author: Maxey, J.,

text:
    The Dollar Dry Cleaning Company v. The Only Dollar Dry Cleaning Company.

      Kaufman, Mattes & Levy, for plaintiff.

      J. M. Walker and J. K. Peck, for defendants.
    June 8, 1928.
   Maxey, J.,

This is a suit in equity. The substance of plaintiff’s bill is that since April 27, 1925, she has been carrying on the business of dry cleaning and dyeing in the City of Scranton, under the name of “The Dollar Dry Cleaning Company,” has erected a large cleaning and dyeing plant and installed costly and modern machinery therein for the purpose of her business, and has expended large sums of- money in advertising said business under said name; and that the defendants, well knowing these facts, have, since July 1, 1927, been carrying on in the City of Scranton exactly the same kind of business as the plaintiff, under the name of “The Only Dollar Dry Cleaning Company.” Plaintiff avers that this constitutes unfair competition and constitutes a fraud, both upon the plaintiff and the public. An injunction is asked for, restraining the defendants from transacting business under the name of “The Only Dollar Dry Cleaning Company.”

Defendants deny the right of the plaintiff to the exclusive use of the word “Dollar,” either separately or in combination, as, against the use by the defendants of the same word in connection with their distinctive word “Only;” they deny that the adoption by them of the name “The Only Dollar Dry Cleaning Company” has worked a wrong or injury to the plaintiff or the public; and they deny that their acts constitute an invasion of the plaintiff’s rights or constitute unfair competition in business. Defendants further allege that the trade name of the plaintiff does not fairly represent the business of the plaintiff, in that she does not exclusively carry on her business at the rate of a dollar, but, on the contrary, often charges more than a dollar for dry cleaning, and that by reason thereof defendants believe plaintiff can gain no exclusive right to the use of the words “Dollar Dry Cleaning Company.”

Findings of fact.

1. A certificate showing that the plaintiff was carrying on business under the trade name “The Dollar Dry Cleaning Company” was filed with the prothonotary of Lackawanna County on April 27, 1925, and with the Secretary of the Commonwealth on May 4, 1925, under the provisions of the Act of J une 28, 1917, P. L. 645.

2. Shortly thereafter, the plaintiff constructed and equipped a plant in the City of Scranton for carrying on her business, which consisted of the dry cleaning of articles of clothing and similar lines of business.

3. The plaintiff invested in her plant an amount between $65,000 and $70,000 in the year 1925, which amount has since been increased to about $100,000, and plaintiff’s business employs thirty-four persons and uses eight trucks.

4. Plaintiff advertised her trade name, “The Dollar Dry Cleaning Company,” in the local newspapers and otherwise, and built up a large business throughout Lackawanna County with many thousands of customers, and by reason thereof the words in said trade name acquired a secondary meaning and became distinctive, and the public within the county came to understand that said name and words signified the plaintiff’s business establishment.

5. Defendants and their wives are the sole stockholders of the Davis Steam Dye Works, which has been operating in Scranton for about twenty-two years in the same line of business as plaintiff is engaged in.

6. In July, 1927, after plaintiff had been operating her business for about two years, and had built up a large volume of business with many thousands of customers, and had, at her own expense, made the name, “The Dollar Dry Cleaning Company,” well and favorably known throughout the county so as to become distinctive of the plaintiff’s establishment, the defendants opened an office in the City of Scranton under the name “The Only Dollar Dry Cleaning Company.”

7. The defendants, trading under said new name, “The Only Dollar Dry Cleaning Company,” maintained no separate cleaning plant, but had their work done at the old-established plant of their corporation, “The Davis Steam Dye Works.”

8. The defendants adopted and used said name, “The Only Dollar Dry Cleaning Company,” with full knowledge that the plaintiff was and had been for upwards of two years engaged in an extensive business in the same line and in. the same community under the name “The Dollar Dry Cleaning Company,” and with full knowledge that the use of the name “The Only Dollar Dry Cleaning Company” would be misleading to the plaintiff’s customers and to the public generally.

9. The defendants published large newspaper advertisements in the same newspapers previously used by the plaintiff and in imitation of the plaintiff’s advertising, and the defendants painted their trucks in imitation of the trucks of the plaintiff, all with the intent and purpose of misleading and deceiving the plaintiff’s customers and the public, and by means thereof diverting the plaintiff’s business to themselves.

10. The methods and means adopted and used by the defendants did in fact mislead and deceive, and had a natural tendency to mislead and deceive, the plaintiff’s customers and the public, and resulted in serious confusion, disturbance and financial loss to the plaintiff, both direct and indirect, for which no adequate remedy at law exists.

11. The defendants’ trade name, “The Only Dollar Dry Cleaning Company,” was false and fraudulent in fact, in that it was calculated to give the impression that no such business as that of the plaintiff was in existence in the community, but that the business and trade theretofore built up by the plaintiff was in fact that of the defendants.

12. The entire scheme and plan of the defendants constituted a conspiracy to injure and destroy plaintiff’s business by fraudulent and deceptive methods. The plaintiff’s trade name and good-will were “pirated,” her advertising copied and trucks imitated, all with the intent and purpose of intercepting, as far as possible, all dealings between the plaintiff and her customers or prospective customers, and with the intent and purpose of fraudulently diverting public patronage to the defendants.

13. Defendants have defrauded the plaintiff and have deceived the public by making the public believe that in doing business with the defendants they were actually doing business with the plaintiff.

14. The public have been deceived and misled by the acts of the defendants to such extent as to confuse in the public mind the identity of the establishment and business of the plaintiff with those of the defendants.

Discussion.

Both parties to this suit are engaged in the dry cleaning of clothing and other articles in and about the City of Scranton. The defendants and their wives are sole stockholders of the Davis Steam Dye Works, which has been engaged in similar business in said city for about twenty-two years. Plaintiff established her business in 1925, and by her intelligence, energy and skill she built up a substantial trade and an excellent reputation in the dry cleaning business. She adopted the trade name of “The Dollar Dry Cleaning Company,” and filed a certificate to that effect under the provisions of the Act of June 28, 1917, P. L. 645. This “Dollar Dry Cleaning Company” has become a well-known and established business in and about the City of Scranton. It is a fair inference that the plaintiff’s well-earned reputation is what led the defendants to call themselves “The Only Dollar Dry Cleaning Company.”

The defendants were within their rights in seeking to increase their trade in all legitimate ways, but it was not within their rights to increase their business by trying to appropriate to themselves, by the use of the misleading name they adopted, the business, or any part of the business, which had been built up by “The Dollar Dry Cleaning Company.”

The very fact that the defendants used the word “Only” shows that it was their intention to deceive the public because, as stated above, “The Dollar Dry Cleaning Company” has become well known to practically every householder in the City of Scranton. Being well aware of the large business built up by the plaintiff under her trade name, the defendants filed a certificate under the act above referred to in the name of “The Only Dollar Dry Cleaning Company.” This was obviously a device deliberately intended to deceive the public who were patronizing dry-cleaning establishments in the City of Scranton. “The Only Dollar Dry Cleaning Company” had no plant of its own and all the business which it attracted was taken care of by the Davis Steam Dye Works. The plaintiff’s forms of advertising and the appearance of her delivery trucks were copied and imitated to such an extent as to deceive the public and to prevent them from knowing which of the two concerns they were doing business with.

It would amount in law to “unfair competition” if the defendant had adopted the name “Dollar Dry Cleaning Company,” but to prefix to that purloined name the word “Only” makes the competition grossly unfair and a palpable fraud upon the public. The conduct of the defendants in adopting that name shows that they intended to deceive the public into the belief that not only did they constitute a Dollar Dry Cleaning Company but that they were the only Dollar Dry Cleaning Company in the City of Scranton, and this was tantamount to representing to the public that the plaintiff, who had been using the Dollar Dry Cleaning Company name for years, was a sham and a fraud.

The case before us presents a clear one for equitable relief by injunction.

The law.

26 Ruling Case Law, Trade-marks, Trade Names, etc., § 53, page 875:

“Unfair competition ordinarily consists in the simulation by one person, for the purpose of deceiving the public, of the name, symbols or devices employed by a business rival or the substitution of the goods or wares of one person for those of another, thus falsely inducing the purchase of his wares and thereby obtaining for himself the benefits properly belonging to his competitor. The rule is generally recognized that no one shall, by imitation or unfair device, induce the public to believe that the goods he offers for sale are the goods of another and thereby appropriate to himself the value of the reputation which the other has acquired for his own product or merchandise. Thus the cases are in accord in holding that it constitutes unfair competition to use a rival’s bottle, tank or package for the sale of a competing product where the purpose and effect of such use are to enable the producer or retailer to pass off the user’s product as the product of the manufacturer originally using the tank, bottle or container. And one who has established a business under a particular name, which he places on the hats of his agents to inform customers that they are his representatives, may enjoin another of the same name, who has engaged in the same business, from using such name as a hat label in such a way as to deceive the public into believing that the one bearing it is connected with the former’s business. Furthermore, it is held that one who offers the goods of one manufacturer under the well-known names and established reputation of articles of another manufacturer for the purpose of deceiving the public and defrauding the latter aggravates, rather than justifies, his wrong by placing his own name on the packages. . . .

“Section 54, page 876, Trade Names in General:. An infringement on a trade name is such a colorable imitation of the name that the general public, in the exercise of reasonable care, might think that it is the name of the one first appropriating it. Where such a similarity occurs it tends to divert trade from a business rival who has previously adopted its name and operates as a fraud which may be restrained by injunction, although the prior user may not have an exclusive right to the use of the name. . . .

“Section 55, page 878, Essentials to Relief: The existence of a valid trademark is not essential to a right of action for unfair competition. Irrespective thereof, persons have no right to dress their goods up in such manner as to deceive an intending purchaser and induce him to believe he is buying those of the plaintiffs, and they may be restrained from so doing. To entitle a person to such relief a proprietary interest in the terms or symbols used is held not to be essential, it being sufficient if he has an interest in the good-will of the business or in the other property threatened. . . .

“Section 57, page 880, Grounds on Which Remedy Based: ... It is the injury to a competitor caused by such deceptive and fraudulent conduct that is the ground upon which courts of equity act in affording relief. Therefore, if one tradesman resorts to the use of any artifice or contrivance for the purpose of representing his goods or his business as the goods or business of a rival tradesman, thereby deceiving the public by causing them to trade with him when they intended to trade, and would have otherwise traded, with his rival, he may be restrained by injunction from pursuing such a course of conduct; such relief being afforded on the ground that an action at law for damages is not a sufficiently satisfactory remedy. The doctrine of unfair competition is based upon the principle of common business integrity, and equity only affords relief when this principle has been violated. The gist of the action is not the harmless use of the particular words and symbols, but the appropriation of a competitor’s business to his injury. . . .

“Section 60, page 884, Intention: ... It is declared that . . . the existence of a wrongful intent might justify the interference of a court of equity on a less showing of injury than would otherwise be required. . . .”

Perry v. Truefitt, 6 Beav. 66, Langdale, M. R.: “A man is not to sell his own goods under the pretext that they are the goods of another man; he cannot be permitted to practice such a deception, nor to use the means which contribute to that end. He cannot, therefore, be allowed to use names, marks, letters or other indicia by which he may induce purchasers to believe that the goods which he is selling are the manufacture of another person.” Quoted with approval by the Supreme Court of the United States in Hanover Star Milling Co. v. Metcalf, 240 U. S. 403, 413.

England v. New York Co., 8 Daly, 375: “The test is whether he (that is, a defendant) uses the name honestly and fairly, or dishonestly, to palm off his own commodity as the production of another.”

Perry v. Truefitt, 6 Beav. 66, Langdale, M. R.: “Whether a person has or has not a property in the name or mark, I have no doubt that another person has not the right to use that name or mark for the purpose of deception in order to attract to himself that course of trade which without that improper act' would have flowed to the person who first used it.”

In the case of France Milling Co. v. Washburn-Crosby, 7 Fed. Repr. (2nd) 304, the defendant, which had marketed wheat flour for many years under the name “Gold Medal,” was restrained from extending the use of this name to pancake flour in unfair competition with the plaintiff, who was already using the name for that product.

In Rosenberg v. Elliott, 7 Fed. Repr. (2nd) 962, where defendant was restrained from applying the name “Fashion Park” to hats and caps after the name had previously been advertised by the plaintiff as applicable to men’s clothing, the court said, page 966: “The issue of unfair competition frequently arises where one who has no valid trade-mark nevertheless complains of another who attempts to pass off his own goods as the goods of his rival. Fraud is the basis of the complaint. When fraud is found, a court will frame its action to promote honest and fair dealing, thereby to protect the honest trader, punish the dishonest trader and protect the public from deception.”

In Pennsylvania Central Brewing Co. v. Anthracite Beer Co., 258 Pa. 45, the court held:

“Any conduct, the natural and probable effect of which is to deceive the public so as to pass off the goods or business of one person as and for that of another constitutes actionable unfair trade competition. If the effect be to injure the plaintiff, the fact that defendant had no fraudulent intent is no defense.

“A dealer coming into a field already occupied by a rival of established reputation must do nothing which will unnecessarily create or increase confusion between his goods or business and the goods or business of his rivals.”

In Hub Clothing Co. v. Cohen, 270 Pa. 487, where plaintiff had' used the name “Hub” for a clothing business in Wilkes-Barre and had advertised the name extensively throughout the county, the defendants were constrained from adopting and using the same name in Pittston, in the same county, the court saying, page 491: “The effect of the act of the defendants in this case must necessarily be to claim unfairly a share of plaintiff’s business and produce confusion in the public mind as to the identity of the person or firm whose goods they were buying, and, consequently, result in financial loss to plaintiff.”

In Elliott v. Skillkrafters, 271 Pa. 185, where defendants were restrained from imitating under a different name the advertising of plaintiff, the court says, page 188: “The good-will of a manufacturer is not to be destroyed through needless simulation by others if the exercise of reasonable precaution to protect it will impose no substantial restriction on the right of another to make and sell. When a person not only copies the general design, but also copies or imitates the peculiar features, marks or devices, tending to produce confusion in the minds of intending purchasers and to mislead them into purchasing his goods in place of those of the original maker, unfair competition results which may be restrained. ... A demand for goods created by advertising belongs to the advertiser; and he will be protected therein against unfair competition by another who seeks in any way to take advantage of such advertisement to sell his own goods.”

Rosenberg v. Elliott, 7 Fed. Repr. (2nd) 962, 965: “When a trade-mark has gained a place in the public mind in association with a given product and has come to be regarded as a guaranty of its quality, the public has a right to be protected from deception in its use. . . . Whether deception of the public be a substantive ground or an evidential test of trade-mark infringement (and of unfair competition), it is, without doubt, a factor which enters into every court’s consideration of what it shall find to be dishonest and unfair dealing and of what it shall require for the protection not only of the owner whose trade has been hurt but of those constituting the public who have been, or may be, deceived by the wrongful use of a valid trade-mark or by unfair acts and practices.”

The defenses.

The defenses interposed in this case are two in number:

1. That the plaintiff has not eome into a court of equity with clean hands.

2. That the words used, “The Dollar Dry Cleaning Company,” merely describe the nature, kind and quality of the business in which the plaintiff is engaged and are words which are not, therefore, the subject of a trade-mark.

As to the first defense, the part of the testimony on which this defense is based appears in the examination of Rose Kaplan, in the case of Rose Kaplan, trading as The Dollar Dry Cleaning Co., v. Frank J. Dux and Eberhard Pooth, trading as The De Luxe Dollar Dry Cleaning Co., No. 4, October Term, 1927, which testimony by later agreement was made a part of the record in the case now before us. On page 8 of the record in the former case, Rose Kaplan was asked, on cross-examination, the following questions and made the following answers: “Q. Do you charge any more than a dollar for any work that you do? A. Not for dry cleaning; we do for steam cleaning. Q. Regardless of the garment, you charge no more than a dollar for dry cleaning? A. There is some things; it depends on the condition of them. Q. There is then a difference in price? A. Yes. Q. Even in the dry cleaning? A. On certain garments, yes.”

On page 10 of the notes of testimony in the case of Rose Kaplan, trading as The Dollar Dry Cleaning Co., v. Frank J. Dux et al., trading as The De Luxe Dollar Dry Cleaning Co., the following questions were answered by Mrs. Kaplan:

“Q. By the Court: When people call you up and asked you what prices are for cleaning a certain garment, do you always tell them? A. The driver gives them all the prices; the drivers are correctly informed. We advertise just what we clean for one dollar.

“By the Court: Are most of the garments cleaned for one dollar? A. About 85 per cent.”

We do not think that the fact that the plaintiff charges more than a dollar for dry cleaning certain garments constitutes such a material misrepresentation as to amount to a fraud on the public and as to take away from her the right to have her trade-mark protected against any such fraudulent devices and practices as have been perpetrated on the plaintiff and on the public by the defendants in not only adopting plaintiff’s trade name but also prefixing to that trade name the word “Only” so as to give the public the impression that not only was the defendants’ concern a Dollar Dry Cleaning Company, but it was the only Dollar Dry Cleaning Company operating in this territory.

It is well settled that immaterial misrepresentations in the use of a trademark, name or label will not defeat the right of the owner to relief in equity against an infringement or imitation by others. It is said in 26 Ruling Case Law, Trade-marks, Trade Names, etc., § 82, page 904:

- “. . . Every exaggerated statement . . . made by a dealer in regard to his goods will not necessarily preclude him from obtaining relief. And where a person seeks protection in the use of a trade name, relief will not be refused merely because for several years he has circulated catalogues and price lists containing false statements as to his exclusive right to the name, where it is not proved that the trade name owes its value in a material degree to the false representations and where the publication has ceased prior to the filing of the bill. Similarly, the mere fact that a jobber of shoes who has them manufactured under his direction for his trade uses a letterhead in which he describes himself as a manufacturer of shoes is not such fraud as will destroy his right to equitable relief against one who infringes his trade-mark. . . .

“Section 86, page 906: The circumstances may be such, in case of a misrepresentation, that from'its character and the manner in which it is made no intent to defraud will be inferred, [as] where it was represented in a small number of circulars that a medicinal preparation was sold only in quart bottles, and it appeared that the words ‘quart bottle’ were in common use in the druggist’s trade to designate bottles of the size used. A misrepresentation may be immaterial, as where it was claimed that the petitioners’ name imported a partnership rather than a corporation, it being said as to such an objection that it cannot make much difference to those who purchase their wares which they are. And it has been decided that right to relief will not be defeated by the unwarranted use of the word ‘imported’ on a trade-mark where it does not appear that such use was intended to deceive the public, or by the continued use of circulars and labels which suggest the foreign origin of a product after its manufacture had been begun in this country.”

The name “The Dollar Dry Cleaning Company” having been established in Scranton by the plaintiff in April, 1925, and the name having been registered in Fictitious Names and Business Docket, No. 2, of Lackawanna County, on page 113, on April 27, 1925, the words “The Dollar Dry Cleaning Company” convey to the minds of the people served by this company a definite idea of a certain company, just as definite an idea as the name of any railroad company or coal company doing business in this city and vicinity. Thousands of people have patronized Rose Kaplan, trading as The Dollar Dry Cleaning Company, and from the volume of business she does under this name and the desire of others to masquerade under her trade name, it appears that the work she has done has been satisfactory to the bulk of her dry-cleaning customers. The fact that when a garment is in exceptionally bad condition she charges more than one dollar constitutes a deception and fraud on no one. Any person having a garment to be dry cleaned whose condition would make it appear that it would be worth more than one dollar to clean it would probably call up and ask the plaintiff what the charge would be in such a case. Even if this precaution was not taken and a charge of more than a dollar was made in exceptional cases, and the charge was, under the circumstances, a reasonable one, it, together with the fact that the person making the charge is doing business under the name of The Dollar Dry Cleaning Company, would not properly give rise to a charge of misrepresentation and fraud. If there is any misrepresentation in using this name in view of the fact that for extra work more than one dollar is charged, the misrepresentation would fall under the class of immaterial misrepresentations.

A person who, by the use as a trade name of a certain well-defined word, deceived the public as to the quality or material or ingredients or as to the source or origin of his goods would, of course, come into equity with unclean hands if he would endeavor to enjoin others from the use of the well-known word.

26 Ruling Case Law, § 84, page 905, cites the following examples of such misrepresentations: “The fraudulent use of the term ‘syrup of figs’ as the name of a laxative preparation into which only a slight quantity of fig juice is put, riot for the purpose of changing its medicinal character . . . but merely to give a weak support to the statement that the article is syrup of figs, will not be protected in equity against imitation. . . . Relief has been refused to the maker of a cosmetic, announced as free from all mineral and poisonous substances, where the evidence tended to prove otherwise, it being declared that he was engaged in a fraud upon the public and, therefore, not entitled to protection. And the word ‘Habana’ on a cigar label claimed as a trade-mark, when in fact the cigars on which the label appeared were mere Havana filler, is such a material misrepresentation and deceit practiced on the public as will deprive the owner of any relief or protection against an infringement.”

In the case at bar, the record is silent as to any person in Scranton or vicinity having been deceived into patronizing Rose Kaplan, trading as The Dollar Dry Cleaning Company, by virtue of the fact that she uses that trade name. We believe no one has been so deceived. If the plaintiff has any deceived or dissatisfied customers, they certainly did not appear at the trial of this case. The bare possibility that some one having a garment to be cleaned whose cleaning should reasonably cost more than one dollar might send the garment to Rose Kaplan under the belief that such person could have the garment cleaned for one dollar, when in fact it would cost more, is not sufficient to charge the plaintiff with the equitable stigma of “unclean hands.”

There is in this city a bank known as. “The Dollar State Bank.” Another bank is known as the “Peoples Savings and Dime Bank.” This latter bank before consolidating with the Peoples Bank was known as “The Dime Bank.” No deception is practiced on the public by this use of either the word “Dollar” or “Dime.” By employing the name “The Dollar State Bank,” the said bank does not deceive the public into the belief that it accepts deposits of only one dollar. By the use of the word “Dime” the other bank does not convey to the public the idea that it accepts only dimes or that it pays a dime interest on every dollar deposited. If any other bank of the City of Scranton would attempt to appropriate the name “Dollar Bank” or “Dime Bank,” either of these banks could properly invoke for the protection of its name the interposition of a court of equity.

We find the defendants’ “first line of defense” not a sufficient barrier to stay the hand of a chancellor.

As to the second defense, to wit, that the word “Dollar” as used by Rose Kaplan in the phrase “The Dollar Dry Cleaning Company” is not the subject of a trade name. What words can be and what words cannot be the subject of protection as trade names is not easy of exact definition. We cannot say that because a word is in common use and belongs to the public in general it, therefore, cannot, under some circumstances, be protected as a trade name. For instance, the words “American,” “United. States,” “Pennsylvania,” “Lackawanna,” “Scranton,” are names that belong to the public in certain territory; yet all these names have been appropriated in some place or other as trade names and would undoubtedly be protected by equity. Likewise, the names of historic characters are sometimes appropriated as trade names, such as George Washington or Abraham Lincoln. Likewise, numbers, such as First, Second or Third, are sometimes appropriated as trade names, and when they become definitely identified with a certain institution, they are subject to equitable protection.

If the defendants in the case at bar had wished to convey to the public the information that they charged only one dollar for dry cleaning, they could very easily have done so without appropriating the plaintiff’s trade name. It would have been a very simple matter for them to have adopted some other trade name and to have emblazoned in all their advertising the fact that they dry cleaned for one dollar. But, as we have already said, the name The Dollar Dry Cleaning Company denotes to tens of thousands of people in this vicinity a certain definite establishment, to wit, that of the plaintiff. It appears from the record that the utmost confusion has resulted from the fact that the defendants have endeavored to use the name of The Only Dollar Dry Cleaning Company. Mrs. Kaplan stated in her testimony in the Dux case above referred to, the record of which is made a part of the record of this case, page 5: “Q. Since these other Dollar Dry Cleaning Companies have opened their business, whether or not there has been any confusion in your business? A. Very much. Q. Tell the court how that confusion has arisen? A. We have had to put on two special operators to answer the confusion caused. They don’t know we are not the owner of the other Dollar Dry Cleaning Companies, and they call up for their work, and we trace back our books and find no record. And, in the meantime, these people lose their slips and raise a row and want to go through our plant looking for their work. . . . They come through and want to find their garments, as there is no other plant, with the exception of the Paramount plant, to go to. In case the offices are closed, they don’t know where to look for their garments. I have had several calls on Sunday and we go down and look all through and we have no record of the garments ; and when they find their slips, they are signed by the Paramount or the De Luxe, and we have to put two special operators on to trace those calls. Q. Whether or not you have had any complaints of merchandise that has been spoiled? A. Yes, we have; just recently we had one. Q. What was the nature of the lady’s complaint? A. It was a dress that was scorched, and she came to our place with a claim for it, and we didn’t clean it at all. Q. Do you know what was the plant? A. It was the Paramount (Dollar Dry Cleaning Company). . . . Q. Whether or not you received any complaints of people soliciting business under the name of the Dollar Dry Cleaning Company? A. Yes, they did (The names and address were given).”

That the defendants were not so much concerned with conveying to the public the idea that they charged a dollar for their work as they were with conveying to the public the thought that they were the people who had established the reputation as The Dollar Dry Cleaning Company is evident from the advertising carried on by the defendants. Mrs. Kaplan testified, page 3 of the case at bar, as follows: “Q. Was there any mark on your advertisement to distinguish it? A. Yes, sir. Q. What was the nature of that? A. A dollar border. Q. A dollar sign? A. Yes, sir.” The plaintiff offered in evidence advertisements published by The Only Dollar Dry Cleaning Company which contained a dollar sign. “Q. What is the color of the trucks that the Dollar Dry Cleaning Company uses? A. Green and gold. Q. Did you ever see the trucks of The Only Dollar Dry Cleaning Company, this defendant? A. Yes, sir. Q. What was the color of those trucks when they first opened? A. Blue and gold. Q. What is their color now? A. They just put on some green, and I think it is white, green and white, or green and gold, I could not say which. Q. How many trucks have you on the road going from your Scranton office? A. Fourteen, and a motorcycle and a business coupe. Q. And all painted the same? A. Green and gold. . . . Q. What is the color of The Only Dollar Dry Cleaning Company now? A. I think they are running two colors, blue and gold, and green. Q. Is the green similar to the green of your trucks? A. Yes, sir. . . . Q. Whether or not you ever received any bills from the newspaper companies charging your concern, The Dollar Dry Cleaning Company, for advertising inserted for The Only Dollar Dry Cleaning Company? A. Yes, sir. . . . Q. Whether or not any people since the institution of this bill in equity have come to your place of business and asked for any suits that were sent to The Only Dollar Dry Cleaning Company? A. Yes, sir, they have; there is some one there every day. . . . Q. Were you ever called up on Sunday and in the evening with reference to getting any goods that were delivered to The Only Dollar Dry Cleaning Company? A. Yes, sir. . . . We were called Sundays, we were called after six o’clock on Saturday. Easter Sunday I thought we would go crazy from telephone calls that day from people that wanted their garments. We made it our rule not to take'any garments after Monday of Easter week; all of ours were out and delivered up to 4 o’clock Saturday. Sunday, we were called for garments and we had no record of them.”

Discussion continued — The test.

We think the test of the right to the exclusive use of an ordinary or commonly-used word as or in a trade name is this: When any person in a certain locality has taken as a trade name any such word not already appropriated as or in a trade name in that locality, has identified the same with a certain line of business in that locality, and has by his or her character, ability and industry given to the business so identified and to the identifying name a property value, and has caused the public to identify definitely that business with that name, said person ought to be protected by equity in the exclusive use of that name in said locality as identifying that line of business, unless the word is of such a distinctive character as to the quality, ingredients, process, use or cost of goods produced by the business it identifies that it would he manifestly unfair to competitors in the same line of business not to allow them to use the same word in exactly the same way.

It is not manifestly unfair to the defendants not to allow them to use the word “Dollar” in their trade name in exactly the same way as plaintiff has been using it in her trade name, for if it is essential to the defendants at bar that they convey to the public the information that they charge only one dollar for dry cleaning, they can easily convey that information without appropriating the trade name which the plaintiff had used in this locality in the dry-cleaning business and with which the public has come to identify the plaintiff’s business establishment and the work done therein. When the public hereabouts deal with “The Only Dollar Dry Cleaning Company,” they believe they are dealing with Rose Kaplan, the plaintiff. Therefore, the manifestly unfair thing is not the denial to the defendants of the privilege of using the trade name “The Only Dollar Dry Cleaning Company.” The manifestly unfair thing would be to permit them to continue to do so to the prejudice of plaintiff's lawfully-acquired and valuable property right and to the confusion and deception of the public.

These are our

Conclusions of law.

1. Defendants are guilty of unfair and inequitable trade practices and competition to the detriment of the plaintiff.

2. Defendants have unlawfully misled and deceived the plaintiff’s customers and the public generally.

3. Defendants have attempted by deception and fraud to divert the plaintiff’s business, assets and good-will to themselves.

4. Defendants should he enjoined from transacting business within the limits of Lackawanna County under the name “The Only Dollar Dry Cleaning Company” or any other name which will include the plaintiff’s trade name, “The Dollar Dry Cleaning Company,” as an integral part thereof.

5. Defendants should be enjoined from imitating the advertising of the plaintiff to the extent of using in defendants’ advertisements language con-tabling the plaintiff’s trade name, “The Dollar Dry Cleaning Company,” or using the word “Dollar” or the sign except to the extent necessary to indicate prices charged by the defendants, such injunction as to advertising to be limited to newspapers printed or advertising signs erected vdthin the limits of Lackawanna County.

6. Defendants should be enjoined from maintaining within Lackawanna County trucks with green or gold coloring or words or signs in imitation of those heretofore used by the plaintiff, particularly from the use of the word “Dollar” or the sign or any representation of a dollar upon said trucks.

In the opinion of the chancellor, the following decree nisi should be entered as the final decree:

Decree nisi.

And now, June 8, 1928, upon consideration of the foregoing case, it is ordered, adjudged and decreed as follows:

1. That the defendants are enjoined from transacting business within the limits of Lackawanna County under the name “The Only Dollar Dry Cleaning Company” or any other name which will include the plaintiff’s trade name, “The Dollar Dry Cleaning Company,” or the word “Dollar” as an integral part thereof.

2. That the defendants are enjoined from imitating the advertising of the plaintiff to the extent of using language therein containing the plaintiff’s trade name, “The Dollar Dry Cleaning Company,” or using the word “Dollar” or the sign except to the extent necessary to indicate prices charged by the defendants, this injunction as to advertising being limited to advertising matter circulated or displayed within the limits of Lackawanna County.

3. That the defendants are enjoined from maintaining within. Lackawanna County delivery trucks with green or gold coloring or words or signs in imitation of those heretofore used by the plaintiff, particularly from the use of the word “Dollar” or the sign “ip” or any representation of a dollar upon said trucks.

4. That the defendants, who have contested the suit, pay the costs of this proceeding.

Order.

Now, to wit, June 8, 1928, it is ordered that upon the filing of this adjudication the prothonotary shall enter the decree nisi and give notice promptly to the parties, or their counsel of record, of the entry of the decree. Within ten days after notice by the prothonotary, exceptions may be filed by either party, sec. reg. If no exceptions are so filed, the decree nisi shall be entered as the final decree by the prothonotary as of course.

Opinion on exceptions.

Maxey, J., Nov. 2, 1928. — The defendants have filed twenty-four exceptions to the findings of fact, conclusions of law, decree nisi and order of court directing its entry.

This case was fully discussed by us in the opinion accompanying our decree nisi. We see nothing in defendants’ exceptions requiring a further discussion on our part.

Order.

Therefore, now, to wit, Nov. 2, 1928, the exceptions to the findings of fact, conclusions of law and decree nisi having been heard by the court in banc, said exceptions are dismissed in their entirety.

From William A. Wilcox, Scranton, Pa.


source: Caselaw Access Project

author: Groff, J.,

license: Public Domain

text:
    Martin v. Droney.

      George T. Hambright and John E. Malone, for rule.

      Charles W. Eaby, contra.
    July 7, 1928.
   Groff, J.,

This is an action in assumpsit against the surety on a lease to recover a balance alleged to be due by reason of the principal (lessee) holding over after the expiration of his lease.

On March 4, 1925, the plaintiff entered into a lease with one Patrick Droney, leasing him, “for the term of one year from the first day of April, A. D. 1925, and ending on the first day of April, 1926, ... all that certain northern half of dwelling known as 132 S. Queen Street, Lancaster, Pa. First and second floors, with use of hall in common with other tenants.”

The lease contains the following: “Either party may determine this lease, if an annual one or a term of years, at the expiration of the term herein created, by giving to the other three months’ written notice of intention so to do, . . . but in default of such notice, this lease, with all the conditions and covenants thereof, shall continue for the additional term as herein provided, and so on from term to term. . . .”

The defendant, Patrick Droney, on March 4, 1925, signed the following, which was printed on the back of the lease:

“For value received, the undersigned hereby becomes surety to the Landlord or his assigns, for the true and faithful performance of the above contract, and every renewal thereof, on the part of the said tenant, without recourse to the said tenant being first required, and I do hereby waive the benefit of any and all exemption laws, on all executions issued to recover any judgment obtained against me in pursuance of the above contract.”

The defendant, in his affidavit of defense, says as follows:

“6. The defendant admits that he executed the surety contract attached to plaintiff’s ‘Exhibit A,’ but avers that the entire rent for the term covered by said lease of March 4, 1925, was paid to the plaintiff, and further avers that said lease of March 4, 1925, was never renewed. Defendant avers that he did not become surety for the payment of the rent reserved by the new lease entered into between the plaintiff and Patrick Droney during the latter part of March, 1926, for the term beginning April 1, 1926, and ending April 1, 1927.”

It was also alleged as a. matter of defense that Patrick Droney had entered into a new lease for the year 1926-1927. This defense was insisted upon on the trial of the case.

The court, in instructing the jury, said: “If there was a new lease entered into in March, 1926, and Tim Droney did not become surety on that lease, and Pat Droney continued to occupy the premises under that lease and not under this lease that Timothy Droney had signed, then, of course, your verdict here ought to be for the defendant.”

The jury found a verdict in favor of the plaintiff for the sum of $30.

The defendant submitted a point for binding instructions and now moves for judgment n. o. v.

Defendant’s contention is that the words “but in default of such notice (meaning the three months’ notice), this lease, with all the conditions and covenants thereof, shall continue for the additional term as herein provided,” without specifying the length of the additional term, were not sufficient to work such renewal as would bind the surety. The position taken by defendant seemed at first to have a great deal of force, but a careful consideration of the whole lease reduces the forcefulness of defendant’s position.

In considering this case, we are not unmindful that a lease is always construed most strongly against the landlord. Justice Potter, in Kaufmann v. Liggett, 209 Pa. 87, says: “As a general rule, in construing provisions of a lease relating to renewals, where there is any uncertainty, the tenant is favored, and not the landlord, because the latter, having the power of stipulating in his own favor, has neglected to do so, and also upon the principle that every man’s grant is to be taken most strongly against himself.”

Judge Head, in Adams v. Dunn, 64 Pa. Superior Ct. 303, 307, says: “There is nothing in that case (Murtland v. English, 214 Pa. 325) to infringe upon the long-established doctrine that where a tenant, after the expiration of his term, holds over with the acquiescence of the landlord, the lease will be considered renewed for another term.”

In Graham v. Dempsey, 169 Pa. 460, we quote the syllabus: “A tenant cannot escape liability for the rent of another term by giving notice that he is going out at the end of his year, and then not going.”

And Justice Mitchell adds: “That actions speak louder than words is sound law as well as proverbial wisdom.”

The defendant in his brief frankly admits that it has been repeatedly held' by both the Supreme and Superior Courts that a provision similar to the provision contained in our present lease will make the tenant and the surety liable for an additional term if the clause is properly worded, and cites Gardiner v. Bair, 10 Pa. Superior Ct. 74; Lane v. Nelson, 167 Pa. 602; McNamee v. Cresson, 3 W. N. C. 450; Reading Trust Co. v. Jackson, 22 Pa. Superior Ct. 69; Platt v. Fisher, 59 Pa. Superior Ct. 114; and then adds: “In all of these cases and in all of the reported cases the clause upon which recovery was allowed provided either that in the event the tenant held over, it should be deemed to renew the lease for an additional period of one year or some definite term.”

This is true as we find the cases. There is no question about the principal’s liability for rent for the additional term he occupied the premises. But we must find something in the lease itself that continues the surety’s liability for the additional term his principal occupied the premises.

This lease, unlike most leases, “doesn’t provide” a renewal of one year or a definite term, but says “shall continue for the additional term as ‘herein provided,’ and so on. . . .”

What do the words “herein provided” mean? How have they been interpreted? The word “herein,” as defined in Words and Phrases (1st series), page 3281, is as follows: “ ‘Herein,’ as used in legal phraseology, is a locative adverb and its meaning is to be determined by the context. It may refer to the section, the chapter or the entire enactment in which it is used; and this rule is applicable to the construction of a document as well as of the statute.”

In Ex parte Helton, 93 S. W. Repr. 913, we find that the phrase “as herein provided,” as used in a statute imposing a fine on the persons who shall hunt without being in possession of a license “as herein provided,” means that the hunter must have in his possession a hunting license issued in pursuance of the other provisions of the statute.

Reasoning from.these two definitions, we find that the words “as herein provided,” used in the lease in question, refer to the entire lease, which covers the period of one year, beginning April 1,1925, and ending April 1, 1926, and we find that there is a term prescribed in the lease, to wit, one year beginning and ending as therein designated, and the words of the lease “shall continue for the additional term as herein provided” would be for the additional term of one year, that term having been provided in the first part of the lease.

We, therefore, conclude that the motion for judgment n. o. v. should be overruled, and that judgment should be entered for the amount of the verdict.

Motion overruled and judgment directed to be entered for the amount of the verdict, with interest and costs.

From George Ross Eshleman, Lancaster, Pa.


author: MacDade, J.,

text:
    Commonwealth v. McCafferty.

      John E. McDonough, for motion.
    June 18, 1928.
   MacDade, J.,

And now, June 18, 1928, it appearing to the court that certiorari to this court in the above matter has been issued from the Superior Court, as of No. 252, October Sessions, 1928, and attention of the court having been called to the same at its session on this date, and the court having no record of any motion for a new trial and reasons assigned therefor in writing and filed, the court declines to fix bail or recognizance in the matter, but respectfully refers the defendant to said Superior Court for further action herewith, namely, to present petition to said court for supersedeas and have the said court fix bail thereunder.

It further appears by the record of this court that, on June 13, 1928, the defendant was found guilty of the charge of operating a motor-vehicle while under the influence of intoxicating liquors; that a» oral motion was made for a new trial immediately after the said verdict was received, which was dismissed by the trial court and leave granted the defendant to file a motion in writing for a new trial and reasons to be assigned therefor within four days, and which order has never been complied with.

Therefore, the defendant having been duly sentenced to pay a fine of $100, the costs of prosecution and to undergo imprisonment in the county jail for one and one-half month’s minimum sentence and three months’ maximum sentence, and no motion being before the court of any kind whatsoever, it is held that there is nothing before the court to be disposed of.

From William R. Toal, Media, Fa.


author: Thompson, J.,

text:
    Nimlet’s Estate.

      S. Lloyd Moore, James F. Hagen and William H. Peace, for exceptants.

      Thomas Kilby Smith and White & Wetherill, contra.
    March 15, 1929.
   Thompson, J.,

The exceptions before us are those filed to the action of the Auditing Judge in allowing the claim of James L. Whitaker for the return of the hand-money paid by him on a contract with the decedent, as follows:

“This Agreement made this tenth day of June, A. D. One Thousand Nine Hundred and Twenty-five (1925), between Mary A. Nimlet, party of the first part, and James L. Whitaker, party of the second part, Witnesseth:

“The said party of the first part agrees to sell and convey to the said party of the second part, who agrees to purchase all her 70/261 interest in All That Certain tract or piece of ground, consisting of approximately Ninety-six (96) acres, Situate at Adams Avenue and Tabor Road, known as the Whitaker Tract, and particularly mentioned and described in a certain deed from Robert Whitaker et ux. et al. to Robert Whitaker and James L. Whitaker, Trustees, dated February 1, 1923, and recorded February 20, 1923, in Deed Book J. M. H., No. 1548, page 36, etc., the dimensions of the tract to be accurately determined by an official survey to be produced by the party of the first part at 70/261 of her expense, on the terms and conditions as follows, to wit:

“The party of the second part agrees to pay for the said interest in the said property of ninety-six (96) acres at the rate of Nine Thousand Five Hundred Dollars ($9500) per acre, without commission, as follows: Six Thousand Seven Hundred and Five Dollars ($6705) thereof in cash upon the signing of this agreement, which deposit shall be forfeited to the said party of the first part as liquidating damages in case of default by the said party of the second part in the performance of the terms of this agreement, and the balance of the said purchase money as follows: Eighty per cent. (80%) thereof to be secured by a valid first mortgage, payable at any time within three (3) years, with interest thereon semi-annually at the rate of six per cent. (6%) per annum, and the balance of the said purchase money to be paid in cash at the time of settlement.

“The premises are to be conveyed free and clear of all encumbrances and easement which affect the marketability of the title.

“The beds of all streets plotted and appearing upon the said plan are included in the premises.

“The party of the second part agrees to take subject to all plotted streets, sewers or municipal plottings for park purposes.

“70/261 of any existing encumbrance or encumbrances on the said premises at time fixed for settlement to be paid out of the purchase money.

“Possession is to be given at the time of settlement, except for small tenement houses on the premises, and possession of such tenement houses to be given by assignment of interest in existing leases.

“70/261 of taxes, water rent, interest on encumbrance, if any, to be apportioned for this current term.

“Title is to be such as will be insured by any reputable Title Insurance Company of the City of Philadelphia at current rates.

“The said parties hereby bind themselves, their heirs, executors and administrators, for the faithful performance of the above agreement within four (4) months from the date of this agreement.

“The said time herein mentioned to be the essence of this agreement unless extended by mutual consent in writing endorsed hereon.

“The party of the first part agrees that the party of the second part shall not be in any way held liable, as Trustee, by her by reason of the sale of this interest in said property at a higher figure.

“In Witness Whereof, the said parties have hereunto set their hands and affixed their seals the day and year first above written.

Mary A. Nimlet (Seal)

“Sealed and Delivered James L. Whitaker (Seal)

in the presence of

John B. Sidebotham

Allen M. Stearne

“Received the day of the date of the within agreement the sum of Six Thousand Seven Hundred and Five Dollars ($6705) on account of the purchase money named therein.

“John B. Sidebotham,

“Atty. in fact for Mary A. Nimlet.

“Received of James L. Whitaker Two hundred and ninety-five dollars additional deposit. John B. Sidebotham.”

There is no substantial dispute as to facts which may be stated by quoting from the opinion of Judge Ferguson, filed in the account of Robert and James L. Whitaker, Trustees, and The Second National Bank, Succeeding Trustee, as stated by James L. Whitaker, Common Pleas No. 3, as of September Term, 1925, No. 8603:

“In 1923, Robert Whitaker and James L. Whitaker became vested with a large tract of ground, composed of five smaller tracts, located in the 35th Ward of the City of Philadelphia, the whole being approximately ninety-seven acres. Robert Whitaker and James L. Whitaker held title as trustees under a certain deed of trust; the trust, in brief, being one to hold the property for a period of five years and to sell the same and to distribute the proceeds among certain members of the Whitaker family in the following proportions: To Robert Whitaker, 70/261; to James L. Whitaker, 23/261; to Mary A. Nimlet, 70/261; to Catherine Whitaker, 70/261; to John Whitaker, 14/261; to Annie L. Whitaker, 7/261; and to John Cecil Whitaker, 7/261. It is unnecessary to recite the other details of the trust.

“Robert Whitaker, one of the trustees, died Feb. 18, 1925. Prior to his death there had been efforts made to sell the ground, with no result excepting the sale of a small tract of two-thirds of an acre to a man named Hartman. On April 27, 1925, a meeting of the parties interested was had to select a new trustee in his place, and the Second National Bank of Philadelphia was selected as such trustee, and a certificate was duly prepared and signed and acknowledged, but not recorded, as required by the deed of trust. In March, 1925, James L. Whitaker and a man named Mallon, of the real estate firm of Kelly & Mallon, went to the office of the Second National Bank, and Mallon made an offer to purchase the entire property at $8000 an acre. Whitaker was willing to sell the tract at that price, but the bank was not. Within a week Whitaker and Mallon went to the office of the bank, and Mallon submitted an offer of $8500 an acre. Whitaker was willing to sell at that price, but the bank was not. When the bank refused to agree to sell to Kelly & Mallon’s client at $8500 per acre, Whitaker notified the bank that he would hold it responsible for any loss that might be sustained by reason of that refusal. It was understood that if a sale was made at $8000 or $8500 an acre that Kelly & Mallon were to receive a broker’s commission of 5 per cent. Shortly after this the bank obtained a purchaser at $9500 an acre, and executed a contract subject to the approval of its co-trustee. Whitaker refused to execute the contract, and, as a consequence, a meeting of the family was had for the purpose of determining whether or not the sale should be approved.

“At that meeting Mrs. Robert Whitaker, who stood in the place of her deceased husband, Robert Whitaker, and Mrs. Mary A. Nimlet, each of whom was entitled to a 70/261 interest in the proceeds of sale, were represented by an attorney-in-fact. They were satisfied with the sale. James L. Whitaker was not, and declared that he knew it was possible to obtain $10,000 an acre for the property. It was understood that the sale at $9500 an acre would be subject to a broker’s commission of 5 per cent. James L. Whitaker, in order to prevent a decision requiring the sale at $9500 an acre, proposed in writing to Mrs. Whitaker and Mrs. Nimlet that he would buy their interest at a price which would net $9500 an acre for the whole, free from a broker’s commission, provided that it was understood that he bought as an individual and should not be charged as a trustee with any profit he might make on their shares. This offer was accepted in writing, and two days later two formal agreements were made, in which James L. Whitaker agreed to purchase the interests referred to, and $7000 was paid on account of the purchase money to each of the other parties to the contracts. This money was paid out of Whitaker’s own funds or funds which he borrowed from the man who subsequently bought the property. These contracts were never consummated.

“Shortly after, Whitaker procured, through the intervention of the same brokers who had previously made the offers of $8000 and $8500 per acre, a contract for the purchase of the land at $10,000 an acre. This contract was submitted to the Second National Bank and it was executed, and in October, 1925, the sale was consummated and the proceeds paid to the trustees. These proceeds are the subject of the account now before the court.

“There appears in the account an item of $19,231.86, being commissions to the accountant; an item of $15,000 to Thomas Kilby Smith, counsel for James L. Whitaker, one of the trustees; and there are two other items of $7000 each which are claimed as credits. These items are the two sums paid to Mrs. Whitaker and Mrs. Nimlet on account of the purchase price of their shares, and it is asked that the items be allowed as credits and charged against their distributive shares and added to the share of James L. Whitaker.

“The four items have not actually been paid out and, therefore, they must be regarded as credits -which are asked for. There has been an absurd attitude of antagonism shown by James L. Whitaker to his co-trustee, the Second National Bank. It was to be expected that there might be differences of opinion between two trustees as to the value of the land. Trustees frequently have these differences and they seem to have been no greater in this case than often occurs. The trustees had but one duty to perform, and that was to sell the property, and it is to be presumed that each was trying to do the best he could for the estate. James L. Whitaker was willing to sell at $8000 or $8500 an acre, and the bank was not. In view of the sequel, the bank rendered a very valuable service to the estate in standing out for a higher price. The bank obtained an offer of $9500 an acre, with which Whitaker was dissatisfied, and they both finally agreed upon a sale at $10,000 an acre. In spite of this service rendered by the bank, counsel for James L. Whitaker, at the opening of the audit, seriously contended that, by reason of the misconduct of the bank, the bank was entitled to no commission. Evidence of such misconduct is not to be found anywhere in the voluminous notes of testimony.

“Notwithstanding the fact that the sale was consummated by both trustees and the proceeds of sale were deposited to the joint account of the trustees, an account was prepared by counsel for James L. Whitaker and filed in court without it being submitted to the bank for approval and signature. The bank is, therefore, not responsible in any way for the form of the account. In addition, a threat was made by James L. Whitaker, after he made the contract to purchase the two interests of Mrs. Whitaker and Mrs. Nimlet, that, since he was then the owner in prospect of more than one-half of the estate, he would have the bank removed as trustee. Apparently, he suppressed and refused to produce to the bank the certificate of the appointment of the bank as trustee after it came back from California, where it had gone for signature. This circumstance delayed for a day or two the settlement of the sale, the bank being unwilling to sign the deed until the certificate was produced. These facts are a sufficient recital of the incidents surrounding the sale of the property to form a basis for a discussion of the several matters which have to be passed upon by the Auditing Judge.

“1. The claims against Mary E. Whitaker and Mary A. Nimlet of $7000 each.

“As above stated, these items are claimed as credits with a view of having them charged against the distributive shares of the two women. Agreements in writing having been made for the sale of those shares to James L. Whitaker, and those agreements never having been consummated, the two women necessarily appear before the court as claimants of their shares of thé proceeds. Why the sales were not consummated cannot be determined by this court; neither can the rights of the parties with respect to the $7000 paid to each of the women be adjudicated. The contracts were not different in substance from contracts to purchase real estate on which a deposit had been paid. They were made between individuals. James L. Whitaker executed the contracts as an individual, and in each stipulated that the parties with whom he contracted should not in any way hold him as a trustee to be accountable to them if a subsequent sale realized a higher price. If the contracts were not consummated as a result of Whitaker’s default, it is probable he has no right to ask the return from each of these women of the $7000 paid. If the contracts failed because of the default of the women, he has an action against them to recover the deposit money. The rights of the parties cannot be determined here. There is no issue raised under which the questions involved could be settled. It is a private matter between individuals, and James L. Whitaker cannot in a trustee’s accounting ask the court to adjudicate his personal controversies.

“As a consequence of the failure to consummate these contracts, an enormous expense is imposed upon the two women with whom James L. Whitaker contracted. Owning, as they do, more than one-half of the estate, they thus become obligated to pay more than one-half of the broker’s commission of §49,079.65; commissions to accountants of $19,231.86, and such counsel fees as are allowed. Had the sales to James L. Whitaker been consummated, they would have borne none of this expense. The result to them, therefore, is a very substantial loss, which cannot be covered or recouped by the $14,000 paid them. It may be that the prospect of these charges against himself as their successor may have induced James L. Whitaker to refuse to carry out the contract, but, as above stated, these questions cannot be determined in this accounting. It was attempted to be shown that this expenditure was one made for the protection of the estate. The whole transaction shows on its face that this was not the case.”

The Auditing Judge’s views [I. e., Judge Wilhelm’s views] can best be shown by an extract from his adjudication:

“Within ten days after the execution of the agreement, James L. Whitaker, by his counsel, T. Kilby Smith, gave notice to Allen M. Stearne, attorney for Mrs. Nimlet, of his fear of the impossibility of carrying the sale as specified in the agreement into effect, and calling attention to the fact that the agreement of sale provides that Mr. Whitaker shall get clear title, and refers to a conversation in which this matter was enlarged upon; that is, ‘the impossibility or at least the difficulty of carrying it into effect.’

“Therefore, the thought of James L. Whitaker that Mrs. Nimlet would not be able to carry out her part of the agreement was conveyed to her at an early date, with the suggestion that the agreement be canceled for the purpose of promoting peace and harmony.

“At the time fixed for the settlement, the parties met, and James L. Whitaker was prepared to carry out his part of the contract, in that he had with him the amount of cash to be paid and a mortgage to be delivered to secure the payment of the balance due upon the contract. Mrs. Nimlet had her deed of conveyance prepared and ready for execution, and the deed of John B. Hartman, which would remove certain restrictions incident to the land, contained in a deed executed and delivered by the trustees to John B. Hartman. James L. Whitaker, through his counsel, called attention to the fact that Mrs. Nimlet could not convey title to the land because she had no title; that the land would not be free from encumbrance, in that there were two mortgages against the land, aggregating $143,000, which were to remain a lien on the land, excepting the proportionate part which Mrs. Nimlet was obligated to pay, and that the title insurance proposed to be issued, as shown by the settlement certificate issued by the Land Title and Trust Company, was not to cover the title to the land, but her title to personal property; that is, Mrs. Nimlet’s interest in the trust.. Because Mrs. Nimlet was unable to convey the land, and unable to convey it free of encumbrances, and unable to have insured the grantee’s title in the land, James L. Whitaker refused to pay the balance of the cash and to deliver his mortgage.

“It appears that neither of these parties, strictly speaking, was able to carry into effect this agreement. That is, Mrs. Nimlet was jmable to perform her part of it, as above recited, and James L. Whitaker was unable to give to Mrs. Nimlet a first mortgage upon the land, as he agreed to do, because it is admitted that there would remain upon the land prior mortgages after Mrs. Nimlet had paid her proportionate share due from her upon the same.

“Therefore, we have these contracting parties each agreeing to do something impossible under the circumstances. It cannot be said that either of the contracting parties was deceived or misled by the other. Both of them knew that the title to the land was not in Mrs. Nimlet, but was in trustees under an agreement by both parties as well as others in interest. Both of them knew of the existing mortgages upon the property and that these mortgages would not be paid at the time fixed for the settlement.

“It is intimated that James L. Whitaker discovered, soon after the execution of the agreement, that it was an improvident or losing one for him, and that he took steps to avoid his obligation for that reason. The conduct of James L. Whitaker in this respect might be of large import if Mrs. Nimlet had been able to perform her part of the contract, and Mrs. Nimlet’s ability to perform is the important question here, because she is here claiming a forfeiture because of a breach on the part of James L. Whitaker.

“It is alleged by the Estate of Mary A. Nimlet that the agreement did not contemplate the conveyance of real estate, but covered only the equity that Mrs. Nimlet had in real estate; therefore, the mortgages upon the land were not an encumbrance contemplated by the agreement. It is established beyond dispute that the title to the land was in trustees and this trust estate had been in existence since Feb. 1, 1923. When there is no provision to the contrary, a trust estate is always subject to the costs, fees and charges incident to its administration, which are a lien upon the property. Webster’s law definition of an encumbrance is 'A burden or charge upon property. A claim or lien upon an estate which may diminish its value. Any interest or right in land existing to the diminution of the value of the fee, but not preventing the passing of the fee by conveyance.’ This definition has been adopted by the courts of a number of states, including Pennsylvania. It may confidently be said that Mrs. Nimlet’s interest in the equity which she had in the land was encumbered by the costs incident to the administration of the trust estate. Her attention was called to this encumbrance, and at the time fixed for settlement she was not prepared to discharge the encumbrance or pay her proportion. The agreement provided that she was to convey, whether it was real estate or personal property, free and clear of encumbrance; something which she was not prepared to do in either case; therefore, she was not in position to declare a forfeiture of the down-money. Courts do not favor a forfeiture, and will only enforce it in a clear case and never in a doubtful one: Stanton v. Pittsburgh, 257 Pa. 361.

“Both parties to this contract knew all the facts and circumstances concerning the land, the title thereto, the encumbrances thereon and the interest of each therein. Neither deceived or attempted to deceive the other. Notwithstanding this, they entered into a contract which both of them knew, or should have known, was a legal impossibility; that is, an impossibility in law apparent when the agreement was made. Where parties make an agreement and they are ignorant at the time that performance of the contract is impossible, there is no contract, if it appears from the construction of the agreement that it was intended to be conditional upon a supposed possibility of performance. There is a mistake here which renders the agreement void: 9 Cyc., 627.

“It is concluded, therefore, that there was no breach of this contract by James L. Whitaker; that Mrs. Nimlet was unable to perform her part of the contract; therefore, in no position to declare a breach and declare a forfeiture of the down-money. It is undisputed that the down-money was paid by James L. Whitaker to Mrs. Nimlet and has never been repaid; therefore, there is due to James L. Whitaker from the Estate of Mary A. Nimlet the down-money which he paid, to wit, the sum of $7000.”

We cannot agree with the above conclusion of the Auditing Judge that Mrs. Nimlet was unable to perform her part of the above contract. In his adjudication he says that, under the contract, Mrs. Nimlet was required to satisfy the $140,000 mortgage on the tract. She was not so required, for the parties themselves had stipulated that Mrs. Nimlet’s share of this mortgage should be deducted from the purchase price, and, in so far as Mrs. Nimlet’s responsibility for her share of the administration of the trust is concerned, the deed of trust requires specifically that “necessary expenses attendant upon the trust shall be borne by the parties beneficially interested in the proportions hereinbefore stated, and it shall be the duty of the said trustees or their successors in the trust to levy on the parties beneficially interested in proportion to their interests a sufficient sum to meet such taxes and charges.”

At the time of the sale, and at the time fixed for settlement, there was no evidence that Mrs. Nimlet had not paid all her share of the expenses up to that time, and it certainly could not be considered that she was required to indemnify Whitaker for all future expenses of the trust after the sale. We call attention to the fact that the person who held this $140,000 mortgage was the Land Title and Trust Company, and they themselves offered their title policy free of this mortgage. Furthermore, at the time fixed for settlement in October this property had been sold for $10,000 an acre and settlement was to take place in a day or so, and this $140,000 mortgage would then have been paid out of the settlement. Aside from this, if there was any question as to Mrs. Nimlet’s liability for the mortgage or expenses of the trust, as Whitaker was to give back a purchase-money mortgage to Mrs. Nimlet for nearly $200,000, a proper construction of the contract would have required him to pay whatever he had to pay out of the deferred purchase price.

It appears to us that when Whitaker bought this property he never intended to make settlement with Mrs. Nimlet. The only reason he bought it was because his co-trustee would not agree to sell at the moment, and he wanted to take advantage of the trust agreement that if there was a difference of opinion among the trustees, a majority interest would control. Whitaker was interested in the buying end of this contract, as is shown by the fact that when he bought from Mrs. Nimlet, it was expressly stipulated that she would not hold him accountable for any profit he would make out of the sale. When he found, after he had bought from Mrs. Nimlet, that Ms co-trustees would go along and sell at a higher price, there was no necessity for him buying Mrs. Nimlet’s share, and, therefore, he wanted his money back. We cannot possibly see any difficulty in carrying out the agreement, not only as it is written, but as all the facts concerning the same justify one in concluding why Whitaker bought and why he did not settle. This is the ordinary case of one co-owner buying out another co-owner.

In Judge Ferguson’s analysis of the facts on the settlement of the trustees’ ae'count he says that Mrs. Nimlet is a very substantial sufferer by reason of Whitaker not having completed his purchase from her. She is obliged to pay her share of commissions and legal expenses, none of which was incurred at the time she sold to Whitaker, and we know of no case where a defaulting purchaser who has occasioned his vendor substantial damage can ever get back his deposit money, where the vendor was ready and willing and anxious to complete: Dluge v. Whiteson, 292 Pa. 334. And for a case where the court has reconciled apparently inconsistent clauses in a contract, see Sipp v. Philadelphia Life Ins. Co., 10 D. & C. 250. In Harrity v. Continental-Equitable Title and Trust Co., 280 Pa. 237, the syllabus is as follows:

“A contract must be so construed, if possible, as to give effect to all of its provisions.

“An interpretation will not be given to one part of a contract which will annul another part of it ,or produce absurd results.

“A clear provision in a written contract cannot be overcome by one that is doubtful.

“Where there is a repugnancy, a general provision in a contract must give way to a special one covering the same ground.

“Where several joint-owners of real estate execute a deed of trust, by which the trustee is given discretionary power to rent and sell the property, and the owners reserve no rights therein except to share in the proceeds, such power of sale given to the trustee is not defeated by a later clause in the agreement which provides that any dispute among the owners as to ‘the management of the business’ shall be settled by a majority in interest.”

The agreement of Mrs. Nimlet to convey clear of encumbrances would have been the law without its being inserted in the contract; but where they specifically provide that Mrs. Nimlet’s share of existing liens and encumbrances should be deducted from the purchase money, no one can successfully contend that a fair construction of the agreement of sale would require Mrs. Nimlet to pay off in full existing mortgages, particularly where it appears she did not owe all the money represented by the mortgage, but that her co-owners, including Whitaker, also owed their proportionate part of the $140,000 mortgage; the construction of the Auditing Judge would require her to pay ■Whitaker’s debt, as well as the debt of her co-owners, which, in our judgment, leads to an absurd conclusion. The claim of Mr. Whitaker is disallowed.

The exceptions are sustained and the adjudication as thus modified is confirmed.

Van Dusen and Stearne, JJ., did not sit.

Wilhelm, J., who sat on the argument of the exceptions, desires to note his dissent to the above opinion.


author: Koch, Dep. Att’y-Gen.,

text:
    Foreign Business Trucks.
    Feb. 26, 1929.
   Koch, Dep. Att’y-Gen.,

Our attention has been called by your department to an instance that, in our judgment, requires this department to interpret the intent and meaning of section 409 of the Vehicle Code, approved May 11, 1927, P. L. 886. There seems to be some misunderstanding among the officers charged with the enforcement of the provisions of this Code.

Two residents of Binghamton, New York, were recently haled by members of the State Highway Patrol before a justice of the peace and were charged with a violation of section 409 (b) and (ó). They were summarily convicted and paid fines. No appeal was taken to the Court of Quarter Sessions in either case.

It appears that these two men are retail coal dealers in the City of Binghamton, New York, and they own and operate in their business certain motor-trucks that are registered and licensed in the State of New York. They have been purchasing anthracite coal at the mines in Lackawanna County and hauling the same back to Binghamton for distribution to their customers.

Section 409 of the Vehicle Code provides as follows:

“(a) Non-residents of this Commonwealth, except as otherwise provided in this act, will be exempt from the provisions of this act, as to the registration of motor-vehicles, trailers and semi-trailers, for the same time and to the same extent as like exemptions are granted residents of this Commonwealth under laws of the foreign country or state of their residence: Provided, that they shall have complied with the provisions of the law of the foreign country or state of their residence relative to the registration and equipment of their motor-vehicles and the licensing of motor-vehicle operators, and shall conspicuously display the registration plates, as required thereby, and have in their possession the registration certificate issued for such motor-vehicle.

“(b) A non-resident owner of a foreign vehicle, operated within this Commonwealth for the transportation of persons or property for compensation, either regularly according to schedule or for a consecutive period exceeding thirty (30) days, shall register such vehicle and pay the same fees therefor as are required for like vehicles owned by residents of this Commonwealth.

“(c) Every non-resident, including any foreign corporation carrying on business within this Commonwealth and owning and regularly operating in such business any motor-vehicle, trailer or semi-trailer exclusively within this Commonwealth, shall be required to register each such vehicle and pay the same fees therefor as is required with reference to like vehicles owned by residents of this Commonwealth.”

Under the reciprocity provisions of section 409 (a), as the same are affected by the New York motor-vehicle laws, residents of New York would ordinarily be entitled to operate motor-vehicles registered in said state within this Commonwealth, unless such operation should come into conflict with sub-section (b) or (c). It is clear that in the case at issue there was no violation of subsection (c), be'cause the business of the non-residents was not carried on within the Commonwealth of Pennsylvania, nor were the trucks operated exclusively within this Commonwealth.

In the recent ease of Com. v. Pickens [11 D. & C. 684], the Court of Quarter Sessions of Lawrence County had occasion to consider a state of facts closely paralleling those here presented. Pickens was the employee of a bakery at Youngstown, Ohio, and operated a motor-vehicle belonging to his employer, registered in Ohio, and used in the delivery of the product of said bakery. Prom time to time, he delivered said product within the limits of Lawrence County, Pennsylvania, and he was arrested and charged with the violation of section 409 (b) of the Vehicle Code.

In reversing the conviction, Judge Chambers, speaking for the Court of Quarter Sessions of Lawrence County, makes the following comment with regard to the intent of section 409 (b): “It would appear that this section of the act was intended to cover such vehicles as are engaged in the transportation of persons or property for hire or pay, in other words, whose business would be in the nature of that of a common carrier. In the ease before the court, it is clear that this vehicle was not used for that purpose, but simply as a means of conveyance for the product of the owner to his customer, and that it was not in the contemplation of the legislature, under this section, to require a license fee from such vehicle.”

An exception was noted in favor of the Commonwealth, but this department, feeling that Judge Chambers’s construction of the section in question was entirely correct, decided to take no appeal from his decision. It is, therefore, clear that residents of states which extend like privileges to residents of Pennsylvania are entitled to operate within this Commonwealth motor-vehicles properly registered in the home states without transgressing the above-mentioned provisions of the Vehicle Code. The exceptions to this privilege exist when the foreign vehicle is operated within this Commonwealth for the transportation of persons or property for compensation, either regularly according to schedule or for a consecutive period exceeding thirty days. And the term “transportation of property for compensation” does not refer to the transportation of the products of a manufacturer or the wares of a retailer using his own motor-vehicle for transportation and delivery of the same. Subsection (c) forbids the operation without Pennsylvania registration of motor-vehicles belonging to non-residents engaged in carrying on business within the Commonwealth where such vehicles are operated exclusively within the Commonwealth in connection with said business.

The members of the Highway Patrol should be fully advised of the foregoing so that unwarranted prosecutions may no longer be instituted. It is easy to see that retaliatory measures by adjacent states might well follow the failure of the officers of this Commonwealth to closely adhere to the reciprocity provisions of our Vehicle Code.

From C. P. Addams, Harrisburg, Pa.


author: Appel, P. J.,

text:
    Schlegel’s Estate.

      Edwin M. Gilbert, for petition.

      Charles W. Eaby, K. L. Shirk, Harris C. Arnold and John A. Coyle, contra.
    June 14, 1928.
   Appel, P. J.,

The record in this case was made during the administration of the late Judge Smith. It is as follows:

Theobald Schlegel died Jan. 17, 1922, testate, and letters testamentary were granted to J. Raymond Anment, a son-in-law — the executor named in the will — Jan. 23,1922. The tax appraisement was filed April 30,1922. March 12, 1923, the executor was cited to file an inventory and account. May 19, 1923, the executor filed his account of the personalty, in which he charged himself with $3000, a debt due from himself, and $500, a debt due from one of the sons. Exceptions were filed June 16, 1923. An inventory was filed July 2, 1923, in which the above two items of indebtedness were scheduled. July 9, 1923, the widow filed her election to take under the will. Aug. 3, 1923, the widow’s appraisement was filed. Nov. 8, 1923, the account was audited, and on Nov. 15, 1923, an adjudication was filed, in which all exceptions to the account were dismissed and the principal in the hands of the executor, to wit, $4803.56, was directed to be paid to the widow upon her giving bond for the use of the persons entitled in remainder. It does not appear that this bond was,ever given. From this decree of adjudication no appeal was taken.

June 17, 1926, a petition to discharge the executor was presented and a rule to show cause, etc., was granted. On the same day, the executor was cited to file an account and a rule granted. June 19, 1926, answers were filed by the executor. July 24, 1926, replications were filed. Nov. 26, 1926, answers to the above rules were again filed, and Jan. 13, 1927, replications were again filed.

Jan. 20, 1927, a petition for an injunction to restrain the executor from selling the real estate was presented, to which an answer was filed Feb. 7, 1927, and replication Feb. 8, 1927.

Jan. 27, 1927, petition for review was filed by the executor, asking to be relieved of the above-mentioned two items of charge — his own debt of $3000 and the $500 debt of the son. A rule to show cause was granted by the court. April 28, 1927, the executor gave a bond to secure the proper application of the proceeds of the sale of the real estate, which was sold by the executor. June 16, 1927, another petition for review was filed by the executor, differing slightly from the former petition for review, raising solely the question of relief from the $3000 and the $500 items of charge. A rule to show cause, etc., was granted. June 21, 1927, an answer was filed by John Schlegel, one of the residuary legatees. Oct. 6, 1927, depositions were taken on the part of the executor and related to the above two items of charge. Oct. 13, 1927, the prayer for review was refused by the court. No appeal was taken from this decree, but on Oct. 28, 1927, the executor again presented a petition asking for a rehearing and a review — again asking for relief from the above-mentioned two items of charge. A rule to show cause, etc., was granted and is now pending.

April 21, 1928, the second account was filed, including the proceeds of the sale of the real estate. M'ay 14 and May 18, 1928, exceptions to the account were filed — to be passed on when the account comes on for audit.

The petition for review filed Jan. 27, 1927, refused by Judge Smith Oct. 13, 1927, and the petition for a rehearing and review filed Oct. 28, 1927, and now pending, both relate to the same matters and raise the same questions. These are the items of $3000 and $500 debts due the estate by the executor and Martin Schlegel. They were both scheduled by the executor in the inventory, charged in the account and are included in the balance of $4803.56 found to be in the executor’s hands directed to be paid to the widow upon her giving a bond. This adjudication is sealed by a definitive decree of the court, from which no appeal has been taken. Under the present rule to show cause, etc., the executor is again asking the court to be relieved from the two charges which he has accounted for as paid. The answer might well be made that, in the face of a definitive decree not appealed from, all matters included therein (and these two items are so included) must be held to be determined. A petition for review may not take the place of an appeal: Sherwood’s Estate, 206 Pa. 465. It may be conceded that under section 48 of the Fiduciaries Act of June 7, 1917, P. L. 447, the Orphans’ Court has power to grant review under certain circumstances if there be error in the adjudication apparent on the record. It may also be granted that, irrespective of any legislation, it has an inherent power “to correct its own records in the interest of justice, even to protect parties from the effect of their own mistakes and blunders:” Sloan’s Estate, 254 Pa. 346; Troutman’s Estate, 270 Pa. 310; Willing’s Estate, 288 Pa. 337. It is to this inherent power of the court to grant relief, when justice and equity require, and no one suffers thereby, that petitioner makes his appeal in this case. He is appealing to the discretion of a chancellor.

It is fundamental that he who asks equity must come into court with clean hands, and because this fiduciary does not have clean hands his petition must be denied. The record of his administration of the trust reposed in him on its face shows his unfaithfulness. The decedent died in 1922. Among the assets of the estate were his own indebtedness of $3000 and that of a son of $500. They were charged by him in his account and included in the balance of $4803.56 found in his hands by the decree of adjudication Nov. 15, 1923. He failed to obey the injunction of the court not to pay this over to the widow without taking a bond to protect the residuary legatees. He failed to pay or collect his own indebtedness and that of the son. He appears to have made payments to the widow out of the principal and now finds himself unable to hand over to the residuary legatees the money due them on final distribution. For nearly five years he concealed the fact that he had not paid his debt to the estate and had not collected the $500 due from the son. During all that time he never intimated they could not be collected. According to the well-understood doctrine of laches alone, he would now be entitled to no relief. During this time he admitted he collected a debt of $1500 due by him that was amply secured by mortgage on property owned by him, and failed or neglected to pay, collect or safeguard the unsecured debt of $3000, from which he now seeks to be relieved. During all this time the residuary legatees were led to believe it was or would be paid. They had a right to believe the corpus of the personal fund, to wit, $4803.56, was amply protected by the bond he was directed to take from the widow. Not until Jan. 27, 1927, when the first petition for review was presented, were they notified that these debts were not paid and could not' be collected. If he thought they were uncollectible, it was his duty to resign promptly his executorship and permit an administrator to be appointed, who could take proper legal measures to collect them. He resisted an application for his discharge and delayed proceedings at every stage. He appears to have wasted and mismanaged the estate, utilizing it for his own benefit, and now, when he has not the personal fund in hand for the residuary legatees, alleges injustice has been done him and asks to be relieved of his own blunders and mismanagement. He created the situation in which he now unfortunately finds himself. He does not come with clean hands and is not entitled to the equitable relief of a chancellor to save him.

The rule to show cause, etc., is discharged and the petitioner is directed to pay the costs.

Prom George Ross Eshleman, Lancaster, Pa.