105 N.Y.S. 646 | N.Y. Sup. Ct. | 1907
The plaintiff, the owner of certain letters patent for improvements in potato diggers, and the inventor of certain other improvements not then patented, entered into a written contract with the defendant, granting to the latter the sole and exclusive right and license to make and sell the machines containing said inventions and improvements ; in consideration whereof the defendant agreed to pay a royalty of five dollars on each of the first 5,000 machines manufactured and sold, a royalty of four dollars on each of the second 5,000 machines manufactured and sold, and thereafter a royalty of three dollars on each machine. The fourth clause of said contract provides as follows: “ Said party of the second part agrees to pay said party of the first part royalties on at least one thousand potato diggers in each calendar year during the continuance of this agreement, and it is mutually agreed that if said party of the second part shall fail to pay such minimum royalty for any one year, then this agreement shall cease and terminate at the end of such year, and all rights hereby conveyed to said party of the second part shall revert to said party of the first part.”
The defendant did not make and sell as many as 1,000 machines in any year during the continuance of the contract; but, at the end of each year, up to and including the year 1903, the plaintiff waived in writing the payment of royalties on 1,000 machines and his right to cancel the contract. He refused to make such waiver for the year 1904; and, the defendant having failed to make payment on 1,000 machines for the year, he demanded such payment and notified it of his election to treat the contract as terminated. This action is brought to recover the difference between the royalties actually paid for the year 1904 and the sum of $5,000, the stipulated royalties on 1,000 machines.
The case turns on the construction of clause four of the contract quoted supra. It will be noted that said clause contains two distinct and absolute agreements: (a) an agreement of the defendant to pay royalties on at least 1,000 machines in each year, (b) an agreement'that the contract shall cease and terminate if the defendant fail to pay such minimum royalties. These two agreements are expressed eonjunc
The eases do not, as claimed by the defendant, require a different conclusion. In the case of Wing v. Ansonia Clock Co., 102 N. Y. 531, the agreement was in the alternative, the defendant agreeing to pay a stipulated sum annually, or else to forfeit its right under the license. In Ebert v. Loewenstein, 42 App. Div. 109; affd. on opinion below, 167 N. Y. 577, it was held that there was no absolute agreement to pay the minimum amount stipulated and that such an agreement would not be implied from the language used. In the case of Corbet v. Manhattan Brass Co., 93 App. Div. 217, there was no absolute agreement to pay a stipulated minimum sum and there were other provisions of the contract showing that it was optional with the defendant whether it would continue the manufacture and sale. It is clear that the absence of any express words agreeing absolutely to pay the minimum sum stipulated was deemed controlling by the Court of Appeals, for the case was decided in that court upon the authority of Wing v. Ansonia Clock Co. and Ebert v. Loewenstein, supra. See 183 N. Y. 548. The precise question here has been at least once squarely decided by the Court of Appeals, Born v. Schrenkeisen, 110 N. Y. 555. The agreement in that case was expressed in the following language: “ We further agree to pay royalty on not less than six hundred chairs a year, and should we fail in this the agreement shall be null and void.” The trial court found that the writing did not ex
The defendant argues that, inasmuch as the contract could not have been terminated if it had paid the minimum royalties stipulated, the plaintiff could not after default terminate the -contract without waiving the payment of such royalties. This ignores the fact that if the payment had been made there would have been no default. The agreement to pay the minimum royalties was absolute. By making default the defendant incurred the penalty of forfeiture, but such default did not excuse it from performing its contract obligations. The defendant contracted to pay royalties on at least 1,000 machines each year for the exclusive right to use the plaintiff’s invention. It has enjoyed such right and must, therefore, pay the stipulated sum, notwithstanding the plaintiff has elected to avail himself of the right to terminate the contract. See Hamilton v. Park & McKay Co., supra.
The plaintiff should have judgment.
Judgment for plaintiff.