Barry v. Coville — 36 N.Y. St. Rep. 598

Majority

p. 598

William Barry, Resp’t, v. Orson Coville et al., App’lts.

(Supreme Court, General Term, Fourth Department,

Filed February 20, 1891.)

Headnote

Seevices—Right to eecover—Pledged peofeety.

Plaintiff assigned to defendants, by an instrument absolute in form, but in reality as collateral security, a two-thirds interest in certain patents, defendants agreeing to furnish him with certain funds and with goods and provisions as long as they were satisfied to carry on business under the patents, and it was agreed that after a certain time, if satisfied that it would not be profitable to continue, they might terminate the agreement, retaining their interest as security for any indebtedness due to them. While the arrangement continued, plaintiff was employed by defendants to do certain work about and make improvements in the patents. In an action for a reassignment after termination of the agreement, Held, that while the agreement lasted defendants occupied the position of owners of two-thirds of the patents, and it was competent for them to employ plaintiff to do such work, and that their subsequent voluntary abandonment of such ownership furnished no ground for a claim that plaintiff should not be paid for his work.

Appeal from a judgment entered in Onondaga county on July 3, 1890.

The action was brought to compel the defendants, Ooville & Morris, to reassign to plaintiff certain patents previously assigned to them by plaintiff and for an accounting, it being alleged that said defendants had received royalties to a large amount and were also indebted to plaintiff in a large amount for services performed by him in connection with improvements. The plaintiff also claimed to recover any balance that might be found due him. The action was brought to trial at a special term December, 1888, where the main issue was as to whether an assignment, absolute in form and made the 13th April, 1885, was in fact held as collateral security for certain debts and obligations.

Upon this issue the plaintiff succeeded, and in the decision of the court after such trial, after setting forth the facts found, it was decided and adjudged that the plaintiff upon the payment to the defendants of what might be Hue them, was entitled to a reassignment of the patents in controversy, and an interlocutory judgment to that effect was ordered, providing, among other things, for a reference to take and state the accounts between the parties, including the matter of royalties and any services the plaintiff during the time in controversy may have performed for the defendants and at their request. It further provided that, upon the coming- in of the report of the referee, either party might move for final judgment and to settle the terms thereof.

p. 599

The question of costs was also reserved. An interlocutory judgment was entered accordingly, from which the defendants appealed to the general term, where the same was affirmed. 25 Ñ. Y. State Rep., 658. Thereafter the reference proceeded, and on June 20, 1890, a report was made which, after setting out items upon both sides, found a balance due the plaintiff of §211.33, and that plaintiff upon the accounting was entitled to judgment in his favor in that amount. The defendants filed exceptions to the report Thereupon, at a special term held by the same justice who tried the case, the plaintiff made a motion to confirm the report and for final judgment, and an order was made which, after reciting the reading and filing of the report and the exceptions, ordered that the report be in all things confirmed, and “that final judgment herein may be entered in favor of the plaintiff and against the defendants for the relief demanded in the complaint, and according to the provisions and findings of the interlocutory judgment herein, and especially adjudging and directing the defendants to execute proper conveyances and assignments of all the patent rights and property mentioned in the complaint.” Judgment was accordingly entered, and it included a provision that the plaintiff recover of the defendants the balance as found by the referee.

The defendants in their notice of appeal state that they appeal from the judgment and from the order confirming the report of the referee, and intern^ to bring up for review the whole of the judgment and the report of the referee and the order of confirmation.

B. N. Bailey, for app’lts; Baldwin & Kennedy, for resp’t.

The main question on this appeal is over the allowance by the referee to the plaintiff of the sum of $985, for services. The finding of the referee is that the defendants Co-ville & Morris are indebted to the plaintiff, “ for services performed for them at their request in and about and growing out of the patents and inventions, part of the subject matter of this action, commencing November 12,1884, and ending July 1, 1885, being 197 working days, and that 1 find that the value of said services to be worth five dollars per day and amounting in the aggregate sum and value of $985.”

This matter of services was within the scope of the reference as provided for by the interlocutory judgment. It was a thing to be determined before the amount that the plaintiff equitably should pay before having a re-assignment could be ascertained. It was a part of the accounting asked for in the complaint and which the court in the interlocutory judgment adjudged that the plaintiff was entitled to have. It, therefore, follows that the point of defendants, that the judgment appealed from, so far as it affects the question of services, has no foundation in the original decision of the special term and the interlocutory judgment thereon, is not well taken. The case of MacNaughton v. Osgood, 114 N. Y., 574 ; 24 N. Y., 531 , does not apply.

It is, however, urged that whatever services the plaintiff per

p. 600

formed were on the mortgaged property, and therefore he is not entitled to credit therefor. Under the agreement between the parties, dated October 2, 1884, the plaintiff assigned to defendants Coville & Morris a two-thirds interest in certain patents and they agreed to furnish him with certain funds and with goods and provisions so long as they were satisfied with the success of the manufacturing and carrying forward the business under the inventions, and the agreement provided that after a certain period, if the defendants became satisfied that it would not be profitable for them to continue their interest and obligations, they might terminate the agreement, with the right, however, to retain their interest ns security for any indebtedness from the plaintiff up to the time of such termination. Under this provision, the defendants terminated the agreement on July 1, 1885. So that during the time covered by the findings of the referee, the defendants were in the position of owners of two-thirds of the patents.

The employment, as claimed by plaintiff, was subseauent to the contract of October 2, 1884, and was something that the contract did not require him to do. It was, therefore, competent for the defendants, if they so chose, to employ the plaintiff, and the fact that they afterward voluntarily abandoned their ownership furnishes no good ground for them to say that the plaintiff ought not to be paid according to their agreement. The statute of frauds does not apply. The work was at defendants’ request and presumably for their benefit. The case of Belknap v. Bender, 75 N. Y., 446 , is not in point. There the promise was to pay a prior debt, and was without consideration.

But the defendants further say that the evidence is not sufficient to sustain the finding of the referee. The record shows that no question is made on the appeal “ of the value of plaintiff’s services per diem.” The only things then to consider are whether the services were performed for the defendants at their request and for the length of time as found by the referee. The plaintiff testifies that on or about November 12, 1884, at the special request of the defendants and upon their promise to pay him for his time, he left other work at which he was then employed, and went to work upon improvements on patents in which defendants were interested, mainly a roller skate, and so continued until after the defendants terminated the original contract. There was some evidence that corroborated the plaintiff. The defendants denied the arrangement, and some circumstances were shown that corroborated their view. Where the truth was, was for the referee to determine, and we think his conclusion on that subject should not be disturbed.

The referee charged the defendants with royalties to the amount of $722.35. The defendants claim the amount should be only $489.01. The evidence, however, is sufficient to sustain the referee on this subject.

The referee allowed the defendants $1,196.70, “for amount of grocery account $1,263.23 less $66.53 disallowed.” The defendants claim there is no proof authorizing this disallowance. In this we agree with the defendants. There is proof from which it may

p. 601

be suspected that there was before the referee some statement as to errors in the grocery account, but no such statement appears in the record, and it is certified to contain all the evidence on this subject. We must, therefore, assume that it does. It follows that the credit to defendants should be increased by the sum of $66.53, with interest from February 9, 1887, and this will operate to reduce the judgment the same amount.

Judgment and order modified by deducting from the amount of the judgment against defendants the sum of $66.53 and interest from February 9, 1887, and, as modified, affirmed, without costs of this appeal to either party.

Hardin, P. J., and Martin, J., concur.