212 A.D. 343 | N.Y. App. Div. | 1925
Lead Opinion
This action was brought in equity to compel the defendant to assign and transfer to the plaintiff all its right, title and interest in and to two inventions assigned by one Frederick L. Fuller to the said defendant, and to establish plaintiff’s right thereto. The plaintiff based its demand for such assignment upon the claim that such inventions were the property of said plaintiff by virtue of a contract entered into between the plaintiff and said Fuller whereby the plaintiff claims Fuller agreed to assign said patents to it. Fuller was not made a party defendant in the action, but the action was brought against the defendant upon the theory that its predecessor, the Remington-Arms Union Metallic Cartridge Company, whose obligations said defendant had assumed, had employed Fuller with full knowledge that such employment was a violation of the terms of said agreement theretofore entered into between the plaintiff and said Fuller, and that, therefore, the defendant became chargeable with the performance of the latter’s agreements.
On February 17, 1909, Fuller, then a resident of Trenton in the State of New Jersey, entered into a contract in writing with the plaintiff, by the terms of which the plaintiff employed Fuller in the capacity of an inventor “ for a period of one year commencing the 15th day of March, 1909.” The term of Fuller’s employment was stated in the contract clearly and without ambiguity, and under its provisions his term of employment thereunder expired on the 14th day of March, 1910. By the terms of the agreement Fuller was to enter the employment of the plaintiff on said 15th day of March, 1909, and agreed to devote his entire time and attention in the interests of the plaintiff, while the contract was in effect, to inventing and carrying out experimental work as directed by the plaintiff. Therefor he was to receive a salary from the cash register company of $5,000 for said period, payable in monthly installments of $416.67. It was further recited in the contract that since said Fuller while in the employ of said company would be in a position to be intrusted by said company with information regarding many of its mechanical devices, the demands of the future looking to the possible betterment of all of their contrivances and mechanisms incidental to their business, and
The contract further provided as follows: “ Said National Company agrees that in the event of its terminating the employment of said Fuller at the end of the period of one year covered by said contract, then, in such event,, said Fuller will be free immediately to enter the services of any other cash register company, as inventor, or in any other connection.”
The contract then excepted an adding or listing machine which Fuller had already completed and for the sale of which he had been negotiating with others, it being agreed that he would do no further work upon said adding machine, but endeavor to dispose of the same at the earliest possible moment and sever all connection therewith. There was also excepted from the contract a certain cash register upon which Fuller had been working during the preceding year and upon which he had expended some $3,000 in its development, and for which he had applied for letters patent to the United States Patent Office; and the plaintiff was given an option to purchase such machine if it desired. By the terms of the contract Fuller also agreed that he would upon demand at any time from said plaintiff furnish full information with regard to any inventions which he may have made or which may have been worked out under his direction during the term of his employment with said National Cash Register Company. The contract admittedly was prepared by the plaintiff and was designed to safeguard the plaintiff’s interests in all particulars. This contract was not renewed at the end of the year, and by its terms expired on March 14, 1910. Nevertheless, Fuller continued in the employment of the plaintiff until September 1, 1917, at varying rates of compensation. Shortly after the expiration of the term of employment under said contract Fuller approached plaintiff’s patent attorney, who was the one in charge of his department, and applied for a renewal of the contract of March 15, 1909, and asked the attorney what the company was going to do about it.
The second contract which was presented to Fuller for his signature and which the attorney told him was of a general form executed by all of the plaintiff’s inventors while in plaintiff’s employ, was executed May 24, 1910, and in somewhat condensed form was a repetition of the provisions of the former contract with reference to Fuller’s agreement, while employed by plaintiff, to assign to his employer all his right, title and interest in and to all inventions or patents relating to cash registers or machines designed for the purpose of accounting or for monetary transactions or mechanisms for use in such cash registers or machines and all processes and tools, excepting said adding machine which was expressly reserved and which Fuller had not as yet disposed of. In the second contract no period of employment was specified and there was no restrictive pro vision, upon Fuller after he should leave plaintiff’s employ.
On August 17, 1917, Fuller entered the employ of the Remington-Aims Union Metallic Cartridge Co., Inc., defendant’s predecessor, for a two-year term at an annual salary of $11,000, Fuller being employed by the Remington Company as an inventor in its cash register department. Concurrently with executing the contract with Fuller the Remington Company entered into an independent contract in writing with Fuller and three other inventors by the names of W. E. Best, W. H. Fryer and J. Q. Finfrock, by the terms of which the Remington Company agreed to pay Fuller and his three co-inventors, upon completion of the tool model of a new cash register that should not infringe any existing
Interpreting the contract as restricting Fuller for one year after
The evidence showed that prior to the commencement of the present action the defendant in connection with the invention and development of its cash register business had expended the sum of $1,300,000. This sum was in addition to the cost of the buildings housing said business. As the result of the decree of the court below, this great expenditure has been lost to the Remington Arms and the fruits thereof have been awarded to the plaintiff. The question, therefore, presented is one of considerable financial importance to the parties.
I am of the opinion that a fair interpretation of the written contracts between the plaintiff and Fuller did not justify the decision of the trial court nor support the conclusion that the plaintiff is entitled to an assignment of the two patents held by the defendant. I am of the opinion that the contract of March 15, 1909, came to an end on the 14th day of March, 1910, and that the restrictive covenant therein contained was not in force or effect after the expiration of the term of said contract, and that in any event the contract would not be enforcible against the defendant who was not a party to it and who had no reasonable ground for supposing that Fuller was bound thereby at the time
And even though the contract provisions be clear, specific performance will not be decreed if the result will be harsh and inequitable. (Pom. Eq. Juris. [4th ed.] §§ 1713, 2107, 2108, 2216.) In the case at bar the equitable principles above alluded to should be applied with the greatest strictness as the plaintiff seeks to enforce the alleged contract against the defendant who was not a party to it, and who should only be held chargeable in equity under its plain and unmistakable provisions, and in the absence of undue hardship to the defendant.
I am of the opinion that under the express terms of the contract of March 15, 1909, the employment of Fuller by the plaintiff was for no longer period than one year, and that at the expiration
That both of these agreements were prepared by counsel for the plaintiff seems reasonably to be inferred for the reason that
Plaintiff must sustain the judgment herein upon the provisions of the contract which it had with its employee, Fuller, strictly
At the expiration of Fuller’s term of employment under the contract on March 14, 1910, he continued with plaintiff without anything being said as to the terms of his employment until the latter part of March or early in April, 1910, when the talk was had with plaintiff’s attorney and representative, Muzzy, with reference to the granting of a new term contract. A new contract was denied Fuller arid he was relegated to a continuance of his employment at the will of his employer and only obligated himself to turn over the fruits of his inventions during the term of his employment in the manner provided in the second contract executed May 24, 1910. I am unable to construe the contract of May twenty-fourth in any other light than as superseding the contract of the year before. It was more than a mere perfunctory document which the plaintiff required all of its inventor employees to sign. It expressly excepted the adding machine which Fuller retained. The contract of May 24, 1910, which Fuller executed was but a condensed form of all of the material protective provisions of the original contract with the sole exception of the provision restricting Fuller for the period of one year from the termination of his employ
It further appeared from the evidence that employees of the invention department of the plaintiff were not at that time given time contracts. They were all employed at will and this was the reason given Fuller why plaintiff refused to make any exception in his case. Upon the trial the plaintiff proved that all its other inventor employees were required to sign contracts similar in form to that executed by Fuller on May 24, 1910, but none of such contracts restricted the employee’s freedom after his employment had terminated. No reason was suggested upon the trial why Fuller should have been restricted more than the 125 of his fellow-employees in the same department. Had it been the understanding of the plaintiff that the original contract remained in force, why the necessity of embodying in the second contract essential provisions contained in the first? Finally, what was the necessity of the contract of May 24, 1910, if the first contract remained in force? It certainly contained no additional provisions to those contained in the first contract. Muzzy, plaintiff’s attorney, to whom Fuller applied for a renewal of his term contract in April,
And the court in that connection inquired: “ That was your understanding, wasn’t it? He was employed at will, and he could leave and you could discharge Mm? (The Witness): Yes.”
The foregoing quotations from the testimony of plaintiff’s man Muzzy would seem to effectively contradict the conclusion of the court that the Mring of the plaintiff after March 14, 1910, was from month to month. A Mring from month to month would be a time employment and differs radically from an employment at will. Fuller’s testimony upon the trial clearly showed that he entered into the original written contract for the term of one year and, with two unimportant exceptions, gave up to the plaintiff the fruits of his life work as an inventor. He entered plaintiff’s employment undoubtedly hoping that he would continue therein. At the end of a year he was informed that the plaintiff would not renew Ms contract and would not hire him for any particular period. His position thereafter became a hazardous one. He was subject to discharge at any time without notice, and it is unreasonable to believe that he intended or that the plaintiff believed that it was exacting from Mm a promise to do that which would deprive him of a living for at least a year in the only employment which he understood or at which he could earn a living.
I think the testimony clearly demonstrates that the defendant throughout acted in the utmost good faith. It is difficult to conceive that an individual or a corporation with the slightest business perspicacity would enter into the contract which the defendant did with Fuller; would expend $1,300,000; would pay Fuller and his three coinventors $150,000 in cash for the model of a cash register which would not infringe existing patents, without believing that it had a legal right to incur such expenditures. Had the defendant entertained the slightest doubts of its right- to deal with Fuller and to purchase of him and his colleagues the patent cash register which they were inventing, the transactions could easily have been delayed three months, when the term for which the plaintiff claims Fuller was restricted would have expired, and even under the interpretation which the plaintiff puts upon the contract, there would have been no objection to his turning over to the defendant the newly-contrived machine.
The defendant apparently acted in the utmost good faith in employing Fuller and in entering the field of cash register manufacture. Indeed, the learned justice presiding at the trial, after the close of the plaintiff’s case openly expressed the opinion that no evidence had been presented attributing any sinister motive to the defendant or which would impugn the good faith of the Remington Company. The plaintiff suffered no injury whatever by reason of the newly-invented cash register. It did not infringe upon any patents held by the plaintiff, and yet the decree appealed from awarded to the plaintiff, without the payment to defendant of a dollar, the entire fruits of defendant’s expenditure of nearly $1,500,000, a most inequitable result. The most that the restriction in the contract could reasonably have been intended to secure to the plaintiff was the right to hold the fruits of its employee’s inventive genius while in its employ, or thereafter, for the period of one year, the right in and to any inventions which depended for utility upon inventions made by the employee while in plaintiff’s employ. The proofs established and the court has held that the inventions which defendant is directed to turn over to plaintiff were not invented while Fuller was in the employ of plaintiff, and that they do not depend for utility upon any invention made by him during such employment. In the face of such a finding, the conclusion of the trial court in turning over such invention to plaintiff seems to us most inequitable and unjust.
I am of the opinion that the decree of the learned court below is a harsh, inequitable and unjust one, and that the same is unsupported by the evidence in the case or by legal or equitable principles applicable thereto. The judgment appealed from should be reversed, with costs, and plaintiff’s complaint dismissed, with costs.
Bowling and Martin, JJ., concur; MoAvov and Burr, J.Í., dissent..
Dissenting Opinion
(dissenting):
The period during which plaintiff’s former employee was to transfer his title to inventions made by him was obviously to extend for a year after the termination of his employment, and was not, in view of the nature of his relation to his employer, to continue merely during the original term of the contract. The intent to restrain his transfer of inventions to others of products similar to plaintiff’s is inherent in the nature of his agreement, and its extension for one year after cessation of employment is not unreasonable nor conditional upon any contingency indicated in any of the memorials embodying the terms of his engagement.
I, therefore, dissent.
Judgment reversed, with costs, and complaint dismissed, with costs. Settle order on notice.