Case Title: Martin Stamping & Stove Co. v. Manley

Citation: 69 So. 2d 671

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1953-12-17T00:00:00Z

Document:
69 So. 2d 671 (1953)
MARTIN STAMPING & STOVE CO., Inc., et al.
v.
MANLEY.
8 Div. 676.

Supreme Court of Alabama.
December 17, 1953.
*674 John C. Martin, Tuscumbia, for appellants.
Watts & Salmon, Huntsville, for appellee.
LAWSON, Justice.
Hugh M. Manley, a resident of Madison County, Alabama, and Martin Stamping and Stove Company, Inc., an Alabama corporation, on April 7, 1948, entered into a written agreement, the material parts of which will be set out in the report of the case.
On August 1, 1949, the agreement of April 7, 1948, was amended in writing so as to reduce the royalties to which Hugh M. Manley was entitled from ten per cent to five per cent of the gross receipts of the articles manufactured and sold by Martin Stamping and Stove Company, Inc., under the provisions of the original agreement. When we hereafter refer to the written agreement we have reference to both the original agreement and the amendment thereto.
After the expiration of the period of time covered by the written agreement and on January 22, 1952, Hugh M. Manley filed his bill in the circuit court of Madison County, in equity, against Martin Stamping and Stove Company, a corporation, and against Frederick H. Martin, individually and as vice-president of Martin Stamping and Stove Company.
The written agreement of April 7, 1948, is made Exhibit A to the bill and the amendment of August 1, 1949, is made Exhibit B.
The case made by the bill is hereafter stated. We will summarize some of the averments of the bill and will also quote some of its provisions.
From April 7, 1948, until April 7, 1951, the period of time covered by the written agreement, Martin Stamping and Stove Company fully complied with the terms of the provisions of the said agreement, paying to Manley all royalties due him for metal shades and awnings manufactured and sold of the character or type covered by the said written agreement.
But shortly prior to April 7, 1951, the respondents notified Manley "that after April 7, 1951, respondents would continue to manufacture such metal awnings and shades embodying the interlocking feature between panels, for which feature complainant's patent application was pending in the United States Patent Office, but that respondents would not pay complainant any royalties upon said metal shades and awnings which they would continue to manufacture and sell after said 7th day of April, 1951."
*675 Upon being so advised by the respondents, "complainant served notice upon respondents that he had elected to treat said contract as amended, as renewed and/or extended and demanded performance of a said renewed and/or extended agreement for the additional term of three (3) years beginning on the 7th day of April, 1951."
From April 7, 1951, until the date this bill was filed, "the respondent did in truth and in fact continue to manufacture the aforesaid metal awnings and shades with said interlocking feature, and did in truth and in fact continue to sell said awnings and shades after April 7, 1951, but wrongfully failed and refused, on demand made by complainant, to pay him the royalties provided for under `Exhibit A', as amended."
Although the respondents continued to keep records as provided for in paragraph 3 of the written agreement, they failed and refused to deliver to complainant a complete statement of all awnings and shades manufactured and sold by them subsequent to April 7, 1951, and the respondents also "failed and refused to allow complainant to inspect the books and accounts of said corporation relating to the manufacture and sale of said awnings and shades with the interlock feature between panels since the 7th day of April, 1951, notwithstanding complainant's demand," although complainant was given that right by the provisions of paragraph 4 of the said written agreement.
It is further averred in the bill as follows:
Aside from the prayer for process, the prayer of the bill is as follows:
On February 18, 1952, Martin Stamping and Stove Company filed its demurrer. On the same day the respondent Frederick H. Martin, in his individual capacity and as an officer of the respondent corporation, filed demurrer. Additional grounds of demurrer were filed by the respondent Martin on May 16, 1952.
The trial court on June 12, 1952, rendered a decree overruling the demurrers of both respondents. It was pointed out in that decree that the demurrers were overruled because they were addressed only to the bill as a whole and the court was of the opinion that "under the allegations thereof said bill contains equity as a bill for equitable discovery and relief, in that said bill sufficiently alleges a wrongful appropriation by respondents of complainant's method of manufacturing metal awnings, the details of which were disclosed in confidence to respondents * * * and since one aspect of the bill is good the demurrer of each respondent to the bill should be overruled."
After obtaining the permission of the trial court, the respondents on July 10, 1952, jointly and severally, filed an instrument which is termed "Additional Demurrers," wherein a number of grounds of demurrer are addressed to the bill as a whole and grounds of demurrer are properly directed to each of the four aspects which the demurrants construed the bill to contain.
The so-called aspects are pointed out in the decree of the trial court rendered on August 1, 1952, which decree in pertinent parts reads:
From the decree of August 1, 1952, the respondents below have appealed to this court. By separate assignments of error the respondents challenge the action of the trial court in overruling demurrer to the bill as a whole and in overruling the demurrer to each of the so-called aspects except that seeking specific performance to which, as shown above, demurrer was sustained.
The complainant below does not here question the ruling of the trial court sustaining demurrer addressed to that aspect of the bill seeking specific performance.
*679 A bill in equity should be separated into paragraphs and numbered for convenience in answering. Equity Rule 11, Code 1940, Title 7, Appendix, p. 1050. However, the numbered paragraphs have no necessary relation to the causes of action presented and no necessary relation to its aspects, which are counterparts of counts in a complaint at law but not so designated. The aspects as such are neither physically segregated nor numbered. They are ascertained only by an analysis of the bill and by a process of mental segregation. See "Aspects of a Bill in Equity," by Judge E. M. Creel, The Alabama Lawyer, July 1951. The manner in which a demurrant addresses his demurrer to a bill does not determine its aspects. Woods v. Allison Lumber Co., 258 Ala. 282, 62 So. 2d 229; Montgomery Limestone Co. v. Bearden, 256 Ala. 269, 54 So. 2d 571, and cases there cited.
The effect of complainant's bill is to say to the corporate respondent, you have no right to use the mechanical device which I invented and which you obtained by virtue of the license contract unless you pay me royalties, even though the period of time during which you expressly agreed to pay me royalties has expired.
And complainant has called upon a court of equity to require the corporate respondent, Martin Stamping and Stove Company, to pay him royalties on all metal shades and awnings manufactured and sold by it since April 7, 1951, on which the said mechanical device has been used.
In order to have a court of equity so decree, complainant sought to call into exercise a well-known form of equitable relief, specific performance, by averring that the action of the corporate respondent in continuing to use the said mechanical device after April 7, 1951, constituted an extension and/or renewal of the said license contract. On that theory complainant sought to recover of the corporate respondent a royalty equal to five per cent of gross receipts, the amount stipulated in the license contract as amended.
But the trial court by its decree has said, in effect, that the allegations of the bill are insufficient to make out a case for specific performance. As shown above, that holding is not questioned here.
But complainant was not content to base his right to relief solely on the prayer for specific performance. He has attempted to frame the allegations and prayer of his bill so as to invoke another form of equitable relief, discovery in aid of a legal claim and an accounting. On that theory he seeks to recover of the corporate respondent a sum equal to its profits derived from the manufacture and sale of metal awnings and shades from April 7, 1951, to the date of the filing of the bill or reasonable royalties or royalties equal to five per cent of the gross proceeds derived from such sales.
In Young v. Dean, 253 Ala. 211, 215, 44 So. 2d 12, 16, we said:
In Erswell v. Ford, 205 Ala. 494, 497, 88 So. 429, 432, it is said:
We come now to consider those grounds of demurrer, properly addressed, which may be sufficiently discussed in brief filed on behalf of appellants to justify treatment here which in effect take the point that the averments of the bill are not sufficient to show that complainant has a cause of action, a legal right.
As indicated above, the contract with which we are here concerned is a license whereby the corporate respondent, for the consideration expressed, is given the right to use in the manufacture of metal shades and awnings the mechanical device, for which complainant had a patent application pending.
Such a license may be given before issuance of the patent. Fur Grooving & Shearing Co. v. Turano, D.C., 39 F. Supp. 877; Davis v. Kittle Mfg. Co., 134 Cal. App. 254, 25 P.2d 253; Sunday v. Novi Equipment Co., 290 Mich. 539, 287 N.W. 909; Schnack v. Applied Arts Corp., 283 Mich. 434, 278 N.W. 117; Kimmig v. Talmadge, 231 App.Div. 646, 248 N.Y.S. 484. See Sherrill v. Alabama Appliance Co., 240 Ala. 46, 197 So. 1.
Suits to recover royalties due under such contracts grow out of the contractual relationship and are not based on infringement; hence, the state courts have jurisdiction. Finnerty v. Wallen, D.C., 77 F. Supp. 508; Seagren v. Smith, 63 Cal. App. 2d 733, 147 P.2d 682.
Beyond any question, in entering into the license contract these parties contemplated that each of them should have the rights specified in the contract and the benefits accruing thereunder during the time complainant's application for a patent was pending, unless the contract was terminated in the meantime.
But appellants contend that since the contract has terminated and the patent has not been granted, they are free to use complainant's invention without payment of royalties to him. We cannot agree. The bill alleges that the application for patent is still pending and we are not here dealing with the rights of the parties with respect to future royalties in the event the patent should be finally denied. It may be that under the terms of the particular contract here involved, if the patent application should be denied the corporate respondent might not be liable for royalties. But see Sunday v. Novi Equipment Co., supra.
But as long as the application for patent is pending we can see no reason why complainant is not entitled to reasonable compensation for the use of his property, his invention. No question of infringement is involvedthe corporate respondent is liable under the circumstances by reason of an implied contract. In re Norcor Mfg. Co., 7 Cir., 109 F.2d 407. See In re Michigan Motor Specialties Co., D.C., 288 F. 377; Seagren v. Smith, supra.
We hold, therefore, that the grounds of demurrer taking the point that it is not made to appear from the averments of the bill that complainant has a cause of action were not well taken and were properly overruled.
*681 Appellants contend that the trial court erred in not sustaining the grounds of demurrer which take the point that the bill, being for discovery and relief, avers no facts showing that the discovery is necessary to prove any facts upon which complainant relies for relief; or that he cannot otherwise prove each and every matter sought to be discovered.
Complainant seeks to discover the number of metal shades and awnings manufactured and sold by the corporate respondent since April 7, 1951, on which his mechanical device has been used and the amount of money received therefor. The amount of his recovery necessarily depends upon such proof.
Complainant avers that he has no records of such sales nor any information bearing thereon; that respondents do have such information and that he has been refused access to respondents' books and records. It is averred: "Complainant has no means of obtaining the information with reference to said matters other than by and through the aid of this Court for relief against respondents by way of discovery." Standing alone, the language just quoted might be said to be a mere conclusion of the pleader, but taken in connection with the facts averred we are of the opinion the averment is more than a mere conclusion. Wood v. Hudson, 96 Ala. 469, 11 So. 530. See Sherrill v. Alabama Appliance Co., supra. The remedy of discovery by interrogatories at law does not deprive equity of its jurisdiction on proper averment. Cleveland Storage Co. v. Guardian Trust Co., supra. See Shackelford v. Bankhead, 72 Ala. 476; Virginia & A. Mining & Manufacturing Co. v. Hale & Co., 93 Ala. 542, 9 So. 256. We are of the opinion that the grounds of demurrer referred to last above were overruled without error.
A bill need not offer to do equity which shows that the complainant is not required to do anything in good conscience as a condition to the granting of relief. Head v. Carroll, 230 Ala. 688, 163 So. 328; Davis v. Anderson, 218 Ala. 557, 119 So. 670. Such is the bill in the instant case, where it is apparent on its face that under no circumstances would any liability for any amount be imposed upon the complainant as a condition to relief.
As regards the grounds of demurrer challenging certain sections of the bill as being indefinite and lacking the requisite certainty of averment, it may be observed that while it is necessary for bills in equity to have such degree of certainty that respondent may be directly informed of the nature of the claim made against him and of what he is called on to answer, the same precision of statement is not generally required in equity as at law, and the certainty with which averments must be made will depend on the particular case. Wood, Wire & Metal Lathers, etc., v. Brown & Root, Inc., 258 Ala. 430, 63 So. 2d 372.
In Horn v. Peek, 246 Ala. 241, 243, 20 So. 2d 234, 235, we said: "* * * It is immaterial what particular language is used in a bill seeking relief and what legal conclusions are drawn by the pleader, if the facts are alleged and a distinct equity power is authorized and sought expressly or impliedly."
Ordinarily, surplusage does not render a pleading subject to demurrer. Buettner Bros. v. Good Hope Missionary Baptist Church, 245 Ala. 553, 18 So. 2d 75.
Prolixity is reached by motion to strike rather than by demurrer. Alabama Power Co. v. Thompson, 250 Ala. 7, 32 So. 2d 795, 9 A.L.R.2d 974; Atlantic Coast Line R. Co. v. Carroll, 208 Ala. 361, 94 So. 820. See Worthington v. Miller, 134 Ala. 420, 32 So. 748; Sims, Chancery Practice, § 228.
Motion to strike has been recognized as proper method of getting impertinent matter out of a bill. Boozer v. Blake, 245 Ala. 389, 17 So. 2d 152.
We are of the opinion that none of the grounds of demurrer insisted on in brief were well taken and that the decree of the *682 trial court should be affirmed. It is so ordered.
Affirmed.
LIVINGSTON, C. J., and STAKELY and MERRILL, JJ., concur.