Loose v. Bellows Falls Pulp Plaster Co.

266 F. 81 | 2d Cir. | 1920

HOUGH, Circuit Judge

(after stating the facts as above). By the conveyance to Hendee et al. plaintiffs doubtless intended to give them an “exclusive right” in the Coale patent to a “specified part of the United States.” R. S. § 4898 (Comp. St. § 9444). The intent was to make them grantees and not assignees or licensees. Robinson, Pat. § 763; Pope, etc., Co. v. Gormully, etc., Co., 144 U. S. 248, 12 Sup. Ct 641, 36 L. Ed. 423.

It may be assumed, but need not be decided, that the grant was not reduced to a license by the reservations of a royalty or otherwise. Cf. Sechler, etc., v. Deere, etc., Co., 113 Fed. 285, 51 C. C. A. 242. If this suit were for infringement, the distinction would be of importance; but in respect of estoppels and methods of procedure there is no difference between the attempted collection of royalties from a licensee and grantee. Robinson, Pat. §§ 794, 820.

[1] By timely motion and assignment of error appellants present the question whether equity lias jurisdiction over this suit; and we must find that such jurisdiction does not exist. Plaintiffs seek merely to recover money computable with certainty as soon as the number of tons of plaster is ascertained; yet, as the pleading shows, it is thought that, by asking discovery, jurisdiction will be exercised to take an account.

Chancery grants discovery when the law affords no adequate remedy to extract from a defendant facts in liis exclusive possession which are a part of or constitute the cause of action. But mere difficulty of ¡moving his case will not confer on a plaintiff the right to file a bill. United States v. Bitter Root Co., 200 U. S. 472, 26 Sup. Ct. 318, 50 L. Ed. 550. Equity will not aid law to ascertain damages by entertaining a bill for discovery. Munger v. Firestone, etc., Co., 261 Fed. 921, — C. C. A. —-. A fortiori will it not retain a bill when the discovery desired has no other purpose than the liquidation of damages. Such is the present'cáse; .for there is no mutuality in the account. The cause of action rests on unquestionable written documents, and the only purpose of a bill in equity rather than a declaration at law is to avoid the trouble of proving before a jury, by the use probably of R. S. § 724 (Comp. St. § 1469), the number of tons made and sold by defendant.

The method of recovering royalties being the same here as it would be if defendants were licensees, it is settled that a bill merely to get unpaid royalties will not lie. Keyes v. Eureka, etc., Co., 158 U. S. 150, 15 Sup. Ct. 772, 39 L. Ed. 929; Heckscher v. Pennsylvania, etc., Co. (D. C.) 205 Fed. 377, and cases cited.

[2] As plaintiffs’ claim may still be urged at law, we consider the question of damages. From the tenor of all the written documents it is plain that what Hendee et al. agreed to do was to make plaster under Coale’s patent, and royalty was to be paid on that kind of plaster. It may be true that any plaster containing wood fiber is Coale’s plaster, “substantially as described”; but the fact was controverted, and there is no proof of it. Even less is there any proof that all plaster to which the descriptive phrase “elastic pulp” is appropriate was within Coale’s range of equivalents.

This action is not to recover Royalty on plaster marketed under a particular name, but to recover.the sum agreed to be paid on plaster of a particular kind, viz. Coale’s kind. A licensee or grantee, paying royalties, pays on what he has agreed to make; he is estopped to impeach the patent under which he operates, and the patent is entitled to a generous construction as against him, but that is all. Eclipse, etc., Co. v. Farrow, 199 U. S. 581, 26 Sup. Ct. 150, 50 L. Ed. 317; Western, etc., Co. v. Robertson, 142 Fed. 471, 73 C. C. A. 587; Walker, Pat. § 507.

[3] We further hold that no ground has been shown for the recovery of royalties from the corporate defendant. From the course of business it was inferred below that Hendee had assigned to the corporation the contract with the plaintiffs. As to this we express no opinion, but, assuming it as true, there is no evidence that on receiving such assignment the corporation assumed the obligation of Hendee et al. to pay royalties. It is only by virtue of such assumption that liability arises on the contract, and this action is on the contract, for no defendant is sought to be held in tort. Cf. Goodyear, etc., Co. v. Dancel, 119 Fed. 695, 56 C. C. A. 300, and cases cited.

The decree appealed from is reversed, and the cause remanded, with directions to dismiss the bill as to Bellows Falls Pulp Plaster Company and to transfer the original bill as against Hendee to the law side of the court, there to be proceeded with, with such alteration in the pleadings as shall be essential. As equity never had jurisdiction, the supplemental bill falls, and is directed to be dismissed without prejudice.

Appellants are granted the costs of this appeal; the corporate defendant will recover its costs of action on taking dismissal of bill.