220 F. 909 | 7th Cir. | 1915
The amended bill in this case was filed by appellant to restrain infringement by appellees of patent No. 946,703, issued to L,. R. Nelson and appellant on January 18, 1910, for a hose connector, etc. The District Court decreed that appellant by reason of the state of the title to the patent was without standing to maintain the bill and that the cause be dismissed for want of equity.
Appellant’s title was acquired in the following manner: The patent as above stated was issued to one R. R. Nelson and to appellees, Nelson taking a one half interest, and appellees the remaining half by assignment before issue. By contract, dated November 13, 1909, between the parties, it was agreed that appellees should have the exclusive right to manufacture the connector in question during the life of the patent, with the proviso:
“That either or both of the said parties of the first part, their heirs or assigns, shall not make any arrangements which will enable any other party, not .mentioned by name in this contract, to manufacture any of the above articles so as to permit competition in the manufacture of the said articles without the consent of the said party of the second part” (Nelson).
By said contract, certain royalties were to be paid to Nelson, who was given charge of the sale of the manufactured articles and the approval thereof, and appellees were to fix selling prices so long as they were acting as exclusive manufacturers. By clause 6 of the contract it was provided that, in case of failure of appellees to pay the agreed royalties or to manufacture the articles in question in such quantity and manner as to supply the demand created by Nelson or otherwise, then Nelson should have the exclusive right to manufacture said articles upon certain conditions named. Clause 7 provided that if Nelson should “devote his time to the general interest” of appellees, including the sale and approval of the goods made under the contract as appellees might direct, then appellees would pay him (Nelson) a weekly sum of not less than $15, exclusive of royalties, “the party of the second part (Nelson) to receive pay for only such time as he may give under the directions of the said parties of the first part” (appellees). In accordance with the terms of said contract, Nelson, claiming that appelleee had failed to comply with the terms thereof, took over the exclusive manufacture of said articles and proceeded to manufacture the same. Afterwards Nelson organized the appellant corporation, to which, on August 28, 1912, he assigned all of his right, title, and interest in and to said contract and all his claims, demands, and rights of action against appellees growing out of said contract, with the right to sue for the same; Nelson having previously and on June 1, 1911, assigned to appellant all his interest in and to said patent, which he described as being an “undivided one-half interest therein.” This was the condition of the appellant’s title at the time this suit was instituted, viz., August 31, 1912.
•It is appellees’ contention: (1) That no rights passed to appellant by virtue of the assignment to it of said contract; and (2) that appel-lees, being owner of a one half interest in said patent, appellant, the .owner of the other half, had no right of action against them.
“Every one has a right to select and determine with whom he will contract, and cannot have another person thrust upon him without his consent.”
And again:
“The rule upon this subject, as applicable to the case at bar, is well expressed in a recent English treatise. ‘Rights arising out of contract cannot be transferred if they are coupled with liabilities, or if they involve a relation of personal confidence such that the party whose agreement conferred those rights must have intended them to be exercised only by him in whom he actually confided.’ Pollock on Contracts (4th Ed.) 425).”
Some contention is made in appellant’s brief to the effect that Nelson was practically the owner of the appellant corporation, and that the assignment of the contract to appellant was not legally within the foregoing rule as to nonassignability of personal contracts. Such, however, is not the law. The transaction stands in the same situation as though appellant were a stranger and entirely unconnected with Nelson.
It therefore follows that appellant had no legal standing to institute or maintain the bill herein, and that such disability still exists, and the decree of the District Court must be, and is, affirmed.