Crowe v. Oscar Barnett Foundry Co.

• Decision Date: 08 May 1914
• Citation: 213 F. 864
• Parties: CROWE v. OSCAR BARNETT FOUNDRY CO.
• Court: U.S. District Court — District of New Jersey

213 F. 864

CROWE v. OSCAR BARNETT FOUNDRY CO.

United States District Court, D. New Jersey.

May 8, 1914

W. P Preble, of New York City, for complainant.

Russell M. Everett, of Newark, N.J., for defendant.

BRADFORD District Judge.

This is a bill for the rescission of a contract between the complainant, Paul L. Crowe, and the Oscar Barnett Foundry Company, hereinafter referred to as the foundry company, and for an account of profits made by the latter. On careful consideration I have reached the conclusion that under the special circumstances of this case there should be a decree for the rescission of the contract, but not for an accounting on either side; and further, that in view of the fact that both parties have been at fault the total costs and expenses of the suit should be paid equally by them. Crowe being the inventor and owner of certain improvements in mechanical stokers for the smokeless burning of bituminous and anthracite coal for use in connection with steam boilers and furnaces, and the foundry company being desirous of manufacturing stokers containing such improvements, entered Crowe as party of the first part, and the foundry company as party of the second part, into a contract under seal bearing date January 29, 1908, whereby, for the considerations and covenants therein set forth Crowe granted to the foundry company, among other things, a sole and exclusive license to manufacture and sell chain grate mechanical stokers under United States patents to be granted to him under three certain applications by him then pending in the United States patent office; such sole and exclusive license to continue 'for the life of all patents issued upon said applications. ' Crowe further granted to the foundry company a license to manufacture and sell the grate bar designed for stokers under patent No. 866,627 in a large number of states, including, among others, New Jersey, for the life of the patent, upon a royalty of one cent for every pound of metal used in the stoker and its operating equipment, excepting the engine. Crowe also granted a license to the foundry company (exclusive as to some territory and non-exclusive as to other territory), to manufacture and sell chain grate stokers covered by the above mentioned patent as to grate bar and by claims in the above mentioned applications for patents, and also all applications made by him for improvements thereon, the license not to be exclusive in the states and territories other than those specified in the contract, upon a like royalty of one cent per pound of metal used in the stoker and operating equipment, excepting the engine. Crowe further granted to the foundry company a license to manufacture and sell the said chain grate stoker with all improvements thereon which should be made by Crowe for 'the life of all patents issued upon any and all applications hereinafter made by said party of the first part on said stoker upon the same terms as above set forth for the above mentioned states and territories. ' The foundry company in and by the contract expressly undertook the manufacture of the stokers under the protection of the above mentioned applications, patent and improvements, and 'guarantees absolutely to the party of the first part the payment to him as a license fee' of the above mentioned royalty and 'agrees absolutely to make settlements to be delivered on the tenth days of January, April, July and October, in each year for the life of the above patent, and of the patents issued upon the said applications, and upon all improvements covering all metal for stokers and operating equipment, except engine, shipped from its shop or other place from which it is made or procured by said party of the second part during the period of the last preceding three months. ' The foundry company agreed to keep separate order and invoice books for the record of the sale of the said stokers and granted the right to Crowe 'to inspect at any time said books. ' The foundry company agreed 'to make and deliver to the said party of the first part full and true returns, under oath, of all stokers and parts thereof, including repair parts shipped by it, together with operating equipments, except engine, and of the total weight of metal used therein, the names of the parties and localities for which said stokers and said parts are to be installed or used on or before the tenth days of January April, July and October in each year covering a period of the previous three months, for the life of the said patents and improvements. ' Crowe agreed to protect the foundry company 'in the rights herein granted against any infringement on the claims in the patent already issued and on patents which may be hereafter issued * * * on said applications and improvements,' and agreed that all improvements made by him on the stoker should be used on the stokers manufactured by the foundry company. And it was further agreed that if such improvements should be of such value that they should be protected by patent, the foundry company would take out such patents at its own expense. On the execution of the above contract Crowe entered into the employ of the foundry company to show it how to construct the stokers and to make the installations, and remained in such employ until August, 1909; but his connection with the foundry company did not long continue before dissatisfaction or differences arose between them. Crowe testifies, among other things, to the effect that while he was in its employ the foundry company was 'very arbitrary in building the stoker properly, and when I was at the plants to make the installations the work was so poor that I had to build the stokers over at the plant, which cost a great deal of time and money,' and that about the first of August, 1909, he left the employ of the foundry company and took an order from the Commercial Trust Company in Jersey City for the construction of a stoker on his own account and for his own benefit 'under my former patent.' This action on the part of Crowe led to litigation between the parties. The foundry company brought two suits in the court of chancery of New Jersey against Crowe, alleging violation of the contract on his part, the first being instituted August 31, 1909; and the decisions in both of these suits were adverse to Crowe, and were affirmed on appeal. In them it was decided that Crowe had violated the rights of the foundry company under the exclusive license granted to it in and by the contract of January 29, 1908, and he was compelled to pay damages Untenable and unjustifiable as the conduct and position of Crowe subsequently may have been, there is enough in that contract to indicate that he may have taken only a mistaken view of the right to construct and install the stoker for the Commercial Trust Company. The contract provided that Crowe should protect the foundry company 'in the rights herein granted against any infringement on the claims in the patent already issued, and on patents which may be hereafter issued by the United States patent office on said applications and improvements. ' The evidence is that Crowe was at and prior to the execution of the contract the owner of many patents not referred to in that contract, relating to improvements in mechanical stokers for the...