Goodman v. Meriden Britannia Co. ( 1882 )

Pardee, J.

(After stating the case.) The question to be answered is, did the defendants owe a debt to William Rogers, Jr., on February 21st, 1873, by virtue of their contract of March 16th, 1868?

The provisions bearing upon this are, that William Rogers and William Rogers, Jr., claiming to be sole owners of a trade-mark in connection with the manufacture of silver-plated ware, in consideration of the sum of $60,000, payment to be made in one hundred and twenty equal monthly installments in advance, sold to the defendant the sole and exclusive right to use the mark for the term of ten years and promised not to attempt to grant any right to use it during that term to any other person. But inasmuch as both parties knew that by reason of the fact that Birch and Pierce were then in the actual use of it under claim of grant from the vendors, and intended to continue such use, the latter could not put the vendee in possession of the right sold, it was made a condition precedent to the existence of any debt that the vendors should cause Birch and Pierce to be placed under permanent injunction. It was also agreed that if at any time during the term any person should prove in a judicial proceeding instituted for that purpose that the vendors were not at the time of the execution of the contract the owners of the right attempted to be conveyed, no installments should thereafter become payable. This provision does no more for the defendant than the law would have done in its absence; and these two possibilities, namely, that a vendor may not have title to the thing sold, although he has and delivers possession, and that he may fraudulently attempt to sell to A that which he had previously sold and delivered to B, attend every contract of sale; and if permitted in this, would in every instance of payment deferred prevent the existence of an attachable debt; and this in cases in which payment is to be made once for all, as well as in those where it is to be made in installments; in cases where the evidence is in the form of a note negotiable, or of a charge on book, as well as in those where the promise rests in parol. But they are .neither of them, as a matter of legal necessity, a condition precedent to the existence of indebtedness for the price of property sold and delivered.

Moreover, in this case the parties made a sharply defined distinction between the certainty that the grantors could not deliver anything of value under the contract until Birch and Pierce should be placed under injunction, and the bare possibilities either that some person of whom the defendant had neither knowledge nor suspicion should at some time be able To prove himself the owner of the mark, or that the vendors would fraudulently undertake to sell to another that which they had previously sold and delivered to it. Until the defendant was made sure that no harm could come to it from the claim of Birch and Pierce it would neither pay nor come under obligation to pay; being certified upon that point it in 1872 withdrew this condition precedent and began to pay. Having possession of the exclusive right purchased, it established the existence of the debt for the price in its entirety by beginning and continuing to pay in advance installments thereon as fractions of a whole. The possibility of failure of title then existed and co-existed with the recurring- payments to the end of the term; but the defendant did not by reason thereof require the vendors, nor did they permit it, to postpone the payment until the expiration of the term; did not require them, nor did they permit it, to postpone for a day even; did not require, nor did they furnish, security for the return of payments made. It paid each installment, not as an independent debt; not as the price in advance of the use of the mark for an isolated month; but as a constituent part of a debt for the gross sum of $60,000 for its use for a term of ten years, and as such the vendors received it. The defendant knowingly and intentionally assumed the risk of promising that its debt should be constantly and regularly diminished as the term wore away, regardless of these possibilities. Evidently it was satisfied with this measure of defence against them, namely, if either of them should ripen into a certainty, that fact should be its protection against the demand for further payments.

The question whether either of the possibilities referred to is to be regarded as a condition precedent or as one subsequent is to be determined by discovering the intent of the parties; to be found .in what they have written, interpreted in the light of what they have done. There can be no more convincing evidence that a man believes that he owes a debt than his voluntary payment; no more convincing evidence that he does not regard a given possibility as a condition precedent to his becoming indebted than his intentional and persistent disregard of it in his voluntary payment of installments.while it exists; no more convincing evidence that a man believes that a debt is due to him than the reception of installments upon it.

We think that when the trustee process was served upon the defendant it was indebted to William Rogers in the unpaid balance of §60,000. Of course the condition, as a condition subsequent, still follows the indebtedness, and if at any time the defendant should lose the exclusive use of the trade-mark through the establishment of a right to it in some other party, its obligation to continue the payments would cease.

There is no error in the judgment complained of.

In this opinion the other judges concurred.