Dutcher v. Harker
| Decision Date | 27 March 1964 |
| Docket Number | No. 8272,8272 |
| Parties | Charles H. DUTCHER, Plaintiff-Appellant, v. Charles Ivan HARKER and Ellaresa E. Harker, Defendants-Respondents. |
| Court | Missouri Court of Appeals |
Walter A. Raymond, Raymond, West & Cochrane, Kansas City, Horace S. Haseltine, Lincoln, Haseltine, Keet, Forehand & Springer, Springfield, for plaintiff-appellant.
Wayne T. Walker, William A. R. Dalton Walker, Daniel, Clampett, Ritterhouse & Ellis, Springfield, for defendant-respondent.
This is an appeal from a judgment denying injunctive relief to both parties in an unfair competition suit. The case involves the right to use the brand name 'Dutcher-Williams,' the name 'Dutcher' alone or in any combination, the labels of the (paint) product, including name, color, and design, advertising and displays, and, to some extent, the quality of the product. Contrary to the usual situation, the seller has sued the buyer; and the buyer has filed a counterclaim likewise praying for injunctive relief.
Plaintiff-appellant Charles Dutcher had been connected with paint business since 1933. He commenced business as a paint manufacturer at Springfield, Missouri, in 1947. This business was (in 1949) incorporated under the name 'Dutcher-Williams Paint and Varnish Company.' Dutcher-Williams manufactured and sold a 'quality' house paint which contained sixty-seven per cent linseed oil. This was (then) marketed under a label with the words 'Dutcher' in large green letters against a white background; directly underneath the word 'Dutcher' was the word 'Williams' also in green letters, but smaller. Below this were the words (black on white) 'Quality House Paint White.' To the side in small letters was the analysis, showing percentage of oil and pigment. Dutcher-Williams also manufactured cheaper or 'Economy' paints under various brand names, but no inferior paints were manufactured and sold under the 'Dutcher-Williams' name. No paints of any kind were sold under the label (in singular) 'Dutcher.' One of the brand names used was that of 'Harco,' used on paint which was manufactured for the defendants Harker, who were also in the paint business.
On July 22, 1957, a written contract was entered into between Dutcher-Williams Paint and Varnish Company, a corporation, as seller, and defendants Harker as buyers. By this contract 'Sellers have this day sold' and did transfer to buyers the entire stock of goods, wares, and merchandise, including finished products and raw materials and the company truck 'as well as the corporate name of the Seller, together with all brand names.' It was agreed that accounts receivable were not sold but would be received and remitted to seller. The agreement then concluded:
'In order that this contract may be fully carried out, the Seller agrees to promptly dissolve the Dutcher-Williams Paint and Varnish Company so that the Buyers may register said name as a fictitious name under which they will do business.'
This agreement was signed on behalf of the selling corporation by C. H. Dutcher (the appellant) as president and Helen Dutcher (his wife) as secretary. Actually Dutcher and his wife owned all of the stock in the corporation with the exception of one qualifying share held in the name of a son.
At trial of the case plaintiff attempted to prove a verbal agreement, contemporaneous with the written contract, that the Harkers agreed that the 'Dutcher-Williams' label was to be used only until defendants could get their 'Harco' label established and then was to be discontinued, unless he, Dutcher, 'came back into the business.' In explanation of this, plaintiff testified that previously the corporation had 'agreed' with another paint company (which sells 'Dutch Boy') not to use the word 'Dutcher' alone in any of its brands or labels and that the name 'Dutcher' was to be so used only for so long as he was associated with the business. This explanation and agreement was rather indefinite, but the above is the best we can interpret it. The court refused to receive the parol testimony in regard to this verbal contract (if indeed it was a contract) as in violation of the parol evidence rule, but permitted it to come in as an offer of proof.
The appealing plaintiff urges the validity of such testimony as establishing a contract (1) not to use the word 'Dutcher' alone and (2) to discontinue the use of the words 'Dutcher-Williams' after the Harco line had been 'established.' If we understand appellant's contentions aright, they are that the evidence was admissible under sort of a mixture of theories: (a) a contract of the individuals, Dutcher with the Harkers, separate and distinct from the contract with the corporation; (b) a contract as to a collateral matter and therefore not within the parol evidence rule; and (c) ambiguity in the written contract.
Plaintiff and his wife were sole owners, stockholders, and officers of the corporation. There is no evidence that this was a forced or involuntary sale of any kind. The sale and dissolution of the corporation could only be made in these circumstances by the volition, instigation, active participation, and voluntary act on the part of the plaintiff and his wife. In this situation (the contract for dissolution and the sale of assets) the contracting party was more than their alter ego; it was they, themselves. The plaintiff had sold or given the name 'Dutcher' to the corporation (to be used in association with 'Williams'). It became the corporate property. Plaintiff is now estopped to deny the gift or the sale to the corporation or the sale by the corporation. A court of equity will not permit plaintiff to assert that his right hand did not agree with his left. But if we, for the sake of argument, should assume that the so-called parol agreement between Dutcher and the Harkers was an entirely separate and distinct agreement between separate individuals, then we would have to say that it was no contract, for the only consideration involved in the so-called separate agreement had to come from the inducement of the sale by the corporation itself.
The parol evidence rule is substantive law. Warinner v. Nugent, 362 Mo. 233, 240 S.W.2d 941, 26 A.L.R.2d 278; Davison v. Rodes, Mo.App., 299 S.W.2d 591; Giraldin Bros. Real Estate Co. v. Stiansen, Mo.App., 315 S.W.2d 636. It is a part of the warp and woof of the law of contracts generally. Were such not the law, no man in modern society could ever feel secure in his business affairs. Hence the rule, subject to exceptions with which we do not now concern ourselves, that where the parties to a contract put in writing that which purports to cover their entire agreement, parol evidence will not be received to change, vary, modify, or contradict its unambiguous terms. Friedman Textile Co. v. Northland Shopping Center, Inc., Mo.App., 321 S.W.2d 9, and citations at 1. c. 14.
A collateral agreement may not be excluded by the parol evidence rule, but that is only where it is an independent and different contract which is not inconsistent with and does not interfere with the terms of the written contract. While the collateral agreement may relate to the same subject matter, it cannot be so closely connected with the transaction as to form a part of it and so qualify or in effect destroy the written agreement. Crossan v. Noll, Mo.App., 120 S.W.2d 189; Francis & Co. v. Saleeby, Mo.App., 282 S.W.2d 167(2); Burns v. Hales, Mo.App., 360 S.W.2d 735, 736. 1 Of course if a contract is on its face incomplete or is reasonably susceptible of two or more different meanings, then parol evidence is competent to resolve the meaning. Fabick Bros. Equipment Co. v. Leroux, Mo.App., 375 S.W.2d 887, and cases cited in footnotes two and three. And in interpreting a contract, if on the face of the instrument the intention of the parties appears to be in doubt, a court may receive evidence of the situation of the parties and the surrounding circumstances in order to put itself in the position of the parties at the time the contract was made so as to look at it through their eyes. Tamko Asphalt Products, Inc. v. Fenix, Mo.App., 321 S.W.2d 527, and cases cited at footnote three, p. 532.
Returning to the contract here involved: It sold 'the corporate name of the Seller, together with all brand names.' More than that it provided that the seller would promptly dissolve the Dutcher-Williams Paint and Varnish Company 'so that the Buyers may register said name as a fictitious name under which they will do business.' As to the name 'Dutcher-Williams,' we think there can be no argument that plaintiff sold, and defendants bought, the right to use that name and brand. The meaning is not doubtful, and we need no construction aid to determine this. Hahn v. Forest Hills Const. Co., Mo.App., 334 S.W.2d 383. Plaintiff's attempt by parol evidence to limit that right to only 'until the Harco label was established' is in derogation of the plain terms of that written contract. Furthermore, if we should hold that this substantive right could be so limited, still plaintiff's contention must fail, for the evidence lacks sufficient force to show that the 'Harco' label is yet 'established,' although in a close case such might possibly be inferred from defendants' advertising. The trial court was correct in refusing to permit the plaintiff to water down the contract by limiting the use of 'Dutcher-Williams' for an indefinite period.
The words 'all brand names' of course require proof of what were the brand names, if such are involved. Testimony of plaintiff that the seller never used the word 'Dutcher' alone was competent to show that such word, in the singular (and not in combination with 'Williams'), was not a 'brand name.'
Did the plaintiff 'sell' the word 'Dutcher'? The contract does not purport to cover that word in the singular. The general rule is that a man has the right, sometimes said to be 'inherent,' to use his surname...
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