PATENT & LICENSING CORPORATION v. Olsen

• Decision Date: 14 February 1947
• Citation: 71 F. Supp. 181
• Parties: PATENT & LICENSING CORPORATION v. OLSEN.
• Court: U.S. District Court — Southern District of New York

71 F. Supp. 181

PATENT & LICENSING CORPORATION v. OLSEN.

District Court, S. D. New York.

February 14, 1947.

Sullivan & Cromwell, of New York City, for plaintiff.

Alexander & Green, of New York City (William R. McDermott, of New York City, of counsel), for defendant.

GODDARD, District Judge.

These are two motions by plaintiff; One, for summary judgment on a counterclaim and the other to dismiss a defense as being insufficient in law. Both motions are based on a contract dated April 19, 1941, which the parties stipulate was made in and to be performed in New York.

The complaint seeks specific performance of the contract to assign to plaintiff all defendant's right, title and interest in and to certain inventions. The contract also provided for the employment of the defendant, as well as the grant by the defendant to the plaintiff of certain licenses on pending patents.

The defendant's counterclaim alleges that the contract provided that the plaintiff should pay the defendant bi-weekly compensation; that the plaintiff had the right to terminate the Agreement at any time by giving ninety days prior written notice to the defendant; that the plaintiff terminated the Agreement on January 31, 1946, without giving defendant ninety days prior written notice. As a result the defendant claims the sum of $1,235.70. Both parties urge that no question of fact is involved and that it is purely a question of law. It is clear that in accordance with Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, the law of New York is applicable.

The law of the State of New York is that:

"`Construction of a plain contract is for the court. The intention of the parties is found in the language used to express such intention. Hartigan v. Casualty Co. of America, 227 N.Y. 175, 124 N.E. 789. If the court finds as a matter of law that the contract is unambiguous, evidence of the intention and acts of the parties plays no part in the decision of the case. Plain and unambiguous words, undisputed facts, leave no question of construction except for the court. The conduct of the parties may fix a meaning to words of doubtful import. It may not change the terms of the contract.' Brainard v. New York Cent. R. Co., 242 N.Y. 125, 135, 151 N.E. 152, 154, 45 A.L.R. 751." Gearns v. Commercial Cable Co., 293 N.Y. 105, 109, 56 N.E.2d 67, 69, 153 A.L.R. 813.

The contract consists of two parts. The first part is an agreement of employment between plaintiff and defendant, the pertinent parts of which read as follows:

"I. (a) Subject to the conditions hereof, P & L agrees to employ Olsen for a period not to exceed one year from the date hereof * * *. It is understood and agreed, however, that P & L shall have the right to terminate the said employment of Olsen at any time, and that in the event it terminates his employment prior to one year from the date hereof, such termination (but not termination by Olsen of his own accord or volition) shall be deemed to effect a cancellation of this entire agreement and of the respective rights and obligations of the parties hereto."

It also provides that the defendant will assign to the plaintiff any inventions made by him during the period of his employment.

The second part of the contract is an agreement between plaintiff, defendant and Olsen Products Company to license certain patents to the plaintiff on terms and conditions set forth in Paragraphs 2 et seq.

Paragraph 9 of the agreement, upon which defendant relies, provides:

"Unless terminated prior to one year from the date hereof in accordance with the provisions of paragraph 1 hereof, P & L shall have the right to terminate this Agreement at any time thereafter by giving ninety (90) days prior written notice thereof to Olsen."

By letter of January 15, 1946, plaintiff advised defendant that his employment would be terminated on January 31, 1946. Although it appears that the contract provided that Olsen's employment was not to exceed one year, he continued to work for the plaintiff and was paid for his services until January 31, 1946.

Under New York law "if a person is employed for a definite period of time at a fixed wage or commission and continues in the same employ after the expiration of the original period, there is a presumption that his employment has been renewed for another term of the same length as the original one and upon the same conditions. This presumption may be overcome by proof of a new agreement or of facts showing that the parties intended otherwise. Adams v. Fitzpatrick, 125 N.Y. 124, 26 N.E. 143; Wood, Master and Servant, 2d Ed., § 96; Mecham Agency, 2d Ed., § 605." Pohlers v. Exeter Mfg. Co., City Ct., 52 N.Y.S.2d 316, 317.

Therefore as each year rolled around, it was presumed that the defendant was employed for another year upon the same conditions as applied to the first year, namely, that the plaintiff could terminate defendant's service at any time.

Although he now contends that his intention expressed prior to the written contract does not agree with the terms of the contract as executed, it is settled that he cannot now vary the intention as found from the language used to express such intention in the written contract. Hartigan v. Casualty Co. of America, 227 N.Y. 175, 124 N.E....