Bourne v. Shapleigh

• Decision Date: 11 May 1880
• Parties: E. H. BOURNE ET AL., Appellants, v. A. F. SHAPLEIGH ET AL., Respondents.
• Court: Missouri Court of Appeals

9 Mo.App. 64

E. H. BOURNE ET AL., Appellants,

v.A. F. SHAPLEIGH ET AL., Respondents.

St. Louis Court of Appeals, Missouri.

May 11, 1880.

Where, by correspondence through the mails, parties have fully agreed upon the terms of the contract, it is not necessary, in order to bind them, that the contract should be formally executed; but, if it appears that the parties intended that they should not be bound until the formal execution of the contract, this intention must govern.

APPEAL from the St. Louis Circuit Court, THAYER, J

Affirmed.

LEE & CHANDLER, for the appellants: A contract can be made by letters, and all letters of a correspondence relating to the same subject-matter are to be taken together in arriving at the intention of the parties.--Story on Con., sect. 386, and cases cited; Esmey v. Gerton, 18 Ill. 483; Vernander v. Codd, Turn. & R. 352. And these letters are to be construed the same as a formal agreement.-- Kennedy v. Lee, 3 Mer. 441; 1 Greenl. on Ev., sect. 268, and cases cited. If there is an absolute proposal and acceptance of a distinct proposition in the letters, the contract is binding, although the parties may have declared that the letters are to serve only as instructions for a formal agreement, or although it may have been an express term that a formal agreement was to be prepared and signed by the parties, and although the minutia of the contract are to be settled by the contemplated formal agreement.-- Skinner v. McDougal, 2 De G. & S. 265; Gibbons v. North-Eastern Metropolitan Asy. Dist., 11 Beav. 1; Abbott v. Sheppard, 48 N. H. 14; Lucas v. James, 7 Hare, 424; Chitty on Con. 730, and notes. And it matters not that the party accepting thought he would not be bound until a formal agreement was drawn up.-- Bell v. Offutt, 10 Bush, 632; Clevi v. Beaumont, 1 De G. & S. 397; Johnson v. King, 2 Bing. 270; Thomas v. Deering, 1 Keen, 729. The mutual assent is perfect when nothing remains to be done to give either party the right to have it effected.-- Abbott v. Sheppard, 48 N. H. 14. When the vendee unconditionally accepts a distinct proposition, and expressly leaves certain minutia to be settled by the vendor, the contract is closed so far as the vendee is concerned, unless he withdraw such submission before the vendor has acted thereon; and the vendee cannot object to a settlement that is reasonable, made by the vendor.-- Walker v. Eastern Counties R. Co., 6 Hare, 594; Kennedy v. Lee, 3 Mer. 441; Fitzhugh v. Jones, 6 Munf.; Chitty on Con. 730, and notes.

MARTIN & LACKLAND, for the respondents: The intention of the parties, as gathered from their acts, must govern.-- The State to use v. Miserez, 64 Mo. 596.

BAKEWELL, J., delivered the opinion of the court.

This was an action for damages for breach of a contract of sale of a patent-right. The defendants deny that any contract was made. The cause was tried without a jury, and there was a finding and judgment for defendants.

Evidence was introduced tending to show that plaintiffs had a right to manufacture and sell a can-opener, under letters patent issued to one Seymour. Defendants were making and selling a can-opener, which plaintiffs regarded as an infringement. In 1868, a member of plaintiffs' firm had a conversation with some member of defendants' firm on the subject, and after his return to Cleveland, where defendants did business, plaintiffs wrote to defendants, whose place of business was in St. Louis, giving a history of the patent, and requesting defendants to examine the matter. Defendants answered that they had taken legal advice, and, rather than to go to law, would make an arrangement. In this letter they say: “We desire to make such arrangement with you as will enable us to proceed with the manufacture of these goods, so as to realize something on an investment; or to dispose of all our claim to you, and obtain our supplies from you as we need them in course of trade. Please state what would be the most satisfactory arrangement we could make with you. So far, we have manufactured but a few goods, owing to the difficulty of procuring them well made at such a price as would realize for us a margin of profit. None others have been made since we were advised of the character of our claim under the Seymour patent.”

To this letter plaintiffs at once replied, declining to make an offer for defendants' patent, and saying that in the case of defendants they would depart from their determination to give no license for infringing can-openers. They make a proposition that, if defendants will pay $600 down, and twenty-five cents per dozen royalty on all can-openers made or sold by defendants thereafter, plaintiffs will make no charge for what has been already sold, and will convey to defendants the right to sell can-openers constructed exactly like the one previously shown by defendants to a member of plaintiffs' firm. Defendants answer, asking that the price be lowered. Plaintiffs reply, refusing to change the terms. In answer to this letter, defendants write on October 20th:--

“We have your favor of October 16th, in answer to ours of 14th. Although we regret that you do not take a more liberal view of our situation, we accept your offer as stated in yours of 22d ult., in the hope that at some future time we may be able to make the investment reimburse us for all outlays. We think, however, you overrate the excellence of the invention, and our abilities to dispose of it. Our pattern is too expensive in its construction to meet with ready sale at a remunerative profit, and can hardly be said to come into competition with yours. Have the goodness to execute the proper papers, and send them to us in blank for examination, and we will arrange the settlement in such way as may be agreeable to you. Your early attention will oblige.”

After an interval of more than two weeks plaintiffs write, apologizing for their long delay, and send on an agreement which they propose as the one to be executed by both parties, for the sale of the right to manufacture and sell the can-opener.

The defendants reply to this letter, after a delay of some weeks, calling attention to “two or three particulars in which,” they say, “the articles of agreement seem to require notice. There is no provision,” they say, “to secure to us the exclusive right to manufacture under the Seymour patent, without which, imitations might be authorized so nearly like the Seymour patent as greatly to interfere with the advantage otherwise to be derived by us. Moreover, it would be advisable to have the privilege of disposing of our rights acquired in the instrument to third parties,...