Buchanan v. General Motors Corporation

• Decision Date: 04 January 1946
• Parties: BUCHANAN et al. v. GENERAL MOTORS CORPORATION.
• Court: U.S. District Court — Southern District of New York

64 F. Supp. 16

BUCHANAN et al. v. GENERAL MOTORS CORPORATION.

District Court, S. D. New York.

January 4, 1946.

Pennie, Davis, Marvin & Edmonds, of New York City (Daniel V. Mahoney, of New York City, of counsel) for plaintiffs.

Cooper, Kerr & Dunham, of New York City (John N. Cooper, of New York City, of counsel) for defendant.

CONGER, District Judge.

Plaintiffs move for summary judgment for the sum of $11,579.80. Plaintiffs submit in support thereof affidavits and exhibits. Defendant makes a cross motion for summary judgment against the plaintiffs, and submits in support of its motion, the pleadings and proceedings in this action, together with certain stipulations and various papers and proceedings had in this court in a prior action.

Both sides assert that there is no genuine issue as to any material fact herein.

Plaintiffs' complaint against defendant is as follows:

That on or about June 27, 1937, Mechanical Ice Tray Corporation and I.C.E. Corporation entered into an agreement with defendant under which Mechanical Ice Tray Corporation licensed defendant to make and sell ice trays for mechanical refrigerators under certain Letters Patent owned by said Mechanical Ice Tray Corporation in consideration of royalty payments to be made by defendant to Mechanical Ice Tray Corporation and to certain individuals.

That during the years 1939, 1940 and 1941 defendant manufactured and sold ice trays within the scope of said agreement which ice trays consisted of two devices on which two unit royalties should have been paid in accordance with the agreement but that defendant paid only one royalty on such ice trays, and concealed from the plaintiffs and their predecessors the facts with respect thereto.

That plaintiffs and/or their predecessors in title had no knowledge of defendant's failure to pay the proper royalties until April, 1943.

It is stipulated that plaintiffs are either the same individuals or successors in interest of all those interested in said contract and in the royalties to be paid by defendant under said contract.

Defendant, by its answer, contends, and if it is correct, then defendant's motion must be granted, that the cause of action here asserted was merged and barred by the judgments entered in the prior action because the parties to each action and the causes of action are identical and that plaintiffs are here attempting to carve out and maintain a cause of action which was part of the original cause as determined by the judgment in the prior action.

This law suit arises out of the royalties to be paid by defendant pursuant to the agreement of June 26, 1937.

In connection with its business, defendant did make and sell ice trays. For some of these it did pay royalties under the agreement. For others, which it claimed were of a different type it paid no royalties, claiming that they did not come within the terms of the agreement and did not embody the inventions of the licensed patents.

It was for failure to pay these royalties that plaintiff sued in the first cause of action. The allegation in the complaint was "that defendant has manufactured and sold ice trays embodying the inventions of the licensed patents upon which it has failed to pay royalties * * *."

That was an action to recover royalties allegedly due from April 1, 1940, and for an accounting therefor.

The District Court did find that the plaintiffs were entitled to partial relief, Mechanical Ice Tray Corp., and I.C.E. Corp. v. General Motors Corp., Southern District of New York, judgment entered October 11, 1943. Upon appeal, the Circuit Court of Appeals for the Second Circuit reversed and dismissed the complaint and the amendment thereto and each and every cause of action therein set forth. See 144 F.2d 720.

Plaintiffs now sue for unpaid royalties on double grids allegedly due and unpaid for a period prior to and shortly after April 1, 1940.

The prior suit as far as I can ascertain from the record had to do with the manufacturing of single ice trays. Whatever royalties were paid were "single royalties." Plaintiffs now claim that defendant in 1939, 1940 and 1941 manufactured and sold double trays upon which defendant paid but a single royalty and upon which plaintiffs claim there should have been paid a double royalty.

It is not denied by defendant that it made these large trays with two grids each, but it contends and did contend very early that each tray was one unit upon which only one royalty should be paid. At any rate when defendant paid royalties it always paid on the basis of one royalty for each tray.

Plaintiffs claim that at the time the first suit was commenced they did not know that these double trays were being made by defendant and had no reason to question whether defendant paid one or two royalties on such double trays and had no reason therefore to include any charge of breaches of the agreement with respect to royalties on double trays in the complaint at the time it was filed.

In order to prepare for the first trial, plaintiffs applied for and were granted an inspection of defendant's books to find out exactly what had been made and sold by defendant upon which royalties had been paid and on which royalties had not been paid.

It was during this examination during the month of April, 1943, that plaintiffs claim they discovered for the first time that defendant had sold double trays on which a single royalty only had been paid.

Defendant has failed to convince me that plaintiffs ever had such knowledge before the commencement of the first action and before ...