FAR Liquidating Corp. v. Brownell

• Decision Date: 13 January 1954
• Docket Number: No. 11076.,11076.
• Citation: 209 F.2d 375
• Parties: F. A. R. LIQUIDATING CORP. v. BROWNELL, Atty. Gen.
• Court: U.S. Court of Appeals — Third Circuit

209 F.2d 375 (1954)

F. A. R. LIQUIDATING CORP. v. BROWNELL, Atty. Gen.

No. 11076.

United States Court of Appeals Third Circuit.

Argued October 23, 1953.

Decided January 13, 1954.

Irwin A. Seibel, Washington, D. C. (Dallas S. Townsend, Asst. Atty. Gen., Leonard G. Hagner, U. S. Atty. for Dist. of Delaware, Wilmington, Del., James D. Hill, George B. Searls, Attys., Department of Justice, Washington, D. C., on the brief), for appellant.

E. Ennalls Berl, Wilmington, Del. (Berl Potter & Anderson, Wilmington, Del., Ernest S. Meyers, Lawrence R. Eno, Laporte & Meyers, New York City, on the brief), for appellee.

Before MARIS, GOODRICH and KALODNER, Circuit Judges.

KALODNER, Circuit Judge.

This is an appeal from an Order of the District Court for the District of Delaware granting the plaintiff, F. A. R. Liquidating Corporation ("FAR") summary judgment and requiring the defendant, the Attorney General of the United States, to transfer to FAR all interest in certain patents. The controversy is detailed in the opinion of the Court below,¹ but the following summarization will suffice for the purposes of this appeal.

On June 26, 1935, Farnsworth Television, Inc. ("Farnsworth") entered into an agreement with a German concern, Fernseh Aktiengesellschaft ("Fernseh") under which it granted licenses to Fernseh in certain European countries under its patents relating to television, radio, talking pictures, and electrical transcription, and received from Fernseh similar rights under the latter's patents in the United States and certain other countries. In December 1938, FAR acquired all the patents of Farnsworth and Fernseh consented to the assignment of its existing agreement with Farnsworth to FAR. The latter became dissatisfied with the agreement, and in November 1939, communicated its desire to Fernseh for its revision. Thereafter, on February 24, 1941, FAR by cable, initiated negotiations with Fernseh for a revision of the agreement. Fernseh did not reply. Two days later, on February 26th FAR's Board of Directors authorized its officers, subject to its approval, to negotiate the revision. On March 17th FAR repeated its former cable of February 24th to Fernseh. The latter finally answered by cable on April 1st suggesting more definite proposals. FAR then cabled Fernseh a more specific proposal on April 4, 1941 — i. e. assignment of all FAR's patent rights in Europe to Fernseh and the assignment to FAR of all Fernseh's patent rights in the United States. No reply was had from Fernseh until May 13th when it, in turn, suggested (1) that Fernseh's pre-war United States patents and patent applications, i. e. those granted or filed prior to September 1, 1939, were to be assigned to FAR and the latter's pre-war European patents and applications were to be assigned to Fernseh; and (2) that the new arrangement would supersede the existing agreement as of the date of receipt by FAR of a cable from Fernseh confirming FAR's acceptance of the proposal. On May 15, 1941, FAR cabled its reply to Fernseh's proposal. This cable read as follows:

"We offer to make agreement with Fernseh as set forth in your cable of May thirteenth nineteen hundred forty-one excepting only quote fourth unquote point which point is not possible because of existing Farnsworth RCA and RCA-European agreements (stop) Fernseh-Farnsworth agreements now existing to be abrogated as of effective date of present proposed agreement (stop) Regarding quote sixth unquote point (comma) costs to be borne by party handling (stop) If you wire your acceptance of this offer our confirming cable to you will constitute a binding agreement between us effective upon date of confirming cable (stop) Have arranged special meeting our directors for May twentieth to approve agreement if acceptable to you (stop) If this arrangement acceptable to you suggest you also cable authority to representative in United States to execute for you formal patent office assignment."

No reply having been received from Fernseh, FAR's Board postponed its meeting from May 20th to May 22d. On May 22 FAR's Board ratified and approved all action taken regarding the cables of May 13th and May 15th and authorized the consummation of the arrangements as set forth in those cables, with such changes as the president of FAR might deem necessary. Still not having heard from Fernseh, on May 28th FAR cabled again. The cable started: "We cabled you an May 15th as follows". There then was quoted in full the cable of May 15th. The cable concluded: "Our directors have approved agreement (stop) awaiting your answer."

On June 4th Fernseh cabled its receipt of the May 28th cable and advised FAR to expect its final answer in a few days. Fernseh's answer, which was cabled on June 14th read as follows:

"We accept your offer in your cable of May twenty-eight 1941 Consider abrogation of existing agreements and mutual assignment of patents as binding (stop) We authorize Mr. Martin as our representative by separate cable. Suggest you also cable authority to representative here for instance Wilhelm Reichel Berlin. * * *"

Fernseh also on June 14th sent a cable to a Mr. Martin, patent attorney and secretary of FAR, which read as follows:

"We authorize hereby Edwin M. Martin 3700 East Potiac Street Fort Wayne Indiana to sell assign and transfer the whole rights titles and interests in and to all letters patent for which he is appointed as our attorney and filed in our name or in the name of Fernseh Aktiengesellschaft in the United States on and before September first 1939."

However, on June 14, 1941, at 1:10 P. M. in Washington, D. C., Executive Order No. 8785² went into effect. This Order prohibited dealings in German property except under Treasury license. On June 20, 1941, FAR applied to the Treasury Department for a license, but action was delayed on the application until after the outbreak of war with Germany in December, 1941. On June 18th by Vesting Order No. 27, and on September 24, 1942, by Vesting Order No. 171, the Alien Property Custodian vested Fernseh's United States patents pursuant to Section 5(b) of the Trading With the Enemy Act, 50 U.S.C.A. Appendix, § 5(b). FAR filed its claim with the Custodian in May 1943, and due to the continued failure of the Custodian and his successors to determine its claim, brought this suit on May 29, 1952, under Section 9(a) of the Trading With the Enemy Act, 50 U.S.C.A.Appendix, § 9(a), in the United States District Court for the District of Delaware against the Attorney General of the United States, Successor to the Alien Property Custodian, to have itself declared the owner of those patents. FAR moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C., on the grounds that there was no genuine issue as to any material fact, and that it was entitled to relief because, at the time of vesting, it was lawful owner of the patents. Defendant cross moved for summary judgment on the ground that at the time of the Vesting Orders Fernseh was still the owner of the patents. According to FAR's theory, the correspondence between it and Fernseh showed that there was consummated a contract and an assignment upon the deposit by Fernseh of an acceptance cable with the German cable office on June 14, 1941, prior to 1:10 P. M. when Executive Order 8785 went into effect. According to defendant's theory, the correspondence between the parties showed that the transaction could not be concluded without a confirming cable from FAR after receipt of Fernseh's acceptance. The District Court rendered an opinion granting FAR's motion and denying defendant's cross-motion, and on March 10, 1953, ordered defendant to turn the patents over to FAR within 60 days.

Defendant bases this appeal upon three contentions: (1) summary judgment is improper where there is a genuine issue as to the meaning of written words; (2) the correspondence between Fernseh and FAR never consummated in a contract as the latter never confirmed as required by its cable of May 15th which was quoted in full in its cable of May 28th; and (3) since there was a genuine issue of fact as to the time when Fernseh's acceptance cable of June 14th was sent, it was error for the lower court to grant summary judgment in favor of FAR. These contentions will be discussed in order.

(1) Defendant's first contention is that the granting of summary judgment is erroneous where there is a genuine issue as to the meaning of written words. According to FAR's theory, the correspondence between it and Fernseh established that a contract and an assignment of the patents were consummated upon the deposit by Fernseh of an acceptance cable with the German cable office on June 14, 1941. In reply defendant urges that the correspondence between the parties established that the transaction could not be concluded without a confirming cable from FAR after receipt of Fernseh's acceptance cable. Defendant argues that since the language of the correspondence is ambiguous, a question of fact was presented and therefore it was error to grant summary judgment. We do not subscribe to this contention. It is well settled that where all of the matters relied upon as constituting a contract appear wholly from writings, the question as to whether a contract exists is one of law and for the court....