Opinion
Argued February 14, 1911
Decided February 28, 1911
George C. Lay and Frederick W. Garvin for appellant.
Morgan J. O'Brien and Eugene Frayer for respondents.
It appears that William S. Thomson, in his lifetime, was engaged in London, England, in the production and sale of perfumes, soap and toilet articles, under the name of The Crown Perfumery Company of London and was the owner of a large number of trade marks, trade names and labels; that he maintained a place of business in Paris and another in the city of New York, in which latter city the defendants Batcheller, Russell and Miller were employed by him as his exclusive agents for the sale of his goods in the United States. On the 30th day of December, 1899, he entered into the contract in question with them, and thereupon they, with the consent of Thomson, caused the business to be incorporated in the name of The Crown Perfumery Company and then transferred the aforesaid contract to that company, by whom the business was carried on by one Welch, as manager, until the 31st day of December, 1907, when the sale of goods under the trade marks, trade names and labels of Thomson was terminated and such trade marks, trade names, etc., reverted to him.
We think the provisions of the contract admit of but one construction, and that is an agreement on the part of Thomson to sell, and of Batcheller, Miller and Russell to buy, the business and the stock on hand of the perfumery company in the United States, excepting the accounts receivable, for a stipulated price amounting to $15,961.38 to be paid in eight quarterly payments, without interest, and that Thomson agreed to grant to them the exclusive license in the United States to use and to apply to the goods manufactured or sold by them the trade marks, trade names and labels previously used by him, specifically enumerating the same, in consideration of a royalty of twenty-five per cent of the net profits of the business, which the purchasers agreed to pay him therefor; with the provision that, in case the sales amounted to less than sixty thousand dollars in any one year, Thomson might terminate the contract and receive back his trade marks, trade names and labels. Thomson further agreed to put the purchaser in direct communication with the source of his supply in Europe and in America and to invoice all articles purchased from the London house at the actual cost therefor, he to be paid ten per cent upon the invoice price. It is thus apparent that the relations existing between Thomson and the purchasers were purely contractual, and that no copartnership, trust or fiduciary relation was created thereby. Such, it would seem, was the understanding of the parties, for semiannually thereafter the regular statements of the net profits of the business were rendered by the perfumery company to Thomson and his percentage thereof paid over to him until the contract was terminated, the end of 1907, when the trade marks and trade names reverted to Thomson. While there were one or two mistakes with reference to crediting interest and so forth, we understand they were subsequently corrected and that all of the business transacted under this contract by the Crown Perfumery Company has been accounted for and settled, and the question that now arises with reference thereto is as to whether it has been deprived of business that legitimately belonged to it.
Upon the trial it was found as a fact that, during the years from 1900 to 1907, inclusive, the defendant the Crown Perfumery Company ordered from the Crown Perfumery Company of London various kinds of perfumery, soaps, powders and other toilet articles, which were not covered by the specific trade marks referred to in the agreement between Thomson and the defendants Batcheller, Russell and Miller, and the London house, at the request of the New York house, delivered from time to time, to the New York house, samples and formulæ of new articles of perfumery and other novelties, and freely gave full facilities for producing in the American market all new articles prepared or devised by the London company, and the defendant company, with the view of increasing its business, used the said formulæ and purchased the said new articles and accounted to Thomson for twenty-five per cent of the profits on sales made of such new articles purchased from the London house. It also is found as a fact that "In the fall of 1901 the original plaintiff, the late William S. Thomson, with a view of increasing the business of the defendant the Crown Perfumery Company, urged the Crown Perfumery Company to manufacture cheap perfumes, soaps and the bath powder known as `Bathodora' in this country for the purpose of saving duty upon the importation of the articles put up in packages for the trade: and also advised the employment of a chemist, the putting in of power and apparatus for the purpose of manufacturing perfumeries and bath powders in the United States. And in the fall of 1901 the defendant the Crown Perfumery Company, for the purpose of saving the duty on importations from England and France, adopted the suggestions of the original plaintiff, the late William S. Thomson, and undertook to manufacture perfumeries and powders in the United States, put in new power in the factory of the said defendant Crown Perfumery Company, and new apparatus for preparing and compounding perfumeries and powders, employed a chemist for that purpose, and thereafter undertook a series of experiments for the purpose of adapting the bath powder, known as `Bathodora' to the American market."
It is further found as a fact that, "In or about the month of January, 1902, the defendants, Batcheller, Russell and Welch, formed a firm or partnership under the name or style of the `Batcheller Importing Company,' contributing an equal amount of capital thereto, and thereafter and from January, 1902, to October, 1907, under said name manufactured and sold perfumeries, soaps and bath and other powders and appropriated the profits on the sales thereof to their own use. The defendants, Batcheller, Russell and Welch, experimented with bath powders and finally produced, in the fall of 1902, a cheap bath powder which they designated as `Bathasweet,' and also a soap which they designated as `Bathasweet Complexion Soap,' and a toilet powder which they designated as `Bathasweet Rice Powder;' and beginning in February, 1903, and continuing down to October, 1907, sold large quantities of `Bathasweet' bath powder, `Bathasweet Complexion Soap' and `Bathasweet Rice Powder' throughout the United States, and appropriated the profits thereof to their own use."
In October, 1907, after Thomson had given notice of his election to terminate the contract, the Batcheller Importing Company was incorporated; and upon refusal of Thomson to take over the stock on hand and business of the Crown Perfumery Company it was transferred to the Batcheller Importing Company.
It is now contended on behalf of the plaintiff that the parties to the copartnership occupied fiduciary relations to Thomson, and that as his trustees they had no right to engage in the manufacture and sale of the new bath powder, soap and rice powder, to which the term "Bathasweet" had been given as a trade mark, except in connection with the business of the Crown Perfumery Company, and that Thomson was entitled to have twenty-five per cent of the net profits therefrom; that it was for that purpose that he recommended in the fall of 1901 that the company should put in additional power and apparatus and employ a chemist for the purpose of manufacturing cheap perfumeries for the United States and thus avoid the duty on importations. The Appellate Division, however, appear to have reached the conclusion that such was not the understanding of the parties, and in reversing the judgment entered upon the decision of the trial court it reversed upon the facts as well as the law, so that the facts as above quoted from the findings now stand reversed. There was some evidence given by Thomson tending to sustain the findings to which we have alluded, as made by the trial court. It cannot, therefore, be well said that there was absolutely no evidence to sustain the findings. The Appellate Division, however, had the power to review the evidence and determine whether the findings were against the weight of evidence, and such, it appears, was the conclusion reached by it. That question this court has no power to review, for, under the Constitution, its jurisdiction is limited to the review of questions of law only. The findings, however, were based upon oral testimony. Such testimony may be changed, further witnesses may be discovered and additional facts obtained. If, therefore, the contention of the plaintiff was to the effect that the conversation found to have taken place between Thomson and the officers of the Crown Perfumery Company with reference to the manufacture of the new perfumeries known as "Bathasweet" in the United States amounted to a contract or an agreement that the manufacture and sale of such articles should be made under the provisions of the original contract, then it would have been the duty of the Appellate Division to have ordered a new trial. But such we do not understand to be the claim of the plaintiff as set forth in his complaint. For, under the express allegations thereof, it is alleged that the business relations entered into between the plaintiff and the defendants Batcheller, Russell, Miller and Welch became and have continued to be those of quasi-partners or quasi-trustees of the plaintiff, and at all times between the 30th of December, 1899, and the present time represented themselves and the defendant Crown Perfumery Company and the so-called Batcheller Importing Company, their creatures and instruments, to be agents of the Crown Perfumery Company of London, under which latter name this plaintiff carried on his business in England. And further, that the relations between the plaintiff and the said defendants were fiduciary, under the terms of the agreement and by the course of business carried on between them. The complaint further alleges, in substance, that the said defendants other than the defendant Miller, disregarding their duties as trustees to the plaintiff and without his knowledge or consent, conspired together to divert the profits arising from the sale of "Bathasweet" powder and other articles under that name, to their own use and for that purpose the copartnership known as the Batcheller Importing Company was organized to manufacture and sell such articles, and that by reason thereof damages resulted to the plaintiff. Such being the cause of action alleged in the complaint, it follows that the right of the plaintiff to recover depends upon the question as to whether the relation between the parties was that of quasi-partners or trustees and as to whether the relation existing between the parties was of a fiduciary character. This question depends upon the construction that is to be given to the original contract. By that contract we are clearly of the opinion that the relation existing between the parties was contractual only and not that of copartners, trustees or of a fiduciary character. It follows that the Appellate Division properly refused a new trial and that its judgment dismissing the complaint should be affirmed, with costs.
CULLEN, Ch. J., GRAY, VANN, WERNER, HISCOCK and COLLIN, JJ., concur.
Judgment affirmed.