Case ID: ny-st-rep_58/html/0048-02.html
Source: Caselaw Access Project
Author: {"author": "The Court.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George Maitland et al., Resp’ts, v. Central Gas and Electric Company, App’lt.
    
      (New York Common Pleas, General Term,
    
    
      Filed March 7, 1894.)
    
    1. Pleadings—Answer—Fraud.
    To make available the defense of fraud in an action for royalties, the answer should contain an allegation that, before the royalties accrued, the defendant rescinded or surrendered the license and notified plaintiff thereof.
    2. Jurisdiction—City Court.
    The city court has no jurisdiction to grant affirmative equitable relief.
    Appeal from judgment of the city court general term sustaining demurrer to a separate defense.
    The action was for the recovery of royalty under a license from plaintiffs, patentees, to defendants. A separate defense was pleaded which alleged fraud of plaintiffs inducing defendants to enter into the license agreement. The alleged fraud was the representation of the licensors that the letters patent were valid.
    
      Birdseye, Gloyd & Bayliss (Benjamin J. Bayliss, of counsel), for app’lt; A. Walker Otis, for resp’ts.
   The Court.

The demurrer was well taken. To make this attempted equitable defense good against the action for royalties it ought to contain an averment that, before the royalties accrued, the licensees had notified the licensors that they repudiated or surrendered the license, so that the latter might be in position to sue for infringements during the period for which they now claim royalties. Marston v. Swett, 66 N. Y., 206 and 82 17. Y. 527 ; Saltus v. Belford, 133 N. Y., 488; 45 St. Rep. 872 ; Skinner v. Walter A. Wood M. & R. Machine Co., 140 N. Y., 217; 55 St. Rep. 568 ; Hyatt v. Ingalls, 124 N. Y, 93 ; 35 St. Rep. 114. See also Hyatt v. Dale Tile Mfg. Co., 106 N. Y. 651 ; 8 St. Rep. 631 ; reported in full in 125 U. S. 49 under title Dale Tile Mfg. Co. v. Hyatt.

The present allegations might be entirely adequate in an action to set aside the license for fraud, if plaintiffs brought such an action in a court having jurisdiction to grant that relief; but that relief would date from the time of the decree setting the license aside and would be no defense in an action for royalties previously accrued. The city court has not jurisdiction to grant such affirmative equitable relief and so the allegations of the so called separate defense are not available in this action as a defense, or for affirmative relief.

The absence of an allegation that before the royalties sued for accrued defendants rescinded, or surrendered, the license and notified plaintiffs thereof, makes this defense bad as an equitable defense, or any defense in this action.

If defendants have a good defense of rescission or surrender and wish to set it up in proper form they must make application to the city court for leave to amend.

We have only to affirm or reverse the judgment.

Judgment affirmed.