Court Opinion

ID: 3594765
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:42:31.722043+00
Date Added: 2024-06-11T07:44:25.739505
License: Public Domain

The right to manufacture felt cloth, under the patent given by the plaintiff to the defendant, by the agreement made in 1848, was a good consideration for the covenant of the defendants. That covenant was to pay to the plaintiff one cent per yard for all such cloth manufactured by them under the agreement. The consideration would have been sufficient to uphold, not only a covenant for the payment of that or any other stipulated sum for cloth manufactured during the life of the patent, but for cloth manufactured after its expiration. This is too clear for discussion. The inquiry then is, for what period of time did the defendants, by the true construction, undertake to pay. To determine this, the entire agreement must be examined, to ascertain therefrom the intention of the parties in this respect. *Page 373 
By the agreement, the plaintiff gave the right to the defendants, to manufacture upon the terms therein stipulated, for and during the unexpired term of the patent, and for and during the term for which the same shall be renewed, if a renewal thereof shall be obtained by or for the plaintiff. It was in consideration of, and in reference to this right, that the defendants covenanted to pay. The covenant to pay, in point of time, is coextensive with the right attempted to be conferred upon the defendants by the agreement, and that embraces not only the unexpired period of the patent, but also, that of a renewal, if obtained by or for the plaintiff. From the facts found, it appears that the patent expired in 1850, and that a renewal was granted in the name of the patentees, by the commissioners of patents, for seven years; and that such patentees, thereafter, in pursuance of an agreement previously entered into with the plaintiff, transferred to it all their right thereto. This authorized the conclusion, that the renewal was obtained by or for the plaintiff, and by the true construction of the defendants' covenant, bound them to pay to the plaintiff the sum stipulated for all cloth manufactured during the latter period. The counsel for the appellant, insists that the act of congress, under which the renewal was granted, gave the defendants a right to manufacture, notwithstanding such renewal, and that the defendants did not, therefore, thereafter manufacture under the right conferred by the agreement with the plaintiff, but under the right given to them by said act. The eighteenth section of the act (5 U.S. Stat. at Large, 125), provides, that the benefit of such renewal shall extend to assignees and grantees of the right to use the thing patented, to the extent of their respective interests therein. This section confers the benefit of the renewal only upon persons who are assignees or grantees, of the right to use the patent to the extent of their interest therein. The defendants, under the agreement, acquire the right to use the patent, only by paying to the plaintiff a royalty of one cent per yard, for all cloth manufactured. This was the extent of their right to use the patent, and all the right conferred by *Page 374 
the above section. (See Chaffee v. The Boston Belting Co., 22 Howard U.S., 217.) Had not the agreement provided for a continuance of the right, during a renewal of the patent, the defendants could have continued such use, by virtue of the act, only by paying the sum agreed upon therefor, during the existence of the original. If there be doubt, as to whether this is the true construction of the statute, the parties have obviated the difficulty in this respect, by providing in the agreement for the use of the patent by the defendants, during the renewal, if any, and for payment of the royalty therefor to the plaintiff. The defendants' counsel, further insists, that the renewal was neither a right or thing in existence at the time of the agreement and, therefore, not the subject of a contract, and cites numerous authorities to support his position. An examination of these authorities shows that a thing not in esse
cannot be sold by contract so as to vest the legal title thereto in the purchaser upon its coming into existence; but other authorities show that contracts relating thereto, if fairly made, will be enforced in equity. (Field v. The Mayor of N.Y., 2 Seld., 179; Hartshorn v. Day, 19 Howard, 211; Munsell v.Lewis, 2 Denio, 224; reversing same case, 4 Hill, 224.) This sustains the recovery in the present case. The distinction between suits at law and in equity having been abolished by the Code, obviates the necessity of determining whether an action at law will lie upon the contract. The counsel for the appellant further insists that the defendants were relieved from their obligation to pay the royalty in future by an act of congress, passed March 28th, 1854. By that act the patent was extended fourteen years from that date. The act contains the following proviso: "And provided further that all persons now enjoying the lawful use of the said invented machine, or any part thereof so patented, and the purchaser of any such machine, or any part thereof, may continue to use the same notwithstanding the provisions of this act." This proviso shows that congress did not, by this renewal, intend at all to interfere with vested rights in the use of the patent, but that those who had acquired such *Page 375 
rights should continue to enjoy them in the same manner as though the act had not passed. This does not affect the rights of these parties. The defendants, under the agreement, had the right to use the patent for the term of the renewal granted by the commissioner of patents, upon paying the royalty, and the proviso simply preserved this right to them, the same as before the passage of the act. The agreement did not embrace the renewal under the act of congress, as that speaks of but one renewal, evidently referring to a renewal to be granted by the commissioner of patents under the then existing law. The remaining question is, whether the plaintiff could recover the royalty upon the cloth manufactured by the defendant subsequent to the service of the notice by the plaintiff upon them, forbidding the further manufacture by reason of the violation of the agreement by them. The agreement contains the following clause limiting the right of the defendants to the use of the patent, and upon the breach of either of the aforesaid conditions said right is to cease and determine, and said party of the second part to be no longer entitled to use or possess the same. It appears, from the finding of facts, that the defendants violated one of the conditions of the agreement, and that thereupon the plaintiff served upon the defendants the notice forbidding their further use of the patent by reason thereof. The judge, notwithstanding, held the defendants were liable upon the agreement, for cloth manufactured subsequent thereto. In this, I think, he committed an error. It was provided expressly that a violation of the agreement by the defendants should terminate their rights under it. This left it at the election of the plaintiff to terminate the agreement, in case of such violation, or continue it in force. The resolution of the directors and of the respondent's notice served thereupon, was an election to terminate the agreement and notice of such election to the defendant. It can hardly be contended that had the plaintiff sued the defendants for a violation of the patent for manufacturing cloth thereafter the agreement would have been any defence to the *Page 376 
action. If not, in force, for this purpose, it clearly was not for the purpose of a recovery of the stipulated price of manufacturing. The plaintiff thereafter was left to his remedy for the violation of the patent. I have examined the findings to ascertain, if practicable, the amount recovered for the manufacture of cloth subsequent to the service of the notice, with a view to the alternative modification of the judgment, but cannot. The judgment must therefore be reversed and a new trial ordered.
HUNT, Ch. J., MASON, LOTT, JAMES and MURRAY, JJ., concurred with DANIELS for affirmance.
WOODRUFF, J., was for reversal upon the grounds stated in GROVER's opinion.
Judgment affirmed.