Holt v. Silver

Lathrop, J. 1. The defendants’ plea and demurrer to the jurisdiction of the court were rightly overruled. The suit is in effect one for breach of contract, and to compel an account and a performance of the provisions of the contract in other respects. There is no doubt that the State courts have the power, and it is their duty, to decide any federal question arising collaterally in respect to the existence or validity or construction of a patent. Nash v. Lull, 102 Mass. 60. David v. Park, 103 Mass. 501. Binney v. Annan, 107 Mass. 94. The fact that the contracts were terminated when the bill was brought makes no difference, because there were rights accruing under them to be determined and enforced. 2. The defendants contend that the notice dated July 26, 1892, given by the plaintiff alone, was insufficient to terminate the contract, because the defendant Tufts did not join in giving it. But at that time Tufts had no interest in the contract, since, by the procurement of the defendant Silver, Tufts had assigned his interest to him. The defendant Silver, therefore, by his own act had put it out of the power of Holt to comply literally with the provisions of the agreement as to notice, and the other defendants, holding by assignment from him, stand in no better position. Eliot National Bank v. Beal, 141 Mass. 566, 568. United States v. Peck, 102 U. S. 64. To oblige Holt, under the circumstances, to show that Tufts had refused to join in the notice is unnecessary in order to do equity between the plaintiff [456] and the defendants. They should not be heard to complain or to insist on a formality which they have rendered impossible of performance, or at the best entirely unnecessary. 3. The master has found that the defendants are entitled to recoup the profits made by Holt on the sales made by him in violation of the Holt-Silver contract under the following rule of damages. The plaintiff is to account for every copy of his book and chart sold as if it had been a copy of the defendants’, and to pay to the defendants the profits which they would have received from the sale of so many additional copies. This finding and ruling was not excepted to by the defendants, and has not been objected to by them on appeal. The defendants, however, put in evidence before the master to show further damages, and various questions arise upon their exceptions relating thereto. We have no occasion to consider in this case whether, if the profits are accepted, further damages can be allowed. See Neilson v. Betts, L. R. 5 H. L. 1, 22; De Vitre v. Betts, L. R. 6 H. L. 319, 321; Livingston v. Woodworth, 15 How. 546; Elizabeth v. Pavement Co. 97 U. S. 126, 139; Callaghan v. Myers, 128 U. S. 617, 665. In regard to the amounts claimed by the defendants for extra expenses for services of employees, experts, maintaining summer schools, etc., the master has found that the expenditures were not reasonably necessary, and not a natural result of the breach of contract. It further appears, from the testimony of the defendant Silver, that these expenditures were caused in greater part by apprehension of injury based upon mere rumors. Such expenses are not recoverable as damages. Sibley v. Hoar, 4 Gray, 222. Moreover, on the evidence, it does not clearly appear that there was a mistake or error in the findings of the master on these points. The master found that there was no market value of the right to publish under the contract on September 1, 1894. On that day the contract was terminated, and there was no further right to publish under it. It further appears that the master found that, assuming that there was a market value, any decrease in such value was not due to the act of the plaintiff. The evidence of market value offered by the defendant Silver was based on [457] the computation of the annual increase in value. This increase was shown as a fact not to be constant, for in two years out of seven there was an actual decrease rather than an increase. It cannot be said, therefore, that the master was clearly in error when he found that the decrease in 1894 was not shown to be due to the breach of contract by the plaintiff. The same kind of evidence was offered to show loss of profits. The master found that he was not satisfied by the evidence that the loss of profits in 1893-94 was caused by the acts of the plaintiff. While some loss of profits may have been caused by the plaintiff’s acts, yet this was a matter for the master to determine as a fact; and it cannot be said that he erred in finding that the evidence did not prove that the damage claimed resulted from the acts of the plaintiff. 4. It is contended by the defendants that the breach of the contract by the plaintiff should deprive him of any right to recover royalties accruing subsequently to such breach, and before September 1, 1894. The master and the single justice ruled otherwise. It is a sufficient reason for refusing to disturb their ruling that all the evidence on this point is not before us. The evidence annexed to the master’s report is admittedly incomplete, and most of it is expressly stated to be on other points. It is impossible, therefore, for us to reverse the rulings made. 5. The remaining question is as to the sum of two thousand dollars which it is contended, by the terms of the contract made on September 1, 1886, between Holt and Silver, was payable by the former to the latter at the termination of the contract. In the first article of this contract it is recited that Holt is joint author with Tufts of certain publications known as the Normal Music Course, and coequal owner of the copyrights, electrotype plates, etc. of these publications, and that he is at present the sole publisher of the same. He then agrees that Silver is to have the exclusive right to print and publish the same during three years from the date of the contract, with the use of all capital invested, appliances, and the like, theretofore used by him in said business. In the second article Silver agrees to do the publishing and pay all expenses of printing, and to pay Holt a sum of money equal to not less than five or more than fifteen [458] per cent, as may be agreed upon, on the net proceeds of the publications, “it being understood that such net proceeds are the receipts from all sales after deducting fifteen per cent therefrom as the sum due to said Holt and said Tufts as joint authors and coequal owners of the copyrights and electrotype plates, etc., as well as the cost of manufacture; and that he will contribute the sum of two thousand dollars as further capital to be secured by said Holt, and returned to said Silver at the termination of this agreement.” By the third article Holt and Silver agre'e that to terminate the agreement at the end of three years from the date thereof, a notice in writing must be given thirty days at least before the expiration of the first year from the date, and that in default of such notice at the end of the first year, the period of one year shall be added to the term of the agreement, and also that, in default of such notice at the end of the second or any succeeding year, a further period of one year shall be added to the agreement as then existing, so that in any event the agreement cannot be terminated absolutely until the end of two years after that year in which such notice may be given. On December 10,1890, Silver purchased the interest of Tufts, and the notice given by the plaintiff to terminate the contract was dated July 26, 1892. It is contended that the defendant Silver is not entitled to recover the two thousand dollars referred to in the contract of September 1,1886, because the plaintiff supposed that he had the sole right to publish, as appears from the contract itself, and that it was contemplated that upon the termination of the contract the sole right to publish would return to the plaintiff, and that this sole right did not return to the plaintiff, as the defendant Silver by virtue of the purchase from Tufts continues to publish the series, and is receiving the benefit of the two thousand dollars extra capital so far as it has increased in value the right to publish jointly with the plaintiff. But we are of opinion that this is no answer to the express contract which the parties made, namely, that the two thousand" dollars should be returned by Holt to Silver at the termination of the agreement. The contract could be terminated only in the manner provided in the third article, so that it cannot be said, as has been suggested, that a termination of the contract by [459] notice was not contemplated by the parties. The fact that the defendant Silver continues to publish the series by reason of an independent title derived from Tufts cannot affect the obligation imposed upon the plaintiff under the Holt-Silver contract. The result is that the decree must be Affirmed.