Court Opinion

ID: 3313020
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:29:57.045141+00
Date Added: 2024-06-11T09:19:06.316089
License: Public Domain

The plaintiff did not, in his complaint, allege the execution of the instrument of May 21st as the contract between the parties, but, on the contrary, pleaded that his signature thereto was procured by fraud, by reason of which he repudiated it. Nor did he, by any appropriate *Page 38 
allegations in his reply to the answer and in his answer to the petition in intervention, set up any breaches by the defendants, of the contract of May 21st. Consequently, the trial court was right in declining to pass upon any issue relative to the breach of that contract by defendants, and no such issue is determined by the decree herein. This makes it unnecessary to specifically consider some of the contentions made by the plaintiff in error, and others must also be deemed to be settled against him by the findings of the trial court upon the issue of fraud in the drafting and execution of the contract. These findings are supported by competent evidence, and, contrary to the insistence of plaintiff in error, we find no admission either in the testimony of Gildersleeve or in his brief herein, which compels the reformation of any part of the contract of May 21st.
There remain, then, for special consideration, two only of the contentions made by plaintiff in error. It is upon these that he chiefly relies. They are: (1) That the contract of May 21st is not supported by a consideration; and (2) that the defendant corporation had no right, under the contract of May 21st and the assignments to it, to enter into the contracts with the intervener and to give to the intervener the license to make and distribute the bit.
1. The argument of the plaintiff upon the question of consideration is that the promises made to the plaintiff in the second contract were the same or at least no more beneficial to him nor onerous to the defendants, than those to the performance of which he was already lawfully entitled under the first contract, and that therefore there was no new consideration present in the second contract sufficient to support plaintiff's new and more burdensome obligations. This argument, whether otherwise sound or not, overlooks a controlling fact. The defendant corporation was not organized until after the execution of the contract of May 21st. It consequently was never bound by the contract of March 28th. Miser G. M. *Page 39  M. Co. v. Moody, 37 Colo. 310, 86 P. 335. When organized, the corporation adopted and entered into as its first and only contract with the plaintiff, the agreement of May 21st. It became a party to that contract. Its promises therein and the partial performance thereof as hereinabove set forth, constituted full and sufficient consideration for plaintiff's promises as contained in that instrument.
2. The assignments required by the contract of May 21st and afterwards made by the plaintiff to the defendant corporation, were of such a full and complete character as to vest in the corporation the entire beneficial interest in both the invention and in the monopoly when it should be granted. Robinson on Patents, Vol. 2, p. 521. The corporation as such assignee had therefore the right to grant to the intervener the sole and exclusive license to make and distribute one of the inventions, unless the granting of such license was either expressly or impliedly forbidden by other terms of the contract between the plaintiff and the defendant company. 30 Cyc. 943; Robinson on Patents, Vol. 2, pp. 522, 523. No express prohibition of the granting of such license is to be found in the contract. Nor do we think that any such prohibition can be fairly implied. The corporation did not agree to manufacture or distribute the inventions. Undoubtedly it possessed the power to do so, and it was contemplated that it might do so. The contract of May 21st, in addition to providing for conferring upon the corporation the right to use, make and sell, also specifically included the right to lease, rent, market, distribute, handle and dispose of said inventions, in any and every way. Not only so, but it provided that the corporation might cause either of these things to be done. The assignments ran also to "its successors and assigns." The means by which the inventions should so be developed and handled was to be determined by the board of directors, according to the express provisions of the contract. Nor is there anything in the royalty provision in conflict with the *Page 40 
existence of these broad rights on the part of the corporation. Robinson on Patents, Vol. 2, p. 521, § 764. The royalty is not imposed upon the sale of the inventions, but upon the income of the corporation from the making, using, selling, handling or disposing of the inventions. It is manifest from the terms of the agreement that the plaintiff did not seek by the terms of the contract to restrict the corporation as to the means it should employ in the development and marketing of his inventions, nor as to the agencies which it should enlist for that purpose. He rather chose to rely in that regard upon the discretion of the board of directors, of which he was to be a member, and the personnel of which he was to control in some measure by his stock ownership.
Whether or not this was an improvident contract from the standpoint of the inventor, we must enforce it as we find it, and we think that under its terms the Universal Rotary Bit Company clearly had the right to enter into the contracts with the interveners.
The issues of fact having been resolved by the trial court against the plaintiff in error, and no errors of law appearing, the judgment must be affirmed.
MR. CHIEF JUSTICE DENISON, MR. JUSTICE BURKE, and MR. JUSTICE WHITFORD, concur. *Page 41