Hadden v. Waring — 22 N.Y. St. Rep. 689

Majority

p. 689

William Hadden, Pl’ff, v. Richard S. Waring, Def’t.

(Supreme Court, General Term, First Department,

Filed March 29, 1889.)

Headnote

1. Contract—Intention of parties—Paroi evidence, when admissi-

ble.

In an action to recover damages for breach of contract, it appeared that the plaintiff’s assignor was an inventor of electrical instruments, the defendant a manufacturer of electrical cables. It was agreed between them, in June, 1882, that the former should furnish to the defendant an improved printing telegraph instrument, and for which he was to be paid partly in cash and partly in the stock of a company to be organized to operate the printer, and to which any invention of the plaintiff's assignor was to be assigned. Subsequently a more formal agreement in writing was entered into by the parties, and which was the instrument sued on. The defendant alleged want of consideration, a failure of the plaintiff’s assignor to fulfill the agreement on his part, and that the written instrument was not intended to be an effective and binding contract, but was executed in pursuance of the prior agreement of June, 1882, and that the object of that agreement was the organization of a company to operate the patent after it had become perfected by the inventor. Meld, that paroi evidence was properly received to show that the intention of the parties was something different from that expressed in the instrument in suit, and that on that question the defendant was entitled to go to the jury.

2. Same—Question for the jury.

There was a conflict of testimony as to whether the plaintiff had performed all the obligations assumed by him in the written instrument. Held, that this raised a question which could not be disputed by the court-alone under objection, and should have been submitted to the jury.

Motion by the defendant for a new trial upon exceptions taken at the circuit and ordered to be heard at the general term in the first instance, on the direction by the court of a verdict in favor of the plaintiff in the sum of $20,481.84.

Charles A. Murphy and W. R. Spooner, for pl’ff; DeLancey Nicoll, for def’t.

—The plaintiff’s assignor, Henry Van Hoevenbergh, a relative of the defendant, is an inventor of electrical devices and instruments.

The defendant is a manufacturer of electrical cables and underground electrical wires at Pittsburgh, Pennsylvania, and is a stockholder in what is known as The Stanley Underground Cable Company, and vice-president and active manage! of that company, the business of which is. the manufacture and laying of underground cables.

In a conversation between Van Hoevenbergh and the defendant upon the subject of inventions to meet the business enterprises of the defendant, Van Hoevenbergh said that he could furnish to the defendant an improved printing telegraph instrument for long distance work which would operate successfully at a distance of a hundred miles at least. Thereupon Van Hoevenbergh furnished a memorandum in writing to the defendant, dated June 19»,

p. 690

1882, (defendant’s exhibit 4,) signed by Van Hoevenbergh only, which is as follows: “ R. S. Waring Company (limited) June 19, 1882. Purchase money, $30,000 in installments, as follows: $1,500 to be paid June 26th, $1,500 on or before July 20th, $2,000 within ten days of the date that the patent is allowed, $5,000 six months from above date, $5,000 nine months from above date, $5,000 twelve months froni above date, $10,000 in stock of company organized to ■operate printer patent to be assigned on payment of first installment. All improvements on original instrument to be assigned without further compensation. This arrangement to include services for six months, dating from October 1, 1882. (Signed.) Henry Van Hoevenbergh, care ■J. H. Bunnell & Company, No. 112 Liberty street, New York.”

The defendant testifies that prior to the execution of any agreement between him and Van Hoevenbergh, the project of organizing a company for operating these printers was discussed between them, and that it was arranged by them that such company should be organized and any invention which might be made by the plaintiff’s assignor, and patented improvements thereon, should be assigned to that company.

This testimony is fully corroborated by the preliminary ■and tentative proposition of June 19, 1882, above quoted, which provides, among other things, that $10,000 of the purchase-price of the patents should be paid in the stock of the company to be organized for the operation of the printer.

Some time subsequently, probably in the spring of 1883, the defendant wrote to Van Hoevenbergh as follows: “I have got Dalzell to anticipate my payment from him a few weeks for $2,500, and I gladly let you have it to get you out of your trouble. I expect the company to take my contract with you off my hands — they want to see the printer working-—but Dalzell requested me to lay the contract before the board at their meeting on next Saturday. Please sign and return the inclosed. I will arrange to pay you the stock as agreed upon on the last payments. Please, also, indorse in your own handwriting on the copy of contract returned to me “ the first patent under this agreement, allowed March 7, 1883,” and place on the contract the date of each payment and amount, including the last $200; the first payment of $1,500 is in the body of the contract, and therefore needs not to be indorsed. But the remainder of the $6,000 paid, $4,500 you will indorse date and amount as suggested. Send the contract by mail to <0. C. Dickey, 100 Diamond street, and I will get it from him.

p. 691

With these facts before us we are enabled to understand quite clearly the purpose of the parties in entering into the more formal agreement subsequently, which bears date June 28, 1882, but which was not, in fact, executed until June, 1888. (Exhibit A of complaint.)

The second and third defenses may be considered together. They set up a want of consideration, a failure on the part of Van Hoevenbergh to fulfill the agreement on his part, and that the written agreement (exhibit A), though signed by the parties, was not intended by them to be an effective and binding contract; but on the contrary, was executed in pursuance of an agreement entered into between the parties in the month of June, 1882, and that the object of the parties to that instrument was the organization of a company to operate it after the same had become perfected by the inventor.

The evidence adduced in behalf of the defendant, particularlarly his own testimony, rendered it incumbent upon the court to submit this question, among others, to the consideration of the jury. The rights of the plaintiff can be no greater than those of his assignor; and Van Hoevenbergh could have no reason to complain of a failure to recover upon a contract which he knew was entered into for the purpose of enabling the parties to turn over to a company, thereafter to be organized, a complete title to the-invention represented by his letters patent.

The paroi evidence admitted by the court to show that the intention of the parties was something different from that expressed in the instrument, was under these circumstances properly received, and should not therefore have been disregarded by the court. The facts in this case constitute an exception to the general rule that paroi evidence-cannot be admitted to vary the terms of or defeat a written instrument.

There is also another ground upon which the defendant had the right to have his case submitted to the jury, and that is the conflicting evidence upon the question whether Van Hoevenbergh had performed all of the duties and obligations assumed by him by the written agreement. The evidence in behalf of the defendant of the refusal of Van Hoevenbergh to proceed with the experiments for which preparation had been made for them at Washington until he had received a thousand dollars more from the defendant, raised a question which could not be disposed of by the court alone under objection.

All of these matters were properly urged at the trial under suitable and timely objections, exceptions and requests, and their consideration necessarily leads to a new-trial.

p. 692

New trial granted, with costs to the defendant to abide the event of the action.

Van Brunt, Gh. J., and Brady, J., concur.