Bonsack Mach. Co. v. Hulse

• Decision Date: 26 July 1893
• Citation: 57 F. 519
• Parties: BONSACK MACH. CO. v. HULSE et al.
• Court: U.S. Court of Appeals — Fourth Circuit

57 F. 519

BONSACK MACH. CO. v. HULSE et al.

United States Circuit Court, W.D. Virginia.

July 26, 1893

S. A Duncan and A. H. Burroughs, for complainant.

F. H Busbee, for defendants.

GOFF Circuit Judge.

This suit is for the purpose of enforcing the provisions of a contract made July 19, 1886, by the Bonsack Machine Company and W. A. Hulse. The complainant, a company organized under the laws of the state of Virginia, has for its business the constructing, operating on royalties, leasing, and selling of machines for the manufacture of cigarettes. The contract alluded to is as follows:

'This agreement made this 19th day of July, 1886, between the Bonsack Machine Company, of the first, and W. A. Hulse, of the second, part, witnesseth: That the said company has this day employed the said Hulse to set up and operate its cigarette machines at a salary of $50 for the first month and $65 per month thereafter, with such advance of salary up to not exceeding $75 per month, as the services of the said Hulse may justify. It is agreed that the said Hulse will serve the company wherever desired; the company to pay his railroad fares whenever traveling at the request of the company. No abatement will be made for loss of time because machines are not kept running, nor any extra payment for extra hours. The said Hulse agrees to do all in his power to promote the interests of the said company, and, in case he can make any improvement in cigarette machines, whether the same be made while in the employment of the said company or at any time thereafter, the same shall be for the exclusive use of the said company. And it is agreed that in case the said Hulse be not able to serve the said company efficiently, or shall in any way neglect his duty, the company may stop his services at any time, paying up to such time; but, in case the said Hulse desires to quit the said company, he shall give sixty days' notice thereof.

'Bonsack Machine Company.

'By D. B. Strouse, President.

'W. A. Hulse.'

It is claimed by complainant that Hulse, while operating a machine under said contract, made an improvement on the Bonsack machine, consisting of a device, which may be attached to the machine, by which the lap on the cigarette is changed from a pasted to a crimped lap. The plaintiff claims that Hulse duly reported his improvement to it, and that the Bonsack Company provided Hulse with a machine to experiment with, a private room to work in, and material to use in testing his device, assuring him, at the same time, that, if his improvement should prove practicable and valuable, the Bonsack Company would pay him liberally for his work; also, that Hulse, so using the machine, room, material, and labor employed to assist him, spent several months in perfecting such device, all at the cost of the complainant; that it is believed it will prove a practicable working arrangement, of more or less value, but the same has not yet been fully demonstrated; that complainant is, under said contract, entitled to the device, and to a conveyance of the same, and of the patents applied for relative to the said improvement; but that Hulse refuses to convey the same, and claims that he has sold an interest therein to the defendant Wright, and that they demand a large sum of money for the improvement, and are endeavoring to sell the same to others. Complainant says that R. H. Wright, the defendant, was, and still is, an agent and representative of the Bonsack Machine Company in introducing the use of its cigarette machines in certain 'foreign lands,' under a contract dated December 22, 1888, and that Hulse was with Wright, working the cigarette machines, and in the service of the Bonsack Company, by virtue of his employment with Wright, when the improvement was discovered; that Wright was aware of the contract of Hulse with the company when he purchased his one-half interest in the device. All these allegations of the bill are either admitted in the answer of the defendants, or, in my judgment, proven by the testimony and exhibits filed in the case.

Should the contract of July 19, 1886, between the Bonsack Machine Company and W. A. Hulse be enforced? It is claimed by defendants that it should not be, that it is void because of fraud in its procurement, because of inadequacy of consideration, and for that it is in contravention of public policy.

The charge of fraud is not sustained. The statement in the answer of the defendants, which is sworn to, that the contract was not read to or by Hulse, and not understood by him when he signed it, is shown by the testimony of several witnesses Hulse himself being one, not to be true. The evidence is full and complete that Hulse understood the character of the instrument he signed, and that he executed it believing it to be reasonable and just. I do not find that the contract was harsh and unreasonable when entered into. There is nothing in the case that shows--no evidence that discloses--that the contract was not a wise and advantageous one for both parties to it. I find that good reasons existed for both Hulse and the Bonsack Machine Company to execute such a contract. The one secured steady, lucrative, and most desirable employment, to continue as long as his own conduct justified it, with opportunities to greatly benefit his condition; while the other obtained a capable employe, and protected its business with such restrictions as its experience in the matter in which it was engaged had demonstrated to be necessary. Subsequent developments have fully justified the course taken, and the...