Case ID: ad_55/html/0444-01.html
Source: Caselaw Access Project
Author: {"author": "Williams, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Rochester Folding Box Company, Respondent, v. George W. Browne and Others, Appellants, Impleaded with Others.
    
      A written resolution of a corporation authorizing a purchase—competency of parol evidence to establish other agreements in respect thereto — an oral agreement fm' no definite time is not within the Statute of Frauds.
    
    Where a resolution of a corporation recites and accepts an offer by certain parties to transfer to the corporation a manufacturing business, tools, machinery, etc., and a patent, for a specified sum payable in the stock of the corporation, parol evidence establishing an oral agreement between the corporation and the parties making the offer, by which, as part of the consideration, two of such - parties were to enter into the employment of the corporation, is competent, when the resolution contains no provision as to such employment, and the evidence justifies a decision that.the whole agreement was by parol, and that the resolution was merely a step taken in carrying out in part such parol agreement.
    A parol contract of employment which does not, by its terms, extend for any definite time, -is not void under the Statute-of Frauds as being one not to be performed within one year.
    Appeal by the defendants, George W. Browne and others, from an interlocutory judgment of the Supreme Court- in favor of the plaintiff, entered in the office of the: clerk of the-county of Monroe on the 3d day of February, 1900, upon the decision of the court, rendered after a trial at the Monroe Special Term, “ setting aside the assignments of the inventions, letters patent and interests set forth in the complaint herein ; adjudging the defendant Arthur B. Cowles to be the equitable owner of the same; directing the defendants to execute assignments of each and all of their title and interests in the same to the plaintiff herein; compelling said defendants to account to said plaintiff [for] whatever they may have received from or by means of the same, and to disclose and produce upon oath before a referee whatever knowledge or data they may have concerning the same ; enjoining the defendants George W. Browne, Standard Lithographing Company, Empire Machine Company and Catherine A. Browne, their agents, etc., from disposing of or in any way interfering with the same.”
    
      O. D. Kiehel and Oucfon db Oakley, for the appellants „
    
      Elbridge L. Adams, for the respondent.'
   Williams, J.:

The judgment should be affirmed, with costs.

The action was brought to establish plaintiff’s right to certain inventions by the defendant Cowles, and to procure the assignment to plaintiff of such inventions and letters patent therefor and all interests therein, and for an accounting of all profits realized by the defendants therefrom. The plaintiff bases its right to relief upon parol evidence of an agreement between the plaintiff and the defendants Cowles, Browne and Levis. The evidence given on the trial was abundantly sufficient to support plaintiff’s contention and the finding of the court that such agreement was made.

The defendants and appellants insist that this parol evidence was improperly admitted, because the agreement between the parties was in writing, and this evidence tended to contradict and vary the terms of such written agreement. It is well settled that parol evidence cannot be given to contradict or vary the terms of a written agreement, but that such evidence is admissible, when it appears that the whole agreement of the parties is not in writing, but the real agreement is by parol, and the writing is made as merely a part performance of such agreement. (Chapin v. Dobson, 78 N. Y. 74; Juilliard v. Chaffee, 92 id. 529, 536.)

The trial court found in this case, upon adequate evidence, that the real agreement here was by parol and was not wholly embodied in the written papers. The facts found by the court were, viz.:

The plaintiff is a domestic corporation; * *■ *.. its certificate of incorporation authorized a capital stock of $200,000 in 2,000 shares of $100 each. The defendants, George-W. Browne, Thomas R. Levis and Arthur B. Cowles, were the promoters and organizers of the corporation, and for their services as such and. for other well-defined considerations and agreements on their part they were to receive a specified share — first fixed at $100,000, and subsequently at $60,000—of the paid-up stock of the corporation.:- The considerations and agreements on their part * * * were substantially as follows: They were to sell and transfer to the corporation a box business recently purchased by them from the Rochester Printing Company, with all the tools, machinery and appliances belonging to it, together with the good will of such business, also letters patent of the United States, dated the 26th day of March, 1895,.-issued to- Cowles and Levis for a new and useful improvement in paper box' machines. It was, moreover, upon the same consideration, agreed by said promoters that the defendant George "W. Browne should enter the employment of the corporation as general manager and sales agent, at a specified salary per year, and devote to the business of the corporation his entire time, talents and experience, and at once turn over to the corporation all the business in the line of folding boxes and lithographing which he controlled. It was also, upon the same 'consideration, agreed, by said Cowles and his fellow promoters with the corporation that Cowles' should enter the employment of the company as foreman of its box factory at a specified salary per week; that he should devote his time, his skill and his inventive faculties to the service of the corporation,, and that the fruits of his invention while in its employment should be the property of the corporation, and that all the letters patent obtained by him therefor should be duly and effectually assigned* to it for its own- use and benefit.”

The writings claimed by the defendants to have embodied the whole contract between the parties were a resolution subsequently passed by a meeting of the plaintiff’s board of directors and an assignment by Cowles, Browne and Levis to the plaintiff and the cer. tificate of stock issued to them.

The resolution recited an offer by Cowles, Browne and Levis to transfer to plaintiff the box business of the Rochester Printing Company, with tools, machinery and appliances connected therewith, and the patent for box making for $100,000, payable in the stock of the company, and accepted such proposition and authorized the issue of the stock to the three persons in payment for said business, tools, machinery, appliances and patent whenever they should be transferred to the. plaintiff." Then the • assignment for the expressed consideration of the $100,000 of capital stock transferred to the plaintiff the box business, tools, machinery, appliances and patents, and the certificate of stock was duly issued.

Cowles and Browne entered the plaintiff’s employ and had charge substantially of the whole business while they were with the company. Cowles, while so employed at a good compensation, $35 per week or about $1,800 per year, was engaged a considerable portion of his time in experimenting in the line of new inventions and improvements, and aided by Browne, and in some cases at the expense of the plaintiff in the fees of lawyers and otherwise, made application for and secured letters patent for the several new inventions which are the subject-matter of this action.

There was within the writings no provisions as to the employment of Browne and Cowles nor as to what they should do, nor as to what they should be paid for their services.

Evidently it was a great inducement to the. formation of the corporation and the entering into the business that the corporation waste have the services and experience of Browne and Cowles in conducting the same, and especially that it was to have the benefit of the skill and inventive faculties of Cowles. We can hardly conceive that' thé enterprise would have been undertaken by the other parties interested if ah agreement for their services had not been made. The theory suggested by the decision of the trial court was that the whole agreement, the real contract, was by parol, and that the writings were-merely steps taken in the carrying out in part of such parol agreement. This seems to have been the only rational conclusion to be drawn from the evidence. If the question was one of fact to be determined from the whole evidence, then the court was clearly correct in its conclusion. There was nothing in the writings themselves to make the question one of law to the exclusion of the other evidence in the case. The parol evidence was in no way inconsistent with or contradictory of the writings. The writings so far as they went were' in a line with and consistent with the pare . contract. They were not complete in and of themselves ; did not express the whole agreement of the parties. They were like notes or receipts given pursuant to or in carrying out a parol contract providing for the giving thereof. We see no reason for disturbing the finding of the court as to the contract. So far as the parol evidence showed the consideration for the $100,000 in stock, transferred to those men, to have been in part the agreement that Cowles and Browne should enter the employ of the corporation and give their services, experience, skill and inventive faculties, it was competent.. It is always permissible to show the true consideration by parol. ( Wheeler v. Billings, 38 N. Y. 263.)

In that case' the consideration expressed in the assignment of a ' patent was $2,500 solely for the patent, and it was held that the defendant was at liberty to show that he was not to pay $2,500 solely for the patent, but was to have in addition thereto, fur that sum, the right to use the improvements already invented by the plaintiff and the right to further suggestions of the plaintiff in perfecting the machine.

The parol contract was not void under the Statute of Frauds, because not to be performed within one year. It was not by its terms to extend beyond one year, nor for any definite time.

The entry made by the secretary in the books of the company was properly admitted in evidence. It appears it was made upon information furnished the secretary by Browne and Levis, and was shown to them after it was made.

After a full examination of the record and briefs of counsel, we arrive at the conclusion that the case was correctly disposed of by the trial court and that the judgment should be affirmed, with costs.

All concurred, except Adams, P. J., not sitting.

Interlocutory judgment affirmed, with costs.