Van Norman v. Barbeau

Vanderburgh, J. The plaintiff and Luther G. Farrder and J. H. White, owners of letters patent for improvements in weighing scales, on the 9th day of March, 1891, entered into a certain license contract with the defendant Charles F. Barbeau, described in the complaint, in and by which he was granted the exclusive right to manufacture and sell the scales therein described, and all the improvements owned or controlled by the parties of the first part, and in consideration of which he agreed to pay certain royalties upon the number of machines mentioned during the life of the patent, and thereby agreed to pay a royalty of $1 each on at least 3,000 scales to be manufactured during the first year after the execution of the contract; and for the purpose of securing the performance of the agreement to pay such royalty for the first year Barbeau and the other defendants in this action executed their bond, also described in the complaint, and running to the plaintiff and Farmer and White, the parties of the first part in the contract first described. It appears that Farmer and White have adjusted their claim under the contract and bond with the defendants, and that the interest of the plaintiff in the royalty secured by the bond is one-fourth thereof, which this action is brought to recover. The defenses set up in the answer are: First, (a defense in favor of all the defendants,) that the contract and bond are without consideration, on the ground that the patent and alleged improve [393] ments in question are of no utility, and that the scales manufactured thereunder were and are practically useless; and, second, in respect to the liability of the sureties in the bond, that one Joseph Barbean, who was named therein as surety, and who, as it was agreed and understood between the plaintiff and remaining sureties should sign the same, did not execute it or become a party thereto. 1. The rule applicable to a defense of want of consideration in a contract for a license to manufacture and sell articles under a patent right is thus stated in Wilson v. Hentges, 26 Minn. 290, (3 N. W. Rep. 338:) “If the patent be valid, the right to sell the article is exclusive, and is, in law, a valuable right, although it may not, in fact, be a profitable one; and, as one may pay or agree to pay what he pleases for such a right, the grant of it to Mm is a valid consideration for Ms promise to pay for it. When, therefore, it is sought to impeach a contract as without consideration, on the ground that the consideration was the grant of a right to sell a patented article, and that the article is. useless, it must be shown that it is useless in the sense that will avoid the patent.” And it is not enough that its practical utility be very limited, or that it will be of little or no profit to the inventor. “The law does not look to the degree of utility. It simply requires that it should be capable of use, and that the use be such as sound morals and policy do not discountenance or prohibit.” The fact that the patented article may or may not be salable at a profit is not to be considered in determining the question of the utility or validity of the patent for the purposes intended by the patentee, and within the rule laid down in Wilson v. Hentges, supra, the question of the popularity of the invention or the measure of the pecuniary profit which may be derived from the manufacture and sale thereof is not material in determining the question involved in this case. Lester v. Palmer, 4 Allen, 145. It did not conclusively appear from the evidence that the patented invention was impracticable or useless; that is to say, that it might not be applied to some beneficial purposes. There was evidence tending to show that the scale would be of practical use for light weigMng, and would work accurately for such purposes. The court, however, instructed the jury, among other things, upon this branch of the case, that they must “consider [394] whether the machine can be sold ior what it costs to make it, whether people will buy and use it,” and also “what practical use can be made of it in manufacturing machines for a profit.” This was error, and presumptively prejudicial to the plaintiff. 2. On behalf of the sureties, the answer alleges that at the time of the execution of the bond referred to it was agreed by and between the principal and sureties therein and by and between the defendants and the obligees in the bond that one Joseph Bar-beau should also sign the same as surety, and that the other sureties should not be liable thereon, nor should the same be delivered, unless he also signed the same as surety. His name was in fact inserted in the bond as one of the sureties, but he did not at any time execute the same. The evidence in behalf of the defendants tends to show that the sureties understood that Joseph Barbeau was also to sign as surety, and that, as between themselves, they executed the same on that condition; also that the bond was deliv-livered to Farmer, one of the obligees therein, at the time of the execution thereof, and that all the defendants were then present. The evidence also tends to prove that the conversation among them in respect to Joseph Barbeau becoming surety with them was in the presence of the obligees, Farmer and Van Norman. But the latter both testify, in substance, that they were not cognizant of any such understanding or condition, and that nothing of that kind was said to them or in their presence, and that the bond was executed in their presence by all the defendants, and delivered to them unconditionally. If this is true, and the defendants delivered the bond to the obligees without insisting upon its execution by Joseph Barbeau as a condition of its becoming operative in the hands of the obli-gees, or any notice to them to that effect, then it took effect immediately upon its delivery, and such delivery may be deemed a waiver of any such condition. It is clear that the sureties might waive the execution of the bond by Barbeau, and in that case it would not be material that his name was included in the instrument with the other parties thereto; hence, under the state of the evidence, it was error for the court to charge the jury that if it was agreed between Charles F. Barbeau and the sureties that Joseph Barbeau should sign it, and that they should not be liable unless he signed it, the plaintiff was bound by such agreement whether [395] she knew of it or not, for the reason that his name was also included in the bond. (Opinion published 55 N. W. Rep. 1112.) There must, therefore, be a new trial, and the order denying it is accordingly reversed.