Niles v. Graham

181 Mass. 41 | Mass. | 1902

Loring, J.

We are of opinion that the plaintiff is entitled to a re-execution of the assignment of the letters patent.

By the true construction of the contract the defendant gave to the plaintiff an equal interest in the patent in question and in any future improvements made by him on the invention covered by it’; and in payment for that half interest the plaintiff agreed “ to furnish capital as needed.” At that stage of the adventure it was not possible to go into details, and the parties agreed that the patent should be assigned to the plaintiff “ to be held by him in trust ” and “ to be assigned ” by him “to a corporation now organized or to be organized whenever the parties may deem it advisable for the purpose of carrying on the business aforesaid.” It is provided that the capital stock of the corporation, to which the patent is assigned, shall be divided in equal shares between the plaintiff and the defendant, but that the amount, to be contributed by each to be sold for working capital, shall be fixed by the plaintiff. No other details were agreed, upon by the parties. It was not specified who was to decide the question, whether an existing corporation should be availed of or a new one organized, and in case a new one were organized, who was to decide the many questions, which necessarily will arise in that connection. Neither was it specified how long a time should be allowed for this purpose, or for the plaintiff to furnish the capital.

The defendant argues, from this failure to deal with these details in the agreement, and from the clause, that the letters patent were to be held by the plaintiff “ in trust during such time as to the parties hereto it may seem advisable,” and from the further clause, that the letters patent were to be assigned by the plaintiff to a corporation “ whenever the parties may deem it advisable for the purpose of carrying on the business aforesaid,” that the defendant had the right to terminate the whole arrangement at any time he thought fit.

But we do not think, that that is the true construction of the contract. Taking the contract as a whole we think that the plaintiff came under an absolute obligation to furnish the capital needed and the defendant came under a corresponding obligation to afford him time to do so. The contract contemplates that the invention is to be exploited by a corporation and that a corporation will be formed, that the capital will be furnished by the plaintiff and that the letters patent will be assigned by the plaintiff to that corporation.

When the defendant had transferred the letters patent to the plaintiff, the plaintiff was bound to furnish the capital within a reasonable time, and the defendant was bound to give him a reasonable time within which to do so. The various questions as to what corporation should be utilized, or, if a new one were organized, what, and how, it should be organized, not having been agreed upon, must be determined by what is reasonable under all the circumstances. As the plaintiff is to furnish the capital and is to decide upon the amount, which is to be contributed by each to be sold for working capital, we think that he should take the initiative in the matter of utilizing an existing corporation or organizing a new one, and that any reasonable course adopted by him must be accepted by the defendant.

The defendant, having wrongfully mutilated the assignment to the plaintiff, should re-execute the same; upon his doing so, if the plaintiff does not within a reasonable time do one of these two things, namely, either assign the patent to an existing corporation which is reasonably fitted for the purpose, or organize such a corporation as is reasonably proper and furnish such capital as is reasonably necessary, he will commit a breach of his contract for which the defendant may have his action of damages. Whether an existing corporation or a new corporation is used, the plaintiff and defendant are to have an equal share in the capital stock.

We think that the ruling made at the hearing was wrong, that since the whole contract could not be specifically enforced by the court the defendant would not be compelled to re-execute the assignment. The amended bill in this suit in its final form, is not a bill seeking specific performance, but a bill to compel the defendant to restore to the plaintiff evidence of the assignment to him in.order that among other things it may be recorded in the patent office. The mutilation of the assignment did not revest the title in the defendant, but it prevented the plaintiff from perfecting the title which as between the parties had already vested. The re-execution of lost instruments is a separate and ancient head of equity jurisdiction. Bennett v. Ingoldsby, Finch, 262. Simmons Creek Coal Co. v. Doran, 142 U. S. 417. Lawrence v. Lawrence, 42 N. H. 109, 112. Lancy v. Randlett, 80 Maine, 169. Kent v. Church of St. Michael, 136 N. Y. 10. The case of an instrument which has been wrongfully mutilated comes within that rule. Since St. 1877, c. 178, (Pub. Sts. c. 151, § 4; R. L. c. 159, § 1,) this court has had full jurisdiction in equity. Billings v. Mann, 156 Mass. 203. Hurd v. Turner, 156 Mass. 205, n. Emerson v. Atkinson, 159 Mass. 356, 361. Nathan v. Nathan, 166 Mass. 294. Weeks v. Currier, 172 Mass. 53. New England Ins. Co. v. Phillips, 141 Mass. 535, 545. Old Colony Railroad v. Rockland & Abington Street Railway, 161 Mass. 416, 417.

Decree accordingly.