Court Opinion

ID: 5229922
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:53:52.104195+00
Date Added: 2024-06-11T08:27:29.624914
License: Public Domain

Scott, J.:
The action is for damages for defendant’s failure to promptly and diligently prosecute the application of plaintiff for a patent pursuant to the terms of a written contract annexed to . the complaint. One of the defenses (the fifth) is to the effect that the plaintiff’s cause of action, if any, is barred by the Statute of Limitations. The reply, which has been demurred to, sets up facts which, as the plaintiff insists, render the defense above stated unavailable.
*719The question involved is important to the parties because upon its answer may depend the outcome of the litigation.
The complaint, although we refused on a former appeal to strike out parts as irrelevant and redundant, and to require other parts to be made more definite and certain (152 App. Div. 943), is by no means a model pleading and is not distinguished for its clarity. It is not impossible, however, with some study, to ascertain the cause of action which it sets forth.
The contract, for the breach of which the plaintiff seeks damages, recites that plaintiff is the owner of a certain invention and applications for letters patent, pending in the Patent Office, as to which certain specified interferences had been filed. The plaintiff thereupon agreed to execute and deposit in escrow with the Twenty-third Ward Bank of the city of ¡New York assignments of said applications and of the patents to be obtained therein, said assignments to be delivered to the defendant when he should deposit the sum of $5,500 in the said bank to the credit of the plaintiff, together with an agreement to pay plaintiff $2,500 out of the profits to be derived from the use of said patents. The defendant on his part agreed to prosecute said applications promptly and to contest said interferences and to pay and bear all the expenses thereof. He further agreed to deposit the sum of $5,500 in cash in the said Twenty-third* Ward Bank to the credit of the plaintiff “ on or before the 1st day of January, 1906, and within thirty (30) days from the .time that a final court decision shall have been obtained sustaining said patent or patents,” and in addition to deposit in said bank an agreement to pay the plaintiff the further sum of $2,500 out of the moneys received from the use of said patents. There is a further promise that if on account of any unforeseen occurrences or causes beyond the control of the parties the court decision shall not have been obtained on or before the 1st day of January, 1906, the plaintiff would extend the time limit for the deposit of the $5,500 and the agreement as to further earnings for a further period of time to be mutually agreed upon.
The complaint alleges that defendant has never deposited the $5,500 as he agreed to do, and has not prosecuted plaintiff’s application faithfully and diligently, but on the contrary abet*720ted, assisted and joined with one Klahn in filing and prosecuting applications for patents embodying the invention of plaintiff, with the result that plaintiff has been put to many years of delay and great expense in endeavoring to get his application properly allowed over the false claims presented with the knowledge and collaboration of defendant. The defense replied to sets forth that the rejection of certain of plaintiff’s applications by the examiner in charge thereof, and the affirmance of the decision of said examiner by the board of examiners of the Patent Office, and the affirmance of the decision of said board of examiners by the Commissioner of Patents, alleged in the 13th paragraph of the complaint, all occurred prior to the 7th day of February, 1905; that the decision or judgment of the Court of Appeals of the District of Columbia affirming the decision of the Commissioner of Patents was rendered on or about the 7th day of February, 1905, and that the alleged failure of defendant to prosecute plaintiff’s application promptly before the Patent Office and the alleged negligence, carelessness and delay of defendant in proceeding with reference to said application for patents all occurred prior to the 7th day of February, 1905, whence, as defendant avers, this action, which was commenced on February 16, 1912, was not commenced within six years after the cause of action alleged in the complaint arose. The reply to which defendant demurs alleges that the time limit for the deposit by defendant of the sum of $5,500 in the bank was extended by mutual consent to February 23, 1906, which was within six years before the commencement of the action. The question whether or not this reply sufficiently answers the plea of the Statute of Limitations depends upon the nature of the cause of action alleged. If it is for damages for breach of defendant’s agreement to promptly and diligently prosecute the application for the patents, the breach, if any, had been committed when the applications were finally rejected. But if the action is for the $5,500 agreed to be deposited in the bank, the alleged agreement to extend the time for making the deposit postponed the establishment of a cause of action until the agreed time had expired.
I think it is clear that the only cause of action alleged in the complaint, and the only cause of action plaintiff could have, *721under the circumstances detailed in his complaint, was for defendant’s negligence and bad faith in prosecuting plaintiff’s application so as to put plaintiff in a position to be entitled to receive the $5,500 down payment and the $2,500 to be paid out of earnings. Hence the plaintiff puts his damages at $8,000, the amount he would have been entitled to receive under his contract if his application had been allowed and the patents issued thereon. The provisions of the contract are perfectly clear that the $5,500 was to be deposited to plaintiff’s credit, and the agreement for a percentage of future earnings to be executed if and when the applications were granted. If defendant failed by wrongful neglect, or fraud to obtain the approval of the applications the time would never arrive for the payment of the $5,500 and the $2,500, but for such wrongful neglect and fraud he would be liable to respond to the plaintiff in damages, and the measure of those damages would be the amount the plaintiff would have been enabled to earn if the defendant had acted diligently and in good faith. If, as the answer alleges, the defendant’s failure to act diligently and in good faith all occurred prior to February 7, 1905, the cause of action then accrued against him, and if it is not the failure to deposit the $5,500 which constitutes the gravamen of the complaint, it is immaterial whether or not the time for making that deposit had been extended.
For these reasons I am of opinion that the demurrer to the reply was well taken and should have been sustained. Consequently the order appealed from should be reversed, with ten dollars costs and disbursements to appellant, and the demurrer to the reply to the fifth separate defense sustained, with ten dollars costs.
Ingraham, P. J., and Hotchkiss, J., concurred; Clarke and Dowling, JJ., dissented.