Denning v. Bray, No. 114

No. 114 | 2d Cir. | May 29, 1894

LACOMBE, Circuit Judge.

The patent is for a dress stay. It was issued November 11, 1890, on application dated July 29, 1890, to the inventor, Morris-P. Bray. By a written assignment, dated May 2, 1891, and recorded in the patent office June 1, 1891, Bray transferred to Oscar Lublin- one-half of all has right, title, and interest in said patent. The defendants, E. J. Denning & Co., are dealers in dry goods, notions, and fancy articles, and as such have sold dress stays which are concededly within the claims of the patent. The stays so sold were made by the firm of Stewart, Howe & May. As the record title to the patent is in the complainants, its validity in no way assailed, and infringement conceded, defendants can justify their dealing in the articles only by •showing that they had the right to sell them. This they seek to do by proving that Stewart, Howe & May manufactured; the articles under a license from one John Kendrick; and upon the defendants rests the burden of showing that Kendrick, though not an owner of record, had the right to license manufacture under the patent. The contention that John Kendrick is the equitable owner of an undivided one-half interest in the patent in suit is based upon a written agreement between Bray and himself dated November 1, 1889. Kendrick testifies also to an earlier agreement between them, which he says was executed May 12, 1888, and produces a draft or copy thereof sighed and sealed by himself. Bray denies ever having signed this earlier agreement. Of each of these men (Bray and Kendrick), it may be said that his narrative of his own transactions, his letters to his various associates (a correspondence with which the record is filled ad nauseum), and his individual conceptions of fair dealing, as evidenced by his conduct, must-impress whoever studies the case with the conviction that his unsupported testimony is entitled to but little weight. As to this alleged first agreement, therefore, the evidence standing oath against oath, and both witnesses being of doubtful veracity, defendants have failed to sustain the burden they assumed. The making of the agreement of November 1, 1889, however, is conceded, and some antecedent circumstances are sufficiently proved. Some time in 1888, Bray and Kendrick, who had been jointly interested in some corset patents, and had frequently traveled together as salesmen, began to discuss the desirability of going into the business of making and selling dress stays. In October, 1888, Bray applied for a patent on a garment stay consisting of two steels in parallel pockets, combined with a cord at the edge of the 'stays, the cord being introduced in the process of weaving. Patent was .issued therefor on January 22, 1889 (896,583), to Bray, - assignor of one-half to Kendrick, and upon this patent the invention covered by -the patent in suit is concededly an improvement. The various discussions between Bray and Kendrick as to going into the dress-stay business, found final expression in tbe agreement of November 1, 1889, which was recorded in the patent office October 30,1890. It is as follows:

“Whereas, Morris P. Bray, of Ansonia, Conn., and John Kendrick, of St. Bonis, Mo., are jointly owners of letters patent dated January 22, 1889 (No. 396,533); and whereas, it is mutually agreed by and between said Bray and Kendrick to share and share alike in said letters patent, and all other inventions to be made ai>pertaining to dress or garment stays (outside of corset stays), it' is hereby agreed as follows: Wilnesseth, the said Bray and said Kendrick, for and in consideration of one dollar each to the other paid, tlie receipt of which is hereby acknowledged, hereby agree not to sell any part of said letters patent dated January 22, 18.89 (No. .'¡96,533), nor to license any other parties to make said dress stays under said patent, or to make or sell, or cause to be made or sold, any of said stays, excepting as shall be sold or made, or caused to be made and sold, jointly by said Bray and Kendrick. It is hereby further agreed that neither party shall make any new invention on dress stays, or canse to be made any new improvements in dress stays, independent of the other party, and that any and all inventions and improvements, either mechanical or design, shall he owned jointly and mutually by said Bray and said Kendrick. The object of this agreement is to create and build up a good business on dress stays, said business to be owned and shared mutually and equally by said Bray and said Kendrick. It is hereby further agreed that, in case any new invention is made by either said Bray or said Kendrick which the parties to this agreeement should not wish to adopt, the party making the invention shall not negotiate for its sale or use to any other parties without the written consent of the other party. In witness whereof, we have this 1st day of November, 1889, set our hands and seals.

“Morris P. Bray. (Seal.)

“John Kendrick. [Seal.]

“Witness: Geo. M. Treat.”

The learned judge who tried tbe case at circuit construed this agreement as providing that whatever rights either might, by its terms, acquire in future inventions of the other, should be “qualified down to the requirements of the business” they were undertaking to build up, and that when that business ceased each patent for an improvement should remain the property of the individual inventor, unqualified by any further interest of tbe other therein. We are of the same opinion. The provisions of the' agreement, undoubtedly, secured to each an equitable interest in any patent for an improvement taken out: by the other, but precisely what that interest was must be determined by a consideration of the whole document. The object: to be accomplished by the agreement is expressly stated to be the creation and budding up of a good business in dress stays, which business was to be owned and shared mutually and equally by both. All provisions in the contract which are at all susceptible of a double meaning must -be so construed as to harmonize with this fundamental object. • Manifestly, tbe underlying consideration for the contributions of each to the common purpose is tbe profit anticipated from the creation and sharing in such business; and a court will not be astute so to construe it that, in the event of the consideration failing, the unexpended contributions of either should still remain the property of the other. Assuming that Kendrick had invented and applied for patents on several valuable “improvements” within a month after the maldng of the agreement, and then died before-the business contemplated had been created or built up,—before' even a single stay had been sold or contracted for,—could it be reasonably contended that it was tbe intention of the parties that the new patents should issue one-half to Bray? Or was it the intent of the agreement to give to both such an ownership of patents for the inventions of each as would enable each noninventor to create and build up a business by licensing outsiders, independently of the other? There seems but one answer to these questions, and the language used by the contracting parties, when taken as a whole, expresses what appears to have been their intent. As to the patent already owned in common (that of 1889), each agrees not to sell his share, nor to give any license to make stays thereunder, nor to make or sell, or cause to be made or sold, any of said stays, except jointly. As to new inventions, each agreed not to make improvements independent of the other, and that all inventions and improvements, either mechanical or design, shall be owned jointly and mutually by them; but they do not provide for any assignment of patents to be issued for such inventions or improvements, and state that the object of the agreement is the creation and building up of the business in which, by the agreement, they became partners. As to inventions of either which both may not “wish to adopt,”— that is, to put into their mutual business,—they secure themselves against possible competition from outsiders by a clause providing that the party making the invention shall not negotiate for its sale or use without the written consent of the other. Whatever right each acquired under this agreement in a patented invention of the other was therefore only such as would accrue to him as a member of the partnership, to which, during its existence, and for its business use, the invention was contributed by the other. Otherwise than as a member of the partnership, or for purposes other than those which that partnership was formed to accomplish, he acquired no interest, legal or equitable, in such patents; and upon the termination of the partnership the interest of each in the inventions of the other would cease and determine.

This construction of the agreement -renders it unnecessary to review the long narrative of subsequent events,—the arrangements which Bray and Kendrick made with Lublin; the formation of the firm known as the “Twin Dress-Stay Company;” its dissolution, and the papers executed upon such dissolution. Appellants’ counsel concedes in his brief that the agreement of November 1, 1889, created between Bray and Kendrick a partnership relation, with no stated term, and terminable at will. It is plain, upon the evidence, that it was so terminated long ago, and the mutual business of the partners abandoned by both. There is nothing to overcome the prima facie proof of invention by Bray, which the letters patent afford; and, the partnership business to which it was temporarily appropriated having terminated, all equitable interest of his former partner therein ceased. Defendants having-failed to make out the defense of license, the decree of the circuit court was correct, and judgment is affirmed, with costs.