Emerick & Duncan Co. v. Hascy

146 F. 688 | 9th Cir. | 1906

ROSS, Circuit Judge,

after making the foregoing statement of the case, delivered the opinion of the court.

On the hearing of the appellees’ motion in the court below, conflicting affidavits were presented on behalf of the respective parties, that on behalf of the appellees’ tending to show, among other things, that in the negotiations leading up to the making of the stipulation, the appellant represented to the appellees’ counsel that it had made little or no profits by the sale of the brushes in question, and that the appellant was so poor that a judgment against it for damages, profits, and costs would be worthless, and that the appellees’ stipulation to waive damages, profits, and costs was made in reliance upon the truth of those representations.

The affidavits on behalf of the appellant are to the effect that no such representations were made, and, further that if made they were substantially true,..the affidavit of Emerick being to the effect that while the gross profits from the sale of the brushes stamped “W. W. Adams & Co.,” were as stated in his testimony before the master $4,191.65; that the net profits of the appellant during the two years and more that they were' engaged in selling the brushes, from all brushes sold by it, were $466.25, which amount includes the sale of brushes of other kinds, and not stamped “W. W. Adams & Co.” The affidavits filed on behalf of the appellant also tended to show that the defendants composing the corporation called “W. W. Adams & Co.” in the negotiations leading up to the stipulation, insisted that they were not guilty of the frauds alleged against them in the bill, and had the right to sell the brushes they did sell, but represented that they were poor, and but starting in business, and could not afford to enter into costly litigation, and that those considerations induced them to enter into the stipulation in question. We do not find it necessary to determine those conflicting questions of fact; for the stipulation was, as a matter of fact, entered into, pursuant to the_ provisions of which the appellant failed to enter its appearance to the suit, by reason of which default a decree was passed without contest for the complainant. Nor is it denied on the part of the appellees that, pursuant to the provisions of the stipulation, the appellant procured its corporate name to be changed from “W. W. Adams & Co.” to “Emerick &' Duncan Company,” not only necessarily involving the appellant in expense, but an act deemed by the appellees valuable to them, and which they could not have compelled by their suit; and, further, that the appellant removed from the brushes in their possession the name “Adams” in a manner satisfactory to the appellees, furnished the appellees with a list of its customers to whom it had sold brushes, and a list of the manufacturers from whom it bought the brushes. It is insisted on the part of the appellees that the latter list was incomplete in that it did not give the names of the manufacturers who placed the objectionable stamp on the brushes. The stipulation in that regard is this:

“Title defendant corporation will furnish to the complainants a true list of the names and addresses of all the manufacturers of the brushes heretofore bought by it, and of all its customers for brushes heretofore sold by it.”

Obviously there is nothing in this language requiring the appellant to furnish the appellees with .the names of the manufacturers who stamped the. brushes. Assuming that it was the intention of the parties that the . stipulation should have so provided, and that the appellees’ counsel, who, it appears, drafted the stipulation, omitted such a provision by mistake or through inadvertence, it affords no justification to the court on this appeal, or to the court below on the motion made to it, to read into the instrument an agreement not there found. We have, then, a stipulation of the parties, pursuant to which the appellant confessed the averments of the bill by failing to enter an appearance thereto, and pursuant to which it performed .other conditions of the stipulation, all of which involved more or. less cost atid trouble, and some of which could not have been compelled by any decree that could have been rendered in the case, upon which stipulation alone the appellees procured their decree against the appellant. Procuring, as they did, that decree upon and by virtue of the stipulation, the appellees, without restoring or offering to restore what they had received thereunder, asked the court below to relieve them from doing the one and only thing they agreed to do as a consideration for those benefits, namely, their obligation to satisfy the judgment in so far as it awarded them damages, profits, and costs. And the court below, by its final decree here appealed from, gave them that, relief.

It is a fundamental principle of equity that one party to an agreement, by whatever name called, whether contract, stipulation, or anything else, cannot be relieved of its burdens while holding on to its benefits. That is exactly what the appellees sought to do, and what they were permitted to do by the court below. They did not offer to put the appellant in statu quo, even to the extent that it was possible to do so; they did not offer to permit the appellant’s default to be set aside and the interlocutory decree to be vacated, to the end that the appellant might, if it elected to do so, contest the suit on the merits; but, holding on to the substantial advantages secured by virtue of the stipulation, they asked to be, and were, by the judgment appealed from, relieved of the one and only obligation they agreed to perform as a consideration for the benefits thus received.

In this there was manifest error, for which the judgment appealed from must be, and is, reversed, with instructions to strike out that portion thereof providing “that the complainants * * * be not required to enter satisfaction of this decree, as provided by the sixth clause of the stipulation filed herein upon the 3d day of December, 1904.”