HALE
District Judge.
This
suit in equity is brought to compel the defendant to assign
to the complainant a one-half interest in certain
improvements, inventions, and patents in or relative to
organs, in accordance with the terms of a written contract
made by the parties on May 15, 1901. The suit is brought also
to restrain the defendant, his heirs, executors
administrators, or assigns, from selling or assigning any
interest in said inventions, improvements, and patents, to
any person other than the complainant, during the life of the
contract. The complainant corporation is a citizen of the
state of New Jersey; the defendant is a citizen of the state
of Massachusetts.
At the
time of entering into the contract the complainant was
engaged in the business of manufacturing and selling musical
instruments, including organs, both keyed and automatic. The
defendant was the superintendent of the complainant
corporation, at a salary of $3,600 per year.
Although
only the second and fourth paragraphs of the contract are
brought before the court for construction, it is material
for
certain purposes of the inquiry, to examine the whole
contract. That contract is as follows:
'Agreement
made this fifteenth day of May, in the year nineteen
hundred and one, between the Vocalion Organ Company, a
corporation organized and existing under the laws of the
state of New Jersey, transacting business at Worcester, in
the county of Worcester, commonwealth of Massachusetts, and
in the city of New York, state of New York, party of the
first part, and Morris S. Wright of Worcester, aforesaid,
party of the second part, witnesseth:
'That
for and in consideration of the mutual covenants and
other consideration hereinafter expressed the parties
hereto covenant and agree as follows:
'First.
The party of the first part covenants and agrees to
employ the party of the second part and does hereby
employ the party of the second part and the party of
the second part covenants and agrees to accept and
hereby does accept exclusive employment of the party of
the first part as superintendent of factories of the
party of the first part.
'Second.
The party of the second part covenants and agrees that
an undivided one half part of the whole right, title
and interest in and to all inventions or improvements
made by him during the term of this agreement, in or
relative to organs both keyed and automatic shall be
the property of the party of the first part, and
immediately upon making any such inventions or
improvements the party of the second part covenants to
apply for letters patent of the United States therefor
and for such foreign patents therefor as the party of
the first part may desire, and to make, execute and
deliver all such applications, specifications, drawings
and other documents as may be necessary to obtain such
letters patent; and the party of the second part
further covenants to execute, acknowledge and deliver
to the party of the first part a proper assignment for
record of an undivided one half interest in each such
invention and in the letters patent when issued: all,
however, at the proper cost and expense of the party of
the first part or its successors and assigns. The party
of the second part further covenants not to sell or
assign his undivided one half part in and to any of the
above mentioned inventions, improvements and letters
patent, which part shall be and remain the exclusive
property of the party of the second part his heirs,
executors and administrators, until the expiration of
the term of this agreement.
'Third.
The party of the second part further covenants and agrees
that he will without further consideration than is herein
expressed assign and transfer to the party of the first
part letters patent of the United States number 509,506 for
improvements in reed and pipe organs and will upon request
of the party of the first part execute and deliver to the
party of the first part a proper assignment of said patent
for record.
'Fourth.
The party of the second part further covenants and agrees
to grant and does hereby grant unto the party of the first
part the exclusive right to purchase and use inventions or
improvements made by him during the term of this agreement,
in self-playing pianos or self-playing devices for playing
pianos, upon such terms as to price or royalty and other
conditions as may be mutually agreed upon; and the party of
the second part further covenants that he will not sell,
assign, transfer or in any way dispose of any such
invention or improvement to any other corporation or
persons than the party of the first part during the term of
this agreement.
'Fifth.
As and for the salary of the party of the second part and
also in full consideration for the transfer of patent
number 509,506 aforesaid, and for the transfer of the
undivided one half part of the right, title and interest in
and to the improvements and inventions and assignments
thereof, mentioned in paragraph second of this agreement,
the party of the first part covenants and agrees to pay to
the party of the second part, and the party of the second
part covenants and agrees to accept the sum of five
thousand dollars per annum, together with a percentage of
one per cent, upon the net value of the increased factory
output in each year over the factory output of the
preceding year of the term of this agreement, which said
percentage shall be ascertained and paid at the end of each
year for which it shall become due.
'Sixth.
It is covenanted and agreed that this agreement supersedes
and makes void the agreement bearing date the fourteenth day
of December, eighteen hundred and ninety-eight, between the
party of the second part hereto and the late the Mason &
Risch Vocalion Company, Limited, and also cancels all other
existing agreements between the parties hereto.
'Seventh.
It is further covenanted and agreed that this agreement shall
be deemed to be in full force and effect from and after the
first day of July, nineteen hundred, and until the first day
of July, nineteen hundred and five, and shall terminate on
said first day of July, nineteen hundred and five.
'In
witness whereof,' etc.
The
testimony tends to show that, previous to making the
contract, Mr. Tremaine, the president of the complainant
company, had many conversations with the defendant in regard
to his experience and ability in manufacturing, improving,
and inventing musical instruments; that the defendant gave
the assurance that he could develop and improve the different
instruments manufactured by the complainant company; that, in
view of these representations made by the defendant, the
complainant company was induced to make the agreement now in
suit, providing for the increase of the defendant's
salary from $3,600 per year to $5,000 per year, with an added
percentage based on the value of the output; and that the
arrangement under this contract was to continue from July 1,
1900, to July 1, 1905.
The
second paragraph of the contract provides that an undivided
one-half part of the whole right, title, and interest in and
to all inventions or improvements made by the defendant
during the life of the contract 'in or relative to
organs, both keyed and automatic,' shall be the property
of the complainant; that the defendant shall apply for
letters patent upon such inventions immediately upon making
them, and shall make execute,...
