Bethlehem Engineering Export Co. v. Christie, 305.

• Decision Date: 10 July 1939
• Docket Number: No. 305.,305.
• Citation: 105 F.2d 933
• Parties: BETHLEHEM ENGINEERING EXPORT CO. v. CHRISTIE et al.
• Court: U.S. Court of Appeals — Second Circuit

105 F.2d 933 (1939)

BETHLEHEM ENGINEERING EXPORT CO. v. CHRISTIE et al.

No. 305.

Circuit Court of Appeals, Second Circuit.

July 10, 1939.

Larkin, Rathbone & Perry, of New York City (Charles B. McGroddy, Jr., of New York City, of counsel), for appellant.

Bond & Babson, of New York City (Walter H. Bond, of New York City, of counsel), for appellees.

Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges.

L. HAND, Circuit Judge.

This is an appeal from a judgment, denying a motion for a preliminary injunction, and dismissing the complaint for insufficiency in law upon its face. All the questions raised can be disposed of by a consideration of the complaint alone, which was in two counts, so little different that the contents of the first only need be stated. The plaintiff alleged that the defendant, Christie, had invented and patented a military tank of unique efficiency, of which he had built one example which was then in the town of Hempstead, New York. That on August 9th, 1938, the plaintiff entered into a contract with Christie and his company (the other defendant) constituting the plaintiff its exclusive agent for the sale and manufacture of the tank and for the sale of rights for its manufacture by others. That the plaintiff had performed the conditions on its part — the payment of $5,000 — but the defendants refused to allow the plaintiff's engineer to make drawings of the tank, preparatory to negotiating for the sale of licenses, and had refused to deliver to the plaintiff the necessary drawings or blue-prints. That on the contrary they had removed some of the drawings already made by the plaintiff's engineer to New Jersey, whither they were about to take the tank also. That since the tank was unique and of great value, and since the plaintiff had made arrangements to demonstrate it to prospective buyers and had negotiated with various persons for the sale of manufacturing rights, it was entitled to a judgment of specific performance. Upon this complaint and some affidavits not necessary to describe, the plaintiff moved for an injunction pendente lite, which the defendants countered with a motion to dismiss.

The contract described the defendants collectively as "Christie", and the plaintiff as "Bethlehem"; and recited that "Christie is desirous of selling its rights to Bethlehem to act as exclusive agent for all countries in the world, and Bethlehem is desirous of purchasing such rights, or to sell its tanks and have them manufactured wherever it deems practical to the Parties of this contract." The plaintiff therefore agreed to pay to the defendants $5,000 in consideration of the rights to be granted, and both parties agreed "that the rights to be sold to any country, its terms should be as follows: each country in case they wish to acquire the manufacturing rights to pay the sum of $50,000 in cash for which Christie agrees to supply the purchaser with a complete set of designs * * * also * * * with a master mechanic or draughtsman * * * until the manufacturer has become expert and efficient and no longer needs the services of an expert. This sum and payment of $50,000 by the purchaser is to be divided equally between Bethlehem and Christie." Because $50,000 was "not an equitable payment" for the rights conveyed "Bethlehem agrees to negotiate on each particular country with whom a manufacturing contract is made with Christie to arrive at a figure for additional payment for such rights, to be discussed in each individual case". Again "before concluding a contract with England, suitable arrangements to Bethlehem and Christie will have to be made with Col. Jervis of the firm of Hitchkins, Jervis and partners." The defendants agreed to give a demonstration of the tank at the plaintiff's request, and to furnish the plaintiff with adequate information in the form of drawings, blue-prints and the like. The contract was to last for one year, but would be automatically extended for five years, "in the event that manufacturing facilities shall have been established, or not less than $100,000 shall have been received during the one year period mentioned in the agreement."

This contract is so obscure, and, strictly taken, so incoherent, that nobody can be sure of its meaning, but so far as we can spell it out, this is what it was. The defendants made the plaintiff its exclusive agent to sell licenses to prospective manufacturers of their tank in foreign countries — perhaps also in this country as well, though apparently it was not included. The plaintiff was not free to sell such licenses generally, but only for those countries where the parties thought it "practical" to do so. The minimum license fee was to be $50,000, but the plaintiff was to try to get more, and the parties were to discuss...