Golden State & Miners' Iron Works v. Angell, 89 Cal. 643

Golden State & Miners' Iron Works v. Angell

89 Cal. 643 | Cal. | 1891

McFarland, J.

In July, 1880, the defendant A. F. Collins obtained a money judgment against the defendant Horace B. Angell and one Cyrus Palmer, and in September of that year an execution which had issued on the judgment was returned wholly unsatisfied. In May, 1884, the said Collins and the defendant Elizabeth A. Bisdon, to whom an interest in the judgment had been assigned, instituted proceedings supplementary to execution against said Angell, which resulted in an order of the superior court, made May 23, 1884, commanding him to assign to one Forbes, a receiver appointed for that purpose, all the right, title, and interest which he, the said Angell, had in four letters patent for improvements in dredging-machines, to be sold in satisfaction of said judgment. A further order was made, permitting all persons or corporations claiming an interest in said letters patent to commence and prosecute any action against said receiver, to determine and enforce such interest. Whereupon the plaintiff herein, a corporation, commenced this present action, averring in its complaint that it is the real owner of one undivided half of said letters patent, and praying that it be decreed to be such owner; that said defendants Collins and Bisdon be enjoined from proceeding further against the same; that said receiver be ordered to make an assignment of the same to plaintiff; and for other relief, etc. The court rendered judgment for plaintiff, substantially as prayed for; and from the judgment, and an order denying a new" trial, the defendants Collins and Bisdon appeal.

The main history of the case, as shown by the findings and evidence, is briefly this: In May, 1880, the plaintiff was, and for mány years before then had been, engaged in manufacturing various kinds of machines, and the defendant Angell was then its superintendent, *651and was also a director and owner of stock in the corporation. Williams & Bixler were then owners of large bodies of swamp-land which they were endeavoring to reclaim, and protect by levees; and a large break having occurred about that time on the line of their works, one of their employees was told by said Angell that he thought his company (plaintiff here) could construct a dredging-machine, with certain improvements, by which levees could be constructed more cheaply than by any other method. Afterwards, interviews were had upon the subject between Angell and General Williams, of the firm of Williams & Bixler. At Williams’s request, Angell sketched out on paper his proposed improvements, and set the draughtsman of the plaintiff to work on a drawing. When the drawing was finished, Williams was somewhat pleased with it; but when an estimate of the cost was made, he thought it would cost too much for an experiment. Williams & Bixler were to advance the money to pay for the construction of the machine. Angell then stated to him that he thought “there were some valuable patentable improvements there that might be worth something, and in case there should be, that in consideration he would put the money in to build the machine and try it, that he would be entitled to one half and the Golden State and Miners’ Iron Works the other half of such improvements, whatever there was that could be secured by patent.” On his return to the iron-works of plaintiff he told Palmer, the president of the company, the statement he had made to Williams, and Palmer said it was “ perfectly satisfactory.” This report was made by Angell, as superintendent, to Palmer, as president of plaintiff. After considering the matter a day or two, Williams & Bixler gave Angell an order employing plaintiff to go on and complete the machine according to the drawings. The machine was built by plaintiff, for which Williams & *652Bixler paid plaintiff seventeen thousand dollars. It was put into operation by Williams & Bixler, at their expense, and proved a success, and was called the “ Hercules dredger.” Afterwards, “ General Williams and Mr. Palmer, the president of the plaintiff, decided it was time to secure, by patent, these improvements ”; and Angell gave to W. Knox, the secretary of plaintiff, a rough idea of what he (Angelí) thought was patentable, and requested Knox to examine the patent-office reports and learn if they had been covered by previous patents, it not being certain at the time which, or how many, of the improvements were new. After thorough investigation it was learned that some of the improvements were new; and rough specifications were given of them to Dewey & Co., patent solicitors, who prepared the papers necessary for applications for patents. Angell signed the applications as required by law; but the entire expense of procuring the patents was paid, one half by plaintiff, and one half by Williams & Bixler; and with the full knowledge and consent of Angell, they were to have the patents. Angell did not pay anything whatever towards procuring them, and the money was not paid for Angell, but by and for plaintiff and Williams & Bixler. Angell claimed no interest in the patents whatever, and when they were received he turned them over to Palmer, president of the plaintiff. In this way three patents were procured, viz., No. 246,362, issued August 30, 1881; No. 268,977, issued December 12, 1882, and No. 278,482, May 29, 1883. Afterwards, under similar arrangements, plaintiff was employed to make certain alterations and improvements on another dredger, called the “Atlas”; and another patent, No. 293,932, issued February 19, 1884, was procured. All these patents were issued to Angell, except No. 268,977, which was issued, one half to Angell and one half to Williams & Bixler. Angell, in his testimony, says: “ I have never *653in any way claimed or asserted any interest in these patents or the improvements described therein..... I took the situation in this way: Here was a certain job of work to be done, for which the foundry and machine-works, when represented, would probably be able to procure the job and make some money; and I was there in their employ, and I considered it a duty to do all I could towards fulfilling the wants of these parties, customers of that concern, and I started in to get up something to accomplish that particular object.” The court finds’ that no assignment of the patents was made by Angell to plaintiff, but that he held the same in trust for plaintiff.

On November 13, 1884, said Angell made application to the superior court to be discharged from his debts as an insolvent debtor, and on March 13, 1885, a decree so discharging him was entered. He was actually insolvent at the time the foregoing transactions took place; but he testifies that he did not then know of his insolvency, and considered his financial condition good.

We have alluded to some extent to the evidence in the case, because the main point made by appellants, and reiterated at nearly every stage of their argument, is, that there is no proof of any contract between Angell and plaintiff by which the latter was to own one half of the patents. But we think that there was ample proof of such contract. Angell expressly stated to the president of plaintiff that the latter was to have one half of the patents; and his conduct afterwards was a continuous and complete ratification of that statement. He allowed plaintiff to expend its own money for its own benefit in obtaining the patents, and expressly disclaimed any interest therein for himself. Certainly there was no want of assent on his part. It is contended that there was no consideration for the contract; but Angell was interested, not only as superintendent, but *654also as a stockholder in plaintiff, to procure the contract with Williams & Bixler; and the “prejudice suffered ” by plaintiff in paying for the patents was a sufficient consideration. (Civ. Code, sec. 1605.) Moreover, it is difficult to see how appellants are interested in that question. And the same may be said of the point that there was no formal action taken on the matter by the board of directors of plaintiff; neither the corporation nor any of its stockholders are making any objection. Something is said in the briefs about defrauding creditors; but in the first place, there is no evidence of any intent to do so, and in the second place, there is no averment in the answer that the transfer of the improvements and the right to patents therefor to plaintiff and Williams & Bixler were made with intent to defraud creditors. As to the other points made, as that the contract was about property that was uncertain, and not in esse, that it was unfair and unjust, etc., while we think that they are not well taken on their merits, it is sufficient to say that they refer to matters in which third parties, whether creditors or not, are not concerned. If plaintiff, through carelessness, had not neglected to have Angelí make a formal assignment of the patents as they were received, which Angelí was always willing to do, all trouble in the premises would have been avoided. The inchoate right which Angelí had to apply for patents for certain improvements to dredging-machines which he thought he had discovered, “ schemes which he had in bis head,” was nothing that could have been reached by a creditor. (Curtis on Patents, secs. 174, 175.) It was merely a privilege, dependent for its exercise upon his own volition. We do not know of any process by which he could have been compelled by a creditor to procure a patent. This right he transferred .to plaintiff and Williams ■& Bixler under the circumstances above stated; he chose to per*655form his contract, and to allow them to procure the patents in his name by the expenditure of their own money; and we think that the court below was right in holding that one half of the patents thus procured was, in justice and equity, the property of plaintiff.

The judgment and order denying a new trial are affirmed.

Sharpstein, J., and De Haven, J., concurred.

Hearing in Bank denied.