American Publishers Corporation, New York, 1896-1897.


The Publishers' Weekly No. 1327; p16-17. (July 3, 1897)

IN the New York Law Journal for June 19, we find the following decision rendered in the suit of the American Publishers Corporation vs. Munro et al., by Judge McLaughlin, of the Supreme Court, Special Term, Part IV:

"On the 31st day of January, 1890, the firm of George Munro, consisting of George Munro, now deceased, and the defendants. George W. and John Munro, entered into a contract with John W. Lovell, in and by which it granted to him, for a term of three years, and [sic] exclusive license to issue all numbers of the Seaside Library, a well-known publication, together with an option to purchase. A part of the consideration for the license and option was (1) the payment of $50,000, (2) the further payment of $2,500 monthly, (3) an agreement to give to the firm the exclusive printing privilege, except first editions, of numbers thereafter issued, (4) the maintenance of the library as a continued series and the book-stock then on hand, including the issue of at least three new numbers weekly, (5) the retention by the firm of all plates then in its possession; and the delivery to it of all new plates thereafter made for the exclusive use of said firm, in case the contract should be thereafter terminated without a purchase. Among other things the contract provided: That in case of the non-payment of any of the.monthly payments therein provided, the firm could terminate the agreement by giving written notice of their intention to that effect; and, if the default in the payment continued for a period of five days after the service of such notice, then the agreement became void. and all claim or interest of said Lovell, or of any one claiming under him, in or to any of the plates or book-stock immediately ceased. Lovell complied with the terms of the agreement until September, 1890, when, under some arrangement made by him, the United States Book Company succeeded to his interest, and he performed until October, 1892, when default was made in the payment for the preceding month, and no further payments were thereafter made. The firm thereupon terminated the contract in the manner therein provided and took possession of, and has ever since held the plates and book-stock. No attempt was ever made to exercise the option to purchase.

In January, 1893, in an action for the dissolution of the United States Book Company, receivers were appointed and continued until February, 1896, when, pursuant to an order of the Court, all of the property held by them was sold to a reorganization committee, which in turn transferred all rights acquired to the plaintiff. On the 4th of January, 1892, the book company executed a chattel mortgage to the Manhattan Trust Company to secure an issue of bonds, dated July 1, 1890, aggregating one million of dollars. The mortgage was foreclosed by the trust company, and the property covered by it was sold in December, 1895, to a purchasing committee, which also, in February, 1896, transferred whatever right or interest it had to the plaintiff. The defendants were not parties to the foreclosure suit, and they had no actual knowledge of the foreclosure proceedings. Neither the receivers, the trust company, nor the reorganization or purchasing committees ever made any demand upon the defendants for the plates or book-stock which they took possession of when the contract was terminated. But the plaintiff shortly after the . transfers to it, made such demand, which was refused, and thereupon this suit instituted. After a careful consideration of the questions involved, and the evidence offered, 1 am unable to see how the plaintiff is entitled to the relief asked. It is conceded that prior to 1890 the firm of George Munro owned and published the Seaside Library, and it must also be conceded that its ownership has ever since continued, subject only to the license and option granted by the Lovell contract.

Lovell was the vice-president and general manager of the United States Book Company, and when that corporation came into existence he informed the Munro firm that it had been organized for the purpose of carrying out the contract made by him, and it thereafter attempted to do so. And it matters not what legal relation the United States Book Company sustained to Lovell, since the fact is that with the consent of both parties to the contract it acquired, subject to the same terms and conditions, the privileges granted to Lovell, one of which was that the plates and books here sought to be reached should be delivered to and become the absolute property of the firm of George Munro, subject only to the option to purchase. The privilege granted could only be exercised upon that condition, and when delivery was made the title to both books and plates at once vested in the firm. They were not pledged or delivered as security for the performance of the contract. The contract does not so provide, and there is nothing in the evidence to indicate any such intent on the part of any of the parties to the transaction. It is suggested that this provision of the contract can not be enforced against the plaintiff because the property delivered belonged to the United States Book Company, and it was not a party to the agreement. But the privilege it exercised came through the Lovell contract, and it came burdened with the conditions, restrictions and obligations therein imposed. Its rights were acquired from Lovell, and, in carrying out the contract, it was either his agent or else his assignee. If an agent, then clearly all of the provisions of the contract were as binding upon it as upon him; and if an assignee, and certainly if the contract is what the plaintiff's attorney terms it -- one of 'letting' and ' hiring' -- it was equally bound while it lasted, since it could only acquire such right as the assignor had, and in doing so became liable, not only for the rent stipu1ated, but also to perform all covenants contained in the lease. (Stewart v. Long I. RR. Co. 102 N. Y., 601). The arrangement necessarily depended upon a continuance of Lovell's license, and the payments of money and delivery of books and plates were for that purpose and no other; and the title to the property, as we have before seen, when delivered, at once vested in the .firm subject to the option to purchase, which was never exercised. When the contract was terminated it had less than four months to run, and it nowhere appears that either Lovell or the United States Book Company ever claimed the sight to continue the publication or objected to the termination. The defendants are not stopped from questioning the validity of the chattel mortgage, or the foreclosure made thereunder. The bonds upon which they received from the trust company the sum of $236.68 were taken by the Munro firm in January, 1892, at the request of Lovell as collateral security for the payment of his notes. It nowhere appears that any member of the firm at any time had actual knowledge that the mortgage purported to include any of the book-plates or book-stock covered by the contract in question; or that the money received was derived from a sale under the foreclosure proceeding. Not a bond was sold or an act done by any of the parties, or by any of the bond holders, so far as appears, upon the faith of the taking or the holding of these bonds by the firm of Munro. It, however, does appear that this money was not paid to or received by defendants until several months after the purchase by the plaintiff. Under such circumstances the principle of estoppel cannot be invoked. It cannot be invoked because it does not appear that the plaintiff was influenced by the acts of the defendant in accepting the money, or that the defendant in accepting it acted with full knowledge of all the facts.

And, in this connection, it must be borne in mind that the firm resumed control of the Seaside Library in October, 1892, and it then bad all of the plates and book-stock in its possession; and that the United' States Book Company passed into the hands of a receiver is January, 1893, and the receivership continued until 1896, and during all this period the right of the defendants to the property now sued for was unquestioned. The plaintiff has also failed to make a case for equitable relief. The question presented simply involves the legal title to personal property, for which an adequate remedy is furnished in an action at law. No accounting is necessary to ascertain what property is held by the defendants, since the plaintiff has a complete inventory of all books delivered made by its own employees; and as to the plates, a schedule is annexed to and made a part of the complaint. No basis is laid for an recounting by reason of the use of the property or profits made, since it nowhere appears that the defendants have ever used or intend to use any of the books or plates is question. The plaintiff must therefore fail upon this ground (Hawes v. Dobbs. 137 N. Y., 465; Dudley v. Congregation. 138 N. Y., 451), It follows that the complaint must be dismissed, with costs. Decision signed."

Last revised: 17 September 2010