Park & Tilford Import Corp. v. Nash

Pattison, J., delivered the opinion of the Court. Mrs. Catherine C. Lanahan, of Baltimore County, Maryland, died on February 13th, 1920, leaving a will which contained the provision: “I hereby constitute and appoint H. Charles Burke to be the sole executor of this Will; but in case of his death, resignation, disqualification for any reason, or his refusal to act as.such executor, then I appoint hereby the Safe Deposit and Trust Company of Baltimore to succeed him and tó be the executor of this my Will.” The will was admitted to probate and letters testamentary were duly granted to H. Charles Burke, the executor therein named, and he proceeded with the administration of the estate. On December 8th, 1923, H. Charles Burke died, after having fully administered all of the assets of the estate which had been inventoried by him as such executor, and which included all assets of the estate known at that time to have any value. William Lanahan, the husband of Catherine C. Lanahan, was in his lifetime engaged in the liquor business in the City of Baltimore under the trade-name of William Lanahan & Son, and in connection therewith he used a certain trade-mark known as “Hunter Eye,” and this asset, and other property belonging unto' him, passed, under the resid ³⁷⁵ uary clause of liis will, to his widow, Catherine C. Lanahan; but, as the Eighteenth Amendment to the Federal Constitution had been passed at the time of the death of the' latter, and the sale of whisky prohibited, this trade-mark was not supposed to be of any value.

Since which time, however, the constitutional amendment has been repealed and the sale of whisky is now lawful; in consequence of which the trademark now has a value, and, because of such fact, the Safe Deposit & Trust Company, on July 18th, 1933, applied to,, and obtained from, the Orphans’ Court of Baltimore County letters of administration, d. 1). n.., c. t. a., on the estate of Catherine C. Lanahan, deceased, that it might administer upon this asset of her estate which hitherto had not been administered upon. An inventory of the estate, consisting of the “trade-mark and good will of the business conducted by the said Catherine C. Lanahan, in the City of Baltimore under the trade-name of William Lanahan and Son,” was made on August 16th, 1933, and returned on the 18th day of August, 1933, in which inventory the value of the trade-mark, etc., was placed at $15,000. On the 22nd day of August, 1933, the court, upon the petition o£ the administrator, passed an order authorizing it “to- sell for cash, ‘all the right, title, interest and estate, legal and equitable of the said Catherine C. Lanahan, at the time of her death in and to the trade-mark and good will of the business conducted by the said Catherine C. Lanahan in the City of Baltimore, under the trade-name of William Lanahan and Son,’ at private sale for not less than the appraised value thereof.” On the same day, August 22nd, 1933, the administrator filed its account of sales, in which it is said “that pursuant to order of this Honorable Court it has sold * * * to the Park and Tilford Import Corporation (the appellant), at private salo for the sum of $15,000 cash, the appraised value thereof,” the property specifically described in the aforesaid order authorizing its sale, although it appears from the following receipt, found in the record, that ³⁷⁶ the Safe Deposit & Trust Company, administrator, previous to August 10th, 1933, and previous to the date of the inventory and appraisement and the order directing the sale of the property, had sold this trade-mark and good will attached to' the business unto the appellant. On the same day, at the time of filing the account of sales, upon the application of Seymour O’Brien, solicitor for certain of the heirs at law and appellees in this case, the court passed a nisi order upon the sale then made, by which it was to be ratified and approved “unless cause to the contrary be shown on or before September 5th, 1933.” On the 30th day of August, 1933, upon the application of the purchaser, the court passed a further order rescinding its nisi order of August 22nd, and ordering “that the sale reported be, and the same is hereby ratified and confirmed and the Administrator is hereby authorized and directed to execute such assignment as may be necessary to fully vest in the purchaser the title to the property sold.” On the same day as the passage of the last preceding order of August 30th, 1933, a petiton was filed by the appellees, through their counsel, alleging that they had received an offer of $25,000 in cash for the purchase of the property in question, and further alleging that the nisi order of July 22nd was rescinded by the court without notice either to them or their counsel, and asked that the court rescind its order of August 30th, 1933, “and revive and re-enter its aforementioned order of August 22nd, 1933, ratifying and approving the account of sale filed herein on or about August 22nd, 1933, unless cause to the contrary be shown on or before September 5th, 1933.” Upon this petition, the court, on August 31st, passed an order vacating and revoking its said order of August 30th, 1933, and further ordered that the account of sales aforesaid “be ratified and approved unless cause to the contrary be shown on or before September 5th, 1933.” Thereafter, and within the time allowed them by the nisi order, the three groups of appellees each filed exceptions to the ratification of the sale, among the grounds therefor being: ³⁷⁷ “1st: That the selling price of Fifteen Thousand Dollars ($15,000) is grossly inadequate and does not represent the fair value of the property purported to be sold. “2nd: That exceptants are confident that they can obtain an offer in excess of Fifteen Thousand Dollars ($15,000) for the property purported to be sold. “3rd: That since the filing of the report of the said sale by Safe Deposit and Trust Company of Baltimore, except-ants, through their counsel, obtained an offer from a purchaser whom they believe to be reliable at a figure greatly in excess of Fifteen Thousand Dollars ($15,000) and that owing to some delay in having the said offer accepted by said Safe Deposit and Trust Company, the said offer has been withdrawn; that exceptants feel that under all the circumstances, they are entitled to a reasonable opportunity to endeavor to have the said offer revived inasmuch as the delay in its acceptance was not due in any manner to their actions or omissions but was entirely beyond control of the ex-ceptants. “4: That offers have already been received in the short time elapsed since filing the said report of sale, greatly in excess of the proposed sale price. “5: That no effort was made by the Administrator d. b. n., c. t. a. reporting said sale to test out the market, nor to ascertain by and through expert advice the real value of the assets by said sales report sought to be sold. “6 : That the sale so reported was collusively made, as appears from the hasty and illegal manner in which the whole proceeding's herein have been conducted. “7: That the appraisers * * * appointed to appraise said assets never had any expert knowledge on the subject matter of the appraisement, nor did they seek such expert advice as would qualify them in making the appraisement herein, nor did they fully understand or know the constituent elements of the good will * * * appraised by them.” A petition was filed by each of the three groups of the appellees, respectively, on September 5th, September 13th, and September 19th, alleging, among other things, that letters. ³⁷⁸ were granted to the Safe Deposit & Trust Company without •obtaining renunciation from the petitioners and without giving to them any notice; that application had been made to the court by the Safe Deposit and Trust Company for the issuance' to them of letters of administration, and each asking for the revocation of the letters of administration on the estate of Catherine C. Lanahan, deceased, issued to the Safe Deposit and Trust Company.

The last of these petitions .asked that, upon the revocation of said letters issued to Safe Deposit and Trust Company, letters of administration be granted to the petitioner Gertrude C. Harris. Upon this last petition, an order was passed on September 19th rescinding the order of July 18th, granting letters of administration, d. b. n., c. t. a., on the estate of Catherine C. Lanahan, deceased, to the Safe Deposit and Trust Company of Baltimore. From this order no appeal was taken. The record then discloses that the court agreed to appoint, as administrator of the said estate, Richard Rash, a son of a deceased sister of Mrs. Lanahan; but it is not shown by the record that any order was passed to that effect and the case proceeded, so far as the record discloses, without any appointment being made.

Thereafter, evidence was heard upon the exceptions to the ratification of the sale made by the • Safe Deposit and Trust Company to the appellant. William T. Goldsborough, of the firm of Reckords & Golds-borough, which had been in the wholesale whisky business since 1885, testified that he was familiar with the business of William Lanahan & Son, and with the copyrighted trademark “Hunter Rye,” used by that company. The company “had a wonderful trade-mark and did a wonderful business,” and “was known all over the world”; that his firm, Reckords & Goldsborough, did the “second or third largest” business in the city of Baltimore, but he did “not feel that Lanahan had a lot of competition.” When asked to give his opinion as to the value of the “Hunter Rye” trade-mark, he answered: “Well, personally, I think a dollar a case. * * * The Lanahans at one time* to my knowledge, were shipping 2,000 cases .a day. Of course, that was built up by an awful lot of ad ³⁷⁹ vertising.

But under any conditions I feel that after prohibition is repealed, and things get straightened out, you would ship at least a hundred eases a day under any conditions.” Hence, its value on a royalty basis would he so much as one hundred dollars a day or $30,000 a year, counting three hundred working days in a year. He was then asked,, “What have yon got to say as to the fairness” of an offer of' $15,000 for the good will of William Lanahan & Son, including all their copyrights and trade-marks ? His reply was: “Well, I do not personally think there is' anything fair about it. I think ti is a ridiculous offer.” And when asked, “IIow much do you think it is worth?” his reply was, “I would say it was worth a quarter of a million dollars under any conditions.” On cross-examination, he was asked: “You speak of a. royalty basis of a dollar a ease that, yon would he willing to give for it.

Would you he willing to give any guarantee of a minimum number of cases, that you would use or the minimum amount you would pay per annum ?” Answer: “That would he an impossibility, due to the fact that in the fourteen years a long time has passed, and a good many old whiskey drinkers have died, and a good many young ones will come up who are not familiar with brands, but I still say the brand has a wonderful prestige to it. There is still millions of people living that know that brand.” Witness stated that he knew that the registration, in Washington, of “Hunter Rye” trade-mark had expired. This he learned when there looking after the re-registration of some of the trade-marks of his own firm, and he also learned that dealers were applying for the registration of the trade-marks of others which had expired. This, however, he thought would amount to nothing, inasmuch as, in his opinion, the one originally registering the trade-mark would succeed in the re-registration of it, and that his estimate of the value of the “Hunter Rye” trademark was made with this knowledge.

George J. Goldsborough, a brother of the preceding witness, testified that he, too, was associated for a short time with his father in the whisky business under the name of ³⁸⁰ Reckorcls & Goldsborough, in pre-prohibition days. He was in the whisky business three or four years only, but he knew of the “Hunter Rye” trade-mark, which, as he said, was “known all over the world,” and it was his opinion that it was “the only whiskey from this country that was shipped .abroad.” He, like his brother, thought that the offer of $15,000 for the “Hunter Rye” trade-mark was “positively ridiculous.” Seymour O’Brien, counsel for Mrs. Gertrude Harris, who was a sister of Mrs. Lanahan, and for Mr. Hash, who is the son of a deceased sister of Mrs. Lanahan, and, with Mr. Milne, counsel for others of the appellees, testified that, since the revocation of the letters of administration granted to the Safe Deposit and Trust Company, he had received an offer for the “Hunter Rye” trade-mark and the good will of the business of William Lanahan & Son. He was asked: “Will you state the amount of the offer ?” His answer thereto was: “In the first place, prior to the revocation of the letters granted to the Safe Deposit and Trust Company,” he .and his partner, Mr. Miles, “had been negotiating with several prospective purchasers,” and “we received one cash offer which was considerably in excess of the offer of Park and Tilford Import Corporation (appellant); and since the revocation of the letters we have received another offer which is better than the first and very substantially greater than the ■offer of Park and Tilford Import Corporation. Q. Will you state the amount of the offers?

A. The first offer was ■$20,000 cash; the second offer was $15,000 cash, and $35,000 .additional over a period of three years. Q. That is the offer you now have? A. I may state to the court that the matter is still in negotiation and that counsel is meeting in our ■office next week for further discussion of the matter. As these offers have not been accepted nor have the heirs whom I represent indicated that they would favor such a sale, the matter is in process of negotiation.

But those offers have been forthcoming up to