Allison Bros. v. Hart — 30 N.Y. St. Rep. 697

Majority

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The Allison Bros. Company, Resp’t, v. James C. Hart, Impl’d, Appl’t.

(Supreme Court, General Term, Fifth Department,

Filed April 11, 1890.)

Headnote

Pleadings—Pasties—Title to patents.

A complaint alleged that A. and his brother, being owners of certain patent rights, assigned interests in them to certain persons, and that all such owners sold and transferred all the property, machinery and all interest in the patents to plaintiff, including improvements; that said A. made and delivered to K. & H. certain machines covered by the patents without plaintiff’s consent, and is receiving from them large royalties therefor, and. asked that they be restrained from paying such royalties except to plaintiff. Held, that K. & H. were not proper parties defendant; that, in the absence of a contract with plaintiff, they would not be chargeable with money damages except through an action for infringement of the patent, of which the state courts have no jurisdiction; that the only relief which this court could grant against them would he to restrain paying the amount duo on the contract with A., which would not make them proper parties.

Appeal from an interlocutory judgment entered in Monroe county, in pursuance of a decision of the special term overruling the appellant’s demurrer to the plaintiff’s complaint.

Theodore Bacon, for app’lt; Bugene Van Voorhis, for resp’t.

The defendant, Hart, is the only one of-the defendants who interposes a demurrer to the complaint. If his demurrer be good, it is not apparent why his copartner, the defendant Kimball, did not join therein, for if either of these parties is liable to any claim made by the plaintiff, the other is also, as they are charged only as copartners, nevertheless, technically speaking, there seems to be no legal obstacle in the way of one of such copartners interposing a demurrer, while the other-answers the complaint upon the merits. Webb v. Vanderbilt, 39 N. Y. Super. Ct., 4 .

If the appellant can be held as a party to this action it must be, not because his presence is ess'ential to any relief which the plaintiff may have against the necessary parties thereto, butsbeeause he is, within a somewhat indefinite and shadowy expression, a proper party. Pomeroy in his work on Remedies and Remedial Rights (§§ 329-330), defines necessary parties as those without whom no judgment can be rendered, and proper parties are those whose presence renders the judgment more effectual, and whereby a complete determination may be had of all the questions that can be raised, and of all the rights which are connected with the subject-matter of the controversy.

A solution of the question whether the appellant may, in any

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view which may be taken of the complaint, be deemed a proper party, can only be had by an inspection of the complaint itself, an analysis of which it may be proper to give.

The first count is designed only to raise and determine the question df title to certain inventions. It alleges, that some time prior to October, 1882, the defendant, Oscar W. Allison, and his brother John, the latter not being a party to this action, were owners of two patent-rights, one of them issued to Oscar W. Allison for an improvement in cigarette machines, and the other to them jointly for an improvement in cigarettes.

These persons, it is alleged, entered into an agreement with one Clarke on that day, a 'copy of which is annexed to the complaint, whereby each of them assigned to Clarke an undivided sixth of his interest in both patents, “and-any improvements, renewals or re-issues of said cigarettes, cigarette machines ór letters patent ” * * * “ for the terni of any extension or improvements thereof or re-issue or re-issues thereon * * * meaning hereby to vest in said F. DeWitt Clarke, one undivided third of said patents, extension or improvements thereof.” Then follows a provision, “ that neither of the three persons shall dispose of, license or grant any portion of their rights to any person without the written consent of the other two.”

On the 5th day of February, 1883, these two Allisons and Clarke sold and assigned to one Allen one-fourth part of “ all patents, machines, machinery, stock, etc., now used and owned by said parties of the first part, in the manufacture of tobacco, cigarettes, etc., under the firm name of Allison Bros. & Co., as well as new patents, machines, machinery or appliances which may be obtained or used in connection with said business; and the parties of the first part do hereby covenant and agrée to make all proper assignments of patents, etc., for that purpose whenever desired.”"

On the 9th day of November, 1883, these last four named persons, composing the firm of Allison Brothers & Company, by an instrument in writing, sold and transferred to the plaintiff all the property, machinery, tools, patterns, machines, implements, stock manufactured, and in the process of manufacture, office and shop furniture, fixtures, material for manufacture, etc., “ together with all patents or interests in patents owned by any or either of said firm for improvements in cigarettes, cigarette machines, and machinery for manufacturing same.”

On the 19th day of November, 1883, the Allisons and Clarke executed to the plaintiff another instrument whereby they assigned to the plaintiff all their interest in two certain letters patent theretofore enjoyed by them and which had been used by the firm of Allison Bros. & Co., “ such transfer to include any improvements, renewals or re-issues of said patented improvements or letters patent,” giving their numbers.

In the month of December, 1883, a patent was issued to the plaintiff for an improvement in cigarette machines invented by Oscar W. Allison.

The complaint then charges that, without the consent of the plaintiff or of Allen or of Clarke, the defendant, Oscar W. Alii

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son, has made and 'delivered to the defendants, William S. Kimball and James C. Hart, as co-partners, twelve cigarette machines, the right to use which belongs exclusively to the plaintiff, and that such machines are the same referred to in the letters-patent aforesaid, “ but if they differ in any respect from the machines referred to in said letters-patent, such alterations or improvement, or improved machine, and exclusive right to use the same, are the property of this plaintiff.” It is further averred that Kimball & Company are using the machines, without the consent of plaintiff, and without the consent of Clarke or of Allen, constructed according to certain patents, the application for the issuing of which has already been made, which will, when issued, belong to the plaintiff; that Oscar W. Allison has delivered to the defendant, the Kinney Tobacco Company, ten of such machines; that Kimball & Company, as well as the Kinney Tobacco Company, received the machines which are used by them from Oscar W. Allison, and agreed with the latter for the use thereof, with notice of the agreement aforesaid, and that the defendant, Oscar W. Allison, who is irresponsible and insolvent, is receiving from these other defendants large royalties for the use of such machines.

The second count of the complaint, availing itself of the allegations and contracts set forth in the first count, is said to be, by counsel for the respondent, supplemental to the first, and put in as matter of precaution, so that in case the contracts as set forth do not express the actual agreement between the parties, they may be reformed on the ground of a mutual mistake, and relief given under the same as so reformed.

Other averments in this pleading touching only the legal effect and meaning of the instruments which are set forth in full, and the inferences from the facts alleged, are not admitted by the demurrer, and must be disregarded. Bogardus v. N. Y. Life Ins. Co., 101 N. Y., 337 .

The prayer against this defendant and his co-partner is, that they may be restrained from paying to Oscar W. Allison any royalties or other moneys for the use of such machines, and that they may be restrained from such use except on condition that they shall pay the plaintiff whatever royalty it is proper for them to pay for such use.

The appellant’s relation to the case is the same under both counts; and his demurrer is broad enough, apparently, to cover any objection to the complaint which may be made in his behalf.

We purpose, as we did when this case was before us on the appeal from the order vacating the preliminary injunction herein, 26 N. Y. State Rep., 825, no further to pass upon the matters alleged in the complaint than is necessary for the decision of the precise question taken by the appeal, though the arguments of counsel have, to some extent, been directed to the rights of other parties to the action.

The averment, if such meaning is intended by it, that Kimball and Hart are indebted to the plaintiff for any royalties or for •compensation for the use of these machines cannot be sustained

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by any adjudication in our courts. No agreement is set up between the plaintiff on the one hand and Kimball and Hart on the other. In the absence of such an agreement any action against these parties would necessarily be on the case for an infringement of letters patent owned by the plaintiff, and the same would be cognizable only in the courts of the United Slates, Continental Store Service Co. v. Clark, 100 N. Y., 365 ; while actions brought to enforce contracts between private parties, relevant to private rights, are not actions arising under the patent laws of the United States. Albright v. Teas, 106 U. S., 613 .

Why then was the appellant made a party defendant ? As we understand the complaint, the only relief which could he granted the plaintiff against him by the state courts would be to restrain him from paying the amount due upon any contract which is outstanding between him and his partner on the one hand and Oscar W. Allison on the other. This, however, does not, in our judgment, within the rule already stated governing parties defendant, make him a proper party. But it may be said that the appellant has no cause to complain, because the only legal relief asked against him is a prohibition to him against paying a debt which he had contracted, and such relief does not involve any judgment against him of which he should be permitted to complain. But a merchant may have quite as great an interest in being permitted to pay his debts as he has in collecting the debts which are owing to him. There being no allegation of insolvency of the appellant, there seems not to have been any reason why he or his partner should have been made a party defendant to this action. In the absence of such an allegation of insolvency his presence would not render any judgment between the real parties in interest more effectual in any conceivable sense.

We have considered the supplemental brief of the respondent’s counsel, filed since the oral argument, but we are unable to concur with him that under the allegations of this complaint the plaintiff is entitled to the benefit of the contract which Kimball and Hart or the Kinney Tobacco Company have with Oscar W. Allison. For, in the absence of a contract to pay the plaintiff for the use of the machines, these defendants would not be chargeable in money damages except through an action for an infringement. They have no interest in the controversy between the adverse claimants to these inventions. If they are bound to pay Oscar W. Allison on a contract which they made with him rather than with the plaintiff, it is difficult to see how the plaintiff can lay claim to payment under such contract without an assignment of the demand. If they have taken a license from the wrong party let the plaintiff bring suit against them for infringement.

The judgment appealed from should be reversed, with costs, and judgment ordered for the defendant Hart on the demurrer, with leave to the plaintiff to amend its complaint on payment of costs.

Dwight, P. J., and Corlett, J., concur.