American Box Mach. Co. v. Crosman

• Decision Date: 07 September 1892
• Docket Number: 2,758.
• Parties: AMERICAN BOX MACH. CO. v. CROSMAN et al.
• Court: U.S. District Court — District of Massachusetts

57 F. 1021

AMERICAN BOX MACH. CO. v. CROSMAN et al.

No. 2,758.

United States Circuit Court, D. Massachusetts.

September 7, 1892

The contract in question in this case was executed January 23 1888, and is as follows: 'This agreement, made and entered into by and between the American Box Machine Company of Amsterdam, New York, party of the first part, and George A. Crosman, John C. Metcalf, and John B. Rollins, all of Lynn, Massachusetts, and George W. Glazier, of Salem Massachusetts, parties of the second part, and the Lynn Box Machine Company, of Lynn, Massachusetts, party of the third part, witnesseth: Whereas, party of the first part is the owner of certain letters patent of the United States for box-covering machinery, among them letters patent dated July 26, 1881, granted to Gordon Monro, numbered 244,919, and letters patent dated May 27, 1884, granted to Horace Inman numbered 299,225; and whereas, the parties of the second part heretofore made or sold or used box-covering machines which party of the first part claimed to be infringements upon the said letters patent; and whereas, party of the first part, on or about _____ brought suit against Crosman and Metcalf, and also another suit against said Rollins and Glazier, for alleged infringement upon said patent No. 244,919, and also on or about the ___ day of _____, another suit against said parties of the second part conjointly, for alleged infringement of said patent No. 299,225; and whereas, the parties of the second part, in June last, organized themselves into a corporation under the laws of the state of New Hampshire, entitled the 'Lynn Box Machine Company,' which has succeeded to their business as manufacturers of paper-box machinery; and whereas, said party of the third part, by assignment, is the owner and holder of certain letters patent of the United States granted to said George W. Glazier, both dated April 5, 1887, and numbered, respectively, 360,582 and 360,583; and whereas, the parties hereto are desirous of settling all questions of difference between them: Now, therefore, the parties hereto covenant--agree--each with the other as follows: First. Decrees shall be entered in each of said suits according to the prayer of the bill therein. The counsel for the defendants therein shall consent thereto, either orally in open court, or in writing, as party of the first part may elect. Second. All costs and accounting in each of said suits is hereby waived. Third. In the event of breach of this agreement by party of the first part in such manner as to materially affect the rights of parties of the second and third parts, or of the trustees herein provided for, then said decrees in each of said cases are to be vacated at the election of the defendants in said cases, and the same shall proceed for judicial determination. Fourth. A trust shall be forthwith created, and a trustee, who shall be approved by party of the first part, shall acquire title to said patents of party of the third part; and said trustee shall forthwith, upon his assuming said trust, give and grant to the party of the first part an exclusive license to make, use, and sell throughout the United States, and until the 27th day of May, 1901, to which date this agreement shall remain in force, the inventions described and claimed in said letters patent as assigned to him; and the party of the first part shall have the right to institute or defend suits or proceedings, as it may elect, in the name of the said trustee, the expense thereof to be borne by party of the first part. Upon the creation of said trust, and the acceptance thereof by said trustee, the parties of the second and the third parts shall forthwith cease to carry on the business of making, using, or selling box-making machinery covered by said patents, or other patents now owned by the party of the first part, except as hereinafter provided. Fifth. The said trustee shall be constituted, by party of the first part, its agent irrevocable, during the continuance of this agreement, to sell all machinery made or controlled by party of the first part in any wise applicable to the manufacture of paper boxes, with a commission for selling of fifteen per cent. on the gross selling price. The selling power of said trustee may be delegated by him to other persons, to be approved by party of the first part, or, if not, then such trustee to be responsible personally for the unauthorized acts of said agents. All machines sold shall be billed in the name of party of the first part, and all business shall be transacted by said trustee and by his salesman in the name of party of the first part, and upon the same terms as party of the first part gives to its customers. Sixth. Said trustee shall have the exclusive right to make, or cause to be made, the single-strip machines for 'topping' and 'covering' that embody the inventions, or substantial parts thereof, described in the said patents owned by party of the third part, and shall receive therefor, from party of the first part, the sum of forty ($40) dollars for each of said machines, which shall be constructed in good and substantial manner, as are made by party of the third part, and may embody in said machines, at the same cost of manufacture, any of the improvements described in letters patent owned or controlled by party of the first part, provided said added parts do not constitute a 'double-strip' machine. The said sum--forty dollars--shall be paid to said trustee for the machines of the size and style theretofore sold by party of the third part for one hundred dollars, and for the machines of the size and style theretofore sold by it for one hundred and twenty-five dollars an additional cost price shall be allowed, equal to the additional expense incurred in making the same, and the selling price of said last-named machines may, if desired by party of the first part, be advanced at least sufficiently to cover such additional cost; and, if, at any time thereafter, the said trustee or persons associated with him make further supposed improvements, they shall be submitted to the party of the first part, and, if approved by it, then an allowance shall be made, and added to the cost price of said machine, equal to the excess of costs, if any, required to make the machines with such improvements. If the said improvements are not approved by party of the first part, then the said trustee shall have the right to embody said supposed improvements in said machines at the original price, to wit, forty dollars, ($40,) and sell the same in the market as and for the price that the original machines are sold. If, at any subsequent time, the party of the first part shall decide to approve and adopt the said improvements, then it shall allow actual cost of making said improvements in addition to the forty dollars, ($40,) above stated. There shall also be allowed to the said trustee the sum of twenty-five dollars on each machine, of whatever kind, which shall embody any of the inventions licensed as aforesaid by said trustee to party of the first part, or any material and substantial part thereof, whether said machines shall have been sold by party of the first part or by said trustee; and, if said machine shall have been leased by party of the first part, then twenty-five per cent. of the rental thereof shall be paid, when received, to said trustee, until the sum of twenty-five dollars per machine shall have been so paid. Said trustee shall be paid the further sum of fifteen dollars ($15) on each topping or covering machine made and sold by him, said fifteen dollars to be in lieu of all other selling commissions whatsoever. Seventh. The selling price of the single-strip covering machines of the size and style heretofore sold by party of the third part for one hundred dollars, hereafter to be made by said trustee, and also the single-strip machines made by party of the first part, shall be one hundred and fifty dollars ($150) each; and the price at which the topping machines made by said trustee shall be sold shall be one hundred and fifty dollars, ($150.) The said prices shall be cash prices, without variation, division, or allowance, or commissions to purchasers or others, except such variation as to terms of payment as may be from time to time agreed upon by the party of the first part and by said trustee, in writing, which terms shall be the same as given by the party of the first part to his customers for machines for a similar purpose. The topping machines made by the party of the first part shall not be sold for a sum less than one hundred and fifty dollars, ($150,) upon terms of payment the same as above stated. Eighth. If the party of the first part shall reduce the price of its double-strip machines, which are now sold at three hundred dollars, ($300,) then the price of the single-strip machine made by said trustee shall be reduced one-half the amount of such reduction, the manufacturing cost, royalty, and commissions to remain unchanged. Ninth. All orders from purchasers furnished by said trustee shall be filled by the party of the first part, unless there is reasonable ground to question the ability of the purchaser to pay for the same, and then the order shall be filled, provided good and sufficient sureties are furnished for said payments. Tenth. The party of the first part agrees to advertise, in its catalogue and otherwise, the said machines made by said trustee, and put the same upon the market in substantially the same manner, and with the same advantage, as it does the machines of a similar character made by it. Eleventh. Regarding the machines, both covering and topping, heretofore sold by parties of the second or third parts, it is agreed as follows: (a) No interference shall be made by the party of...