Meriden Britannia Co. v. Rogers

13 A. 405, 55 Conn. 496, 1887 Conn. LEXIS 64

• Court: Supreme Court of Connecticut
• Decided: December 16, 1887
• Status: Published

Opinion

Pardee, J.

On March 16th, 1868, a written contract was signed by the plaintiff, of the first part, and by William Rogers and William Rogers, Jr., of the second part, the pertinent portions of which are as follows, viz:—

“ This agreement, made and concluded this 16th dajr of March, 1868, by and between the Meriden Britannia Company, a joint stock corporation organized and existing under the laws of the state of Connecticut relating to joint stock corporations, and located in Meriden, party of the first part, and William Rogers and William Rogers, Jr., both of Hartford, Connecticut, parties of the second part, witnesseth:— That the party of the first part, in consideration of the promises, covenants and agreements of the parties of the second part, herein contained, hereby promises, covenants and agrees, to and with said parties of the second part, to pay the said parties of the second part, jointly or to the survivor of them in the case of the death of either of them, the sum of five hundred dollars per month, payable in advance each month, for the period of one hundred-and twenty months, commencing on the 20th day of March, 1868. In consideration of said promise and agreement of said party of the first part, said parties of the second part do for themselves, both jointly and severally, covenant, promise and agree with said party of the first part as follows, to wit:—

“1st. That they will, and each of them will, during the period aforesaid, use the influence they have in the market to secure trade for said party of the first part in the articles of silver-plated forks and spoons and other silver-plated ware.

“ 2d. That said party of the first part shall have and enjoy the sole and exclusive right to the use of certain trade marks heretofore used by the parties of the second part, to wit :o ‘(Anchor) Wm. Rogers & Son, A A,’ also, ‘1847, Rogers Bros., A 1,’ upon all silver-plated -forks and spoons made or sold by said parties of the first part after the 20th of March, 1868. And said party of the first part may authorize the use of said trade marks, or either of them, upon spoons and forks manufactured or sold by other parties, where said party of the first part is to be benefited by the manufacture or sale thereof.

“ That they, the said parties of the second part, will not, and neither of them shall, use either of said trade marks during all the period aforesaid, or any other trade mark or stamp in which the name of Rogers shall be used or form a part thereof, or engage in the business of making spoons or forks, either directly or indirectly.

“ That they will not allow, suffer or permit any other person or persons, party or parties, to use, infringe upon or imitate either of the trade marks aforesaid, to wit: 6 (Anchor) Wm. Rogers & Son, A A,’ and ‘1847, Rogers Bros., A 1.’

“That they will not permit, suffer or allow any other person or party, persons or parties, to use the name of said William Rogers, or of the said William Rogers, Jr., upon any stamp or trade mark upon silver-plated forks and spoons or other plated ware during the period aforesaid; but that the right of the said party of the first part to the use of the said trade marks, and each of them, and to the use of the names of the said William Rogers and of said William Rogers, Jr., upon forks and spoons, shall be sole and exclusive to the said party of the first part.

“ And whereas certain parties in Hartford, to wit: Thomas Birch and William J. Pierce, are now using the trade mark 6 (Anchor) Wm. Rogers & Son, A A,’ it is understood that the aforesaid payment is not to commence until said parties of the second part, at their own expense, shall have enjoined said Birch & Pierce, and prevented the use of said trade mark by them.

“ And it is further understood and agreed that the payment of said sum shall at all times be dependent upon said party of the first part being fully secured and protected in the exclusive use of said trade marks, and that if any other person or party shall establish their right to use either of the aforesaid trade marks, said payments shall thereupon cease. But all suits that may be necessary to defend them in the use of said trade marks, shall be maintained at the expense of said parties of the first part, except only in the case of said Birch & Pierce; and if necessary to use the names of said William Rogers and William Rogers, Jr., or either of them, in any suit for the protection of said parties of the first part, the same is hereby authorized.”

On this contract the plaintiff indorsed the following:—

“ West Meriden, Jan. 1st, 1872.—The Meriden Britannia Company agree ■ to pay the full amount called for by this contract from January 1st, 1872, and to waive the performance by the parties of the second part of all conditions in this contract in relation to the use of the name Rogers by the concern in Hartford, and consider and admit the claims of Wm. Rogers and Wm. Rogers, Jr., to the full amount of five hundred dollars per month, as specified in this contract, to be in full force from January 1st, 1872, and thereafter until the expiration of this contract.

“Meriden Britannia Company,

“ H. C. Wilcox, President.'1'’

William Rogers died in 1873. The William Rogers, Jr., above named, is the defendant; and the discussion will proceed upon the assumption that he alone was the party of the second part.

It is quite certain that the plaintiff intended to buy and the defendant intended to sell the exclusive use of his time, skill, reputation and trade marks, during the period of ten years next -following the date of the agreement; quite certain that tlie exclusive use of the name and trade marks was in the consideration of the plaintiff of the greatest worth to it. At the signing of the agreement both parties knew that Birch & Pierce of Hartford claimed and were exercising the right to use the trade mark “ (Anchor) Wm. Rogers & Son, A. A.” Therefore the plaintiff reserved to itself the right to withhold all payments under the contract until the defendant should secure it in the exclusive use stipulated for, although it expected him to go at once into its service and give his time, skill, and such partial use of his name and trade mark as was then possible. Accordingly on the succeeding day he began and thereafter continued to give Lis time, skill, and such use of the trade mark as he could command. From the subject matter of the contract and the contemporaneous acts of the parties it is to be presumed that both expected such speedy termination' of use by Birch & Pierce as is possible in cases where there is use without shadow of right. Therefore the contract expressly excused the plaintiff from making, and barred the defendant from demanding, any payment until the use by Birch & Pierce should be stopped, even if he should begin and continue to give time, skill, and a partial use of name and trade mark. Yet the plaintiff began on the first day of service and continued thereafter to pay something monthly in advance; presumably unwilling to furnish any occasion for an abandonment of the contract. But, contrary to this presumed expectation, not only was the defendant unable to stop the use of the trade mark by Birch & Pierce, but the latter were able to fortify themselves in a continued use by an injunction prohibiting him from denying, even, that they had such ■right. The result was that up to January 1st, 1872, nearly four years from the date of the contract, the defendant had not performed his agreement to put the plaintiff in possession of the promised exclusive use. But during this entire period of his failure to perform, the plaintiff paid and he received some- money monthly in advance; so that such payments on January 1st, 1872, aggregated $16,555.49. if he had kept-his agreement and payments had been made in accordance with the contract the aggregate at this last date would have been $22,767; a retention of $6,111.53 by the plaintiff. There was no period put to this account by settlement between the parties during this time. The plaintiff kept its record of the several payments in the form of charges to its expense account. On January 1st, 1872, presumably despairing of the ability of the defendant to prevent by force the use of the trade mark by Birch & Pierce, the plaintiff purchased a major interest in the Wm. Rogers Manufacturing Company, then owning Birch & Pierce's rights, and thus at its cost, by negotiation, secured that exclusive right which the defendant had agreed to deliver at his cost. By this purchase the parties were placed on Jan-nary 1st, 1872, in the position in which it was assumed by the contract they would be on the 19th of March, 1868; the plaintiff in possession of the exclusive use of the trade mark, and the defendant in a position to demand equal monthly payments in full and in advance according to its terms; with this important exception, that the exclusive right had been obtained by and at the expense of the plaintiff and not by or at the expense of the defendant. On January 1st, 1872, the plaintiff indorsed upon the contract a waiver of the right therein reserved to withhold all payments until it should be in possession of such exclusive use, and on that day began and thereafter continued to pay the full sum of $500 monthly in advance according to the contract, until the expiration thereof, and on February 28th, 1878, paid the defendant the sum of $333.33 for the last twenty days of the term of ten years, which sum he received without objection. As has been stated, during the period between March 19th, 1868, and January 1st, 1872, the defendant, while performing in part, fell short of the full measure of his promise in that he did not deliver the exclusive use of the trade mark; during the same period the plaintiff, refraining from exercising its right to withhold all payments, withheld a part; presumably the withholding was according to the estimated measure of injury resulting from the failure of the defendant to perform. It is not found that at any time during the period between March 19th, 1868, and January 1st, 1872, when payments of some money monthly in advance were made, the defendant objected to these as being too small, nor that on the last named day at the beginning of the new period of full payment, or ever after, he demanded the whole or any part of the sum of $6,111.53 retained by the plaintiff. There is neither finding nor suggestion even that the plaintiff had or claimed to have any other right to detain the money than that resulting from the defendant’s failure to perform. Not only did the defendant on January 1st, 1872, when the period and occasion of detention ended and that of full payment commenced, omit to demand more for the past, but at the end of the ten years, when he received his final payment under the contract and was about to leave the service of the plaintiff, he omitted to avail himself of the appropriate opportunity for such demand. Upon such detention on the one part and acquiescence on the other, the law founds the irresistible presumption that the defendant has received all he has ever claimed to be Ms due; that he received and acquiesced in this last payment as being in full of all demands under the contract.

In February, 1873, A. C. Goodman brought an action of assumpsit against the defendant, and on February 21st, 1873, garnisheed the plaintiff as having in its hands money belonging to the defendant. He obtained judgment against the defendant in December, 1873, for $2,749.57 damages and $32.28 costs. The latter not paying, Goodman took the necessary legal steps to enforce payment against the plaintiff as being indebted to the defendant. In Goodman v. Meriden Britannia Company, 50 Conn., 139, this court, upon the assumption that the state of facts existing in February, 1873, was the same as at the beginning, so far as performance by the defendant is concerned, determined that at the beginning the plaintiff came under an obligation to pay, and the defendant acquired the right to receive, the gross sum of $60,000, payable in one hundred and twenty equal monthly instalments in advance, and that on any day in said term the plaintiff owed the defendant the unpaid balance of said sum payable in instalments in the future, and therefore the debt was open to appropriation by his creditors by process of foreign attachment. For the purposes of that decision, the waiver indorsed by the plaintiff upon the contract on January 1st, 1872, placed the parties in the position which they would have occupied if no right to withhold payments had been reserved to the plaintiff. Therefore on February 21st, 1873, the plaintiff was indebted to the defendant to the extent of the unpaid balance of $60,000, in manner and form as above expressed, and came under legal compulsion to pay Goodman’s claim against him. It did pay the amount thereof; namely, $4,183.39 damages and $138.83 costs. In February, 1873, two courses were open to it, either to detain from money thereafter payable to the defendant sufficient to meet the demand of Goodman, and pay him, this being in law a payment to the defendant upon the contract; or, if it preferred for any reason not to put in peril the benefits to be derived from an uninterrupted execution of the contract by the defendant, it could continue to pay him full and equal monthly payments according to the letter of the contract, and rely upon repayment by him, if the pending suit by Goodman against it should result in a judgment in his favor, and compulsory satisfaction thereof by the plaintiff for the benefit of the defendant. The contract expired in 1878 and the defendant then received full payment thereunder. It was not then a matter of certain knowledge to either party that Goodman would be able to obtain judgment; he did not until 1882. In the plaintiff’s replication to the defendant’s special defense it is alleged that the regular monthly payments were made in advance to him according to the terms of the contract upon his repeated request and demand, and upon the supposition by both parties, based upon advice of counsel, that the contract was so drawn that no part of the sum to be paid to the defendant could be appropriated by his creditors. Upon the record he did not deny this allegation.

Upon the service of garnishee process upon the plaintiff by Goodman in 1872 it became its right to protect itself against possibility of loss by withholding payment from the defendant ; it became his duty to refrain from demanding payment until he had placed the plaintiff beyond such possibility. Having knowledge of its legal right and his legal duty, if thereafter he received regular and full payments from it upon the contract, in advance monthly, he did so under a promise implied by the law that he would save it harmless from Goodman’s suit, either by himself paying such judgment as the latter might recover, or if not thus, by repaying the amount. The defendant’s act of receiving full payment, not having protected the plaintiff, was the legal equivalent of a request by him for a loan for his own use and benefit, the granting of such request, and the consequent promise by Mm to repay, precisely as if no other transaction had taken place between them. Under the circumstances his reception .of the money which would have become payable to him, had not the law sequestered it in the hands of the plaintiff for the payment of his debt to Goodman, was a request to it to pay for his accommodation from its own funds a debt wMch he justly owed and a promise by him to repay the money. He is responsible in the legal sense for all that has occurred; he requested Goodman to become and compelled him to remain his creditor; he requested the plaintiff to hold his money in its hands within reach of legal process by Goodman, and thereby become liable to a judgment against itself for his sole use and benefit ; he has received from it all the money belonging to him in its hands; he has left it to payr, in.addition, his debt to Goodman. The necessary legal consequence is that he must repay.

The plaintiff permitted all of the money of the defendant to go out of its hands into his own after service of process of garnishment by Goodman. By so doing, as between the latter and itself, it by force of law became liable to pay the defendant’s debt to Goodman from its own funds; subjected its own property to the levy of an execution; and did iu fact upon legal compulsion satisfy his judgment from its own money. But as between it and the defendant, the debt was in no sense that of the former; in every sense that of the latter; and he is not to be heard to contend that, inasmuch as the former stepped into his place at bis request and for his benefit and became primarily liable to pay his debt and permitted him to fall into the position of surety, he can now insist that as between them it simply' discharged its own obligation.

There is error in the judgment complained of.

In this opinion the other judges concurred.