84 F. 922 | U.S. Circuit Court for the District of Indiana | 1898
This is a suit in equity, brought on February 24, 1896, by Frank H. Buhl, a citizen of the state of Pennsylvania, against John Stephens and the Midland Steel Company, cit
On the hearing upon the exceptions, counsel for the defendants pressed upon the court various grounds upon which it was contended that the suit was not maintainable. It was urged that there was a
It was also contended that specific performance could not be enforced, because there was no proof of a certain, complete, and definite agreement, and because there was no mutuality in the agreement,- and it was inequitable, as it was optional with the complain-. ant for the period' of one year whether or not it should be carried into effect. This suit was brought within two months after the agreement had been made, and ten months before the expiration of the option. The complainant had one year in which to develop the process, at the end of which time he was at libertv to accept or reject' the agreement. It is manifest that the option was reserved for the benefit of the complainant. The defendant Stephens was in no way interested in the proposed development of the process during the year. However much the process may have been developed and perfected, he was to receive no advantage therefrom. He had parted with the exclusive use of the process, and it was to his advantage to have the option determined at once. The bringing of the suit constitutes an affirmation of the agreement, and a waiver of the comí plainant’s right to await the expiration of the year before electing to become bound by the agreement beyond his power of revocation. The agreement does not lack mutuality because the complainant had the right until the end of the year to terminate it. He was not bound to await the expiration of the year, but whenever within that time he elected to accept the license upon the stipulated terms, the agreement became mutually obligatory. Johnston v. Trippe, 33 Fed. 530, 536. The agreement rests upon a sufficient consideration, and is not inequitable or unequal in its terms. The agreement was, as has been said, for the sale of the exclusive use of a process for the manufacture of polished steel plates. No limitation of the term for which the license was to run is fixed by the contract set out in the bill of complaint. But the master finds that it was to continue in force for the period of 17 years. During this term the complainant was bound to pay for the right to such exclusive use not less than |750 per month.
It was contended by counsel for complainant that the statute of frauds did not apply, because the agreement does not appear from its terms to be incapable of performance within the year. The true construction of the clause of the statute of frauds which requires a memorandum in writing of “any agreement which is not to be per
The denial in the answer of the defendants of the making of the contract on which the complainant bases his suit is as effective for letting in the defense of the statute of frauds as if the existence of the statute had been specifically pleaded, and the benefit of it claimed. May v. Sloan, 101 U. S. 231; Dunphy v. Ryan, 116 U. S. 491, 6 Sup. Ct. 486; Buttemere v. Hayes, 5 Mees. & W. 456. Under section 34 of the judiciary act of September 24, 1789, it has been uniformly held that the statute of frauds as well as the statute of limitations of the state are applicable to the courts of the United States in actions at law. Packet Co. v. Sickles, supra; Warner v. Railway Co., supra; Leffingwell v. Warren, 2 Black, 599. It has been held, in the absence of any legislation by congress on the subject, that the statute of limitations of the state where the suit was brought is applicable to suits in equity in the courts of the United States. Lewis v. Marshall, 5 Pet. 470. It has also been held that the statute of frauds of the state where the suit is brought is applicable to a suit in equity in a court of the United States. Randall v. Howard, 2 Black, 585; May v. Sloan, supra. This rests upon the familiar maxim, “Acquitas sequitur legem.” It would certainly be an anomaly if a parol agreement were to be held invalid because not provable on the law side of the court for want of a written note or memorandum, while it is to be held valid and provable by parol testimony on the equity side of the same court. In my judgment, no such anomaly exists. On the whole, the court is of opinion that the agreement set out in the bill of complaint is not provable by parol, and therefore the exceptions to the master’s report will be overruled. The bill is dismissed for want of equity at complainant’s cost.