137 F.2d 728 (3rd Cir. 1943), 8148, American Type Founders v. Lanston Monotype Mach. Co.

Docket Nº:8148.
Citation:137 F.2d 728, 59 U.S.P.Q. 44
Case Date:August 04, 1943
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

Page 728

137 F.2d 728 (3rd Cir. 1943)

59 U.S.P.Q. 44




No. 8148.

United States Court of Appeals, Third Circuit.

August 4, 1943

Argued Jan. 4, 1943.

Martin M. Reed, of Brooklyn, N.Y., for appellant.

Francis S. Bensel, of New York City (Larkin, Rathbone & Perry, of New York City, and Donahue, Irwin & Gest, of Philadelphia, Pa., on the brief), for appellee.

Page 729

Before BIGGS, JONES, and GOODRICH, Circuit Judges.

BIGGS, Circuit Judge.

The plaintiff, American Type Founders, Inc., is engaged in the business of designing and manufacturing type. The defendant, Lanston Monotype Machine Company, manufacturers and sells monotype machines and matrices for use with such machines. The plaintiff filed a complaint pursuant to the provisions of the Federal Declaratory Judgments Act, Act of June 14, 1934, 48 Stat. 955, as amended, 28 U.S.C.A. § 400, seeking an adjudication as to whether it could terminate upon reasonable notice a contract made by it with the defendant which failed to specify a definite term or to prescribe conditions which should determine its duration. Under the contract referred to, which was dated December 1, 1925, the plaintiff granted to the defendant a non-exclusive right to manufacture matrices of all sizes of all the type faces designed by the plaintiff and not produced by the defendant prior to the date of the agreement. The defendant agreed to pay a fixed royalty for each matrix manufactured by it under the contract. At the time the contract was made a number of the plaintiff's type faces were covered by design patents, all of which were due to expire prior to January, 1935.

On December 28, 1938, the plaintiff notified the defendant that the agreement had been cancelled. The defendant refused to recognize the attempted cancellation. The plaintiff then wrote a letter dated August 15, 1939, stating that it would permit the defendant to sell until December 31, 1939, the type faces which it had in stock. The defendant reiterated its refusal to recognize the cancellation. Since January 1, 1940, the defendant has tendered to the plaintiff checks to cover the royalties on type faces which it has sold pursuant to the terms of the contract. The plaintiff has not cashed these checks. Since the defendant is seeking to enforce the contract no question of lack of consideration can arise because of the fact that type faces are not now covered by design patents. York Metal & Alloy Co. v. Cyclops Steel Co., 280 Pa. 585, 124 A. 752. We entertain no doubt that an actual controversy exists within the purview of the Declaratory Judgments Act. See Dewey & Almy Chemical Co. v. American Anode, Inc., 3 Cir., 137 F.2d 68, and the authorities therein cited.

Since no proof was offered either as to the place of execution or the performance of the contract the court below correctly applied the law of the forum. 1See Black & Yates v. Mahogany Ass'n, 3 Cir., 129...

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