Beacon Oil Co. v. Perelis
| Decision Date | 04 April 1928 |
| Citation | 160 N.E. 892,263 Mass. 288 |
| Parties | BEACON OIL CO. v. PERELIS. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
OPINION TEXT STARTS HERE
Report from Superior Court, Middlesex County; A. R. Weed, Judge.
Suit by the Beacon Oil Company against Walter J. Perelis. On report to full court. Decree for plaintiff.
T. Hunt and W. Gates, Jr., both of Boston, for plaintiff.
S. C. Randall and R. Proctor, of Boston, for defendant.
The defendant was the general manager of the plaintiff, an oil refining corporation. In 1922 it began the use of the ‘cracking’ process in producing gasoline. To prevent the formation of a carbon deposit, the defendant made use of a coil of pipes through which the material passed before reaching the vaporizer, in order to extract the excessive heat from the material. In and about the plant this improvement was commonly called the ‘after cooler.’ The defendant also conceived the idea of increasing the production of gasoline by an increase in the ‘cracking’ temperature. To accomplish this he added another coil of pipes to the process then in use and by the application of a ‘cracking’ temperature to this additional coil the ‘cracking’ process was prolonged and the amount of gasoline increased. This was spoken of as the ‘time coil.’ Before July, 1924, both of these improvements were in practical use at the plaintiff's refinery. Although they were conceived by the defendant, in their development Wollenberg, the plaintiff's president, and Walsh, its assistant manager, collaborated and by study and suggestion contributed to their utilization. The expense of the preliminary work and the installation of these improvements were sustained entirely by the plaintiff. It was found by the judge that Wollenberg on behalf of the plaintiff orally agreed with the defendant that the defendant should be acknowledged as the inventor of the ‘after cooler’ and ‘time coil’ and the plaintiff would defray the expenses of applications for patents, these patent applications to be assigned to a new corporation, one half of the capital stock of which was to be issued to the plaintiff and one half to the defendant.
On or about July 22, 1924, the defendant sent to Wollenberg descriptions of the ‘time coil’ and ‘after cooler.’ On or about this date patent attorneys were employed at the plaintiff's expense to file and prosecute applications for the inventions. Their fees for service were paid for by the plaintiff, and from this time until the present suit was begun the defendant was in constant communication with the patent attorneys, ‘suggesting, drafting, revising and discussing descriptions of the inventions, and their purpose and mode of application.’ On March 18, 1925, patent application No. 16,952 was filed; later another application, No. 39,280 was filed. In January, 1926, seven claims of application No. 16,952 as amended were allowed. No further action on either application was had prior to the filing of the bill in this suit. The defendant revoked the power of attorney of the patent attorneys on file at the patent office.
In February, 1926, the Everett Oil Process Company was organized by the plaintiff under the laws of the commonwealth, with a capital of one thousand shares without par value. In March, 1927, the secretaries of the new corporation and of the plaintiff tendered to the defendant a certificate for five hundred shares of the capital stock of the new corporation and requested in return an assignment to the new corporation of the inventions and patent applications numbered 16,952 and 39,280 and all improvements therein. Formal drafts of such assignment were offered to the defendant for his signature. The defendant refused to accept the certificate of stock and to execute the assignment.
The trial judge ordered that a decree be entered that upon delivery to the defendant of five hundred shares of the capital stock of the Everett Oil Process Company the defendant was to execute and deliver to the plaintiff an assignment of patent application No. 16,952. The case was reported to this court.
[1] There was evidence to support the finding of the judge that the defendant orally agreed with the plaintiff, acting by its president Wollenberg, to assign the patent applications for the ‘after cooler’ and the ‘time coil’ to a corporation to be formed, one half of the capital stock of which was to be issued to the plaintiff and one half to the defendant. In addition to the testimony of Wollenberg that such an agreement was made, there was testimony from the patent attorneys to the same effect. Some of the defendant's letters tended to show that the agreement was made. The evidence was conflicting but an examination of all the reportedevidence satisfies us that the judge was justified in finding the agreement as relied on by the plaintiff was made.
[2][3] The defendant contends that the contract cannot be enforced specifically; that the contract even if one existed was not sufficiently definite; that the details of the corporation to be formed and the state in which it was to be organized were not sufficiently defined. It is settled law in this commonwealth that a contract to assign a patent will be specifically enforced in equity. Somerby v. Buntin, 118 Mass. 279, 287,19 Am. Rep. 459;Marshall Engine Co. v. New Marshall Engine Co., 199 Mass. 546, 85 N. E. 741. There was no uncertainty as to the corporation to be formed or the other details of the contract such as to prevent its specific enforcement. It was sufficiently definite. The contract was made in this commonwealth. The organization of a corporation under the laws of the commonwealth was a reasonable compliance with the oral agreement. The absence of a specific statement as to some of the details of the organization of the new corporation did not deprive the court of its jurisdiction to enforce the agreement. The amount of the capitalization, the provisions of the by-laws and other matters of detail, which were not agreed on, were not important provided the corporation was formed in substantial accord with the agreement. ‘The various...
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