30 F. 525 | U.S. Circuit Court for the District of Southern New York | 1887
From the pleadings and proofs it appears that the orator and one Daniel W. Norris, who owned.letters patent No. 195,385, .dated September 18, 1877, granted to him for improvements in incased glass vessels, entered into a partnership for the purpose of mailing and
" While this agreement was in force, September 11, 1879, Norris gave notice of the dissolution of the partnership between him and the orator, and thereafter claimed that the orator had no interest in or right to the three-eighths of the license fees or royalties accruing due from C. Riessner & Co., and November 4, 1879, assigned all his remaining interest in the patents to one Wesley Young, subject to the contract with C. Riessner &' Co. Thereupon, November 7, 1879, the orator commenced suit against Norris in the state courts of Illinois, where they resided, to have his rights to the three-eighths of the license fees decreed to him, arid for an injunction to prevent the collection of the amount due on that share by Norris. Riessner & Co. were informed of this litigation, and withheld payment of the share claimed by the orator. In January, 1880, C. Riessner & Co. failed to make payment of the royalties of the December previous, due January 1st, for more than 10 days, and Norris claimed the right to terminate the contract on that ground. On March 26, 1880, the court of Illinois, in which the suit between the orator and Norris was pending, decided that the orator was entitled to the three-eighths interest in the license fees accruing under the contract with G. Riessner & Co., and decreed that Norris execute an assignment of that share of the interest in that contract, and that, in default of such execution by Norris, the same be made by a master of the court, which was done. C. Riessner & Co. were fully informed of this decree, and soon thereafter'paid to the orator the amount of that share of the royalties up to the first day of April, 1880. Norris appealed from the decree, and Riessner & Co. retained the three-eighths share from him', and paid it to the orator monthly, to November 1, 1882. On the twentieth of that month the supreme court of Illinois reversed the decision in favor of the1'orator, and. the orator immediately applied for a rehearing. Riessner & Co. were informed of this, and on December 20th wrote to the orator that, as the ease had then been decided in favor of Norris, they did not feel justified in paying him any more until a final decision was reached; that until then they should withhold all further amounts; and, if the decision should come in his favor, he would at once receive áll that was due him. After that, relying on the decision already made, they made terms with the assignees of Norris, and those acting with him and under him. On June 16, 1888, the supreme court of Illinois affirmed the original decree in favor of Norris, and, on July 3d after, Riessner & Co. paid to the orator’s attorney the three-eighths of the royalties for November and December, 1882, and gave receipts therefor. They have declined to pay him any further royalties, and this suit is brought for au account and recovery of the same.
The most important question that is made is whether the orator was entitled to the three-eighths of the license fees after the dissolution of the partnership. The decision of the supreme court of Illinois, having jurisdiction of the parties and the subject, is conclusive, as between the orator and • Norris, but not as between the orator and C. Riessner &
■ Another important question is as to the effect of the failure to make payment for 10 days, and of what was done thereupon by his assignee and by himself. The contract provided that, upon such failure, Norris might terminate the agreement by serving notice to that effect. This provision was for security of payment, and could be waived. He did not give any notice of termination, and insist upon it, but alluded to it, and suffered the contract to continue, and received subsequent payments. The agreement could not be both terminated and continue. When his assignee gave notice, it was long after it had boon loft to continue, notwithstanding that default. And what was done does not appear to have been done to really terminate the contract, but to cut oil' the orator’s rights under it, and leave it to continue under the form of a new one,
Another question is as to the effect of what transpired when the payments of the orator’s share for November a,nd December, 1882, was made to his attorney. The testimony of the defendants tends to show that this payment -was made upon an agreement that he would make no further claim on them, but would look to Norris for further indemnity. The testimony of the attorney is that there was no such agreement. The receipts are for the exact amounts paid, and specify that they are for the amounts due for those months. It may be that something -was said about reaching Norris, but the presumption is strong that the receipts show the real transaction, and, supported as it is by the testimony of the attorney, it is not overcome by that of the defendants. If they so understood it, he did not apparently, and the transaction would not amount to an accord and satisfaction without a mutual understanding to that effect.
Another question made is as to the liability of the defendant Meier. He entered the firm just before or at the time when the royalties in question began to accrue. He enjoyed the benefit of the license as a partner in the firm, under the contract. He is not liable upon any express contract, but is liable upon the implied contract to pay for what he has had as a member of the firm, upon the terms upon which the firm had it.
Some question has been made about the validity of the patents, or of the reissue of one of them. The defendants have not, however, so far as has been shown, been evicted from any of the exclusive rights which the patents purported to give, by any paramount title, but have occupied and enjoyed those rights. They are not, therefore, in any position to dispute their licensor’s title. White v Lee, 14 Fed. Rep. 789; McKay v. Jackman, 17 Fed. Rep. 641.
The defendants insist that this court, as a court of equity, has not jurisdiction of this cause, for the reason that it is a suit for an account of license fees, by an assignee of the claim, as they allege; and they rely upon Root v. Railway Co., 105 U. S. 189, and Hayward v. Andrews, 106 U. S. 672, 1 Sup. Ct. Rep. 544, in support of this limitation. It is an account of license fees that is sought in this case, but not by the licensor, as was the case in Root v. Railway Co., nor by an assignee of a right of action at law merely, as was the case in Hayward v. Andrews. The orator’s rights accrued to him by force of his interest as partner, and they were purely equitable rights, existing independently of the formal assignment by the master in chancery under the decree in Illinois. As the written contract ¿lid not run to him, he could not maintain an action at law.upon it; as he was the equitable owner of the three-eighths part of the royalties, as they accrued, he could maintain a suit in equity for
A suggestion is made that the jurisdiction fails because the amount in dispute does not exceed $500. But as the amount of this share appears to have been $230.65 for November, 1882, and $103.38 in December, it clearly enough appears that the amounts of the same for the number of months in controversy will exceed, or reasonably may be claimed to exceed, $500. It is also objected that neither Norris or Young is made a party, and insisted that they, or one of them, should be. But the defendants have fully settled with them, and the orator claims nothing of them. There is nothing in controversy in which they have any interest. The defendants have all the rights in respect to the orator’s claim that these persons had. and the orator has his own rights. The controversy is wholly between the orator and defendants. No others appear to be necessary parties.
Let a decree be entered for the orator for an account of the three-eighths of the license fees, according to the prayer of the bill, with costs.
(April 9, 1887.)
Further question is made, on settlement of the decree in this case, with respect to the termination of the license by the act of parties other than the orator, anti to accounting for what has been done since suit brought. If Norris, or Young, his assignee, had power to terminate the contract, without regard to the orator's rights under it, for non-payment of the license lees, neither of them did so for that cause, and they had no right to do it but for that cause. The defendants had the power to terminate the contract by giving notice according to its terms, and ceasing to operate under it. They did not do that. If they had, they would have been chargeable only so far. The orator h'ad rights under the contract which the others could not trade away. Wliat was done about terminating the license appears to have been to pretend to terminate it without really doing so, for the purpose of cutting off the orator’s lights. This was of no effect. They could not do, by indirection, what was beyond their power to do directly. What they did under the patents was done in pursuance of the original arrangement, and the orator is entitled to his share. The rights of the parties are to be determined as they stood at the commencement of the suit. When deter