Hyperlawhypertext legal database Hunt v. American Radiator Co. 73 N.Y. St. Rep. 229

← Cases

Hunt v. American Radiator Co.

73 N.Y. St. Rep. 229 Court N.Y. App. Div. Decision date 1896-02-07 English

Contents

Majority

p. 229
Nathaniel N. Hunt, App’lt, v. American Radiator Company et al., Resp’ts.
(Supreme Court, Appellate Divison, Fourth Department,
Filed February 7, 1896.)

Headnote

1. Pleading—Complaint—Accounting.
A complaint, in an action for an accounting on a contract for the use of a patent was held not to state a cause of action against the defendants who are not parties to the contract and áre guilty of no fraud in obtaining the
p. 230
use of the patent from the defendants, with whom the plaintiff contracted, where no privity was shown between them and plaintiff nor any violation of any agreement with plaintiff in permitting them to use the patent.
2. Same—Improper joinder op causes op action.
To justify the uniting of several parties as defendants in equity or an action at law, there must be a common interest, centered in one cause of action.
Appeal from a judgment, sustaining demurrers to the complaint.
Willard Payson Smith and John Cunneen, for app’lt; William L. Marey, for resp'ts.

Judgment affirmed, with costs, on the opinion of SPRING, J., delivered at special term, with leave to amend the complaint upon payment of costs of the demurrer and of this appeal.

The opinion by Mr. Justice Spring at special term is as follows:

Denuded of verbiage, the complaint isoas follows: It alleges that one Bryant had invented a tapping machine, and method for cutting screw threads; that he assigned one-half interest in this unpatented device to the plaintiff; that the defendants Bond & Pierce who were copartners, entered into an agreement with said plaintiff whereby the said defendants were to obtain a patent of such device, and manufacture and introduce the same into use, and to account to the plaintiff for one-half of the gains and profits flowing from the business carried on, and by the terms of such agreement the one-half interest in such patent owned by plaintiff was to be assigned to said Bond & Pierce, and the same was accordingly done; that in pursuance of said agreement said copartnership defendants did secure such patent, and did carry on the business contemplated thereby, and have failed to account (stating a cause of action against Bond & Pierce); that after a time the defendant the Pierce Steam-Heating Company was organized as a corporation, and by an arrangement with said Bond & Pierce, the nature of which is not alleged in the complaint, continued for a definite period to use said devise, and then another corporation, the American Radiator Company, defendant, was organized, and since that time it has been using said-device by virtue of an arrangement with said copartnership defendants, and it has failed to account for such use and the profit arising therefrom; that each of said corporations knew, of plaintiff’s agreement with said Bond & Pierce. The demurrer is on two grounds: (1) The failure to state a cause of action; (2) the improper joinder of causes of action.

Each ground seems to me tenable. A cause of action is stated against Bond & Pierce, but there is no privity alleged, nor can any be spelled out of the complaint, between the" plaintiff and the other two defendants. There is no allegation that Bond & Pierce fraudulently transferred any interest in the patent to either of said corporations, or that there was any violation of any agreement with plaintiff, in permitting either-of them to use the device. So far as the pleading shows, the copartnership held a valid right to

p. 231
its use, and that, too, without restriction. The copartners’ duty was simply to account to plaintiff for the profits accruing from the business. They, within the compass of their rights, by some understanding, allowed each of these defending corporations to use this devise. There is ho suggestion of any violation of that agreement with plaintiff in this license or permission or contract, whatsoever it may have been. That in no way absolved Bond & Pierce from accounting to plaintiff. Plaintiff was in the same situation in which he had always been. He had, according to his averments, a valid claim against them, and it was not impaired or affected by the arrangement with the defendants using the machine under these copartners. There is no allegation that the corporations were to account to plaintiff. They were liable to Bond & Pierce, and they have accounted, for aught that appears, but there was no privity between them and plaintiff. This is not the familiar case of novation, where the transferee agrees to account to the original owner, or assumes a specific burden running to a third party, for there is no intimation of an assumption of any liability by either of these corporations. It is simply that Bond & Pierce permitted these other defendants to use this device, and that neither conflicts with the rights of the plaintiff in his dealing with the copartners, nor does it impose any burden on the licensees to account to the plaintiff, so far as the allegations of the complaint show. A cause of action cannot be hinged upon the indefinite allegation that the arrangement between the two copartners and the corporations was unknown to plaintiff. In order to make defendant corporations liable, there must have been an agreement to pay plaintiff, and no such averment is pleaded, and it cannot be said the allegation referred to is sufficient to justify that inference.

If, however, it should be urged the copartners were trustees, and that the other defendants, having knowledge, áre chargeable with the performance of the trust, and hence liable to account, we are confronted with the other ground of demurrer,—the .uniting of actions improperly. The complaint alleges that the Pierce Steam-Heating Company used the device during its corporate existence. If liable at all, that corporation would be liable to account for the period of its user. That is a precise, specific cause of action. The radiator company has used the patent since its organization, and-is still using it,—another ascertainable period. There - is no community of interest between the two. The fact that Bond & Pierce are stockholders in each corporation in no way alters the situation. They are legal entities, distinct and separable, and each chargeable for its own acts. If one-eighth of the right of user of the device had been granted to the radiator company, a like fractional part to the Pierce Company, and a similar quantity to an individual, each explicitly chargeable with the duty of accounting to plaintiff, he could not sue them all in one action, for each stands on its own rights. Their interests are severable and divisible. If the plaintiff were the holder of half a dozen promissory notes against different makers, no one would claim the simple fact he was the owner of them all would justify him in

p. 232
bringing one action on all the notes; and if Bond & Pierce, with others, were makers on these notes, it would not alter the rule. In a suit in equity the rule adheres in its vigor, relaxed at times to prevent a multiplicity of suits, or where, possibly, an accounting is subsidiary to the main issue; but whether a suit in equity or an action at law, to justify uniting several parties as defendants there must be a common interest, centering in one cause of action. The complaint contains, in its prayer for relief, a request that the defendants retransfer the interest in the patent to the plaintiff, but there is no allegation in the complaint justifying the prayer. The assignment to Bond & Pierce is not attacked as fraudulently made or induced. .There is no claim of a denial of any interest of plaintiff in the patent, but it is simply a failure to account, in pursuance of an agreement which is recognized in the complaint as valid and subsisting. So the relief really sought by the complaint is an accounting, and each must account, if at all, to the extent of his user. IE this pleading is good, it involves the trial of three causes of action, with no sort of relation to each other, and against three defendants who are not united in interest, and all in one action. A jumble of that kind is not within the compass of the most liberal interpretation of Code pleading, in all its anxiety to obviate a multiplicity of suits. The cases cited by plaintiff are clearly distinguishable. In Brinkerhoff v. Brown, 6 Johns. Ch. 139 , which is a leading case, the joinder of actions was upheld because there was a fraudulent conspiracy alleged, and that was the gravameq of the action; but the court explicitly enunciated the principle that it was necessary for all parties to be affected alike, to justify making them defendants. See Nichols v. Drew, 94 N. Y. 22 ; Adams v. Stevens, 7 Misc. Rep. 468 ; 58 St. Rep. 510 ; Gardner v. Ogden, 22 N. Y. 327 . The demurrer must be sustained, with costs.

Cases cited