Kaplan v. Gray

• Citation: 215 Mass. 269,102 N.E. 421
• Parties: KAPLAN v. GRAY et al.
• Decision Date: 18 June 1913
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

215 Mass. 269

102 N.E. 421

KAPLAN v. GRAY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

June 18, 1913

COUNSEL

Brandeis, Dunbar & Nutter, of Boston ( J. Butler Studley and Roger Sherman Hoar, both of Boston, of counsel), for plaintiff.

Currier Rollins, Young & Pillsbury, of Boston (Samuel H. Pillsbury and Richard Y. Fitzgerald, both of Boston, of counsel), for defendants.

OPINION

DE COURCY, J.

The plaintiff's right to recover depends upon the construction of a written agreement between Charles G Wridgway, to whose interest he succeeds by assignment, and the defendants Gray and Hollander, formerly copartners under the name of Gray & Davis, and hereinafter called the defendants.

Wridgway was the owner of certain letters patent for a lamp shade for road vehicles. By the agreement in question he licensed the defendants to manufacture the shades for the period of one year, and further agreed not to permit any other lamp manufacturer in the United States to make them during the continuation of the contract, to protect the defendants in any litigation concerning the same and to protect the patent if necessary, and also to renew the contract for three years if they should have complied with the terms thereof. The defendants on their part agreed to manufacture at least 1,000 shades, the same to be of a quality such as would not injure the value of the patent, and each shade to bear the patent number, the inscription 'Wridgway No-Glare Shade,' the date of patent and the consecutive license number, and also to include the said inscription in all advertising matter. Further they were to pay $1 for each shade manufactured, to settle accounts monthly and to keep and render monthly an account of the number of shades manufactured.

The agreement contained the following provisions:

'The sum of $500.00 (five hundred dollars) is hereby deposited by parties of the second part, with party of the first part, as security for the faithful performance of this agreement on their part to be performed, and said $500.00 (five hundred dollars) is to be applied to the last five hundred (500) shades manufactured by the parties of the second part, at the end or termination of this contract.

'It is further agreed that if parties of the second part shall fail to comply with terms of this contract, and shall fail to properly number all shades manufactured by them, or to make settlements as hereintofore (sic) stated, the said sum of $500.00 (five hundred dollars) deposited, as aforesaid, shall be forfeited to party of the first part, as fixed, liquidated and ascertained damages, and the contract between the parties hereto shall terminate and become null and void.'

The only breach of this agreement specified in the bill of complaint is the failure to manufacture and pay for more than 25 shades. The plaintiff contends that the provision relating to the deposit of $500 should be treated as a penalty and void, that the actual damages should be assessed, and that the defendants, by failing to manufacture the guaranteed number of lamps, became indebted to him in the sum of $1,000 with interest thereon. He undertakes to apply on account of this sum the $25 received from the defendants for the shades manufactured, and the $500 deposited by them, and now seeks to recover the alleged balance of $475 with interest.

We are of opinion, however, that a fair interpretation of the agreement makes it manifest that the parties intended this $500 to be liquidated damages and not a penalty in the event of a breach. In fact they have expressly so stated in the language of the second paragraph above quoted, designating the money as 'fixed, liquidated and...