Miller v. Union Switch & Signal Co. — 58 N.Y. Super. Ct. 85

Majority

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FRANK W. MILLER, Plaintiff v. THE UNION SWITCH AND SIGNAL COMPANY, Defendant.

Headnote

Pleadings, admission in, effect of—Option to use after a certain event on a certain payment, effect of proof of use after that event—Matters overcoming such effect constitute an affirmative defence—Former adjudication, when not a bar.

Where certain rights or privileges are by a contract to arise on its ter- . mination, and the complaint in an action founded on such rights or privileges alleges the termination of the contract, which allegation is not denied by the answer, it is unnecessary for the court to determine what kind of a termination was contemplated by the contract. The admission in the pleadings preclude litigation of that question on the trial.

Where under a provision of a contract one has an option after a certain event to use certain inventions of another upon payment to that other of a stipulated annual sum, -to be paid quarterly, and there is proof tending to show that after that event he used the invention, the plaintiff makes out a prima facie cause of action for the stipulated sum. Is the defendant claims that under other provisions of the contract he was entitled to use the inventions in performance of contracts made before the happening of the event upon the happening of which the option is given, that, if a defence, is an affirmative one and must be proved by him to avoid his prima facie liability.

Where a contract provides that one of the parties thereto shall be employed by the other as a manager at a stipulated salary, and also that he shall be paid for the use of certain inventions a certain annual sum, payable quarterly, and shall also receive in addition to such a compensation a certain proportion of net profits, and provides that on the termination of the contract the employer shall have an option to use said inventions on the payment of a certain annual sum, to be paid quarterly, a judgment in favor of the employee for damages for his discharge as manager, and for the salary and profits due him at the time of his discharge, and for the sum then due for the use of the inventions, is not a bar to an action brought under the option clause to recover for the use of the inventions subsequent to the discharge and the termination of the contract the sum stipulated to be paid therefor.

Before Truax and Dugro, JJ„

Decided April 9, 1890.

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Exceptions ordered to be heard in the first instance at general term.

This action is brought under the eighth clause of an agreement made between Charles R. Johnson and the Union Switch and Signal Company (which clause and agreement were considered in the case of Charles R„ Johnson against that company, ante page 59; for the agreement and clause in question see that page) to recover the quarterly payment for the use. of the inventions referred to in the clause for the quarter ending September 1, 1888, which quarterly payment was assigned to the plaintiff by Johnson.

Defendant read in evidence the judgment roll in an action brought by Johnson against the company. From the judgment roll it appeared that that action was brought to recover a sum due under the contract in question to Johnson for salary as manager; also for a sum due him under the contract for royalties for January and February, 1888 ; also for a sum due him on account of profits earned by the company ; also for damages for his discharge on March 1, 1888, as manager, and that Johnson recovered a judgment.

The other facts sufficiently appear in the opinion.

Miller & Savage, attorneys, and George W. Miller of counsel, for plaintiff.

Carter Hughes & Cravath, attorneys, and Charles E. Hughes and John W. Houston of counsel, for defendant.

The action was brought by the plaintiff as the assignee of one Charles R. Johnson, to recover the sum of $1,625 as an installment of royalties claimed to be due and payable for the three months ending on the first day of September, 1888, under a contract entered into on the 20th

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clay of September, 1886, by the said Johnson and the said defendant. The contract is set forth in full in the complaint.

It was provided in the 8th clause of said contract “that in the event of the termination of this agreement, the said company,”—that is, the defendant, “by reason of the expenditures that shall have been made during the. continuance of their agreement, shall have a license, not exclusive, to use all the inventions that may have been used in carrying on the business of the company, on the payment of $6,500 per year, said sum to be paid quarterly.”

It was alleged in the complaint that said contract was terminated by the defendant on the first day of March, 1888, which was before the time provided in the contract for its termination. This allegation is not denied in the answer, and therefore it is not necessary for us to determine what kind of a termination of the contract was contemplated in the 8th clause of the contract. It is true there was an attempt to litigate this question on the trial, but a party will not be allowed to litigate on the trial a question admitted by the pleading.

It was also alleged in the complaint and denied in the answer that the defendant “ had used-and was, on the said first of March, 1888, still using, and has since that time still continued to use, manufacture and sell to others to use ” the inventions referred to in the contract of the 20th day of September, 1886.

It has been held by a general term of this court that the plaintiff must show, in order to sustain his cause of action, that the defendant has used since the termination of said contract some of the inventions mentioned in the contract and in the complaint. The plaintiff did offer evidence that tended to show such use, but the defendant contends that it had the right, during the countinuance of the said contract, to make contracts for the delivery and

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sale of the inventions mentioned in said contract, and that it was not shown that such inventions were not used under contracts made prior to the termination of the contract between plaintiff and defendant. This defence, if it be a defence, is an affirmative one and should have been shown by the defendant affirmatively on the trial. It is also to be noticed that it is not within the letter of the contract.

The judgment roll offered in evidence is not a bar to this action. The plaintiff’s right to royalties began after the termination of the contract and then only on the defendant’s using the inventions men-, tioned in the contract. That is, the mere breach of the contract did not give the plaintiff’s assignee a cause of action for royalties.

The defendant’s exceptions are overruled and judgment is ordered for plaintiff' on the verdict, with costs.

Dugbo, J., concurred.