Court Opinion

ID: 5236049
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:09:18.51021+00
Date Added: 2024-06-11T08:27:44.001356
License: Public Domain

Smith, P. J.:
These judgments might well be affirmed upon the opinion of the learned trial justice sitting as a referee. To this opinion we have only a few considerations to add. Under the contract, which is here for interpretation, the plaintiff is entitled to recover if it appears that the defendant in 1911 and 1912 had materially less than 63,000 “paid subscribers.” Upon the wording of the contract alone the court might interpret the expression “paid subscribers” to mean those only who had prepaid their subscriptions. The trial court has found that by an established custom of the trade the term “ paid subscribers ” has a broader meaning, and includes not only those whose subscriptions had been prepaid but any subscriber to whom the paper was sent and who had once paid, although the subscription had not been prepaid for the years in question. This finding is abundantly supported in the record.
*872First. The purpose of the contract is to advertise the plaintiff’s product. The actual circulation of the defendant’s magazine was confessedly over 70,000 copies per month, although some of these subscribers had not paid for several years. The magazine was only sent upon the request of the subscriber, renewed in writing each year, upon which the trial court has found that there was legal liability to pay. The purpose of the insertion of the advertisement would, therefore, seem to be fully accomplished whether or not the subscriber had in fact paid the subscription price in advance.
Second. The contract itself in effect defines a paid subscriber as one to whom the paper was not sent as a gift. The term “circulation” is therein described as “the total number of copies of each issue of the publication above mentioned which shall be published and sold and delivered by the publishers thereof, both to paid subscribers and to news agencies, exclusive of all returns from news agencies and copies given away in any manner whatsoever.” It appears that it was the custom of the different magazines to give away to employees, to advertisers, advertising agents, to exchanges and for other purposes what are called service copies. These would seem to be the part of the circulation that was intended to be excluded by the terms of the contract.
Third. The term “paid subscriber ” has been construed by the plaintiff’s general manager and secretary, who negotiated and signed the contracts in question. In 1912, E. Mapes, who for the plaintiff negotiated and signed these contracts, was upon the circulation committee of the Association of American Advertisers, which was an association composed of about seventy or eighty prominent advertisers, which at its own expense had audits made of magazines and newspapers to determine the extent of their circulation for the purpose of •ascertaining their value as advertising mediums. Among the papers thus examined by this association were the Knickerbocker Free Press and the Albany Times- Union in the city of Albany. In that year a contest arose between those two papers as to which had the larger “paid circulation.” This contest was referred to a committee of this association, of which Mr. Mapes was a member. That committee decided *873that in ascertaining the paid subscription list all those subscribers should be counted who' had once paid and to whom the paper was then being sent, although no subscription had in fact been paid for fourteen years. The record does not show whether or not Mr. Mapes assented to that decision, but as he was on the committee which made the decision and it could easily have been shown if he dissented therefrom, it is fair to assume that it was his interpretation, as well as that of the committee, of the term “paid circulation.” It is true that this was the interpretation of the term as that applied to the circulation of a newspaper and not of a magazine. As the audit of' a newspaper circulation, however, was for the same purpose as the audit of a magazine circulation, it is difficult to see why the term should have a different meaning when applied to the circulation of a magazine in a contract for advertising. This interpretation of the term made in 1912 by the man who negotiated and signed this contract for the plaintiff is most cogent, if not controlling evidence of what was intended in the contract to be included in the term “paid subscriber.” Fourth. The witness Turner is an expert accountant, who for four, years before the trial had done nothing except examine the circulation of magazines and newspapers. He had done this work under employment from the plaintiff and other individual advertisers, and also of the Association of American Advertisers before mentioned. Of this association said Mapes is now the president and was then upon the circulation committee. He swears that in making those audits the entire circulation of the paper was divided into two branches, paid and unpaid; that there was included in the paid class the entire mailing list and the news agencies, and in the unpaid class the employees, advertisers and advertising agents, exchanges, service Copies; that in the class of paid subscribers was included all subscribers to whom the magazine was sent, whether or not payment had been made in advance or the subscriber was in arrears. It is true that few magazines continue to send the paper where the payment of the subscription is far in arrears. That, however, was a matter entirely within the policy of each magazine, and some were more liberal than others, and since 1912 the tendency had been to draw the *874lines still closer. The plaintiff produced two experts, who made the audits of the defendant’s magazine for the years 1911 and 1912, in order to ascertain whether the plaintiff was entitled to any rebate under the contract. This audit was made, however, at the request of the plaintiff, and with a strict construction of the term “paid subscribers” as only those who had paid in advance, it was found the circulation was substantially less than 63,000 copies a month. The testimony of plaintiff’s main expert, Rink, as to what was understood to be included in the term “ paid subscribers ” is unsatisfactory and evasive, and in view of the purposes to be accomplished by the contract in question the trial judge was abundantly authorized to find that in the custom of the trade the term “paid subscribers” was not limited to those subscribers who had paid in advance. An examination of the evidence of the two experts called for the plaintiff will be found to contain no substantial dispute of the evidence of Turner, the defendant’s expert, as to what was understood to be embraced within the term “ paid subscribers ” in an audit made for the purpose of determining its value as an advertising medium.
Fifth. It appears that the price of this magazine was normally $1 a year, and that the receipts for the years in question from the subscription list were only between $20,000 and $30,000. This disparity between the circulation and the receipts therefrom undoubtedly casts some suspicion upon the good faith of this circulation. There is no question made, however, that the circulation in fact exceeded 70,000 copies per month. Moreover, while the subscription price was ordinarily $1 a year it is suggested in the evidence that clubs were formed with a subscription price of fifty cents. So that the actual paid subscriptions were not fairly represented by the actual amount of cash received. It appears from the evidence that other magazines, by offering prizes, send their numbers to many who in fact pay for the magazine much less than the subscription price. Presumably the increased price received from advertisements inserted compensates for loss in the subscription price. These facts were all known to Mapes when he made this contract, and with knowledge of these facts and of the fact that audits made for the purpose of these associations *875included in the list of paid subscribers many whose subscriptions were not prepaid, it is a fair inference that if he had intended to provide only for prepaid subscriptions he would have used more specific language to that end. There was no finding by the trial court of any bad faith on the part of the defendant in padding its circulation list, nor was there any request by the plaintiff so to find.
The judgment dismissing the complaint must, therefore, be affirmed.
All concurred, Kellogg, J., in result, except Woodward, J., dissenting in opinion.