Allbright-Nell Co. v. Stanley Hiller Co.

• Decision Date: 20 July 1934
• Docket Number: No. 4995.,4995.
• Citation: 72 F.2d 392
• Parties: ALLBRIGHT-NELL CO. v. STANLEY HILLER CO.
• Court: U.S. Court of Appeals — Seventh Circuit

72 F.2d 392 (1934)

ALLBRIGHT-NELL CO. v. STANLEY HILLER CO.

No. 4995.

Circuit Court of Appeals, Seventh Circuit.

July 20, 1934.

Fred Gerlach and Norman H. Gerlach, both of Chicago, Ill., for appellant.

Franklin M. Warden and F. Allan Minne, both of Chicago, Ill. (Cromwell, Greist & Warden and Winston, Strawn & Shaw, all of Chicago, Ill., of counsel), for appellee.

Before EVANS and SPARKS, Circuit Judges, and STONE, District Judge.

STONE, District Judge (after stating the facts as above).

Appellant challenges the decree in toto. It denies liability for infringement on several grounds; one of them being that upon the findings of fact made by the court, its manufacture of the infringing products prior to the commencement of the suit was under and by virtue of the exclusive license which appellee had granted to it. It contends that it fully and properly accounted for all royalties due under said license contract, and it denies the facts upon which it is ordered to turn over its interest in the second patent to appellee.

The complaint was filed on February 24, 1930. On May 4, 1932, one Ozouf (defendant in court below who did not appeal) was made a party to the action, and the bill was amended alleging the grant of the patent, No. 1,828,968, to Hiller and Ozouf, and prayed for an assignment by appellant of its interest therein to appellee.

At the conclusion of the trial the bill was, over appellant's objection, amended to conform to the proofs adduced at the trial.

Prior to March 4, 1925, Stanley Hiller invented and his company, the appellee, had constructed a high-pressure press for extracting the oils and juices from animals and fish. On that date the appellant was in the business of making and selling packing house machinery and entered into a written contract with appellee wherein it acquired the exclusive right, for a period of ten years from the date of the agreement, to manufacture and sell high-pressure presses in accordance with the inventions of the two Hiller applications for patents that were then pending and which later matured into patents No. 1,700,407, granted January 29, 1929, and No. 1,739,459, granted December 10, 1929. By the terms of the contract appellant agreed to begin promptly after the signing of the contract and to continue through the life of the agreement to manufacture and sell the presses and to pay appellee for the said exclusive license, one-half of the selling price of presses it manufactured and sold, after first deducting the manufacturing costs.

Before trial appellee withdrew the allegation in its bill charging appellant with infringement of patent No. 1,739,459.

Immediately after the contract was signed appellee furnished appellant, Allbright-Nell Company, with the patterns, dies, drawings, blueprints, and other data pertaining to the press, and some time thereafter Stanley Hiller, president of appellee, came to Chicago and aided appellant in getting the press ready for market. Appellant manufactured and sold presses under said contract and on May 28, 1928, notified appellee in writing that it would discontinue the manufacture and sale of the presses under the agreement of March 4, 1925; that it considered the agreement terminated except for settlement of the account with respect to the presses manufactured and sold prior to May 28, 1928. Appellee refused to acknowledge the alleged right of said appellant to terminate the agreement and continued to treat it as in full force and effect to the time of the commencement of this action.

After May 28, 1928, appellant manufactured and sold presses similar to those manufactured under the contract, and marketed them under the name of "Anco."

The trial court found that the contract was valid, and that by its terms it was to be in force for a term of ten years, with no provision for earlier termination; that it was in force at the time the bill of complaint was filed; that appellant manufactured and sold presses under the license it acquired, but made no payments to appellee under the contract. These findings are supported by the evidence.

The District Court made other findings relative to the validity of the patents and their infringement. We deem it unnecessary to consider them, as we find that the rights of the parties to this action are controlled by the terms of the contract which was not terminated until the commencement of this action on February 24, 1930, thus eliminating the issue of patent infringements.

Until appellee acquiesced in or consented to appellant's attempt to repudiate the contract, appellant had the right to withdraw its proposed repudiation thereof, and appellee did not contract with any other person for the manufacture or sale of the presses after May 28, 1928.

Appellant assigns as error the order of the District Court permitting appellee to amend its bill at the conclusion of the trial to conform to the proofs adduced at the trial. The amendment in part was as follows: "That plaintiff did not agree to a termination of said contract prior to the filing of this bill of complaint by which action plaintiff...