Gay v. Fair

Barker, J. The evidence was' taken under .Equity Rule 85, and the case comes here by an appeal from a decree dismissing the bill. There is no dispute that the plaintiff is [527] a stockholder, nor that he has brought the matters with which the bill is concerned to the attention of the officers in control of the corporation, who own or control a majority of its stock, nor that the corporation has neglected, if it has not refused, to take action upon the alleged matters of complaint. The chief of those is that while by the votes of the stockholders and of the directors the sale from the inventor to the corporation was for certain shares. of the stock, no other consideration being named in the votes, the conveyance recited as a further consideration an agreement of the corporation to pay the inventor two hundred dollars a month. . Although the stock stipulated in the votes has been transferred, the inventor has also received some such monthly payments, and the corporation, and its officers, and a majority of its directors at least, take the ground that the inventor, who is also the president and one of the three directors, was entitled to the monthly payments. Growing out of this was a reassignment to the inventor of the patent issued by the United States, to be held by him until the indebtedness because of the omission to make the monthly payments should be made good. The evidence leads us to the inference that, notwithstanding the language of the votes, the monthly payments and the transfer of stock were both terms of the bargain with the inventor, and that the clause to that effect in the conveyance was assented to by the plaintiff while he was himself a director ; and that he also assented by his affirmative vote to the action of the directors on August 19, 1898, in declaring the. stipulation for the monthly payment to be an obligation of the corporation. It seems that the plaintiff, at the same meeting, opposed and protested against the vote that the principal patent, not then issued, should be issued to the inventor, and held by him until the payments in arrears should be made up. The conveyance contained no term requiring a reassignment in case of non-payment. But it seems that the corporation had no other means of securing its indebtedness. As the invention had been assigned to the corporation, the United States patent issued to it notwithstanding this vote and was then reassigned. Assuming that it would have been better not to make this reassignment it may have been made and received in good faith, merely as security for the overdue instalments and for the future discharge of the [528] obligation. After the bill was filed this patent was again assigned to the corporation, and it now stands in its name. In connection with this reconveyance the claim to further payment of the monthly sum was given up, for what consideration does not clearly appear. But it is not a necessary inference that the assignment as collateral, or the retransfer, was unfair. The Canadian patent was issued to and stood in the name of the corporation. The English and German patents have not been issued. The French patent has been issued to the inventor and has not yet been assigned to the corporation; nor had the reassignment of the United States patent to the corporation been recorded in Washington at the time of the hearing. The inventor testified that at all times he had been ready, and was ready still to execute any proper assignments, or other instruments, to vest in the corporation all the inventions and patents contemplated by the agreement between himself and the corporation. From this and the other evidence it would be proper to infer that there had been no design on the part of the corporation, or of any of its officers, to betray or sacrifice its interests in any of the matters of which the plaintiff complains. The invention made after October 29, 1897, does not seem to have been one to which the corporation had a right. We are of opinion that the bill should be dismissed. As the corporation had not, at the time of the appeal, caused the retransfer to itself of the American patent to be recorded, and had not then taken to itself a transfer of the French patent, and as the English and the German patents, if granted, will issue in the name of the inventor, although in fact the property of the corporation, this suit ought not to bar any stockholder from claiming that all the inventions covered by the agreement, and the patents therefor in the United States, the Dominion of Canada, England, France, and Germany, are the property of the corporation. We assume that it was for this purpose that the recitals were inserted in the decree, and it is just to dismiss the bill without prejudice to the right of any stockholder to claim that the inventions and patents mentioned in the bill, except the invention alleged to have been made after October 29, 1897, and the patents therefor, are the property of the corporation. So ordered.