Summary
In Bailey v. Stafford, Inc. (178 App. Div. 811, 815), PAGE, J., writing for the court, said: "When a contract is not limited as to the time of its duration, it is terminable at the will of either party, upon giving a reasonable notice to the other."
Summary of this case from Capital City Surety Co. v. LazarusOpinion
July 13, 1917.
Charles E. Kelley, for the appellant.
James A. Davis, for the respondent.
The action is brought to enforce by injunction a negative covenant in a written agreement. The plaintiff has for some years manufactured and sold a chemical ink eradicator, and the defendant has for many years been engaged in the manufacture and sale of writing inks. The complaint alleges the making of an agreement between the parties on January 25, 1901, whereby the plaintiff agreed to manufacture and put up for sale his ink eradicator under the name of "Stafford's Ink Eradicator" and to allow the defendant the exclusive right to sell the same, the plaintiff agreeing, during the continuance of the agreement, not to appoint any other agent or to supply any other person or persons with the said product, and the defendant agrees, for the same period, not to handle any ink eradicator of any other make or description. After stating other agreements not material to this case the contract provides that "this agreement to be terminated by either party by giving the other six months' notice to that effect, in writing."
On March 28, 1904, the parties entered into another contract which provided that the plaintiff agrees to manufacture a fluid ink eradicator, the bottles containing it to be inclosed in cartons or wrappers similar to those theretofore used by the plaintiff in offering for sale the ink eradicator manufactured by him, describing the same, and to have printed thereon S.S. Stafford's Ink Eradicator. The defendant agrees to purchase the ink eradicator so manufactured and put up and to pay therefor as therein required. The plaintiff "covenants and agrees that he will not at any time during the continuance of this agreement, or after the termination of the same, sell or offer for sale any fluid ink eradicator under the name of S.S. Stafford's Ink Eradicator." The 4th subdivision of the contract which it is sought to enforce by this action reads as follows:
"And the party of the second part [the defendant] covenants and agrees that from and after the execution of this agreement it will not at any time, either alone or jointly with, or as agent for any person or persons, firm or corporation, manufacture or cause to be manufactured, and sell or offer for sale any fluid ink eradicator or any ink eradicator in imitation of the ink eradicator manufactured by the party of the first part, or put up in similar cartons, boxes, forms or wrappers and labelled with similar labels, so long as the party of the first part furnishes this eradicator at the above price of thirteen dollars per gross."
On January 16, 1915, the defendant notified the plaintiff that after six months from said date the agreement between them would terminate and that defendant would cease purchasing ink eradicating fluid from the plaintiff. The complaint then alleges that on or about the 1st day of October, 1915, the defendant "commenced to manufacture and sell under the names `Stafford's Ink Eradicator' and `Stafford's Ink Annihilator for Removing Ink' an ink eradicator which was not manufactured by nor bought from the plaintiff, and defendant has ever since said date continued to manufacture and sell a fluid ink eradicator upon the packages and cartons of which appear the labels `Stafford's Ink Eradicator' and `Stafford's Annihilator for Removing Ink;' this fluid ink eradicator manufactured and sold by the defendant is in imitation of the eradicating fluid manufactured by the plaintiff, and the labels on the cartons, boxes or packages of the defendant are similar to the labels of the plaintiff's boxes and cartons with respect to the name `Stafford's Ink Eradicator' and `Stafford's Annhilator for Removing Ink,' and in this respect are in imitation of plaintiff's labels." Then follow allegations that the defendant is using the said names to mislead and deceive the general public into purchasing its eradicator, in the belief that it is purchasing the eradicator manufactured by the plaintiff, and that the ink eradicator sold by the defendant and labelled "Stafford's Ink Eradicator" and "Stafford's Annihilator for Removing Ink" has a ready market and is sold in large quantities, and that by reason thereof the defendant is making large sales that otherwise would be made by the plaintiff to his great and irreparable damage; that defendant has thereby become a competitor of plaintiff, where formerly it was a customer, and such sales have contributed and will contribute to deprive plaintiff of a market for "Collin's Ink Eradicator" which he has been and still is manufacturing and selling to the general public; that the defendant is appropriating to itself all the good will, reputation and popularity of the commodity known to the general public as "Stafford's Ink Eradicator." The plaintiff demands judgment that the defendant, its agents, etc., be restrained and enjoined from manufacturing and selling any fluid ink eradicator, or from using the names "Stafford's Ink Eradicator" or "Stafford's Annihilator for Removing Ink" or names similar thereto. An injunction pendente lite has been granted in the terms of the demand for judgment.
The defendant demurred to the complaint for insufficiency, and an interlocutory judgment was entered overruling the demurrer. While there are some allegations in the complaint appropriate to a cause of action for unfair trade and competition, it is not claimed that it is intended thereby to present such a cause of action. It is conceded that there is no imitation of the package or carton formerly used by the parties during the period of the contract, nor is it claimed that the defendant is imitating the package or label of plaintiff's product known as "Collin's Ink Eradicator." The sole questions presented are, has the defendant the right to manufacture or sell any ink eradicator, and if it has, can it use the name "Stafford's Ink Eradicator" or "Stafford's Annihilator for Removing Ink" upon the packages or cartons in which the same is inclosed. The learned justice below has held that inasmuch as there was no provision for terminating the contract of March 28, 1904, it is still a subsisting binding agreement, notwithstanding the six months' notice of its termination given by the defendant to the plaintiff on January 16, 1915. In this he is clearly in error. When a contract is not limited as to the time of its duration, it is terminable at the will of either party, upon giving a reasonable notice to the other. ( Outerbridge v. Campbell, 87 App. Div. 597, 599, and cases cited; Kenderdine Hydro-Carbon Fuel Co. v. Plumb, 182 Penn. St. 463, 469.) As the former contract provided for a termination on a six months' notice, such notice would seem to have been considered by the parties proper and reasonable. The contract was lawfully terminated. The plaintiff had no right thereafter to sell or offer for sale any fluid ink eradicator under the name of S.S. Stafford's Ink Eradicator, he having expressly covenanted to that effect in the contract.
The defendant had the right to use its own name in its business, unless it had contracted otherwise. To hold that the defendant had agreed never to sell any fluid ink eradicator by the terms of the "fourth" subdivision of the contract renders the remaining provisions of the subdivision unnecessary and meaningless. But if the subsequent portion be read in connection with the first, it provides that the defendant agreed not to sell any fluid ink eradicator or any ink eradicator in imitation of the ink eradicator manufactured by the plaintiff or put up in similar boxes, forms or wrappers and labelled with similar labels. The charge in the complaint is that the similarity is in the use of the name "Stafford's Ink Eradicator." No other similarity between the defendant's and the plaintiff's product is claimed. As there was no agreement by the defendant not to use the name and plaintiff has expressly agreed not to use such name, it follows that the complaint does not state facts sufficient to constitute a cause of action.
The interlocutory judgment will be reversed, with costs, the demurrer sustained and the complaint dismissed. This also calls for a reversal of the order granting the injunction, with ten dollars costs and a denial of the motion.
CLARKE, P.J., SCOTT, DOWLING and DAVIS, JJ., concurred.
Judgment reversed, with costs, demurrer sustained and complaint dismissed, with costs. Order granting preliminary injunction reversed, with ten dollars costs and disbursements, and motion denied.