Wappler v. Woodbury Co.

• Decision Date: 20 July 1927
• Citation: 246 N.Y. 152,158 N.E. 56
• Parties: WAPPLER v. WOODBURY CO.
• Court: New York Court of Appeals Court of Appeals

246 N.Y. 152

158 N.E. 56

WAPPLER

v.WOODBURY CO.

Court of Appeals of New York.

July 20, 1927.

Suit by Adolph C. Wappler against the Woodbury Company. The Special Term rendered a judgment in favor of plaintiff (128 Misc. Rep. 352, 218 N. Y. S. 46), and the Appellate Division of the Supreme Court in the First Judicial Department affirmed such judgment (218 App. Div. 754, 218 N. Y. S. 930). From its judgment, defendant appeals.

Judgment of the Appellate Division and judgment of the Special Term reversed, and complaint dismissed.

See, also, 206 App. Div. 452, 201 N. Y. S. 503.

Appeal from Supreme Court, Appellate Term, First Department.

Wm. H. Chorosh and H. H. Nordlinger, both of New York City, for appellant.

Keyes Winter and John C. Pemberton, both of New York City, for respondent.

CARDOZO, C. J.

In 1918, Robert Buggeln, for whom plaintiff is a ‘dummy’ or an agent, sold to William A. Woodbury the entire capital stock of the Woodbury Company. The chief value of the stock was dependent upon the ownership of trade-marks then in litigation. Another corporation, the Andrew Jergens Company, made claim to them as owner. Accordingly there were provisions in the contract whereby the terms of payment for the stock were proportioned to the menace of the suit. The total price was to be $6,000, of which $500 was paid in cash. The residue, $5,500, was not to be paid at all unless the Woodbury Company prevailed in its contest for the trade-marks. In the event of a final determination in its favor, $1,000 was to be paid within 90 days and the balance, $4,500, within 15 months thereafter. There was, however, another menace in addition to the challenge of title to the trade-marks. A judgment for $15,000 had been entered against the company. Buggeln held this judgment for his own use in the name of his brother-in-law, Clinton. To enforce it would wipe out the value of the shares. An agreement was therefore made whereby this judgment was assigned to one Hart, a ‘dummy’ for Woodbury. If Woodbury paid the $5,500, the judgment was to be canceled. If Woodbury defaulted in payment, the stock and the judgment were to be given back to Buggeln or Buggeln's nominee.

The United States District Court decided the trade-mark litigation in favor of the Woodbury Company. Payment for the stock was not yet due, for there was an appeal from the decree, and payment was not to be made until final determination. Even so, the rendition of the decree was a signal, it seems, to Buggeln to try to regain his shares by one method or another. At that time William A. Woodbury had assigned the shares to C. Palmer Woodbury, who also received from Hart an assignment of the judgment. Buggeln brought a suit in the Supreme Court to rescind and cancel his sale of the shares upon the ground that the resale was a violation of a term of the agreement. The Supreme Court decided this suit against him. On the very day that the decision was announced he turned to new devices. His brother-in-law, Clinton, had already assigned the $15,000 judgment to Hart, Woodbury's nominee, who had assigned to C. Palmer Woodbury. Without a shadow of right, Buggeln, on the very day of the adverse decision, executed and filed another assignment of this same judgment, to a second ‘dummy,’ Wappler, the present plaintiff. Upon the basis of his pretended ownership of this judgment, Wappler brought this suit to enforce the judgment against the defendant corporation, to sequester its assets, and to wind it up by a receiver.

The suit was begun June 27, 1922. Not till October 23, 1922, did the Supreme Court of the United States dismiss the writ of certiorari in the trade-mark litigation. Ninety days thereafter, January 21, 1923, the first payment for the stock, $1,000, would be due under the contract. Fifteen months thereafter, April 21, 1924, would be the time for the payment of the balance. This action was tried in March, 1924, and the decision made in June, 1925. Pending the action, Wappler assigned his judgment to the Andrew Jergens Company, which, defeated by its rival in the trade-mark litigation, was attempting by a flank movement to regain the lost ground. The Supreme Court at Special Term gave judgment for the sequestration of the assets and the appointment of a receiver as prayed for in the complaint. It conceded in its opinion that no cause of action was in existence when the action was begun. The plaintiff at that time had no title to the judgment. The owner was C. Palmer Woodbury, who has not been joined as a defendant. No default had yet been made in the payment of the purchase money for the stock, for nothing was yet due. The court held, however, that default had come about through the failure to pay the installments accruing under the contract while the sequestration suit was pending. The effect of this default, according to the holding of the court, was automatically to revest the title to the judgment in Buggeln or his nominee. The principle was then invoked that equity will adapt its relief to the facts as they exist at the date of the decree. Under cover of that principle, applied at times by courts of...