Electric S. S. Co. v. Gill-Alexander Electric M. Co.

Decision Date26 November 1894
Citation28 S.W. 486,125 Mo. 140
PartiesELECTRIC SECRET-SERVICE CO. et al. v. GILL-ALEXANDER ELECTRIC MANUF'G CO. et al.
CourtMissouri Supreme Court

1. A contract between plaintiff and defendant provided that defendant was to work for plaintiff in perfecting certain electrical devices, and that, when a company should be formed to manufacture them, 50 shares of stock were to be issued to defendant, or a sum of money paid in lieu thereof, in consideration of which defendant agreed to convey to plaintiff his patent rights in the devices. Defendant perfected the machines, and the company was formed, but no stock was issued to defendant, nor was any money paid to him. Held, that plaintiff was not entitled to specific performance of the contract to convey the patent rights.

2. Equity has jurisdiction of a suit for specific performance of a contract for the sale of a patent right.

Appeal from circuit court, Jackson county.

Action by the Electric Secret-Service Company and others against the Gill-Alexander Electric Manufacturing Company and others for specific performance of a contract for the transfer of patent rights. There was judgment on the circuit for defendants, and plaintiffs appealed. Affirmed.

The finding of facts and decree of the trial court mentioned in the opinion are as follows:

"Now, at this day, this cause coming on to be heard, and the court, having fully heard and considered the pleadings and evidence of the parties and the arguments of counsel, doth find the facts as follows: That on the 10th day of March, 1885, there was issued certain letters patent of the United States, from the patent office of the United States, number 313,720, and called `An Improvement in Automatic Electric Signal-Controlling Apparatus,' to the defendant Edwin R. Gill, Jr., one-half interest, to plaintiff John T. Russell, one-fourth interest, to plaintiff James M. Chaney, one-eighth interest, and to one Wm. A. Simmington, one-eighth interest. Then thereafter said Chaney became the owner of said Wm. A. Simming ton's one-eighth interest by assignment on the face of the said patent. That by a contract dated October 25, 1886, said J. T. Russell and E. R. Gill, Jr., granted to said James M. Chaney the exclusive right and privilege of selling, at any time within ten months from the date last aforesaid, all the right, title, and interest of said Russell and Gill to said patent right, upon the condition that, if a sale of said patent right should be made within said ten months, said Russell and Gill were to receive, in full payment of all their right, title and interest in said patent, the sum of seven thousand five hundred ($7,500) dollars, — that is, the said Russell was to receive twenty-five hundred ($2,500) dollars, and the said Gill five thousand ($5,000) dollars, — and the said Chaney to receive the remainder of the sum for which said patent right might be sold. That said Russell and Gill were to make a good and valid assignment of all their said right and title to said patent right upon the payment to them of said sum of $7,500. That said Chaney was, at his own expense, to make diligent endeavor to effect a sale of said patent right within the specified time, and, in case such sale was effected, to pay to said Russell and Gill said $7,500; and, in case said sale was not effected in the time specified, said agreement was to be void and of no further effect, and the rights of the parties to be as though no agreement had been made. That on the 21st day of December, 1886, said J. M. Chaney entered into an agreement with the plaintiff A. W. Jones by which said A. W. Jones undertook to and engaged either to sell for cash said patent right to some individual parties or corporation, or to organize a company and dispose of said patent for part cash and part stock of said company, or to organize a company to sell a sufficient amount of stock of said company for the purpose of manufacturing, operating, or selling said patent or device; said Chaney to be at no expense thereby, — conditional that if said Jones did not effect a satisfactory sale or disposition of said patent or device within ten months from the 25th day of October, 1886, the said agreement to be void; and said contract of October, 1886, was made part of the contract last aforesaid, and said Jones took the place of Chaney under said contract of October 25, 1886. This agreement was approved by said Russell and Gill. That said E. R. Gill, Jr., in the months of December, 1886, and January, 1887, proceeded to construct, at the request of said A. W. Jones, and did construct, three machines, fully illustrating the workings of said patent devices. That on the 25th day of March, 1887, an agreement was entered into between said A. W. Jones and said E. R. Gill, Jr., by which said Gill agreed to make, within the shortest time possible, a complete and practical working machine, known as the `Automatic Electric Signal-Controlling Apparatus,' and upon the completion of said machine, and when its workings had demonstrated that it would do what the said Gill claimed it would do, to give to said A. W. Jones his time and assistance in promoting and consummating the sale of said apparatus, or the organization of a stock company for the purpose of manufacturing, operating, or selling the said patent device. That the said A. W. Jones, on his part, agreed to employ said Gill for said purposes, and to pay him a salary of $50 per month, in advance, commencing at said March 15, 1887, his board and lodging wherever he might be acting under or awaiting the instructions of said A. W. Jones, and his railroad and traveling expenses to and from all points to which he might be directed to go, and back to Kansas City; and, in case a stock company should be formed for the purpose of manufacturing, operating, or selling said apparatus, the said A. W. Jones should cause to be issued to said Gill fifty shares of the capital stock of such company so formed, fully paid up and nonassessable, and of the par value of one hundred dollars per share, — all to be done without any costs to said Gill. That should said A. W. Jones succeed in forming such stock company, and fail to issue or cause to be issued to said Gill the said fifty shares of said stock, then in that case the said A. W. Jones agreed to pay the said Gill the sum of $5,000, in lieu thereof. That this contract provided that, as far as consideration is concerned, it was to have nothing whatever to do with the contract of Chaney, of date October 25, 1887, and the $5,000, in stock or money, to be paid to Gill by the said Jones, was no part of the $5,000 in money to be paid to Gill under the contract of October 25, 1886, but was in addition thereto. The term of the employment of said Gill under this contract was limited by its terms to the ten months named in said contract of October 25, 1886, and was to expire with that contract, unless sooner forfeited by said Jones, he finding it impossible to utilize said machinery by sale or the formation of a company as in said contract provided. That on the 20th day of August, 1887, said E. R. Gill extended in writing the contract between himself, James M. Chaney, and John T. Russell, of the date of October 26, 1886, for the period of sixty days from August 20, 1887, and thereafter for any longer period of time which the said A. W. Jones might in his judgment and at his option deem necessary.

"The court finds that E. R. Gill proceeded to construct the machines and apparatus mentioned in said contracts according to the terms and conditions thereof, and to exhibit, under the directions of said A. W. Jones, in Kansas City and in various cities of the East. That said A. W. Jones exerted himself to sell and dispose of said patent devices and letters patent at the various places where the said Gill, under his directions, exhibited the said machines and apparatus. That on the 10th day of October, 1888, said A. W. Jones, together with the plaintiff B. F. Jones, and E. L. Martin, whom he had theretofore associated with himself in this enterprise, organized, under the laws of the state of Missouri, a corporation, under the name of the `Western Electric Lock Company,' with an authorized capital stock of $100,000. That the articles of incorporation of said company stated that it had a fully paid-up capital of $100,000, in lawful money of the United States. That the purposes for which said corporation was formed were to manufacture, sell, and deal in the `Gill Electric Combination Lock,' in all its various applications...

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