Priscilla Publishing Co. v. Cream of Wheat Co.

Braley, J. The plaintiff, - publisher of “ The Modern Priscilla,” a monthly magazine, and the defendant entered into annual contracts under which the plaintiff agreed to insert and publish the defendant’s advertisement of its cereal, “ the cream of wheat,” in each issue during the years 1919, 1920, and 1921. The declaration has two counts to recover respectively the amounts alleged to be due for 1920 and 1921, and a third count on an account annexed covering the same period. Gerrish Dredging Co. v. Bethlehem Shipbuilding Corp. Ltd. 247 Mass. 162. The answer was a general denial, with a plea of payment. A claim in recoupment and a declaration in set-off also were filed to recover alleged overpayments or damages arising from the alleged failure of the plaintiff to furnish the circulation guaranteed not only in 1920 and 1921, but also in 1919. The parties concede that at the close of the evidence there were no issues of fact for the jury, and, the exceptions to the admission of evidence having been waived, the questions for decision on the report of the trial judge, are, whether as matter of law the verdicts ordered should be set aside or modified. The price for the insertion of the advertisement in each month of 1919 was $1,339.80 with a cash discount of three per cent, and an average circulation of five hundred thousand copies for every month was guaranteed. In 1920 the rate was $2,040 for each month, but in 1921 it had become $2,380, while the average circulation for 1920 and 1921 was fixed at six hundred thousand copies. The principal, if not the only controversy, is over the75 construction of the clause common to all the contracts, which relates to the volume of circulation, and its general character. It reads as follows: “ The party of the first part does hereby guarantee that the average, circulation of the above mentioned publication for the term during which the above advertisement shall run, shall be six hundred thousand (600,000) copies per issue, and it is understood that the term circulation for the purpose above mentioned, shall be construed as follows: 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 the news agencies, exclusive of all returns from news agencies and copies given away in any manner whatever. And it is further understood and agreed that no subscriptions shall be considered a paid subscription that is more than six months (6) in arrears or for which the publisher receives, in cash, less than fifty per cent (50%) of his published subscription price. “ And it is hereby understood and agreed that the said publishers of the Modern Priscilla will allow the said Cream of Wheat Company, or its authorized agent, to have at any time full access to such books and papers as are considered necessary by the Cream of.Wheat Company or its agent for the purpose of examining and ascertaining the circulation of the said The Modern Priscilla and its methods of obtaining said circulation, it being understood that said examination may be made by the said Cream of Wheat Company, or its authorized agent, at any reasonable times, without notice, but that said examination shall not be made oftener than twice in each year; and it is further understood and agreed that in case said examination does not bear out the circulation claimed and embodied in this contract and shall be found to be materially less than six hundred thousand copies (600,000) the expense of this examination, not to exceed one hundred dollars ($100.00) shall be borne by the said The Modern Priscilla, otherwise by the said Cream of Wheat Company. “ It is further understood and agreed that in case said [76] examination shows the circulation to be materially less than above stated The Modem Priscilla will, immediately after such examination, make a pro rata rebate to the Cream of Wheat Company for said shortage in circulation, paying said rebate in cash.” The language is free from all ambiguity. The parties themselves have defined the term “ circulation.” It is “ The total number of copies of each issue of the publication . . . which shall be published and sold and delivered by the publishers thereof, both to paid subscribers and to the news agencies, exclusive of all returns from news agencies and copies given away in any manner whatever.” The word “subscriptions” is also defined. “No subscriptions shall be considered a paid subscription that is more than six months ... in arrears or for which the publisher receives, in cash, less than fifty percent ... of his published subscription price.” The manifest intention is, that the circulation shall consist solely of subscriptions paid in cash, and all other subscriptions are not to be counted. It was correctly ruled as matter of law, that the subscription agreements of the plaintiff with the Crowell Publishing Company, to accept subscriptions as shown by the record, as well as. similar contracts with other companies, which contained no reference to sales of single copies, but merely covered arrangements for subscriptions to be obtained for the plaintiff by the several agencies, were not within the terms of the contracts on which the action is brought. The plaintiff moreover, by reason of the rebate in the subscription agreements, did not receive in cash fifty per centum of its regular price for subscriptions. The word “ receives ” as used in the contracts is synonymous with the word “ accepts.” The paid subscriptions received and accepted, are to be in cash, and cannot be diminished below fifty per centum of the published subscription price by rebates, or gratuities in any form to agents under agreements with the plaintiff to increase the circulation of its magazine. Standard Oil Co. of Indiana v. United States, 164 Fed. Rep. 376, 390; 90 C. C. A. 364, 378. The circulation- books of the plaintiff during the years in [77] question, which under the provisions of the contracts had been •examined by expert accountants employed by the defendant, and whose audit was admitted to be accurate, showed that if the agency agreements were excluded the circulation fell materially below the average circulation as guaranteed. The examination of the accountants with the results thereby shown having been put in evidence, the parties for the purposes of the trial agreed, that if the ruling to which we have referred was made, “ the circulation ... for the years 1919, 1920 and 1921, fell materially short of the average monthly circulation guaranteed by the contracts for those years, in the amount of a monthly average of 113,377 for 1919, 148,607 for 1920, and 191,198 for 1921, ...” and that “ the payments made by the plaintiff to the Crowell Publishing Company, which payments were all that could be claimed by the Crowell Pubhshing Company from the Priscilla Publishing Company under their contract, should be deducted from the cash received by the Priscilla Publishing Company for such copies or subscriptions in determining whether the plaintiff has received in cash for these copies, or subscriptions fifty per cent of the published subscription price of The Modern Priscilla. “ It is agreed that the defendant’s specifications in connection with its claim in set-off and its claim of recoupment as to total circulation and copies returned or given away are true. “ It is agreed that the contracts between the plaintiff and other companies having relations with the plaintiff similar to the plaintiff’s relations with Crowell, are substantially the same in wording as the Crowell contracts.” It follows that the defendant was entitled to recover the amount overpaid, and the verdict in set-off for $3,745.64, the computation of which if the defendant prevailed is not attacked, was rightly ordered. Massachusetts Mutual Life Ins. Co. v. Green, 185 Mass. 306, 309. The contracts severally were entire. But there is no contention that the plaintiff’s failure of full performance was intentional, and, the defendant, having received and accepted the benefit of the advertisements as published, should make compensation. Cullen v. Sears, 112 Mass. [78] 299, 308. Burke v. Coyne, 188 Mass. 401, 404. The deficiency in circulation having been established, the plaintiff, as the court correctly held, could recover only the proportion of the contract price which covered the actual circulation, to be ascertained on the basis of the guaranteed circulation of six hundred thousand copies for each issue, and the verdict for $6,245.64 should stand. The report states, that if the rulings were right, “ judgment is to be entered on the verdicts.” But by G. L. c. 232, § 11, “ Judgment in an action in which a declaration in set-off has been filed shall be rendered in favor of the party to whom a balance is found due for the amount of such balance, not exceeding the jurisdiction of the court, with costs. If the amounts found due to the respective parties are equal, judgment shall be rendered in favor of each for such amounts and an entry shall be made that the judgments are satisfied by the set-off, with costs to either party, or without costs, as the court orders.” The entry accordingly must be, judgment for the plaintiff, with costs, in the sum of $2,500. Sargent v. Fitzpatrick, 4 Gray, 511. Caverly v. Bushee, 1 Allen, 292. Woodworth v. Fuller, 230 Mass. 160; S. C. 235 Mass. 443. So ordered.