Hornbostel v. Kinney — 16 N.Y. St. Rep. 824

Majority

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Ida Hornbostel, App’lt, v. Francis S. Kinney et at.,. Resp’ts.

(Court of Appeals,

Filed June 12, 1888.)

Headnote

1. Contract—Construction of.

The material part of the agreement in question was “ should, however, Francis S. Kinney, and his sub-licensees, fail to use said process in the treatment of at least 250,000 pounds of tobacco per annum, from and after May 1, 1879, then and thereupon said exclusive license shall cease, determine and be forfeited; but said Kinney shall, in such event, nevertheless have the license, though not exclusive, to use said process in the treatment of tobacco to be used in the manufacture of cigarettes, and in the treat ment of smoking tobacco, for the period and within the district aforesaid." By the prior portion of the agreement, the license was exclusive during tiles continuance of a certain patent of the right to use a certain process in the treatment of tobacco for cigarettes, Held, that there was nothing in the agreement from which a covenant could be implied that the defendant.

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should at all events subject at least 250,000 pounds of tobacco annually to this process or pay a royalty upon that amount, the same as if he had. Booth v. Cleveland Bolling Mill Co., 74 ST. Y., 15, distinguished.

2. Trade-mark—Injunction restraining use op when bight to not shown.

It appeared that the trade-mark ■' Sweet Caporal” under which certain cigarettes were sold, had not become known as the name of cigarettes made from tobacco treated in any particular way, that the word " sweet ” was prefixed to the word “caporal” (which had always belonged to the individual defendant) as a means of discovering the amount of sales of tobacco subjected to the plaintiff's process, but that there was no agreement giving plaintiff any property in said trade-mark, and that plaintiff’s process was of no value and had not been used by defendant but a very short time, Held, that the plaintiff was not entitled to an injunction restraining defendant from using said trade-mark.

Appeal from a judgment of the general term of the New York superior court, affirming a judgment in favor of the defendants, entered at the special term.

Lewis Johnston, for appl’t; John S. Davenport, for resp’ts.

We do not think the plaintiff’s contention as to the'meaning of the agreement entered into between herself and the individual defendant can be sustained. That contention is that the agreement between the parties contemplates the treatment of, at least, the minimum amount annually of 250,000 pounds of tobacco by defendant by the “ Hornbostel process,” and the payment of the stipulated royalty therefor during the life of the patent, and that if the defendant ceased entirely to use the “process” above mentioned, the liability to pay the royalty to plaintiff on the stated minimum amount of tobacco annually would still remain.

The liability of the defendant is bounded by the written agreement entered into between the parties, and the material part thereof is as follows: “Should, however, said Francis S. Kinney and his sub-licensees fail to use said process in the treatment of at least 250,000 pounds of tobacco per annum, from and after May 1, 1879, then and thereupon said exclusive license shall cease, determine and be forfeited; but said Kinney shall, in such event, nevertheless have the license, though not exclusive, to use said process in the treatment of tobacco to be used in the manufacture of cigarettes, and in the treatment of smoking tobacco for the period and within the district aforesaid,”

By the prior portion of the agreement the license was exclusive during the continuance of the patent of the right to use said process in the treatment of tobacco for cigarettes. It is thus seen that the exclusive character of the license, taking the whole agreement into consideration, depended upon the application of the process to at least 250,000 pounds of tobacco annually; and that if such an amount of tobacco

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were not subjected to such process, the exclusive character of the license ceased, determined and became forfeited, and the defendant thenceforward was subject simply to the obligation of paying the agreed upon royalty of one cent a pound for each pound of tobacco which he subjected to this process.

This statement of the terms of the agreement seems to me the strongest argument against the contention of the plaintiff. There is nothing in the agreement or in the surrounding circumstances in proof in the case from which a covenant can be implied that the defendant should at all events subject at least 250,000 pounds of tobacco annually to this process or pay a royalty upon that amount the same as if he had. The penalty for a failure to thus subject annually that amount of tobacco to the process is provided for by and contained in the agreement, and that is, that the exclusive character of defendant’s license shall cease and be forfeited.

Authority for implying the covenant is thought by the plaintiff to rest m the case of Booth v. The Cleveland Rolling Mill Co. ( 74 N. Y., 15 ). That case, however, holds that in order to imply a covenant in a contract under seal (which this contract is), there must exist a manifest and clear intention that one of the parties shall do the act, m regard to the doing of which the covenant is to be implied. To make the case fit the facts here we should have to hold that there was in the contract in question a clear intention manifested that the defendant should at all events during each year of the life of the patent subject at least 250,000 pounds of tobacco to the process, and pay the royalty thereon annually. On the contrary, a perusal of the whole contract leaves us in no doubt there was no such intention, but simply an intention to re-vest in the plaintiff the right to license others upon the failure of defendant to subject the stated amount of tobacco annually to the proces. Judge Allen,- in the case above cited, well says: “It is a cardinal principle that every agreement or covenant must be interpreted according to its peculiar terms, and so as to carry out the intent of the parties; and it follows that the ruling upon and the interpretation of one agreement will seldom aid in the construction of another, except as it may illustrate some general rule of interpretation applicable to both.”

The case cited is so different in its facts and in the character and purpose of the agreement construed from the one under consideration here, that it lends no aid as to the proper interpretation of the latter. We feel quite clear that there is no foundation for the plaintiff’s theory of an implied covenant to manufacture.

Upon the second proposition of plaintiff, in which she

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desires an injunction preventing defendant from using the trade mark “Sweet Caporal,” which she alleges he is using, and which she also alleges distinguishes the cigarettes made from tobacco subjected to the above mentioned process, the findings and refusals to find of the trial judge are fatal to her contention.

He was requested to find that the brand or trade mark “Sweet Caporal,” under which the cigarettes were sold, became widely known and valuable in the community, because of the use of the said invention or process in treating the tobacco and in the manufacture of the cigarettes, and because of the liking of consumers therefor and the belief and confidence of the public that said cigarettes were made from tobacco treated by said process. This was refused by the judge.

The evidence seems to show that the public were entirely ignorant of the existence of any such process, and consequently of its effect upon tobacco. There was evidence also tending to prove that the process itself was of no value; that there were other and just as efficient means of attaining the same end, and, finally, that the defendant had given up and abandoned the use of the process since December, 1879, and had at that time notified the plaintiff to that effect, and that the corporation defendant had never used the process, and the right to use it had never been assigned to it by the individual defendant. The evidence also tended to show that the word ‘ ‘ Sweet ” was first prefixed to the word “Caporal” (which had always belonged to the individual defendant) as a means for him to discover the amount of the sales of tobacco subjected to the plaintiff’s process, and thus to give him some means of forming an opinion of the value of the process, but that there was no intention of making any agreement, and no agreement was in fact made, that as between these parties the adoption of that means should result in the making of a brand or trade mark, in which they should have common rights, and which the defendant should have no right to use unless he continued to use the plaintiff’s process.

Upon the findings and refusals to find made by the trial judge, we think no right to an injunction was shown, and the judgment should, therefore, be affirmed, with costs.

All concur.