Pitts v. Jameson

By the Court, Johnson, J. The contract entered into between the plaintiff and Horace D. Jameson the intestate, on the 20th of March, 1846, did not operate as an assignment or transfer to the latter of the right and title secured by the letters patent, to the invention, within the territorial limits of the state of Ohio. It was a mere agreement, which secured to the intestate the exclusive right to make and use, and to sell to others for use, the machine invented, within that state, except such as the plaintiff, who still retained the title or ownership of the right, might choose to make and sell himself, which right he reserved in the agreement. In Gayler v. Wilder, (10 Howard, 477,) it was held that an agreement by which the owner of a patent right transferred to another the exclusive right to make and vend the article invented, in a certain territory, but reserved to himself the right to make and vend also, within certain limits and upon certain terms, and the other party agreed to pay a certain stipulated price for each article made and sold, was only a license to manufacture and sell, although in terms it appeared to be an absolute sale or assignment of the right within the specified territory. The agreement in this case, although in the nature of a license, .is more than a mere technical license. It i.s a contract, founded upon a sufficient consideration, by which a right is secured, not revocable at the pleasure of the grantor, and not a mere personal trust, but a fixed contract right, vested in the grantee and assignable by him. It was however a chose in action, not in possession, there being no transfer of title. But by the terms of [316] the contract the intestate and his assigns could retain the right so long only as he or they prosecuted the business under it. Whenever the business of making the machines was abandoned or given up, the rights secured by the contract reverted to the plaintiff. Then, and not till then, could the plaintiff sell to third persons the right to make or vend the machines within the said state, without making himself liable to respond to Horace D. Jameson, his personal representatives or assigns, for all the damages sustained by reason of such new license. The reservation in the contract was to the plaintiff himself, only; a mere personal privilege, not transferable to third persons. Upon the death of H. D. Jameson, this contract, and all the rights secured to him by it, went to the defendants as assets. But they as administrators could not carry on business under it, any farther at most than was necessary to complete machines begun by the intestate in his lifetime and remaining unfinished at his death. To that extent, and for that purpose, they might lawfully, as they did, use the materials provided by the intestate in his lifetime under the contract, and thus preserve the right to the estate, and prevent its reversion to the plaintiff. (Story on Cont. § 287. Siboni v. Kirkenam, 1 M. & W. 418. 2 Id. 190.) But beyond this they could do nothing. They held the right in trust merely, to convert into money if necessary to the settlement of the estate, and if not, to distribute with the surplus of the personal estate,'according to the statute. They had no right as administrators to carry on the general business of making machines under the contract. They might have sold and transferred the right, in order to raise funds to pay debts, and the purchaser would have acquired all the rights, as I think, secured to Horace D. Jameson in his lifetime, had the business of making machines been carried on without suspension. But it was not shown or pretended, upon the trial or upon the argument, that the defendants ever wished or endeavored to dispose of the contract for the purpose of settling the estate, or that they or any one, who was, or might be, entitled to it in the way of distribution, contemplated carrying on the business under it of making machines. There is nothing to show that the value of the con [317] tract as a chose in action was in the least diminished by the license from the plaintiff to 0. M. Bussell & Co. or others to make and sell machines in Ohio. Hence it follows that the only damage sustained by the defendants was in the diminished price of the machines completed by them, caused by the new license, and this the judge instructed the jury to allow. [Cayuga General Term, June 6, 1853. Selden, T. R. Strong and Johnson, Justices.] The learned judge was, I think, clearly right in refusing to charge the jury as requested by the defendant’s counsel, that the authority given by the plaintiff to C. M. Bussell & Co. to build and vend machines at Massillon, while the defendants were engaged in finishing the machines left by the intestate, followed by their act of' building and vending, was a bar to the action. The defendants, while engaged in finishing up the machines within the scope of their power, as administrators, were acting under the rights conferred by the contract, and in pursuance of it as a valid subsisting contract, and of course are bound to respond according to its terms for each machine so completed under it. If the plaintiff in the mean time violated any of the provisions of the contract, either express or implied, such violation was available to the defendants by way of recoupment of damages only, not in bar of the action. As long as a party to a contract elects to keep it on foot, and goes on under it as a valid subsisting contract, and does not avail himself of a breach by the other party to rescind and put an end to it, so long he is bound by it, and an action may be maintained against him upon it, and he can only set up a breach by the other party, by way of recoupment. I am of opinion that the charge of the judge was unexceptionable in all respects, at least as against the defendants. Hew trial denied.