Deering Harvester Co. v. Kelly

• Decision Date: 13 July 1900
• Docket Number: 800.
• Citation: 103 F. 261
• Parties: DEERING HARVESTER CO. v. KELLY et al.
• Court: U.S. Court of Appeals — Sixth Circuit

103 F. 261

DEERING HARVESTER CO. v. KELLY et al.

No. 800.

United States Court of Appeals, Sixth Circuit.

July 13, 1900

Oscar T. Martin and Thomas C. Banning, for plaintiff.

James Johnson, Jr., for defendant.

Before LURTON, DAY, and SEVERENS, Circuit Judges.

SEVERENS Circuit Judge.

This case is brought here on writ of error. The plaintiff, Kelly for himself and as trustee for certain companies who are named in the title of the action, brought suit in the court of common pleas of Clarke county, Ohio, to recover the sum of $5,000, part of the purchase price for licenses under certain patents sold by him and the companies for whom he stands as trustee to the Deering Harvester Company, the defendant below and plaintiff in error here. The suit was removed into the circuit court of the United States upon the petition of the Deering Harvester Company, where it was tried before the judge, without a jury, upon evidence with respect to which there was no dispute. It was proven by this evidence that the plaintiff and those for whom he acts as trustee granted licenses to use a large number of patents owned by them to the Deering Harvester Company, and that in consideration thereafter the latter company agreed to pay the sum of $25,000, $20,000 of which was to be paid down. The Deering Harvester Company having some doubt of the validity of the vendors' title to some of the patents, it was agreed that the payment of the remaining $5,000 should be deferred, to enable the vendors to demonstrate that they had a good title or, if they had not, to enable them to perfect it; and six months were allowed for that purpose. A referee was agreed upon, to hear evidence and decide whether 'the Deering Harvester Company had reasonable grounds to dispute the full legal title. ' If it was shown that no reasonable ground for doubt existed, or if it was shown that such reasonable ground did exist, and the other parties should clear it up to the satisfaction of the referee, then the remaining $5,000 were to be paid; otherwise, not. So much of the agreement as related to that subject is here quoted:

'It is further agreed that the above-named licensors shall submit all papers showing titles to the patents above enumerated, at their earliest convenience, to said referee, and that the said Deering Harvester Company shall within two weeks thereafter submit its objections to said titles to the said referee, and, if the said referee then decides that the Deering Harvester Company has reasonable grounds to dispute the full legal title, the said licensors shall be given six (6) months in which to protect (perfect) said title or titles. If, within the time last specified, the said licensors perfect the titles to the satisfaction of the said referee, the said Deering Harvester Company shall pay to the said licensors, or their authorized representatives, five thousand ($5,000) dollars. It is mutually understood that, if the said licensors fail to show a perfect legal title to the above patents within the prescribed six months, the said Deering Harvester Company shall not be required to pay the above sum.'

A hearing was had before the referee, and he decided, in substance, as the court below held, that the title was not an absolutely perfect title, but was a good marketable title. Thereupon the plaintiff demanded the payment of the $5,000, which was refused. The court (Thompson, J.) made and filed its findings of law, upon which it reached the conclusion that the plaintiff was entitled to recover the sum demanded, and entered judgment accordingly. The defendant moved for a new trial, which was denied, and the defendant excepted. A bill of exceptions was settled. Only two exceptions appear therein, one of which is thus stated, and it is all that appears concerning it:

'Counsel for the plaintiff offers the license (Exhibit A), and the award under consideration, and the decision of the referee (Exhibit B), which is received subject to the objection and exception of the defendant, the competency of which to be determined when the case is disposed of.'

'The other exception was to the overruling of the motion for a new trial. The only other exception appearing in the record is one following the entry of the general finding and judgment, in the following language:

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