Cook v. Sterling Electric Co.

• Decision Date: 02 January 1907
• Docket Number: 1,291.
• Citation: 150 F. 766
• Parties: COOK v. STERLING ELECTRIC CO.
• Court: U.S. Court of Appeals — Seventh Circuit

150 F. 766

COOK v. STERLING ELECTRIC CO.

No. 1,291.

United States Court of Appeals, Seventh Circuit.

January 2, 1907

Keene H. Addington, for appellant.

John F McHugh, for appellee.

Before GROSSCUP, SEAMAN, and KOHLSAAT, Circuit Judges.

GROSSCUP Circuit Judge.

Appellant is an electrical engineer and inventor, and prior to 1898 was in the employ of the Central Union Telephone Company, which employ he left in the year 1898, to engage in the business of manufacturing electrical machinery, devices and appliances. This he did through a corporation known as the Sterling Electric Company, of Illinois, two-thirds of whose stock was owned by him, and one-third by one Walter E. Doolittle-- a corporation that in February, 1898, began to manufacture and sell electrical machinery, appliances, devices, and apparatus, used especially in operating telephonic systems.

February 23rd, 1898, there was executed by appellant to the Sterling Electric Company of Illinois, a written license covering the inventions of appellant in telephonic apparatus, some of which inventions had matured already into patents, and others were pending on application (but not covering the patent in suit, application for which had just been made) which license granted to the Sterling Company the exclusive right to manufacture, sell and use, the inventions thus named.

The business of the Sterling Electric Company of Illinois seems to have grown rapidly-- so rapidly, indeed, that for the purpose of getting a working capital to take care of its increasing business, negotiations were opened up between Cook and Doolittle, on the one side and the Commercial Club of Lafayette, on the other, looking toward the removal of the plant from Chicago to Lafayette. Some matters connected with these negotiations are admitted. It is admitted, for instance, that the negotiation contemplated that the property of the Illinois corporation should be taken over by an Indiana corporation of the same name, having a capital stock of one hundred thousand dollars that the property thus taken over should include all the property, plant and assets of the Illinois corporation (except bills receivable and book accounts), as also a license from appellant of the right to manufacture, use and sell, certain telephone machinery, devices, apparatus and appliances covered by his inventions (the extent of this license being the thing in dispute); that to Cook and his wife and Doolittle should be issued seventy-five thousand dollars par value of the Indiana corporation, fully paid and non-assessable, and the other twenty-five thousand to be subscribed and paid for in cash by certain citizens of Lafayette; that of this seventy-five thousand issued to Cook and his associates, fifteen thousand should be bought from him at par, in cash, by citizens of Lafayette; and that all of these stipulations, except the disputed one relating to the license, were fully carried out in the removal that took place.

The terms of...