Case ID: ny-super-ct_34/html/0118-01.html
Source: Caselaw Access Project
Author: {"author": "By, the Court.—Jokes, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ANDREW COATES, Plaintiff and Appellant, v. FREDERICK K. GODDARD, et al., Defendant and Respondent.
    Extba Allowance.
    1. Actions in which the court has power to grant an extra allowance.
    
    A. In all actions which are difficult or extraordinary, when a defense has been interposed or a trial had.
    S. Basis of. Can be granted only on a money basis, upon which a percentage can be calculated.
    3. Offer, after defense interposed, to allow judgment, and acceptance thereof. The court has power, notwithstanding such offer and acceptance, to grant an extra allowance.
    4. Trademark has not, in itself, as distinct from the value of the article of which it is the trademark, any money value which can constitute a money basis on which to compute an extra allowance.
    5. Costs. Extra allowance, when granted, forms part of.
    Before Barbour, Ch. J., McCunn and Jones, JJ.
    
      Decided December 31, 1871.
    Appeal from order.
    This action was brought to obtain an injunction against defendants restraining them from infringing a certain trademark, claimed by plaintiff to have been adopted by him for the designation of spool linen thread manufactured by him ; also to obtain an accounting of the inferior thread having on it the simulated trademark which remained in the defendants’ hands, and of the profits made by the defendants on the sale of inferior thread bearing the simulated label, and for the profits of which they have deprived plaintiff by sales of said inferior thread bearing said simulated label; also to obtain a receiver of said inferior thread on hand, to the end that it might be destroyed ; and also to recover five thousand dollars as damages sustained by the plaintiff by reason of the sale of said inferior thread bearing simulated labels.
    The defendants answered the complaint. After answer, they served on plaintiff’s attorneys the following offer:—
    “ The defendants hereby offer to allow judgment to be taken against them in this action, restraining and enjoining them, their agents, workmen, clerks, cart-men and servants, and each and every one of them, from getting up, using or disposing of the labels, engravings or impressions, or any or either of them, set forth in the complaint as simulated ;• of any labels, engravings or impressions, simulating those used by the plaintiff ; or from getting up, selling, or otherwise disposing of any thread or other articles marked on spools, packages, or otherwise, with any of said labels, engravings or impressions, and also for the costs of this action.
    “Dated September 28th, 1870.
    “MAN & PARSONS,
    ‘‘ Defendants' Attorneys
    
    The plaintiff’s attorney accepted the offer. Thereafter a motion was made by the plaintiff’s attorney, at special term, for an extra allowance, under section 309 of the Code. The motion was denied. From the order of denial this appeal is taken.
    
      
      Varnum & Turney, appellant’s attorneys.
    
      F. J. Fithian, of counsel, submitted thus:
    I. This action is within the spirit and meaning of section 309 of the Code. Subdivision 2 of that section provides that “ In difficult and extraordinary cases, where a defense has been interposed, .... the court may also, in its discretion, make a further allowance to any party, not exceeding five per cent, upon the amount of the recovery or claim, or subject matter involved. The il subject matter ” involved in this action is the right to the uninterrupted enjoyment, by the plaintiff, of his trademarks, and to protection against ‘the fraudulent imitation of them by the defendants (People v. Albany & Vermont R. R., 16 Abb. Pr. 465). The claim is twofold, viz : 1. For a perpetual injunction restraining the fraudulent use of such trademarks by the defendants. 2. For damages in five thousand dollars sustained by the plaintiff. The claim for damages is merely second-' ary. The only damages which can be recovered in an action of this character are the profits of which the owner of the trademark has been deprived by means of the fraudulent imitation of it, and these are usually comparatively small, and always difficult of proof (Gruilhon v. Lindo, 9 Bosw. 603). For the great damage in the injury of the value of the trademark itself, by reason of the. fraudulent imitation of it, the law> affords no remedy except by injunction.
    II. Proof is admissible on the motion for an extra . allowance of the value of the “ subject matter involvedP This value, as appears by the affidavit of the plaintiff’s agent, is not less than twenty thousand dollars. In People v. Albany & Vermont R. R. Co. (16 Abb. Pr. 465), before referred to, it was held that where an action is brought to obtain an injunction, the value of the property sought to be affected by the injunction will furnish the amount by which the percentage can be given, and that such value can be proved by affidavits on the motion for an allowance (Coleman v. Cheney, 7 Robt. 578, recognizes the same principle).
    III. The acceptance by plaintiff of the defendants’ offer of judgment, under section 385 of the Code,' did not deprive Mm of his right to an extra allowance. The term “costs” in section 385, is general in its signification, and includes not only the specific allowances given by sections 307 and 308 of the Code, but also the allowances in the discretion of the court, authorized by section 309. Title 10 of the Code, which includes all the provisions respecting costs, is entitled “ Of the costs in civil actions.” Section 303 of this chapter abolishes the fee bill as it existed prior to the Code, and provides that there may be “allowed to the prevailing party certain sums by way of indemnity for‘his expenses in the action, which allowances áre, in this act, termed costs.” Sections 304 and 305 of the same chapter provide that “costs shall be allowed” to the prevailing party in the cases mentioned in these sections. Section 307, giving certain specific allowances by way of costs, says, “ when allowed, costs shall be as follows” Section 308 of the same chapter provides that “in addition to these allowances, there shall be allowed to the plaintiff in actions of partition, foreclosure, for the adjudication of a will and determination of claims to real property,” certain fixed percentages. Section 309, subdivision 2, which is applicable to the present action, provides that “the court may also, in its discretion, make a,further allowance to any party,” &c. If the term “ costs,” in section 385, means merely the specific allowances given by section 307, a defendant in a foreclosure or partition case could deprive the plaintiff of the benefit of an extra allowance, under section 309, by serving an offer to permit judgment “for the relief demanded in the complaint, with costs.” In Wing v. Erie R. R. Co. (1 Hilt. 235), it was held that where a judgment was rendered for an amount fixed by stipulation, the plaintiff was entitled to costs, although they were not mentioned in the stipulation. In New York Fire & Marine Ins. Co. v. Burrell (9 How. Pr. 398), an extra allowance was given in a foreclosure suit, where a tender had been made before judgment of the amount due, with interest and costs to the time of the tender,—Clerks, J., holding that the additional allowance was not in the nature' of costs ’incurred subsequent to the tender, but that it is a compensation to the plaintiff for the expense and trouble incurred from the commencement of the action through all its stages (see also Bartow v. Cleveland, 7 Abb. Pr. 343). So, in Thurston v. Marsh (14 How. Pr. 572), Roosevelt, J., says: “the Code permits a defendant to serve an offer of judgment for a specific sum with costs. On such judgment the percentage may be added and the costs thus completed.” Brown v. Safeguard Ins. Co., 7 Abb. Pr. 345. In an action in which an attachment was issued, the parties agreed, before the cause was at issue, upon a settlement, by the terms of which the plaintiff was to discontinue on the payment of his costs by the defendants. Davies, J., held that the costs to be paid included a full allowance under sections 308 and 309 of the Code. Gelpeek v. Leather Cloth Co., 12 Abb. Pr. 361, note. This action, in which an attachment had been issued, was settled before judgment, upon an agreement to pay debt and costs. The court held, unanimously, that the plaintiff was entitled to the allowance prescribed by section 308, in addition to the regular costs. Davison v. Waring, 9 How. Pr. 254. An offer of judgment was made and accepted, and plaintiff applied for an extra allowance, which was refused by Harris, J., on the ground that there “ was no pretense that the proceedings were attended with any more than ordinary labor or difficulty.” The following cases were all decided upon the ground that in actions where attachments have been issued, the allowance under section 308 can be granted only where there has been a recovery (Brace v. Beatty, 7 Abb. Pr. 445). The court say: “ Extra allowances are given for the entire services in conducting the cause to judgment, which cannot be divided in awarding the extra allowance” (Pratt v. Conkey, 15 How. Pr. 27; Bostwick v. Tioga R. R. Co., 17 Id. 456). After issue joined the parties settled, the defendants agreeing to pay a certain sum, and costs and disbursements of the action. An extra allowance was granted, but upon appeal the order was reversed, on the ground that no recovery had been had in the action.
    Messrs. Man & Parsons, attorneys, and John E. Parsons, of counsel for respondents, urged thus:—
    
      First. The word “costs,” as used in section 385, means the bare taxable costs allowed by section 307. There can be no doubt of this; were it otherwise, the defendant would never know what he was offering. The object of section 385 is to provide a means whereby plaintiff and defendant may compromise by agreeing upon some certain amount for which one is willing to allow, and the other to take judgment; to provide some means whereby defendant may reduce plaintiff’s claim to the correct amount without going to trial, and having full costs recovered against him, besides an allowance, no matter how small may be plaintiff’s recovery. By accepting the offer, plaintiff makes a contract with defendant for recovery of a certain amount. The amount is not certain, if a motion has to be made to fix it. All the cases on the subject hold that the offer must be unconditional, and leave nothing to be ascertained or determined before entry of judgment. This rule, of course, binds plaintiff as well as defendant (see Pinkney v. Childs, 7 Bosw. 660; 15 Abb. Pr. 137, note;.
    
      
      Second. It has been repeatedly held that in equitable actions, like the present, no allowance in addition to costs could be had. As, for instance, in actions to' compel specific performance of contracts to' sell real estate, to set aside fraudulent transfers of property, for an accounting as to rents and profits, &c. (8 How. Pr. 31; 12 Id. 170 ; 13 Id. 297).
    
      Third. There is another ground upon which an allowance in such cases should be denied. An allowance is not a matter of common law right, where the law is to be stretched to favor a party. On the contrary, the statute is to be strictly construed, as this court in especial has ‘always construed the provisions' of the Code, taking care that the law is not so relaxed as to suffer abuses to creep in. Here we have entitled ourselves to the protection of the court by confessing, and allowing judgment to be taken against us. We have prevented further litigation by such confession, and stand in a meritorious position.
    
      Fourth. There is in this case .no basis for the computation of any amount. The amount of allowance is to be computed, 1st. Upon the recovery; 2nd. Upon the claim ; or, 3rd. Upon the subject matter involved. Here there was—1st. Ho recovery of any-amount upon which to compute; 2nd. The allowance upon the claim can only be made to" the defendant, not to plaintiff (Wilkinson v. Tiffany, 4 Abb. Pr. 98). As to the third basis for allowance, the Subject matter here involved is the amount of defendants’ - profits, and the damages plaintiff would recover if he had proceeded to trial, and had an accounting and an assessment of damages, and it has nothing whatever to do with the value to plaintiff of their trademark. As to the value of defendants’ profits, plaintiff does not show and cannot show what they are ; and the court will not inquire further than is shown by the papers before it, because this would be a reopening of the case, which defendant has avoided by allowing judgment to be taken against him. (see Coleman v. Chauncey, 9 Robt. 578, where the subject is very fully discussed by Judge J ores). Plaintiff seems to claim by his moving papers that the value of his trademark is the subject matter of the action. We do not claim his trademark nor try to prevent his using it, so he cannot be said to have recovered it in any proper sense of the word. It is evident that our infringement of the trademark and our profits and his damage are the subject matter, and these he has waived by acceptance of our offer.
    
      Fifth. The plaintiff, after acceptance of our offer to allow judgment, under which he recovers no judgment, for property, or for money as damages, or profits, nothing but an injunction, is not entitled to an allowance in addition to costs.
   By, the Court.—Jokes, J.

The order below is sought to be supported on two grounds.

1st. That the court has no power to make an allowance under the circumstances of the case.

2nd. That if it has the power, then it rests in the discretion of the judge to whom the application is made, whether he will exercise it or not, and that such discretion was,properly exercised by the judge below.

To maintain the first ground it is urged:

a. That in equitable actions like the present no allowance can be had.
5. That the acceptance of the offer makes a contract between plaintiff and defendant for the recovery of a sum certain; and that the amount of an allowance being uncertain and requiring to be determined by the court on motion, is not covered by the terms of the contract.
c. That there is no basis on which to compute the allowance.

To establish the first reason the case of Osburn v. Betts, decided March, 1853 (8 How. Pr. 31); Weeks v. Southwick, decided July, 1855 (12 Id. 170), and Buchanan v. Morrell, decided December, 1856 (13 Id. 296), are cited.

These cases were all decided under the statutory provisions as they existed in 1852, which had not been altered up to January, 1857 (see Code of 1852, § 308). These provisions were that :

1st. In actions for the recovery of money or of real or personal property after a trial had, the court might, in difficult and extraordinary cases, make an allowance.
2nd. That an allowance might be made in any case where the prosecution or defense had been unreasonably or unfairly conducted.
3rd. That an allowance might be made in certain specified actions and proceedings, and in actions where a warrant of attachment had been issued, without regard to the character of the case, as being difficult or extraordinary, or that of the prosecution or defense as having been unreasonably or unfairly conducted.

Under these provisions, the court correctly held in the above cited authorities, that where a case did not fall within the second and third provisions the power to grant an allowance was expressly limited by the first provision to actions for the recovery of money or of real or personal property. On this doctrine the decisions in the cited cases rest.

The present statutory provisions are widely different. The two limitations contained in the first provision of the Code of 1852, to wit: that the action must be one for the recovery of money or of real or personal property, and that a trial must have been had—are removed ; and an extra allowance is authorized in all cases which are difficult and extraordinary, when a defense has been interposed and a trial had (Code, § 509, as amended in 1865). The foregoing cited cases have, therefore, no application.

As to the second reason: If it be true that the offer and its acceptance form a contract, it by no means follows that it is necessarily a contract for the recovery of a certain fixed amount. That depends on the construction to be given to the language of the offer.

The offer and acceptance are, however, proceedings in the cause, and are more analogous to a stipulation in a cause, which the court will enforce or relieve from on motion, than to a contract as such which can only be enforced or relieved from by an independent action. In mating a contract one may propose such terms as he pleases (provided he infringes not a positive prohibition of law), and the other may accept or not without subjecting himself to any penalty or forfeiture for not accepting; while in mating the offer the defendant is under certain restrictions, and the plaintiff, if the offer is properly made, is subject in a certain event to the incurring of a loss by reason of his non-acceptance.

This leads to an inquiry into the nature, object and scope of the provisions of the Code relating to an offer by the defendant and its acceptance by plaintiff.

That a defendant might in some cases be willing to concede that plaintiff was entitled to some, or a part, of the relief he asked, but be desirous of contesting his right to the rest, was too apparent to escape the attention of the codifiers. It was also apparent that the defendant, if successful in defeating the plaintiff as to the part of relief which he disputed, should not be subjected to the payment of the costs arising in that litigation because the plaintiff succeeded as to the relief which he was willing to concede, but that he should rather be himself paid the costs thereof ; while the plaintiff should be indemnified for the expenses of the litigation which produced the offer, if he was willing to accept it and end the suit.

To meet such cases the provision in question was framed and passed. It is clear that to be consistent with these reasons for the adoption of the provision the offer for a judgment as to parts of the relief sought, must be unconditional and unqualified, since the reason for allowing the offer is that the defendant is willing to concede the right of plaintiff to part of the relief sought, which reason fails if he clogs his offer with conditions or qualifications, for in that event he does not concede the right to relief except on the terms which he may choose to impose.

The language of the provision of the Code (excluding for the present the words “or to the effect”) is: “The defendant may . . . serve on the plaintiff an offer in writing to allow judgment to be taken against him for ¿he sum or property therein specified, with costs.” The language precludes the idea that any condition or qualification can be annexed. The only doubt that could arise is on the introduction of the words “to the effect.” These words have, however, in view of the reasons on which the provision is founded, been construed not to admit of the annexing of any condition or qualification, but simply to meet cases where the relief sought was something other than money or property, and to authorize, in these cases, an offer to allow judgment of a specified part of the relief sought, without any condition or qualification.

This is the effect and sole effect of.the case of Pinckney v. Childs (7 Bosw., 660), cited by the defendant. The language used in that case, “That section prescribes an unconditional, unqualified offer, upon which the clerk can enter judgment without further proof or inquiry,” when construed in connection with the whole context of the case, and bearing in mind that the whole amount of the costs for which judgment is to be entered under the Code is always to be fixed and determined by the clerk, sometimes requiring the determination by him of matters of fact, will be found to refer to that part of the offer which offers to allow judgment for a part of the relief demanded as being the plaintiff’s right arising out of the cause of action, and not to that part which offers indemnity for the expenses of the litigation, to wit, the costs.

Upon further reviewing the provision of the Code, it will be found that for the purpose of indemnifying the plaintiff for the expenses of the litigation, the defendant is required, in addition to offering judgment for a certain specified part of the relief demanded as being the plaintiff’s right arising out of the cause of action, to also offer judgment for the costs of the action. He is not permitted to offer judgment for a certain specified amount of costs ; but generally for the costs of the action. The offer, then, so far as relates to the costs, is required to be, and in fact is, an offer to allow judgment for such costs as the plaintiff is entitled to. This leaves it open for subsequent inquiry and deter ruination as to the amount of costs to which the plaintiff is entitled.

For such determination it is necessary to ascertain what is included in the word “ costs.”

■ The same act which contains the provision permitting the defendant to serve an offer to allow judgment to betaken against him with “costs,” defines what is meant by the term costs when used in the act. It defines it as meaning those sums which by the provisions of the act may be allowed to the prevailing party in the judgment by way of indemnity for his expenses in the action (Code, § 303). How, section 307 authorizes the allowance of certain specified sums, and section 309 authorizes, in certain cases, a further allowance in addition to the sums specified in section 307. Section 303 declares that these allowances are for the purposes of that act termed “ costs.”

There being nothing in section 385 to control this declared signification of the word costs, it must be . taken to have been used with that meaning in that section.

The offer, then, is not merely to allow judgment for such of the sums allowed by section 307 as the plaintiff might then be entitled to, but also such further sum as the court may deem him entitled to, and allow him, under section 309, by way of indemnity for his expenses. Both allowances are covered by and included in the term costs,”' as used in section 385.

It is suggested that if this construction prevails the defendant would be without the means of determining, with any degree of accuracy, the amount of the costs that might be adjudged against him, and that thus he would be deprived of one important element in determining whether to make an offer or not.

Whatever force there may be in this suggestion as addressed to the legislative body for an alteration of the law, it has no force as an argument against the above construction of the law. Indeed, I think it has no force as a suggestion to the legislature. The amount of costs to which a defendant might be subjected under his offer, forms no element in determining whether he should make an offer or not. The object of the offer is to enable a defendant to exempt himself from liability to pay the plaintiff’s expenses of future litigation by reason of his ultimate recovery of a judgment which the defendant was willing he should take at the outset, although he was unsuccessful as to the matters litiga-1 ted, and to enable the defendant to recover from the plaintiff his expenses of his future successful litigation I of the matters really in controversy. All that is neces-1 ' sary for the defendant to determine for this purpose is, I whether he is willing to concede that the plaintiff is en-l titled to some part of the relief he demands. He is not to indulge in a train of reasoning like this: I know the plaintiff is entitled to some relief, and if I can get off for a certain amount of costs, or for less costs than I would otherwise be chargeable with, I will let him take that which I know he is entitled to, and will make an « offer, but if I cannot then I will not. He might have relieved himself from all costs by a proper notice, offer, tender, or payment before suit brought; but not having done this, and having put the plaintiff to the expense of a suit which has forced an offer, he should not be permitted to use that offer for the purpose of impairing the plaintiff’s claim for an indemnity for his expenses up to that time.

For the above reasons I have come to the conclusion that on an offer under section 385, the court has power to grant an allowance under section 309.

The next question is whether there is any basis on which an allowance can be granted.

The power to grant an allowance is limited to five per cent. It results from this that the allowance granted must be ascertained by a percentage, and for this purpose a sum of money must be ascertained as the amount on which the calculation is to be made.

Otherwise the limitation would be inoperative, since it could never be ascertained whether five per cent, had been exceeded, and the result would be a power to grant an allowance without limitation.

It is provided by the Code that the percentage may be granted on the amount of the recovery or claim, or subject matter involved.

In the case of a plaintiff, the percentage can be calculated only on the recovery, or the subject matter involved, and not on his claim ; while in the dase of a defendant it may be calculated on the plaintiff’s claim, and also in some cases on the defendant’s recovery, or on the subject matter involved.

The words “ amount of recovery or claim,” indicate and mean that the recovery or claim shall be for a sum of money, the words “subject matter involved” being used to cover all other cases.

In the present case the plaintiff has not recovered a money judgment. He has only obtained a judgment for an injunction. If, then, he is entitled to an allowance, it must be on the subject matter involved, and the percentage must be calculated on the money, value thereof.

Even though the claim for damages and profits may be considered as originally involved, yet no allowance can be granted thereon, because the plaintiff has not succeeded as to them, but by the acceptance of the offer has waived his claim thereon.

The plaintiff, however, claims in his complaint a right to and property in a certain trademark, and that defendants have infringed thereon. The answer puts both these claims in issue. The offer is to be regarded as a concession of both claims. It results that the trademark and its infringement constitute the subject matter involved, and that the plaintiff has succeeded thereon.

But no money value can be assigned to the trademark as distinct from the value of the article of which it is the trademark; while the infringement is a wrong, and as such, incapable of possessing a value.

I have been unable to ascertain any money basis on which to calculate a percentage, and for this reason think the order below must be sustained.