New Departure Mfg. Co. v. Rockwell-Drake Corp.

HOUGH, Circuit Judge (after stating the facts as above). The first defense above outlined, was pleaded as a basis for so reforming the contract of 1903 as to express the thought that plaintiff engaged (in effect) to retain defendant Rockwell in general management of its business or a great part thereof. The pleader’s object was, after establishing the reformed contract, to prove a breach by the dropping of Rockwell from all high corporate place, and then to obtain, as a result of such breach by plaintiff, reconveyance or surrender of the patent in suit. In a manner and for reasons not material, the effort to obtain reformation was abandoned before trial; result is that we have here presented, as a defense only,-the matter outlined in our statement of facts; there is no counterclaim or cross-bill before us. ■ We shall express no opinion on the question whether without reformation this defense was open to defendants; the point has not been argued, and, though suggested by some early objections to evidence, was not pressed after a prolonged trial was fairly begun. It must, however, be evident that if the testimony fails to prove mutual mistake by and between Rockwell and plaintiff, if for all that is shown the contract of 1903 is what the parties at the time intended, and especially if plaintiff has committed no breach of that agreement going to the whole contract, then defendants have failed to establish anything worthy of Consideration even in foro conscientiae, no matter what the court may .think of. the state .of the pleadings. Without attempting a definitive statement of. the meaning.of the phrase “mutual mistake,”.we assume that defendants meant the sort of error described in Page v. Higgins, 150 Mass. 27, 22 N. E. 63, 5 L. R. A. 152; i. e., “a mistake common to all the parties to a writtén contract,” usually relating “to a ■mistake concerning the contents or legal effect” of the instrument. In 1903 defendant Rockwell was still a most influential, if not the dominant, figúre in plaintiff’s corporate affairs, the contract in question was drawn by the company’s frequent, if not usual counsel in patent matters; there is nothing unusual or abnormal about it, and the evidence tendered consists for the most part of complaints by Rockwell of the treatment awarded him by an enormously enlarged and changed corporation 10 years or more later. We can discover no evidence even .tending to show that any mistake mutual or otherwise was made in 1903; indeed, we may note that it would have been most singular, and even of doubtful legality, if the contract had sought to fasten any one man on the company as á manager Or its equivalent for (apparently) the balance of his natural life. [333] Therefore the plaintiff had good right to “elect” to terminate Rockwell’s employment. But we find that was never done; he was relegated to a position of little corporate importance compared to the places occupied by him for 20 or more earlier years; but, so'far as this record shows, he is still head of the patent department and entitled to draw $5,000 a year, if he wants to. On this point we think and find that Mr. Rockwell quit, or rather drifted away from, plaintiff in anger, and regarded the stipulated salary with contempt. He assuredly did not leave because of nonpayment of salary and royalties. It is true that admitted royalties were not paid, because Rockwell refused to surrender some disputed claims to other royalties. Let it be assumed (not decided) that plaintiff was without any excuse in refusing to pay a just debt unless the creditor would in consideration of such payment settle another and wholly unrelated dispute; the breach was but partial, it related to a severable portion of the agreement, and much worse conduct has afforded no defense to a suit for patent infringement. Vacuum, etc., Co. v. Dunn, 209 Fed. 219, 126 C. C. A. 313. We conclude this branch of the case by holding on the facts that the contract of 1903 was and is a document not shown to be affected by any mistake, and on the law that plaintiff has committed no breach thereof available to Rockwell in defense of this suit. This renders it unnecessary to consider whether if Rockwell had a defense of the kind now disposed of, it would be available to the corporate defendants. The defense of Hugh Rockwell’s infancy is untenable for several reasons : (1) Hugh himself has never to this day, so far as shown, expressed or felt any objection or regret over his conveyance to his father, and that such conveyance was at most voidable, and not. void, is plain on the facts stated. The son, therefore, having never disaffirmed, so far as his father’s rights are concerned, the defendant Rockwell has good title; the period of the statute of limitations having long passed before suit brought. Sims v. Everhardt, 102 U. S. 300, 26 L. Ed. 87; Wells v. Seixas (C. C.) 24 Fed. 82. (2) Even if Hugh could and did timely disaffirm as to plaintiff’s title, the right is personal to him, and these defendants cannot assert it. Williston on Contracts, vol. 1, p. 451. (3) Assuming that Hugh had right or duty of affirmance or dis-affirmance quoad the plaintiff, he did so affirm, after majority, by actively assisting plaintiff in getting as owner the patent in suit. It is true that years later he organized the Rockwell-Drake Company in order to exploit this invention; but he did so, not with any intent to disaffirm, but because he believed that all efforts to get a patent had failed. Wherefore he or any one else had good right to do what he did. The acts of affirmance were earlier and positive. “There is a well-recognized? distinction between the nature of those acts which are necessary to avoid an infant’s deed, and the character of those that are sufficient to confirm it.” Irvine v. Irvine, 9 Wall. 617, 627 (19 L. Ed. 800). Acts of lesser solemnity or formality suffice for confirmation. The question is one of fact, and we find the fact.to be [334] that Hugh Rockwell had confirmed whatever he could confirm (if anything) in the title of plaintiff before the formation of Rockwell-Drake Company. For these reasons there is no merit in the second defense. We find, however, error in declaring defendant Rockwell an infringer. The bill should have been dismissed as to him. He had no part in his son’s Rockwell-Drake enterprise. He advised against it, and there is no proof at all that he has ever done anything more „in or about the infringements of the Marlin-Rockwell Company, than has any and every other officer of that concern of equal or large authority. It is not enough to charge a corporate officer with infringement that he acted as such officer, even when the corporate business was infringement; he must be shown as acting beyond the scope of his office. Weston, etc., Co. v. Empire, etc., Co. (C. C.) 166 Fed. 867, affirmed 177 Fed. 1006, 100 C. C. A. 670; Reis v. Rosenfeld, 204 Fed. 282, 122 C. C. A. 480. That Marlin-Rockwell Company may, by receiving defendant Rockwell into its service, be equitably estopped from contesting validity of patents obtained by plaintiff from Rockwell, may be admitted as true (Mergenthaler, etc., Co. v. International, etc., Co. [D. C.] 229 Fed. 168 [17], affirmed 229 Fed. 407, 143 C. C. A. 527); but that does not make Rockwell an infringer. Affirmative acts, here totally lacking, are necessary. We think it proper to note that, while attention to good pleading, is always economical, it would in this case, have saved much time and a great deal of expense. Decree modified, by directing dismissal, without costs as to Rockwell, and, as modified, affirmed, without costs.