Court Opinion

ID: 6966181
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:54:21.137889+00
Date Added: 2024-06-11T16:08:37.565425
License: Public Domain

Mr. Justice Phillips delivered the opinion of the court: It was held by the Appellate Court, as they were warranted by the evidence in doing, that the contract between appellants and appellee was entered into by the latter upon the faith of representations by appellants that the right to use the patent was. not disputed, which representations were known by appellants to be untrue when made, and further, that upon becoming aware of the fact that the rights of appellants were disputed, (in respect of which'fact there can be* no longer any controversy,) appellee was justified, as we think it unquestionably was, in its refusal to proceed under the contract; and it therefore necessarily follows that the conclusion of the Appellate Court that the agreement made by appellants to give an indemnity in the form of a bond, in addition to the covenant in the contract to defend any suit brought for infringement, was upon a valid and sufficient consideration, and the failure of appellants to comply with the agreement would authorize appellee to rescind, hold the apparatus subject to the order of appellants, and refuse to pay therefor. Upon the most careful consideration of the case we can find no error in the rulings of the trial court in respect of this issue. The more important question, and the one chiefly relied on by appellants for reversal, arises from the admission of evidence by the trial court tending to show that the patent claimed by appellants, or their apparatus or machine, was an infringement of a patent controlled by the National Gas Light and Fuel Company. By the contract between the parties appellee was to have the privilege of using the apparatus and machinery put in by appellants, and the right to so use the same was the sole consideration for entering into the agreement and of assuming the liability to pay, for which suit is brought. If appellants had no right to grant the use of such apparatus there was a total failure of consideration, and appellee was not bound, under its contract, to subject itself to liability for infringement upon the Springer patent, and might rightfully refuse further to be bound whenever it became apparent that the use of the apparatus sold appellee by appellants subjected it to suit for damages by the owners of the Springer patent. The apparatus was wholly worthless to appellee if it could not be safely and lawfully used, and appellants having covenanted that it might be so used, and induced appellee to purchase it upon the representation and covenant that appellee should have the right to its full enjoyment and use, it follows, necessarily, that if appellants had no right to sell to appellee the privilege of using the apparatus there was a failure of the consideration for the promises of appellee. Rice v. Garnhart, 34 Wis. 453; Bliss v. Negus, 8 Mass. 46; Nye v. Baymond, 16 Ill. 153. The foregoing position is not seriously controverted, but it is insisted that this issue was not within the jurisdiction of the State court, and that the question involved fell within the exclusive jurisdiction of the Federal courts, —that is to say, that if the issue could be determined in the State courts, it could only be determined after a finding that there was an infringement, by the United States court. It may be conceded, and upon this question there is no conflict of decision, that in a direct proceeding for the infringement of a patent the jurisdiction of the Federal court is exclusive. The weight of authority, however, is, that where the question arises collaterally, as it does in this case, it may be determined in the State courts. The defense interposed was, that the consideration had failed, in whole or in part, because the purchase by appellee was induced by the false and fraudulent representations of appellants that their apparatus was not an infringement upon the Springer patent, and that there was no claim by the owners of that patent that appellants’ patent or apparatus was an infringement upon it, and that the apparatus sold by appellants to appellee was, and was claimed by the owners of the Springer patent to be, an infringement upon said patent. Upon this, issue was taken and evidence to sustain the plea admitted. The question arose out of a contract between the parties, and the matter of infringement was collaterally involved. In Nye v. Baymond, supra, it was held that in the absence of matter estopping the defendant from denying the existence of a patent or the right of the plaintiff to sell it, “the law seems to be settled that in an action for rent for the use or the purchase money for a patent or pretended patent sold, the defendant may show, in defense, either that there was no such patent, or that the patent was invalid, or that the plaintiff had no right to sell it,”— citing Curtis on Patents, 199, 200, and Hayne v. Maltby, 3 Term Rep. 438,—and a judgment of a circuit court in favor of the defendant was affirmed by this court. As sustaining this doctrine, see, also, Rice v. Garnhart, supra; Page v. Dickerson, 28 Wis. 695; Midlebrook v. Broadbent, 47 N. Y. 443; Slemmer’s Appeal, 58 Pa. 155. Numerous other cases sustaining the same doctrine may be found. We are of opinion that where the question arises collaterally, the State court has jurisdiction to determine whether the particular thing is or is not an infringement of a prior patent, and that therefore the court did not err in admitting the testimony complained of. Complaint is made of refusal of instructions asked for by appellants. It can only be determined whether error has been committed when all of the instructions are considered. The Appellate Court, and this court,- upon being made aware that all of the instructions are not included in the abstract, might well decline to consider the error assigned in respect of the instructions abstracted. The courts should not be required to pass on a case upon a partial abstract, or go to the record to find those portions of it which are omitted. In this case, however, we find in the record nineteen instructions given at the instance of appellants, not abstracted, in which every material point in the instructions refused to which appellants were entitled is sufficiently stated. The objections urg-ed to instructions given at the instance of appellee are each met by the views already expressed. If we are correct in our holding upon the principal questions involved in the case, the instructions given stated the law with substantial accuracy. The judgment of the Appellate Court will be affirmed. Judgment affirmed.