Ambler v. Choteau

• Decision Date: 22 January 1883
• Citation: 107 U.S. 586,1 S.Ct. 556,27 L.Ed. 322
• Parties: AMBLER v. CHOTEAU and others
• Court: U.S. Supreme Court

107 U.S. 586

1 S.Ct. 556

27 L.Ed. 322

AMBLER v. CHOTEAU and others.

January 22, 1883.

S. S. Henkle and O. D. Barrett, for appellant.

P. Phillips and W. Hallett Phillips, for appellees.

WAITE, C. J.

This is a suit in equity, and the case made by the bill may be stated as follows:

Ambler, the appellant, and one R. M. Whipple, invented an improved mode of manufacturing gas from petroleum, for which they were about to apply for patents, and being desirous of securing each to the other one undivided half of what they were doing, on the twenty-fourth of May, 1869, entered into an agreement of copartnership to effect that object. The third article of the agreement was as follows:

'Article 3. R. M. Whipple shall have the exclusive and entire 'business management' of the same, so as to include the introduction of said invention to public use, and to secure, as far as possible, the adoption of the same, both in this country and in all other countries; and for which purpose, and all and singular the purposes incident thereto, the said R. M. Whipple shall have full and ample power and authority, and is hereby granted by said Ambler full power and authority, to act for him in the premises, to sign his name, and make his seal to any instrument, and all instruments of writing needful and necessary to carry out the object and intention of this agreement, as fully and entirely as the same may be done by the said Ambler if personally present at the doing thereof; and the said A. I. Ambler hereby ratifies and confirms all and singular whatsoever may be legally and lawfully done in and about the premises.'

All patents secured for the invention were to be put into the business and owned by the parties in equal shares. The proceeds of sales and all other profits were to be equally divided.

For the purpose of carrying into effect the provisions of the partnership agreement, Ambler, on the twenty-fifth of May, executed to Whipple an assignment of all his interest in the invention and in the patents that might be issued thereon. The agreement and the assignment were both recorded in the patent-office. On the thirteenth of July, 1869, a patent was issued to Whipple & Ambler for 'Whipple & Ambler's Steam Petroleum Gas-generating Apparatus,' which was embraced in their inventions. In September, 1869, Whipple fraudulently determined to exclude Ambler from the benefits of their undertaking, and to accomplish that purpose formed another partnership with one Thomas S. Dickerson, to whom, in October, 1869, a patent was issued for an improved mode of manufacturing gas from petroleum, which was the invention of Whipple & Ambler. Afterwards another patent was issued to Whipple & Dickerson, which came within the scope of the Whipple & Ambler experiments. In this condition of affairs, Ambler, on the fourth of January, 1870, began a suit in equity in the supreme court of the District of Columbia against Whipple & Dickerson, the object of which was to bring the Dickerson and the Whipple & Dickerson patents into the Whipple & Ambler partnership, and to get an account of sales and profits. The supreme court of the district dismissed the bill, but on appeal to this court that decree was reversed at the October term, 1874, and the cause remanded with instructions to enter another decree, 'declaring Whipple & Dickerson to hold in trust for the benefit of Ambler to the extent of one-half of the two patents issued to them,' and 'that an accounting be had as to the profits realized by them, or either of them, from the use or sale, or otherwise, arising from said patents.' Ambler v. Whipple, 20 Wall. 559. A decree was entered in the court of the district on the second of February, 1875, in accordance with this mandate and afterwards upon an accounting a balance was found due from Whipple of $666,052.35. Whipple is insolvent, and the amount due from him is uncollectible. On or about the twenty-first of April, 1870, Whipple & Dickerson sold and conveyed to James G. Blunt and Merritt H. Insley, of the state of Kansas, the right to use the Dickerson patent in Missouri for $35,000, and on the twenty-third of December, 1871, the right to use the Whipple & Dickerson patent in the same state for the same sum. On the eighteenth of December, 1871, Charles P. Choteau, Gerard B. Allen, Charles H. Peck, Stilson Hutchins, Theodore Laveille, George H. Rea, Albert C. Ellithorpe, John Kupferle, James G. Blunt, M. H. Insley, Charles P. Warner, Frank Gregory, and Oliver B. Filley organized a corporation under the general corporation law of Missouri by the name of the Missouri Liquid Fuel Illuminating Company, with an authorized capital of $500,000, divided into 5,000 shares of $100 each....