Virgin Islands Corp. v. WA Taylor & Co.
| Decision Date | 08 January 1953 |
| Docket Number | Docket 22448.,No. 59,59 |
| Citation | 202 F.2d 61 |
| Parties | VIRGIN ISLANDS CORP. v. W. A. TAYLOR & CO. |
| Court | U.S. Court of Appeals — Second Circuit |
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Holmes Baldridge, Washington, D. C., Myles J. Lane, New York City, Irwin W. Silverman and David Lloyd Kreeger, Washington, D. C. (Harry I. Rand, Washington, D. C., of counsel), for plaintiff-appellant.
Rogers, Hoge & Hills, New York City (James F. Hoge, Lenore B. Stoughton, New York City, Andrew J. Graham, Brooklyn, N. Y. and William F. Weigel, New York City, of counsel), for defendant-appellee.
Before SWAN, Chief Judge, and L. HAND and FRANK, Circuit Judges.
1. A motion to dismiss a complaint, without the aid of anything except the complaint itself, is usually a most undesirable way for a defendant to seek a victory. For, on such a motion, the court must construe the complaint's language in a manner most favorable to the plaintiff; and, if that language is at all ambiguous, seldom will it, when thus generously construed, fail to show a cause of action. So here, interpreting the complaint as we must, we conclude that the district judge erred.
2. The defendant relies on this sentence in clause 11 of the five-year 1940 contract: "The brand and trademarks shall be the property of the Importer and may be registered by it in its name." This, says defendant, compels a decision in its favor. But, as this sentence does not dwell alone, it must be reconciled with other provisions.
3. The succeeding sentences of clause 11 are illuminating. They provide that if, during the five-year period — from March 30, 1940 to March 30, 1945 — the defendant either liquidates its business or discontinues the importation or sale of alcoholic liquor, then VICO shall have "the option to purchase the trademark" at a price to be determined by appraisers. We find it difficult to believe (absent evidence) that the parties meant that, if the defendant ceased operations on, say, February 1, 1945, VICO had the option to buy the name, but that if the operations continued some sixty days longer — until March 30, 1945, when the five-year contract period expired — then VICO lost all rights to the name. For purposes of a motion to dismiss, we think clause 11 must be interpreted to mean that, if the operations continued for the full five-year period, the entire right to the name should be in VICO at the end of that period, and without any payment to defendant.
4. This interpretation finds support in the complaint which, interpreted generously in plaintiff's favor, tells the following: (1) When the first contract was made in October 1936, the parties contemplated that a name would be devised under which VICO rum would be marketed. (2) The name "Government House" and the label were subsequently devised in December 1936. (3) The parties at that time agreed that defendant should have an exclusive right to use the name and label but only until the contract period ended, at which time the entire right thereto would vest in VICO. (4) On March 24, 1937, defendant registered them but solely as agent for VICO. (5) Beginning in October 1937, the defendant began advertising VICO rum, emphasizing that its sale was part of a Government project to rehabilitate and further the economic recovery of the inhabitants of the Virgin Islands. The first shipment was advertised as the culmination of the "Virgin Islands three-year recovery plan"; the rum was called "a humanitarian project as well as a beverage." (6) The name and label thus became associated in the minds of consumers with a rum produced in the Virgin Islands, a rum with the sale of which the government of the Virgin Islands had a connection. (7) When the March 30, 1940 contract was made, the parties knew of this consumer attitude. (8) The use of the name and label in the sale of other rum would deceive and mislead consumers, as defendant's use is doing.
The foregoing facts we must take as if they were proved. If, then, defendant's interpretation of clause 11 of the 1940 contract were correct, it would be plain that the parties, when they executed it, intended that, after its expiration on March 30, 1945, defendant should be able, if it so desired, to deceive consumers (as it now does). Such an interpretation should be avoided where possible. For "when there is a choice, a court will prefer that construction which is lawful"5 and not one which imputes to the parties a purpose to make possible the public's deception.
5. Congress, in the Act of June 30, 1949, incorporating plai...
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