Hyatt v. Mark — 55 N.Y. Super. Ct. 507

Majority

p. 507

ELIZABETH A. L. HYATT, Appellant and Respondent v. JACOB MARK, et al., Respondents and Appellants.^[1]

Headnote

Contract for royalties; construction of.—Area held to fall within the terms basement and basement extension, used in a contract calling for royalties on work done on basements andbasement extensions.—Boy allies when chargeable under such contract for work done on steps, risers and platforms forming part of an area.—Accounting; the court has power to allow objections to an account other than those formally filed.—Onus probandi as to charging, or relieving from royalties for certain work.

The plaintiff being the owner of certain rights secured to her by letters patent for “improvements in illuminated basements and basement extensions, sidewalks, roofs, etc.,” entered into a contract with defendants whereby she gave to defendants certain privileges to manufacture and sell under the patent, they to pay her a royalty of thirty cents per square foot “ of illuminating work made and sent away by the defendants to be used for the purpose of making illuminated basements and basement extensions.” On an accounting by defendants to plaintiff under the interlocutory judgment therein, the referee charged defendants for illuminating work for covering areas. Held, no error. Although an area, per se, is not part of a basement, or of a basement extension, and although the letters patent contained passages which by themselves would lead to the conclusion that the phrase “basement extension” as used in the contract, meant something different from an area, yet, taking all that there is in the patents together, the referee was right in his conclusion that the contract meant, among other things, such a-basement extension as would result from an area being covered by the illuminating work.

The referee also charged defendants for steps, risers and platforms, forming wholly or partly an illuminated roof over an area. Held, that since the phrase “basement extensions” comprised areas, these items were properly chargeable against defendants, if the work was used in connection with illuminated covering of area; and the exception to the finding in this regard being general, and there being no suggestion that the findings contained a charge for illuminating work not used in con

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nection with illuminating covering of area, that the ruling of the referee should be sustained.

The referee found in favor of plaintiff on matters not contained in her objections filed to the account filed by the defendants. Held, that the referee had power to allow objections other than those formally filed, giving the accounting party an opportunity to meet them.

The referee refused to charge defendants under the provisions of the contract, with illuminating work consisting of separate tiles capable of various uses besides that of illuminating basement extensions, and not indicating any special use to which they were to be applied and not made ■ and sent away to be used for the purpose of making basements and basement extensions, although adapted for covering basement extensions, in default of plaintiffs showing that such tiles were actually used for covering basement extensions, holding that the onus probandi for charging the defendants for such work lay on the plaintiff to show the actual use of such tiles in covering basement extensions. Held, that the ruling of the referee was correct; that defendants had a right under the contract to make and sell such separate tiles without payment of royalties if they were not made and sent away to be used for the purpose of illuminating basements and basement extensions, and that defendants were not bound in order to relieve themselves from a liability for royalties for such tiles, to show that they were in fact used for purposes other than for basements and basement extensions, or to show how they were to be used.

Before Sedgwick, Ch. J., and O’Gormar, J.

Decided May 7, 1888.

Appeal by each party from a judgment entered upon a report of referee, directed in an interlocutory judgment.

The facts sufficiently appear in the opinion and the head notes.

George W. Van Slyck, attorney and of counsel, and JR. B. McMaster, of counsel, for plaintiff.

Edward D. McCarthy, attorney and of counsel, for defendants.

The obligations of

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the defendants to account to plaintiff under the contract between them, were held to exist in Hyatt v. Ingalls, 49 Super. Ct. 375. It was further held that the court had jurisdiction of the action. Every question that related to the obligation to account, was determined by the court on the appeal to the general term, and now only such exceptions as concern the accounting are to be considered.

The contract bound the defendants to pay thirty cents per square foot “ of illuminating work made and sent away by the defendants to be used for the purpose of making illuminated basement and basement extensions.”

The defendants’ counsel excepted to the referee ruling that the defendants should be charged for “ illuminating work” used for covering areas. The claim is that areas were not, within the intention of the parties, basement extensions. What was according to the contract a basement extension, was a question of fact. It is true that an area, per se, is not part of a basement or of a basement extension, and there are considerations drawn from the patents in evidence, that by themselves would lead to the conclusion that a basement extension, as used in the contract, meant something different from an area. Yet taking all there is in the patents together, I think the referee was right in his conclusion that the contract meant among other things, such a basement extension as would result from an area being covered by the “ illuminating work.”

The referee’s findings as to the defendants’ liability for steps, risers and platforms, forming wholly or partly “ an illuminating roof ” over areas, should be sustained. They were within the terms of the contract if the phrase cs basement extension ” comprises areas. The exception to the finding was general. There is no suggestion that the finding alluded to contained a charge for “ illuminating work ” not used in connection with “ illuminating covering” of areas.

The learned counsel for defendants urges that the referee found for matters not contained in the first 115

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objections made by plaintiff to the account filed by the defendants. Whatever may be the usual practice, the referee had the power to allow in any form that did not work injustice to the defendants, an objection to the account presented by defendants, whether or not a statement of objections had been previously made. A formal filing of objections implies that the accounting party need not prepare to meet any other objection. But the court has power to allow other objections to be made giving the accounting party opportunity to meet them.

I am of opinion that on the defendants’ appeal the judgment should be affirmed with costs.

On the plaintiff’s appeal, it is urged that the referee should have charged the defendants “ for all tiles adapted for covering basement extensions and manufactured and sold by them, or manufactured and used by them, which they have not shown were actually used for purposes other than basement extensions or how such material was to be used.”

In other words, the plaintiff claims that the burden of proof was upon the defendants to show that the tiles that they sold and which might be used for “ illuminating basements and basement extensions ” were not then used, and that if this were not proved, the defendants were to be charged with the royalties according to the contract.

The “ illuminating work ” in question was separate tiles, which were capable of various uses besides that of illuminating basement extensions. The tiles as made and sold by the defendants, did not indicate any special use to which they were to lie given.

Not only did the contract in action, allow the defendants to make and sell such separate tiles without payment of royalties, if they were not “ made and sent away by the defendants to be used for the, purpose of making illuminated basements and basement extensions; ” the patents themselves made no claim for the separate tiles, apart from their combination for certain uses. This

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right of the defendants to make and sell was not incumbered by the contract in any of its provisions. It would be an unusual limitation of the right to sell and of the benefit thereof, to require that the defendants should not only inquire of their customers as to the use to which the tiles were to be put, but should investigate the course which the tiles actually took after they were sold. The ruling of the referee in this respect was correct.

I am of opinion that the referee was right in his action as to work done by defendants in glazing tile.

Judgment affirmed as to each party with costs.

O’Gorman, J., concurred.