Virgin Islands Corp. v. W. A. Taylor & Co.
Virgin Islands Corp. v. W. A. Taylor & Co.
Opinion of the Court
1. A motion to dismiss a complaint, without the aid of anything except the complaint itself, is usually a most undesirable way for a defendant to seek a victory. For, on such a motion, the court must construe the complaint’s language in a manner most favorable to the plaintiff; and, if that language is at all ambiguous, seldom will it, when thus generously construed, fail to show a cause of action. So here, interpreting the complaint as we must, we conclude that the district judge erred.
2. The defendant telies on this sentence in clause 11 of the five-year 1940 contract: “The brand and trademarks shall be the property of the Importer and may be registered by it in its name.” This, says defendant, compels a decision in its favor. But, as this sentence does not dwell alone, it must be reconciled with other provisions.
3. The succeeding sentences of clause 11 are illuminating. They provide that if, during the five-year period — from March 30, 1940 to March 30, 1945 — the defendant either liquidates its business or discontinues the importation or sale of alcoholic liquor, then VICO shall have “the option to purchase the trademark” at a price to be determined by appraisers. We find it difficult to believe (absent evidence) that the parties meant that, if the defendant ceased operations on, say, February 1, 1945, VICO had the option to buy the name, but that if the operations continued some sixty days longer — until March 30, 1945, when the five-year contract period expired — then VICO lost all rights to the name. For purposes of a motion to dismiss, we think clause 11 must be interpreted to mean that, if the operations continued for the full five-year period, the entire right to the name should be in VICO at the end of that period, and without any payment to defendant.
The foregoing facts we must take as if they were proved. If, then, defendant’s interpretation of clause 11 of the 1940 contract were correct, it would be plain that the parties, when they executed it, intended that, after its expiration on March 30, 1945, defendant should be able, if it so desired, to deceive consumers (as it now does). Such an interpretation should be avoided where possible. For “when, there is a choice, a court will prefer that construction which is lawful”
5. Congress, in the Act of June 30, 1949, incorporating plaintiff, provided that “the Corporation shall not engage in the manufacture of rum or other alcoholic beverages.”
Reversed.
. See, e.g., Eddy v. Prudence Bonds Corp., 2 Cir., 165 F.2d 157, 161; American Machine & Metals v. De Bothezat Impeller Co., 2 Cir., 180 F.2d 342, 347.
. 48 U.S.C.A. § 1407b (h).
. After the amendment constituting this provision was agreed to on the House floor, the following amendment was offered and defeated: “Provided further that all investments and property which relate directly to the making of rum shall be sold or discontinued on or before July 1, 1951.” (95 Cong. Rec. 5716.) Thus, although Congress barred plaintiff from itself manufacturing rum, it did not require appellant to divest itself of the rum distilling facilities, whose most advantageous use from the point of view of return to the Islands is, of course, in the production ’ of rum. Congress and the Congressional committees, when considering the legislation which became the Act of June 30, 1949, were fully informed of VICO’s methods of operation of the properties in the Virgin Islands — particularly the distributorship contracts which had been entered into first with defendant and subsequently with another disti-ibutor, Shaw. They were also aware that the use of these Government-owned properties for the production and sale of rum was the best, indeed the only, means of economically exploiting them. Hearings before Subcommittee of Committee on Appropriations, “Government Corp. Appropriation Bill 1949.” (H.R. 80 Cong. 2d Sess.) pp. 332 et seq. When Congress, with such knowledge, refused to order the sale of properties by VICO, it necessarily approved their retention as well as their use and operation, the only prohibition being against government manufacture for its own account. The only alternative would have been for appellant to shut down the properties and to keep them shut down, which would have meant deterioration, obsolescence and the ultimate loss of the government’s investment. This alternative, we think, rejected by Congress in refusing to adopt the proposal that “all investments and property which relate directly to the making of rum shall be sold or discontinued * *
. We can arrive at the same conclusion on this ground: Clause 11 shows that the writing did not contain the full understanding of the parties as to the disposition of the name after the term of the contract expired.
Reference
- Full Case Name
- VIRGIN ISLANDS CORP. v. W. A. TAYLOR & CO.
- Cited By
- 1 case
- Status
- Published