Clark v. Fernoline Chemical Co. — 23 N.Y. St. Rep. 964

Majority

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Franklin S. Clark, Pl’ff and Resp’t, v. The Fernoline Chemical Co., Def’t and App’lt.

(New York Superior Court, General Term,

Filed May 6, 1889.)

Headnote

1. Contract of employment—To make experiments—Discoveries— Employee not bound to assign patents to employer.

Under a contract for the services of one who is employed at a monthly salary to make experiments as a chemist for the benefit of his employer, with the materials of his employer, the employer acquires no right or title-to the discoveries of his employee; but simply a license to use them; and,, as a corrollary, the employee is not bound to assign to his employer patents granted to him on such discoveries

3. Same—Refusal of employee to make known discoveries—Sufficient GROUND FOR DISCHARGE—No DEFENSE OR BAR TO ACTION FOR SERVICES RENDERED—SET-OFF.

The refusal by the employee, when requested' bjr the employer, to make known the discoveries made by the employee while so employed, would be sufficient ground for his "discharge. The case would be analogous to one in which the servant did not fully perform, or unskillfully performed, his contract, This would be no bar or defense to an action for services rendered. The remedy of the employer in such an action is to set off or recoup the damages sustained by him.

3. Same—Must be set up in answer as a set-off—Hot as a defense.

To enable the defendant to off-set or recoup such damages, they must be set up in the answer to the complaint, not as a defense, but as a set-off or counter claim, or by way of recoupment.

Appeal by defendant from judgment in favor of the plaintiff, entered upon the verdict of a jury and from order denying defendant’s motion upon the minutes for a new trial.

Edward M. Shepard, for 'app’lt; Charles Blandy, for-resp’t.

The appellant asked for the consideration- and determination of but one question, and this arises upon certain rulings made by the trial judge by which the defendant was denied the benefit of certain matters urged as a defense to plaintiff’s claim for salary, alleged to be due to-him as a discharged employee. The action was brought for services actually rendered at the agreed rate of sixty-five dollars per month, and not for damages for wrongful dismissal. The recovery had was limited to salary accrued up to the day of the discharge, as found by the jury. The defendant had pleaded by answer, and upon the trial offered to prove the following, viz.: “ That the agreement between

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the plaintiff and defendant, whereby the plaintiff entered into the employ of the defendant, was an agreement for the employment of the plaintiff in the capacity of a chemical expert and chemist, and that the plaintiff should, until his employment should be terminated by the defendant,. chemically work with the defendant’s products, and endeavor to develop and discover new products and processes for the benefit of the defendant.

“Under such agreement the plaintiff did enter into the employ of the defendant. But contrary to the terms of said agreement, the plaintiff, in the spring of 1887, refused to disclose to or give the benefit of his discoveries to the defendant, but insisted on retaining said discoveries for his own benefit. Thereupon, and on the 7th day of June, 1887, the defendant terminated said contract and discharged the plaintiff from its employment.”

The court at the trial excluded all evidence offered upon this branch of the case, except as to the discharge and the time thereof, and held that, as matter of law, the plaintiff was entitled to his salary up to the day of his discharge, to which rulings the defendant duly excepted.

The defendant raises no question as to the amount of the recovery, and consequently the real question involved in the appeal is whether the rejected evidence, if admitted, would have defeated the entire claim of the plaintiff for salary, prior to his discharge.

In my opinion it would not and could not have had that effect.

The case sufficiently shows that the real point of difference between the parties was that the plaintiff refused to assign to the defendant some patents taken out by him for his discoveries. This the defendant was not entitled to under the decision of Hapgood v. Hewitt ( 119 U. S., 226 ). In that case it was held that under a contract like the one in question, the employer acquires no right or title to the discoveries of his employee, but simply a license to use them.

But even if it should be assumed that the defendant would have proved all that was alleged, it does not follow that such proof would have sustained a forfeiture of salary accrued. The plaintiff had rendered service, and it had been accepted. There was no actual dishonesty or fraud. The plaintiff simply took an untenable position as to his rights under the contract, which justified the defendant in terminating the contract. Moreover, under the concessions made by the appellant in the points submitted, the case is to be treated as if the plaintiff had rendered service without objection for the entire period for which he had been engaged. The case is, therefore, analogous to one in which the servant did not fully perform, or unskillfully

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performed, his contract of employment. In such a case it is now settled that failure to fully perform, or unskillful performance, is no bar or defense to an action for services rendered, and that the only remedy of the employer in such action is to off-set or recoup the damages sustained by him. Turner v. Kouwenhoven, 29 Hun, 232 ; affirmed in 100 N. Y., 115 .

As the facts excluded were set up as a defense, and not as a set-off or counterclaim, or by way of recoupment, the defendant was not prejudiced by the exclusion.

The judgment and order appealed from should be affirmed, with costs.

Sedgwick, Ch. J., and O’Go'rman, J. concur.