Warth v. L. Loewenstein & Sons

Mr. Justioe Brown delivered the opinion of the court. It would serve no good purpose for us to discuss at length all the interesting questions raised by the facts set forth in the statement prefixed to this opinion and argued in the elaborate briefs filed on each side of this controversy. The jury found a verdict which was in favor of the' defendant on the matters contested on the trial between the plaintiff and defendant, and we are not disposed to disturb the judgment founded on it. On the main questions involved, we think that an oral contract for the use of machine D 154, with terms and conditions such as were embodied in the license from the plaintiff to the copartnership of L. Loewenstein & Sons, of machine B No. 40, may be assumed to be proved to have been made between the plaintiff and the defendant (the corporation L. Loewenstein & Sons), as claimed by the plaintiff, without rendering the verdict so clearly against the weight of the evidence that it must be interfered with by us. The claim of appellee, as we understand it, is that no such contract was proved; that, on the contrary, the testimony of Henry Warth in connection with the correspondence introduced would have warranted the jury in finding that there was merely an agreement to sign a license contract in the future with terms which, to be binding, must receive such subsequent assent or signature of the parties, or that at best, if the oral agreement was more precise than this, and was to sign a specific license contract, such agreement was broken, and that it was only an action for such a breach, and not an action for royalties like the present, which accrued to the plaintiff. We are of the opinion that the evidence offered by the plaintiff, showing, in addition to the statement of Hr. Warth, the fact that the defendant kept and used the machine after the contention of the plaintiff that it was bound by the terms of the proposed license agreement was plainly made known to it, and the further fact that it paid a bill according to its tenor, which set forth that contention, sufficiently established the existence of the contract that plaintiff claimed. But we cannot agree with appellant as to its necessary legal effect. The seventh clause of the license agreement provided that the licensees might terminate the payment of royalty therein mentioned, upon the condition that the machine should be returned and delivered to said licensor by the licensees with payment of royalty up to date of such return, and “upon the further condition and the said licensees agree that they will not thereafter use or authorize or allow to be used directly or indirectly in their business or elsewhere any other cloth cutting machine until the expiration of the Warth patents.” It seems to us that the effect of this last quoted peculiar provision is to make a collateral agreement which . went into immediate effect. Such we understand, too, to be the position as to the language used taken in the argument of this appeal by both parties. It did not require, they say, a further agreement at the time of the return of the machine, hut constituted by itself (if it was entered into and was valid) an agreement between the parties of the date at which it was agreed to. Assuming this, what is the legal result? Let it be supposed that on January 14, 1897, the defendant had beyond all dispute returned the entire machine D 154 and paid all royalties due to that date, and was not then using any other cutting machine of any kind or nature. Certainly until it did use such another cutting machine there would be no right of action for further royalties under the oral contract of February 25, 1895. The terms of that contract would have been complied with. But suppose that in December, 1907, just before the last Warth patent mentioned in the license expired, the defendant began to use an electric cutting machine. Doubtless plaintiff would then claim that under the agreement of February 25, 1895, an action had accrued to her for a breach of the contract made on that date, and .she might perhaps with some plausibility claim (we express no opinion on the validity of such a claim) that the measure of damages for that breach was the aggregate of the royalties she had been deprived of during the intervening years. But could she sue directly under the agreement of February 25, 1895, for the royalties themselves for which from 1897 to 1907 she had had no claim whatever? If she could not (and we think she could not), then in this case the defendant could bring the claim for royalties to an end by a return of the machine with payment of royalties to the date of the return, leaving to the plaintiff her claim, if she had one, for damages for any breach of the collateral agreement to use no other cutting machine during the life of the Warth patents. We are aware that language (purely obiter dictum) in the last paragraph of the opinion of the majority of the court in Warth v. Liebovitz, 179 New York, 200, might seem to militate against this view, but it does not change our confidence in its soundness. We think it would make no difference whether this collateral agreement was immediately broken at the time of . returning the machine, or was thereafter broken, bnt it may be noted in the case at bar, that it does not appear when the defendant began to use the “electric machine” mentioned in the testimony of Charles F. Warth. It was certainly more than a year after the return of the Warth machine that Charles F. Warth saw it in operation. The view we take, that the direct obligation to pay royalties could be terminated by the appellee by returning the machine with payment of the accrued royalty to date, would seem to have been taken by the trial judge and by both the plaintiff and defendant below, if we should judge by the instructions II, III and VII. Instruction II (unchanged in this regard) was requested by the plaintiff and despite appellant’s ingenious argument to show that it does not state the same doctrine as the instruction III, which was requested by the defendant, we think its purport in the natural use of language is clearly the same. Appellant complains of instruction III, but we do not see how she could effectively do so, even if it were erroneous, since, in our view, she propounded the same doctrine in instruction II. Sibley Warehouse Co. v. Durand Co., 200 Ill., 354. But we do not think either II or III erroneous. We do not understand, however, why the defendant asked or the trial judge gave instruction VI. It is inconsistent with II and with III. It is more favorable, therefore, to the plaintiff than the theory she herself propounded in her offered instructions, and in our opinion, had it not been requested by the defendant, might have been objected to by it as erroneous and misleading. But it cannot be complained of by appellant. Under this construction of the contract claimed by appellant to exist, the question to be left to the jury was whether the machine with the royalties due up to that time was at any time returned to her. The appellee claims that it made such a return on January 14, 1891, and it is admitted that together with the attempted return on that date it paid the balance of the amount of royalties due under the contract at that time. Without discussing in detail the contentions and arguments made by appellant and appellee in that regard, we will simply say that after a careful consideration of them, we are of opinion that it was a question properly to be left to the jury, whether the action of the appellee on January 14, 1897, was a compliance with the condition of the contract. There was a fair question under the alleged contract and correspondence, in connection with other evidence introduced, by the appellant, whether the “machine” to be returned was not that which appellee forwarded to Stapleton, and whether the appellant did not in effect admit it to be such, by the objection which it made as to the “further agreement” demanded in her letter of January 21, 1897, and her omission, personally, or by her agents, before the suit was brought, to call particular attention to the non-return of that portion of the installed apparatus which she now claims was retained, although it had been observed by her agent to be still in place. The appellant, indeed, by her offered instruction II asked the court to submit this issue to the jury. We do not think that the evidence on this point is such that we can declare it to be clearly inconsistent with the verdict. The appellant, besides her point on the weight of the evidence and her objections to the instructions III and VII, which we have disposed of, complains of other alleged errors in the trial. She objects to the admission of evidence that Emanuel Loewenstein left Chicago for Europe before the trial and after the case had been passed on notice, on account of his health and under the advice of a physician, and in connection therewith also objects to instruction IV, as follows: “The court instructs the jury that they should not draw any inference unfavorable to the defendant from the fact that Emanuel Loewenstein has not appeared as a witness in this case on behalf of the defendant, if from the evidence the jury believe that said Loewenstein is unavoidably absent in Europe at the time of this trial.” We do not think there was error in admitting the evidence or giving the instruction. The law is correctly stated in Jones on Evidence, sec. 17, and in Hope v. West Chicago St. R. R. Co., 82 Ill. App., 311, and Mantonya v. Reilly, 184 Ill., 183, that “The mere withholding or failing to produce evidence which under the circumstances would be expected to be produced, and which is available, gives rise to a presumption against a party.” We think it was proper to allow the introduction of evidence tending to show why, under the circumstances, Emanuel Loewenstein’s testimony might not be expected, and to leave it to the jury under the instruction complained of, to say whether he was “unavoidably absent,” and to instruct them that if they so found they should not draw an unfavorable inference from the omission of his testimony. Nor do we see anything injurious to the defendant in the questions which were allowed to be put to and answered by Charles H. Warth in relation to his deposition, of in the fact that the jury were allowed to take Exhibit 22 to the jury room with the pencil memorandum on it which had been excluded from the evidence. The memorandum was immaterial and could not have influenced the jury, who had the “favor of the 23rd” to which it referred before them. And so also was the notation on Exhibit 8, in our view, entirely immaterial. It could not have affected the- verdict had it been admitted. The question of costs has caused us some hesitation, but following the opinion of the Appellate Court for the Third District in Wagner v. Heckenkamp, 84 Ill. App., 323, wc are inclined to think that a proper construction of Chapter 135 of the Eevised Statutes justified the trial court, although the issues joined on the pleadings were found for the plaintiff, in taxing the costs against the plaintiff. Although in this case, as in that, evidence was lacking that the money was at all times pending the suit in the hands of the clerk of the Circuit Court, yet it does appear in this ease, as in that, that the tender was made before suit, that no objection was made to its form, but it was declared as not sufficient in amount—that there was no evidence or suggestion that at any time the plaintiff desired to accept it, and that during the trial “the money was again tendered and refused, after which it remained with the clerk until the trial was concluded and it still remained unaccepted.” We therefore conclude that the judgment should be affirmed as it stands. The view we take of the case relieves us from the necessity of any decisive consideration of the cross-errors assigned by the appellee, or of the proposition made by counsel that the seventh clause of the “license agreement” would be in any event void as against public policy. We will say, however, that we do not consider the error well assigned which complains of the admission of the depositions of Apollonia Warth and Henry Warth, nor do we think that the seventh clause of the license agreement could be adjudged void as in restraint of trade. As to the demurrer to the plea of Statute of Frauds, we cannot agree with counsel for appellant that the fact that a corporation may be dissolved within a year brings this case within the reasoning of the opinions cited by them from the Massachusetts courts, where “the full performance of the agreement depended upon the contingency of the life of a party.” Peters v. Westborough, 19 Pick. 364; Doyle v. Dixon, 97 Mass., 208. The opinion of Judge McAllister in White v. Murtland, 71 Ill., 250, adverts to the “nice distinction” made hy the Supreme Court of Massachusetts between the facts in Peters v. Westborough, 19 Pick., 365, and those in Hill v. Hooper, 1 Gray, 131. We think the case at bar, under the theory of appellant as to the contract, comes rather within the rule laid down by the case of Hill v. Hooper than within that announced in Peters v. Westborough. But it is not necessary for us to decide whether the demurrer was not in any event properly sustained upon other grounds. As the appellee himself admits, if the view that we take of the contract to pay royalties is a correct one, it was capable of performance within a year. The judgment of the Circuit Court is affirmed. Affirmed.