaden, 125 Iowa 696, 700, 101 N. W. 511,
513 (1904).

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 NOTES 357

been extended to cases where the goods of the two parties

enough to cause a likelihood of confusion in the public min
where the public is likely to think the defendant's goods are
tured or marketed by the aggrieved, as well as those in which
may believe the defendant's goods are those it has bought b
now seeks, as the plaintiff's. The rendering effectual of tr
gross in tradename cases means the granting of protection a
by others aside from any considerations of passing off, inasm
new use is made apart from any secondary meaning. In oth
the transferee becomes owner of the name itself, not mere
secondary meaning. This would be extremely unjust in man
as where the tradename is a personal name, to the use of whi
ness many may be entitled.22 Or it may be a geographical n
which, aside from protection against passing off, no one shou
clusive rights. By their essential nature, tradenames deplet
guage rather than contribute to it; they cannot be classed as
as are trademarks. Furthermore, if validity be given to tra
tradenames in gross, the only restriction upon sale or license
remain will be likelihood of deception of the public. Since t
majority of tradenames are most valuable in their secondary
business men will be afforded greater leeway in attempting t
against the public interest, because a highly uncertain stand
stituted for one which, whatever its defects in limiting the
individuals to take advantage of the value of reputations w
have built up, is much more certain. The same reasoning m
plied to cases involving any assignment or license of a trade
noting personal qualities, where the assignee or licensee is to
of the name in a different capacity from that in connection
its reputation has been acquired.23
There is a distinction between the effects of transfers in
trademarks and tradenames, for use in connection with a dissim
cle or business, i.e., where there is not a likelihood that the publ

1 Vogue Co. v. Thompson-Hudson Co., 300 Fed. 509 (C. C. A. 6th

(1925) 25 COLUMBIA LAW REV. 199. Contra: Dunlop Pneumatic T
Dunlop Motor Co. [1907] A. C. 430; Ridgeway Co. v. Amalgamated
T. L. R. 149 (1911); Turner's Motor Manufacturing Co. v. Miesse P
Syndicate, 24 R. P. C. 531 (1907).
2Howe Scale Co. v. Wyckoff, Seamans and Benedict, 198 U. S. 11
Ct. 609 (1905); Waterman Co. v. Modern Pen Co., 235 U. S. 88, 35
(1914); Nolan Bros. Shoe Co. v. Nolan, 131 Calif. 271, 63 Pac.
Higgins Co. v. Higgins Soap Co., 144 N. Y. 462, 39 N. E. 490 (1895)
v. Storm, 103 Tenn. 40, 52 S. W. 880 (1899).
3 As where one whose name has great repute in the musical field,
use of his name to a candy company. There is no imposition on t
such transactions, as the tradename is a representation of worth only
of its reputation.

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358 COLUMBIA LAW REVIEW

imposed upon; and the effects of the transfers set forth

supra. The difference consists in the imposition of an add
rent in the latter cases.24 Not only does the assignee fail t
rights but also the assignor is held divested of all the rights
had. The trademark or tradename is said to have beco
juris.25 A recent application to a case of a license "in gro
in the case of Everett 0. Fisk & Company v. Fisk Teacher
The object of the licenses was to deceive the public into b

24 In the former it is not held that the transferor loses his rights
persons merely because of the transfer. Eiseman v. Schiffer, supr
Milling Co. v. Salt Lake & Jordan Mill & Elevator Co., supra note 4. The as-
signor is still entitled to protection, if he has clean hands, i.e., has participated in
no deceit. Benioff v. Benioff, 64 Calif. App. Dec. 745, 222 Pac. 835 (1923). The
case may be distinguished on the ground that the gratuitous license was not acted
upon. The distinction is not very material. In Atlas Assurance Co. v. Atlas Ins.
Co., 138 Iowa 228, 114 N. W. 609 (1908), it was held that licenses in gross, where
the licensee did not come into competition with the licensor, did not preclude the
licensors from successful prosecution of actions against subsequent users of the
tradename or trademark.
25 That is, anyone who wishes may use it with impunity, whether or not he is
competing. See Thorneloe v. Hill, supra note 4; Macmahan Pharmacal Co. v.
Denver Chemical Mfg. Co., supra note 4. Little material exists on this point, but
since the courts invariably say that a plaintiff must have clean hands to secure
relief in equity, and there is no doubt that a plaintiff who makes an assignment in
fraud of the public has not clean hands, it is safe to say that the tradename has
become publici juris. See Everett O. Fisk v. Fisk Teachers' Agency, 3 F.(2d)
7 (C. C. A. 8th, 1924). "An exclusive privilege for deceiving the public is as-
suredly not one that a court of' equity can be required to aid or sanction. To do
so would be to forfeit its name and character." Fetridge v. Wells, 4 Abb. Pr. 144,
148 (N. Y. 1857). Quoted with approval in Manhattan Medicine Co. v. Wood, 108
U. S. 213 (1883). See NIMS, op. cit. supra, note 12; 476 et seq. Also KERLY,
TRADEMARKS (6th ed. 1927) c. XIV, XV, especially at pp. 425, 486.
The question remains as to how much actual deceit of the public there must be
for the court to declare the name pzublici juris. It may safely be stated that there
must have been some actual deception, at least. In Clark Thread Co. v. Armitage,
67 Fed. 896 (S. D. N. Y. 1895), it was held that plaintiff's right to enjoin an
infringer was not impaired by the fact that another manufacturer, whose similar
goods came little into competition with plaintiffs, had long used the tradename
with plaintiff's assent. The case is not in point, since there was no license-merely,
at most, a failure to prosecute. In Eiseman v. Schiffer, supra note 4, the assignor
of a trademark in gross was held divested of all rights, but on the ground that his
discontinuing the use of the mark operated as an abandonment.
20 Supra note 25. Plaintiff conducted a business in Boston for many years under
the tradename "Fisk Teachers' Agency." Through so-called licenses, plaintiff
authorized the use of this name by local agencies established by individuals, in many
cities, which plaintiff did not own, and with which it had no connection, except
through contracts under which territory was apportioned and the agencies listed in
plaintiff's advertisements, for which they were to pay to plaintiff a percentage of
receipts. The Denver Agency refused to be bound any longer by the contract, and
incorporated under the name of "Fisk Teachers' Agency." In a suit to enjoin the
use of the name, claimed by plaintiff as its tradename, held, decree dismissing the
bill affirmed. Plaintiff's attempted licenses were ineffective, because a tradename
cannot be assigned (licensed), except as an incident to the sale of the business and
goodwill in connection with which it has been used. The name had lost its dis-
tinctiveness as plaintiff's tradename by reason of the licenses, and had become
publici juris. The case is criticized in (1925) 20 ILL. L. REV. 90. See Snodgrass
v. Welle, 11 Mo. App. 590 (1882).

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 NOTES 359

independent businesses conducted non-competitively in separate

were all integral parts of a national organization. The prestige
tradename and the deception of the public were increased by th
leading national advertising campaign made possible by the co
tions of the various agencies. The licenses were held void, as l
in gross, and, there being fraud in the transactions, the traden
declared to have become publici juris.
So it is thought to deter dealings which are likely to work a
on the public. Factually, the deterrent is of little or no avail.
the original owner now has unclean hands and can no longer e
the use bf the tradename, everyone is free to deceive the pub
judicial license. Further, the state of affairs frowned upon is
to continue. All that the court has accomplished is to penalize su
ings, when attempted to be enforced as executory contracts. A
situations to that of the Fisk case are not uncommon. There are those
of misrepresentations in a trademark or tradename itself,27 and all cases
of assignment resulting in deceit of the public, as in the musical world,
where names, such as Paul Whiteman and Vincent Lopez, having im-
mense value because of the popular reputations of these public idols,
are licensed or assigned to be used in connection with bands all over
the country bearing no relationship to the assignor.28 There is at pres-
ent no way of getting at these conditions-all that the present remedy
does is to force the assignor to "cash in," i.e., not to make executory
agreements, and to increase the deception by allowing anyone to use
the name. The purpose of this rule cannot be attained unless fortified
by additional sanctions. Competitors who are injured by the deceit
should be granted injunctive relief, wherever there is unfair competi-
tion as well as fraud upon the public. In addition, the Federal Trade
Commission, as well as similar bodies, should extend its present activi-
ties so as to institute proceedings against those attempting imposition
upon the public by assignments and licenses of trademarks and trade-

7 When the mark or name itself contains a material misrepresentation, it is

uniformly held that no relief may be obtained against use by others. Leather Cloth
Co. v. The American Leather Cloth Co., 4 DeG. J. & S. 137, 11 H. L. Cas. 523
(1863); Manhattan Medicine Co. v. Wood, supra note 25. As to collateral mis-
representations, the English rule seems to be that they do not bar plaintiff's rights.
Ford v. Foster, 27 L. T. [N. s.] 219. But see Worden v. Calif. Fig Syrup Co.,
187 U. S. 516, 528, 23 Sup. Ct. 161, 164 (1903). But cf. American Thermos
Bottle Co. v. Grant Co., 282 Fed. 426 (C.C.A. 1st, 1922), a case decided under
the federal statute requiring foreign-made goods to be so marked. In Hegeman
& Co. v. Hegeman, 8 Daly 1 (N. Y. 1880), the court held that plaintiff could en-
join defendant's wrongful use of the tradename, only after plaintiff corrected
the misrepresentation in its own use of the name, by inserting "successor to."
28 Blakely v. Sousa; Messer v. The Fadettes; Bailly v. Betti, all supra note 3.
These cases show clearly the invalidity of transactions such as the "Paul White-
man" situation.

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 360 COLUMBIA LAW REVIEW

names.
names. Fines,
Fines,
and other
and criminal
other criminal
penalties, would
penalties,
assuredlywould
prove nota-
assured
ble
bleweapons.
weapons. Such Such
measures
measures
are identical
arewith
identical
those applied
with in those
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situations
situations in the
in field
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tradeof
regulation.29
trade regulation.29

THE AVAILABILITY OF THE FLOATING CHARGE AS A SECURITY DE-

VICE IN THE UNITED STATES.-The device most frequently used in the
British Empire1 to secure corporate indebtedness is the floating security.2
It amounts to a blanket charge over all the assets of a corporation:
realty, personalty, after-acquired assets, and book accounts.3 But the
most important feature of the floating charge is the power of the cor-
poration to "do business in due course" without interference from de-
benture-holders,4 and without the tying up with fixed charges large cor-
porate assets which could be more productively applied to business uses.
Thus the debenture-holder is secured by a going concern, with the power

9 A fine example of limitation upon the privileges of individuals to deceive the

public may be found in the Food and Drugs Act, c. 3915, 34- STAT. 768 (1906).
See especially Regulation of the Secretary of Commerce, No. 20 (Oct., 1906), to
the effect that a distinctive name (a), shall not represent any single constituent of
a mixture or compound; (b) shall not misrepresent any property of quality of a
mixture or compound; (c) shall give no false indication of origin, character, or
place of manufacture, nor lead the purchaser to suppose that it is any other food
or drug product.

1 But not in Scotland, (1927) 1 JURID. REV. 159.

2 For a general treatment of the subject see (1924) 1 SEMINAR ON THE LAW
DF BUSINESS ORGANIZATION 20 (Columbia Law School Materials).
"The floating security is an equitable charge on the assets for the time being
of a going concern. It attaches to the subject charged in the varying condition
it happens to be from time to time. It is of the essence of such a charge that it
remains dormant until the undertaking charged ceases to be a going concern or
until the person in whose favor the charge is created intervenes." Per Mac-
Naghten, J., in Government Stock and Other Securities Investment Co. v.
Manila Rail Co., [1897] A. C. 81, 86. See also Fraser, Reorganization of Com-
panies in Canada (1927) 27 COLUMBIA LAW REV. 932, 935 et seq.
In Canada the usual language creating the charge is as follows: "The
Company, by way of a first floating charge in favor of the Trustee with the
payment of all principal moneys, interest and other moneys, for the time being
and from time to time owing on the security of these presents and of the bonds
hereby secured, charges its undertaking and other property and assets present
and future, not hereinbefore assured, mortgaged, or charged together with all
present and future tolls, incomes, and sources of money rights, powers, privi-
leges, and franchises; provided that the floating charge created by this para-
graph shall in no way hinder or prevent the Company from pledging, selling,
alienating, assigning, hypothecating, giving security to its bankers under the
Bank Act of Canada or otherwise charging, disposing of, or dealing with the
subject matters of such floating charge in the ordinary course of its business,
and for the purpose of carrying on the same."
Even "goodwill' is "property" subject to the charge. Re Leas Hotel Co.,
[1902] 1 Ch. 332. See Bank of New Zealand v. Gathier & Co., 16 N. Z. L. R.
484 (1897), for a discussion of what particular assets are affected by the charge.
4For the purposes of this note, the term "debenture-holder" will be used
to designate a creditor secured by a floating charge, in contradistinction to a
"bondholder," whose security is typically the mortgage. This is not an essential
classification.

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