Case Name: Murphey, Appellant, vs. Weil, Respondent
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1896-03-10
Citations: 92 Wis. 467
Docket Number: 
Parties: Murphey, Appellant, vs. Weil, Respondent.
Judges: Maeshall, J., took no part.
Reporter: Wisconsin Reports
Volume: 92
Pages: 467–476

Head Matter:
Murphey, Appellant, vs. Weil, Respondent.
January SO —
March 10, 1896.
Contracts: Construction: Disallowance of patents: “ Thermostat: ” “Automatic machine: ” Joint promise: Rescission: Judgment.
1. Extrinsic evidence as to the meaning of the word “thermostat” in a contract is inadmissible, that word having a fixed and definite meaning.
S. A contract of sale of corporate stock provided that the vendors should refund to the vendee a specified part of the purchase money if the patents applied for by one of the vendors “ for thermostat and automatic machine ” should be disallowed in substance. There were pending at the time six applications by such vendor for patents on thermostats or improvements in thermostats, and one application for a patent on a clockwork device to change automatically, at predetermined times, the temperature at which a thermostat would maintain the heat. Held, that such clockwork device was the “ automatic machine ” referred to in the contract.
3. Under such contract the vendee was entitled to a return of the specified part of the purchase money if the patent on the automatic machine was disallowed in substance, even though all the other patents were allowed. '
4. The contract of sale being a joint one on the part of the vendors, and there being nothing to show any severalty of interest, the promise to refund is construed as a,joint promise; and the vendee having, as authorized by one of the vendors, paid for the stock by advancing the purchase money directly to the corporation, the other and surviving vendor became liable, on the disallowance of the patent for the automatic machine, to refund the agreed portion of the purchase money.
. 5. No rescission or return of the stock was necessary in such case to entitle the vendee to enforce the contract..
"6. A judgment in favor of the defendant upon one of three counterclaims, but not specifically disposing of the others, is held a bar to any future recovery upon such others, where it recites the verdict upon them in favor of the plaintiff.
Appeal from a judgment of the superior court of Milwaukee county: R. D. MaRshall, Judge.
Affirmed.
This is an action to recover $12,500, claimed to be due from the defendant to the plaintiff as a balance of the purchase money of certain shares of corporate stock under the terms of the following contract: '
“Agreement made and entered into this 23rd day of March, 1887, by and between H. E. Jacobs and N. 8. Murphey, of the first part, and Bengamin M. Weil, of the second part, all of Milwaukee, Wisconsin.
“ Witnesseth, the parties of the first part agree to sell and deliver to the party of the second part two hundred and fifty shares ($25,000) in full-paid capital stock of the Jacobs Electric Company of Milwaukee, Wisconsin, for the sum of twenty-five thousand dollars ($25,000), to be paid as follows: $13,500 to be paid at this date; $1,000, May 1,1887; $1,000, June 1, 1887; $3,000, July 1, 1887; and $6,500, October 1, 1887, — without interest'; $12,500 of said money to be advanced and loaned to said company by the parties of the first part.
■ “ It is further agreed that the parties of the first part will, for the same consideration and at the same time, sell and deliver to the party of the second part two hundred and fifty shares ($25,000) in full-paid stock of the Electric Temperature Controlling Company of Milwaukee.
“ It is further agreed that, if the patents applied for by Jacobs on the invention for thermostat and automatic machine be disallowed in substance, the parties of the first part agree to refund to said Weil $12,500 of tbe money paid hereunder.
“ Witness our hands and seals 'this 2nd'day of April, 1887.
“H. E. Jacobs, [Seal.]
“ N. S. Mubphey, [Seal.]
“BeNj. M. Weil, [Seal.]”
Mr. H. E. Jacobs, one of the contracting parties, died before the commencement of this action, and his interest in the contract was assigned to the plaintiff by his administra-^ tor. The defendant’s answer was quite long, and, so far as necessary to be stated to understand the questions involved in this action, consisted: (1) Of defensive matter, to the effect that the stock sold and delivered to the defendant was not full-paid stock; that the conditions to be performed by the plaintiff on his part had not been performed; and. that the patents referred to in the last part of'the contract had been disallowed, and consequently that the plaintiff cannot recover. (2) A first counterclaim on, the ground that the contract was induced by fraudulent representations as to the' value of the patents. (3) A second counterclaim for damages on the ground that the stock transferred was not fully paid. (4) A third counterclaim for damages on the ground that the patents named in the last clause of the contract had been disallowed in substance; that the defendant had advanced to the corporation $6,000, which was in fact a part payment of the $12,500 of deferred payments provided for by the contract in question, which said money was, by direction of Murphey and Jacobs, advanced directly to the company and used in its business, instead of being paid first to Murphey and Jacobs, and by them advanced and loaned to the company, as contemplated in the contract.. This sum of money was sought to be recovered under the third counterclaim.
It appeared by the evidence that prior to the making of the contract in suit the two corporations named in the con tract, viz. tbe Electric Temperature Controlling Company ' and tbe Jacobs Electric Company, bad been organized, and that at tbe time of tbe making of the contract tbe plaintiff and Jacobs owned all of tbe stock of both corporations. Tbe stock of each corporation was originally paid for by the assignment to. tbe Jacobs Electric Company of certain alleged inventions, and tbe right to tbe assignment of all future inventions by Jacobs of improvements in thermostats, or devices for regulating temperature in rooms. At tbe time of tbe assignment to tbe corporations of these inventions, present and prospective, of Jacobs, to wit, February 21, 1887, such inventions were described in tbe assignment as follows: First, an application for letters patent on a device known as an “ Automatic Adjustment of Thermostat; ” second, application for letters patent for automatic device to open and close drafts of furnaces and stoves; third, application for letters patent for improvements in. thermostats. Prior to the execution of tbe agreement in suit, other applications for patents in the same general direction bad been made by Jacobs, so that at tbe time of making of such contract, viz. April 2,1887, application bad been made by Jacobs for seven patents, described as follows: Application No. 212,383, for improvement in contact devices for thermostat; application No. 216,409, for improvement in electric temperature controlling device;- application No. 365,438, for improvement in thermostats; application No. 363,644, for improvement in electric temperature controlling device; application No. 363,645, for improvement in electric temperature controlling device; application No. 365,600, for improvement in electric temperature controlling device; application No. 214,595, for pole changer for thermostats. It appears that two of these patents (No. 216,409 and 212,383) 'ha'd been allowed in March, 1887, but that no patents bad been issued thereon at the time of the making of tbe contract, because the fees for tbe issuance of patents bad not 'been, paid; and it is claimed that tbe parties, when they made the contract, did not know of the fact that they had been allowed. All applications except No. 214,595 covered .alleged improvements of various kinds in thermostats, either in the thermometric apparatus, or in the apparatus immediately connected with the dampers of the stoves, or both. Application No. 214,595, denominated “Pole Changer for 'Thermostats,” consisted of the combination with a thermostat of a clockwork device, which was to be wound up, and was to adjust and change the temperature at which the thermostat would act upon the dampers at certain predetermined times. This application is referred to in the case as the “ Clockwork Device.” The evidence showed that all of the applications above named were allowed, but that, though application No. 214,595 was in form allowed, a patent thereon was refused, as the result of interference proceedings brought by the Eutz Thermo-Electric Company.
At the conclusion of the trial the court directed a verdict ■by which the jury found in favor of the defendant and •against the plaintiff on the cause of action contained in the plaintiff’s complaint; second, in favor of the defendant and against the plaintiff for the sum of $5,108 on the cause of ¡action contained in the third counterclaim; third, in favor of the plaintiff and against the defendant on the causes of .•action contained in the first and second counterclaims. Upon this verdict judgment was entered in favor of the defendant, dismissing plaintiff’s cause of action, and for $5,108 .•and costs upon the cause of action set forth in the third •counterclaim. From this judgment the plaintiff appealed.
Eor the appellant there were briefs by Charles Quarles ¡and H. J. Killilea, of counsel, and oral argument by Mr. Quarles, Mr. Killilea, and Mr. N. 8. Murphey.
Eor the respondent there was a brief by Turner & Tim-■lin, attorneys, and J. G. Flanders, counsel, and oral argument by W. M. Timlin and Mr. Flanders.

Opinion:
WiNslow, J.
This case was before this court upon a former occasion, and will be found reported in 89 Wis. 146.. The question then before the court was whether the court', below erred in granting a new trial on the ground of inconsistency in the findings of a special verdict which had been, rendered in the case upon a former trial, and it was held! that the new trial was rightly granted. It was held upon that appeal that the patent for the clockwork device, though-formally allowed, was disallowed in substance, because never issued on account of its interference with the Butz patent. The evidence upon this question is the same as upon that trial, and therefore it is settled in the case that the application for a patent on the clockwork device was " disallowed, in substance." The contract in question provides that, " if. the patents applied for by Jacobs on the invention for thermostat and automatic machine be disallowed in substance,, the parties of the first part agree to .refund to said Weil' $12,500 of the money paid hereunder." It is apparent that if the words " automatic machine," in this clause of the contract, must be held to refer to the clockwork device, then, the application for a patent for an " automatic machine " has been disallowed in substance. This was the construction placed upon it by the trial judge, and upon this construction he decided the case and directed a verdict for the-amount which it was conceded the defendant had advanced to the business. If he was right in his construction of the-contract, the judgment must be affirmed; if wrong, then, there should be a new trial.
It is claimed by the plaintiff that the court was not justified in construing the words " automatic machine " as referring conclusively to the clockwork device, but that there-was evidence in the case which would justify the conclusion that the word " thermostat," as used in the contract, referred^ to the thermometer and the expanding metal strips upon-the wall of the room, and that the words " automatic ma chine " referred to the electro-magnetic apparatus by means-of which the dampers of the furnace are opened or closed as the metal strips on the wall open and close an electric-circuit. Erom this premise it is argued that the question as-to the meaning of the words " thermostat and automatic machine," as used in the contract, was a question for the-jury and,not for the court.
" Thermostat " is a word with a definite and certain meaning, both in ordinary parlance and as used by heating engineers. It means a self-acting apparatus for the regulation of temperature. This is what a thermostat is now, and1 what it always has been, however simple or however complicated it may be. It includes the whole apparatus,— as well the expanding strip or strips _ of metal or other substance upon which the heat first acts as the intermediate wires, magnets, or other apparatus, if any, by which the dampers of the furnace are opened or closed as the strips expand or contract. The word " thermostat " being, then, a word of fixed and definite meaning, that meaning must be attached to it when it is used in a contract. Parties cannot use terms with a fixed and cerfain meaning, and then disclaim such meaning,— at least, without reformation of the contract, and no reformation is sought or claimed here. Janesville Cotton Mills v. Ford, 82 Wis. 416. There is no-ambiguity or uncertainty as to what is meant by the word " thermostat." Therefore its meaning could not be affected by extrinsic evidence. Kirch v. Davies, 55 Wis. 287.
Starting with this premise, and referring to the evidence, we find that at the time of the execution of the contract in suit there were pending six applications for patents which were for thermostats pure and simple or improvements in thermostats, and we find one application (No. 214,595) which was an application for a clockwork device to be used in connection with a thermostat. This device was to be woundi up with a key, and its object was to automatically change . the position, of the expanding strips of metal at certain pi'e- . determined hours of the day or night, so that for a certain number of hours of the day the thermostat would maintain the heat at a lower degree than during the remaining hours. It was expected, for instance, that by the aid of this clockwork the temperature might be maintained at seventy degrees during the daytime, and at sixty degrees during the night, with no other action on the part of human agencies than the replenishing of the fire and the winding of the clockwork. This was manifestly an " automatic machine." There were therefore six applications for patents upon thermostats, and one application for a patent upon an automatic machine (which was not a thermostat), pending when the contract was made by which it was provided that, " if the patents applied for on the invention for thermostat cmd automatic machine be disallowed in substance," then the defendant's purchase money was to be refunded. The words are not " thermostat or automatic machine." If so, then it might be reasonably argued that the automatic machine referred to was the thermostat, which is in fact an automatic machine itself. Rut the words are " thermostat and automatic machine." They are distinct. The automatic machine is in addition to the thermostat. In this state of the evidence, it appearing that there were pending at the time, and included in the negotiations of the parties, six applications for patents on improvements in thermostats, and one application for patent on an automatic machine to be used in connection with a thermostat, there is no room left for construction. The contract becomes absolutely certain, and the automatic machine referred to can be nothing but the clockwork device,-— the only automatic machine, aside from .a thermostat, for which a patent was applied for at the time of the contract. This being our conclusion as to the •construction of the contract, it becomes unnecessary to consider the parol evidence which was introduced on both sides tending to throw light upon the meaning of the words used. Under the view we have taken, it is immaterial. It may be .said, however, that such evidence was, in the main, very strongly corroborative of the meaning which we have attributed to the words as matter of law.
The patent for the automatic machine having been disallowed in substance (Murphey v. Weil, 89 Wis. 146), the •question is whether this fact entitles the defendant to a return of his purchase money, when it appears that the six •applications for improvements in thermostats were all allowed. Upon this question the trial judge said, in deciding the cause: " I think the language used in the contract, ' That if the patents applied for by said Jacobs on the invention for thermostat and automatic machine be disallowed,' must be construed as covering all the patents. That is, not all the patents must be disallowed, in order that the cause of action might accrue for the recovery of the money, but that, if any one of the patents was disallowed in substance, that the cause of action would accrue. That is my interpretation of that contract. It appears conclusively that one of the patents was disallowed in substance in the patent office. In mj7- judgment, that was sufficient to allow the bringing of the action to recover back the money." We quite agree with this interpretation of the language of the contract, and think it the only reasonable view to take of the provision. Furthermore, the question would hardly seem to be an open one in this case, for the reason that it was held upon the former appeal (Murphey v. Weil, supra) that, if this application •{i. e., the application for a patent on the clockwork device) has not been allowed in substance, the defendant is entitled ¡to have the purchase money to the amount of $12,500 returned.
We regard the promise to refund the purchase money to Weil as unquestionably a joint promise. The contract is apparently joint, from start to finish. The complaint alleges that Jacobs and Mwphey jointly owned the $12,500 worth. of stock in tbe Jacobs Electric Company when tbe contract was made. Tbe agreement to sell that stock to Weil i& joint in terms. Tbe payments were evidently expected to be made to either, as there is no provision for separate payments. Tbe agreement to advance to tbe corporation the amounts paid by Weil for tbe stock is joint. Tbe agreement to deliver tbe shares in tbe second corporation is joint. In fact, no separate interest, as between Murphey and Jacobs, is disclosed anywhere; and, in tbe absence of anything showing severalty of interest, tbe promise to- refund should be construed as a joint promise. New Haven & N. Co. v. Hayden, 119 Mass. 361. Tbe contract being joint, and tbe evidence ¿showing without dispute that one of tbe joint contractors, Jacobs, authorized Weil to pay bis purchase money by advancing it directly to tbe corporation, there can be no question as to the liability of tbe surviving joint promisor, on tbe happening of tbe contingency which requires repayment of such purchase money. Nor was rescission or return of tbe stock necessary to entitle Weil to enforce tbe contract, because tbe contract does not require it, nor can it be reasonably construed to require it. It seems to have been considered (as tbe fact apparently is) that if tbe patents applied for were not allowed in substance tbe stock would be valueless.
It is argued that tbe judgment is defective because it does not specifically dispose of tbe issues raised by tbe first and second counterclaims. Tbe verdict, which is recited in tbe judgment, disposes of every counterclaim; there has been no withdrawal of any of tbe counterclaims; and tbe judgment in favor of defendant upon the third counterclaim alone we regard, under these circumstances, as a complete bar to any future recovery upon tbe first or second counterclaim. Morgan v. C., M. & St. P. R. Co. 83 Wis. 348.
By the Oowrt.— Judgment affirmed.
Maeshall, J., took no part.