3 F. 143 | U.S. Cir. Ct. | 1880
This is an action for breach of covenant, brought originally in the circuit court of the county of Essex, New Jersey, and removed by the plaintiffs into this court under the provisions of the act of congress regulating tho removal of causes, approved March 3, 1875. There was a general demurrer to the declaration filed in the court below, which the court, after argument, sustained, and leave was granted to the plaintiffs to amend. An amended declaration was thereupon filed, to which the defendant, after craving oyer of the writing or agreement mentioned in the declaration, again put in a demurrer, and the question to be determined depends upon the nature and character of the contract on which the suit is brought.
The declaration in substance alleges that the defendant corporation was the owner of the two several patents, one for an improvement in treating and moulding pyroxyline, and the other for making a certain valuable substance or compound known as celluloid, and, being such owners, on the tenth day of March, 1872, by a certain indenture between the defendant corporation of the one part and Charles M. Theberath, Jacob H. Theberath, George M. Drake, Samuel J. Coursen, Jr., and Martin M. Drake, of the other part, sealed with the seals of the respective parties, granted, conveyed, and made over to' the plaintiffs, as well as to the said George M. Drake, Samuel J. Coursen, Jr., and Martin M. Drake, and to each of them, the full and exclusive right to use the said material within the United States for the purpose of its application to harness, carriage, and trunk trimmings, and for no other use or purpose whatever, as a license under the above-named letters patent, or any other United States letters patent, or parts of the same, or privileges that might then or thereafter be in the possession of the defendant corporation; that the said. defendant therein and thereby promised and agreed to prosecute, at their own cost and expense, every party unlawfully infringing said letters patent, or any one or parts of the same, in so far as said letters patent pertained
It further alleges that it was provided by the said agreement that if, from any cause, the said defendant corporation should fail to furnish 100 pounds of celluloid per day, if requested so to do, on 10 days’ previous written notice, or any other amount, up to 500 pounds per day, on 60 days’ notice in writing, then the said parties of the second part, or either of them, should be at liberty to prepare the material for the purpose set forth in the agreement, and should keep books of account showing the amount by weight of said nia.terial so made and used by them, or either of them, and should make returns under oath, on the first days of January, April, July, and October, of each year, during the continuance of the said manufacture, of all the material thus made, and within 10 days after each date of return should pay to the defendant corporation the sum of one dollar as royalty for every pound of the material specified in the said agreement.
The declaration thou alleges that although the plaintiffs have always kept and performed all things in the license contained on their part to be kept and performed, and although the defendant corporation was bound to furnish to the plaintiffs celluloid in such colors and quantities as they desired, not to exceed 100 pounds per day, upon 10 days’ notice, nor
The issue raised by the demurrer turns upon the question whether the contract on which the suit is brought is joint or several. The counsel for the demurrants insists that it is a license, authorizing the licensees jointly to use the patented article in the manner and upon the terms specified in the agreement, and that no action is maintainable thereon by any number of the licensees less than the whole number. The counsel for the plaintiffs, on the other hand, contends that the contract is, in fact, an assignment of a portion of the patent to grantees; that the several owners of a patent are not partners, but tenants in common, and that each part owner has the right to order and use the patented article without the consent of the other, and hence that the grantor is severally liablé to each one of the grantees for the breach of the covenants of the agreement.
In the present case, tho instrument executed by the parties to transfer a right to use or manufacture the patented article is called by them a license, and not an assignment. This is not conclusive, but suggestive of their intention; and all pretence of an assignment is negatived by the clause in which the grantor covenants to prosecute, at its own expense, every party or parties that unlawfully infringe the letters patent, or any one or parts of the same, remaining in its possession, so far as they pertain to carriage, harness, and trunk trimmings.
Not only did the grantor retain the patents, but it also retained the use and control of the invention, except so far as the same could be applied to a particular branch of industry or manufacture, to-wit, harness, carriage, and trunk trimmings. It promises and agrees, for a stipulated price, to promptly fill all orders of the licensees for the material required by them in said manufacture, and in the event of its failure to fill them with reasonable promptitude — to-wit, orders for less than 100 pounds por day on demand, orders for 100 pounds upon 10 days’ notice, and orders for any other amount up to 500 pounds upon 60 days’ notice — the licensees are at liberty to prepare the said material, for the purpose and use aforesaid, to any extent needed in their business, by rendering quarterly statements under oath of the amount of their manufacture, and by paying therefor the royalty of one dollar per
2. Whether it is a joint contract with all the licensees, or several with each, is a more difficult question to answer. The difficulty arises from two sources: First, from the loose and careless use of words in the agreement itself; and, second, from the fact that the law determines whether a'covenant is joint or several much more from the subject-matter of the contract than from the words employed. Williams on Personal Property, 304.
The contract on its face is said to be between the defendant party of the first part, and George M. Drake, Samuel J. Coursen, Jr., Charles M. Theberath, Jacob H. Theberath, and Martin M. Drake, party of the second part, “for themselves, their heirs, executors, administrators, and assigns, respectively.”
The obvious and most usual meaning of the word respectively is “as relating to each.” It is not easy to say what the parties meant by its use in the foregoing connection. If it has reference to the persons composing the party of the second part, as well as their heirs, executors, administrators, and assigns, do not each of the individuals have a separate and distinct interest in the license, and is not each one entitled to the use of the invention in the manner and upon the conditions expressed in the contract ? And why should there be a covenant with the assigns respectively of the licensees, if each one had not the right to individually use or individually assign his interest without the concurrence of his co-licensees ? But it may be admitted that the words used prima facie import a' joint covenant; yet, if the covenantees have a separate interest in the subject-matter, each may have a separate cause of action, and to this effect are all the authorities. Windham’s Case, 5 Rep. 8a; Slingsby’s Case, Id. 19a; Eccleston v. Clipsham, 1 Saund. R. 153-154, (1;) James v. Emery, 8 Taunt. 129-245; Thomas v. Pyke, 4 Bibb, 418-420.
Does the agreement convey to these licensees a separate interest in the subject-matter of the grant ? It licenses them
But, without expressing any opinion on this point, I think there is another fact appearing in the case that did not appear in the court below, and which estops the defendant from objecting to the non-joinder of the other licensees as plaintiffs in the suit. The declaration alleges that, previous to the defendant’s refusal to furnish celluloid to the plaintiffs,, the said George M. Drake, Samuel Coursen, J'r., and Martin M. Drake surrendered all their right, title, and interest to and in said license to defendant, and the defendant accepted said surrender, whereby the plaintiffs became the sole owners thereof.
The demurrer admits the fact alleged, and we have thus presented this interesting question, where five persons are licensed to use a patented article, and the licensor afterwards agrees that three may surrender their interest, whether the remaining two may still exercise the rights and privileges conferred by the license.
I can perceive no reason why they should not be allowed to do so, nor why the defendant, after agreeing to such severance of interest, should not be estopped from setting up that the released licensees did not join in the suit upon a contract in which, by their voluntary act, and with the assont of the defendant, they had no further concern.