Burpee v. Guggenheim

NETERER, District Judge (after stating the facts as above). Plaintiff contends that, under each of the agreements, title to all of the property in dispute was in him, to be divested only by performance of the conditions imposed; that the Syndicate failed to pay the amount agreed to be paid under tire first agreement, $15,000, plus the “factory account,” and failed to perform, in not posting the guaranty within the time.provided for, or at all; and that the breaches on defendants’ part relieved plaintiff of further obligation on the contract, and entitled him to cancel it and terminate defendants’ rights thereunder. Defendants assert that no breach has been made of either the original or supplemental contracts,. that the $15,000 agreed to be paid for labor and materials was paid, and assert that they had a reasonable time, under the law, to post the guaranty, and that such reasonable time extended over the period intervening between the date o'f the supplemental agreement and the commencement of this action, and that, even though default was made in posting, the plaintiff waived this default by subsequent negotiations with the defendant and demonstrations looking to a satisfactory resumption of contractual relations. [1-3] I do not think there is anything in the evidence which justifies the court in saying that the plaintiff has waived any default, if default was made on'the part of the defendant. I am also satisfied, from the evidence and stipulations in this case, that there was an understanding between the parties to this action that the item which is known as the “factory account” wa^ to be paid by the .defendants. I do not think, however, that it was understood that that item should be included in the $15,000 account, and t|ie $15,051.53 having been paid on account of the labor and .material, I do not think that default could be claimed on that score. The fact that the plaintiff may have a cause of action against the defendants for $1,359.02 paid on factory account would not. authorize the plaintiff to simply appropriate any property interests that the defendants may have in satisfaction of such a claim. The defendants failed to comply with a material part of the supplemental agreement, in that they failed to post the guaranty as therein provided, or make any tender or offer in court, and this' fáilure has continued for more than three years; and I am satisfied from the evidence that it was agreed that this should be posted within a short time following February 20, 1912. Irrespective of the special [219] agreement to post within 10 days, the defendants were required to perform this part o£ the contract within a reasonable time (9 Cyc. 611), and a reasonable time would be such time prior to the fulfillment of the contract, which was July 1, 1912, as would enable the plaintiff to complete the contract. And on failure to> post the plaintiff had a right to treat the guaranty as a condition precedent, and on a breach to exercise his right of election to declare the contractended. 3 Elliott cn Contracts, ,§ '2026. “The breach may consist in the failure to perform a condition precedent. Thorn is a condition precedent, within this principle, where one of two mutual acts must necessarily precede the other and the former act is a condi-iioii precedent.” 8 Elliott on Contracts, § 2014. No rights have accrued to the defendants under the supplemental agreement, because they have complied with no part of it. Nothing was done by the plaintiff under the supplemental agreement to which, liie defendants could claim any interest. All rights which the defendants have, therefore, rest upon the original agreement, by the specifications of which the defendants were only to have interest in the machines or in the patents when they conformed to the stipulations and requirements of the contract. The defendants decline to accept thq result of plaintiff’s efforts as such compliance. It is agreed that the invention does not come within the stipulations of the contract, either in the manufacture of quantity or in the price of manufacture, and upon such failure, by express stipulations, the contract was to be deemed ended; and there is no provision in any part of the contract giving the defendants an interest'in any machines or the product of the plaintiff, or any of the efforts of his labor, except upon the completion of the. machines -within the stipulations of the contract and upon the payment of $33,750 for the manufacture of 15 sets of machines, other than the first set of machines. A conveyance of the letters patent, drawings, patterns, etc., from the plaintiff is expressly conditioned upon the payment of the royalty named and the keeping and observing of its covenants by the Syndicate. The right to a conveyance from plaintiff to the defendant rests upon contract. “The statutes of the United States require that the patent issue upon the application of and in the name of the real inventor, although he was employed and paid to make it for the benefit of the one employing him. In such ease the employer may he entitled to the ownership of the patent, and may compel its transfer by assignment; but this depends upon the nature of the agreement between them. A company that employs a skilled workman to ms ire improvements on its machinery is not entitled to a conveyance of the patents secured by the workman on improvements so made, in the absence or agreement to that effect.” 30 Cyc. 880. “But a manufacturing corporation, which has employed a skilled workman for a stated compensation to take charge of Ms works and to devote Ms tune and services devising and making improvements in articles there manu-facaired, is not entitled to a conveyance of patents obtained for inventions made by him while so employed, in the absence of express agreement to that effect.”Dalzell v. Bueber Mfg. Co., 149 U. S. 315, 13 Sup. Ct. 886, 37 L. Ed. 749; Hapgood v. Hewitt, 119 U. S. 226, 7 Sup. Ct. 193, 30 L. Ed. 369. Defendants cannot demand the fruits of a contract without assuming the burdens. [220] [4] I do not think that there is any force in tire contention that plaintiff in this case has mistaken his remedy. 'Section 57 of the Judicial Code removes the objection of the defendants that the court has no jurisdiction to entertain this action to remove the cloud upon the title to personal property. This is likewise recognized by Simpkins, Federal Suits in Equity, (2d Ed.) p. 342. Other cases sustaining this conclusion are Jellenik v. Huron Copper Mining Co., 177 U. S. page 1, 20 Sup. Ct. 559, 44 L. Ed. 647; Citizens’ Saving & Trust Co. v. Ill. Cen. Ry. Co., 205 U. S. page 46, 27 Sup. Ct. 425, 51 N. Ed. 703; Magnuson v. Clithero, 101 Wis. 551, 77 N. W. 882; Martin & Earl v. Maxwell, 86 S. C. 1, 67 S. E. 962, 138 Am. St. Rep. 1012; Blair v. Chicago, 201 U. S. 400, 26 Sup. Ct. 427, 50 N. Ed. 801. A court of “equity has jurisdiction to remove a cloud from the title to a patent, where .that cloud consists in an express or implied assertion of adverse ownership or encumbrance.” Walker on Patents (4th Ed.) § 295. I think a decree should be entered in this case in favor of the plaintiff and against the defendants as prayed for, except as to the first set of machines in the possession of the plaintiff, which should be decreed in the defendants, subject, however, to the lien of the plaintiff upon said machines in the sum of $1,359.02 remaining unpaid on the “factory account,” and which the defendants agreed to pay, less $51.53.