Proctor v. Preservaline Manufacturing Co. — 21 N.Y. St. Rep. 885

Majority

p. 885

Joseph O. Proctor, Jr., Resp’t, v. Preservaline Manufacturing Co., App’lt.

(Supreme Court, General Term, First Department,

Filed January 28, 1889.)

Headnote

Contract—Violation or.

The defendant, for a valuable consideration, sold to the plaintiff the sole and exclusive right for a certain district, to use and sell all of defendant’s preparations, upon which, it held patents, and contracted not to sell or supply said preparations to any other person within said district. The plaintiff subsequently"discovered that a similar preparation was being sold in his district, under a different name, and ostensibly by a different company, and made complaint to the defendant, who in reply denied all knowledge ■of the company. It appeared on the trial that the preparation sold by the last named company was "manufactured by the defendant, and was the same as that to which the plaintiff had purchased the exclusive right. Held, that a judgment for the plaintiff was properly rendered in an action to recover damages for a violation of the contract.

Motion by defendant after interlocutory judgment for new trial on exceptions.

O. E. Lydecker, for app’lt; H. D. Hotchkiss, for resp’t.

This action was brought to recover damages for the violation of a contract, by which the defendant, a corporation created and existing under and by virtue of the laws of this state, for a valuable consideration sold, assigned and transferred to the plaintiff the sole and exclusive right for the city of Gloucester, in the state of Massachusetts, to use and sell all grades and kinds of said company’s preparations, called preservalines for fish, upon which said company holds patents. The contract further provided that the company was not “to sell or supply to any person or persons whomsoever, within said commonwealth of Massachusetts any" kind or grade of preservaline for fish except to certain Boston houses who are named, and to them only for their own individual and immediate use in their business and not for sale, and that it will in no manner, directly or indirectly, knowingly sell or supply to any person or persons whomsoever for sale again to any person or persons living or doing business in said Gloucester any grade or kind of preservalines for fish.”

p. 886

After this contract was made, the plaintiff, having satisfied himself of the usefulness of the Preservaline by a series of experiments, and in 1885, discovered that there was being sold a similar preparation called Conserving Salt, ostensibly by a corporation called the Standard Food. Preserving Company, apprehensive that that would enable his competition to make an inroad upon his profits,, he having had prior to this discovery the almost exclusive power of warranting his fish, addressed a letter to the; defendants on the subject. It should be here noted that his contract was signed on. behalf of the defendant by Charles E. Calm, as secretary and treasurer. The communication was responded to while Charles E. Calm was secretary and treasurer, the letter being signed by E. C. Calm, as president," in which it was stated, “We have never heard of this concern, don’t know them, can’t find their office, nor have they any rating, and we think they will not amount to much.” Subsequently, and in July, 1885, in response to a further complaint on the subject of the Conserving Salt, the defendants, sent another letter in which it was said, “Regarding the Jersey concern, we have- never heard of them since you first wrote us. All our exertions .to locate them proved .unavailing.”

It appears, however, that the defendant knew of this company and of their salt, and for the very convincing-reason that the defendants manufactured it for them, a confession made by Chas. E. Calm while upon the stand as a witness.

There were many other circumstances to which it is not. deemed necessary to make special reference, as, for example, the virtual identity of the two compounds the recommendation in the Standard Company’s circular of the method of application adopted by plaintiff and revealed by him to defendants, the management of the com any’s business by the brother of the defendants’ president, the concealment of his name therein, his use of one O’Hara’s name, and his personation of that individual, all tending to establish the fact that the two companies were acting in concert, if indeed the defendant was not in fact a combination of both; the Standard Company being used for.the purpose of enabling the defendants t.o evade the consequences of their exclusive sale to the plaintiff.

The learned judge who presided at the trial was impressed with the conviction that the two companies were substantially the same. He said that all the active managers of the other company, were relatives of the owners and managers of the defendant, and that the whole course of their dealings and the falseholds told by the

p. 887

defendant agents as to the Standard Company, convinced him that the two companies were substantially the same.

Considering the character of the contract, the plaintiff’s services in giving the subject of its permanence and value, the fact of his warranting the fish as he did, founded upon his belief in the preservaline character of the compound bought from the defendant, and the resultant competition, it is not surprising that, having no scruple about such a course, the defendants should have resorted to any artifice by which they could evade their obligations and supply advantageously the other and virtually identical compound under a different name to the plaintiff’s competitors.

The denial by the defendañts of all knowledge of the New Jersey Company, and the contemptuous way in which they spoke of it, taken in connection with the fact that they not only knew of the existence and locality of the company, but were actually manufacturing its competing compound, and shipping it directly to customers in the prohibited territory, are Circumstances of such strength that they cannot be rejected, but must, indeed, be accepted as controlling evidence of the evil design of the defendants, and their attempted practical use of it to the detriment of the plaintiff.

An examination of the requests to find, and the exceptions to evidence, seems to present no question requiring particular consideration. They suggest a professional effort to overcome legal obstacles and difficulties arising from the evidence by which the learned counsel, anxious and zealous, hopes to save his clients from the consequences of their fraudulent designs.

We see no reason for arresting the progress of this case, and think that the interlocutory judgment appealed from should be affirmed, with costs.

Van Brunt, Ch. J., and Macomber, J., concur.