Featherlax Corporation v. Chandler

• Decision Date: 30 November 1966
• Docket Number: No. 243,243
• Citation: 412 S.W.2d 783
• Parties: FEATHERLAX CORPORATION, Appellant, v. Dr. M. H. CHANDLER et al., Appellees. . Corpus Christi
• Court: Texas Court of Appeals

Page 783

412 S.W.2d 783

FEATHERLAX CORPORATION, Appellant, v. Dr. M. H. CHANDLER et al., Appellees.

No. 243.

Court of Civil Appeals of Texas Corpus Christi.

Nov. 30, 1966.

Rehearing Denied Feb. 9, 1967.

Second Motion for Rehearing Denied March 9, 1967.

Kelley, Looney, McLean, & Littleton, Jackson Littleton, Edinburg, for appellant.

Sidney P. Chandler, Corpus Christi, for appellees.

OPINION

GREEN, Chief Justice.

This suit, filed August 7, 1961, was brought by appellant Featherlax Corporation against appellees M. H. Chandler and Sidney P . Chandler to determine and enforce rights claimed under a written contract between appellant's assignor Harold L. Stern and appellee M . H. Chandler, dated April 11, 1953. Trial before the court and jury was had on plaintiff's second amended original petition filed May 8, 1965, and defendants' first amended original answer filed October 10, 1962. From a judgment favorable to defendants, rendered after jury verdict, plaintiff has appealed to this court.

Dr. M. H. Chandler is and has been for many years a dentist, practicing that profession in Weslaco, Texas. Sidney P. Chandler, his brother, is and has been for many years an attorney at law, with his office in Corpus Christi. Harold L. Stern, assignor to Featherlax Corporation of the contract in question, is and has been during all the time here involved head of Stern Dental Laboratory Company, a corporation which constructed on prescription dental prosthesis or replacement teeth and dental appliances. He also was at all such times president of appellant Featherlax Corporation, which was organized in the early part of 1953.

The contract which is the subject matter of this suit, dated April 11, 1953, signed by Dr. M. H. Chanlder as Party of the First Part and Harold L. Stern as Party of the Second Part, states:

'THAT WHEREAS, application for letters patent of the United States have been made by Party of the First Part being patent application No. 346817 of a Teeth Protector on the 6th day of April A.D 1953, and the said Party of the First Part is the sole owner of all rights incident thereto, and,

WHEREAS, the Party of the Second Part is desirous of obtaining all rights in connection with the production, manufacturing and distributing of said Teeth Protectors.

NOW, THEREFORE, the parties have agreed as follows: * * *.'

Paragraph numbered 1 provides that in consideration of the royalties and agreements by Stern, M. H. Chandler grants unto him, his heirs and assigns, 'the sole and exclusive right, privilege and licenses universally to produce, manufacture and distribute Teeth Protectors based upon and containing the articles for which a patent application has been made by the Party of the First Part, together with all improvements and any and all other items pertaining to Dental Protection which has been or may be developed and/or invented by, through or under the patentees to the end of the term for which any letters patent are granted concerning or pertaining to Dental Protectors.'

Paragraph 2 provides that 'the Party of the Second Part shall pay to Party of the First Part, to-wit: Dr. M. H. Chandler, royalties in the amount of twenty-five (25) cents for each item sold in accordance with this agreement by the Party of the Second Part, his heirs, successors or assigns * * *.'

Paragraph 14 states that Stern 'shall be at liberty to grant sublicenses hereunder to produce, manufacture and/or sell any items contemplated herein universally. Party of the Second Part and his heirs shall have the right to assign this agreement and Party of the First Part may assign his interest herein * * *.'

Paragraph 15 provides that 'It is understood by and between the parties hereto that the Party of the Second Part contemplates transfering his rights in this agreement to a corporation, that upon said transfer and assignment being completed the corporation assignee will be deemed to be the Party of the Second Part of this agreement and all rights, privileges and liabilities of the Party of the Second Part will become the rights, privileges and liabilities of the corporation.'

Paragraph 17 reads: 'It is further understood and Party of the Second Part is hereby given an option and right of first refusal to purchase the patent rights of the Party of the First Part, in the event that the Party of the First Part desires to sell the same or any part hereof, and the price of sale, if any, shall be the same to the Party of the Second Part as any bona fide offer made to Party of the First Part by a third party.'

By written instrument dated November 15, 1953, Harold L. Stern granted and assigned to appellant Featherlax Corporation all of the rights acquired by him under the terms of the contract of April 11, 1953, between Dr. M. H. Chandler and Stern. Authority for such assignment was expressly given in paragraph 15.

In so far as the points of error raised on this appeal are concerned, plaintiff's second amended original petition, which was his trial pleading, was two-fold in nature, seeking (1) a cancellation of the contract of April 11, 1953 upon the basis of fraud in its inducement, and (2) a determination of a breach by defendants of the purchase refusal provision of the contract (paragraph 17) and an enforcement of the resulting rights of the plaintiff. Although the statement of facts contains 1357 pages, and in addition there are approximately 450 written exhibits filed in this court, much, if not most of this evidence does not concern the points we are called upon to decide, and we shall try to restrict ourselves to the testimony we consider material to the issues involved on appeal.

At the start, we are met by a motion filed in this court by appellees on May 5, 1966, within 30 days after the filing of the transcript and statement of facts, to strike all or a portion of the record. In this motion appellees call attention to the fact that the transcript is filed in two volumes, the first containing instruments filed in connection with the case as finally tried, and the second consisting of instruments concerning only a cross-action of appellees which was dismissed long prior to the trial of this cause. We agree that this second transcript is in no way material to the issues raised on this appeal, and though it is on file in this case, we have not concerned ourselves with it in considering our disposition of the appeal. Appellees' objections to certain instruments and documents contained in the first volume of the transcript are overruled; we have considered only the instruments and documents which we find to be properly pertinent to the appealed cause.

Appellees complain of the filing in this court of the statement of facts because, so they state, they had no adequate time in which to review and decide whether or not to approve same and the trial judge's approval was a qualified approval. The facts show that the trial court on March 30, 1966 signed the certificate at the end of the statement of facts evidencing an absolute and unconditional approval thereof. He thereupon delivered same to appellant's attorney, and sent a letter to the district clerk asking him to make a docket entry that he had approved the statement of facts on March 30, 1966, 'with the agreement and understanding that such signature will not lessen the time for approval by counsel for defendant as to such Statement of Facts.' Appellant's attorney on April 4th delivered the statement of facts to appellees' lawyer in Corpus Christi with the request that since April 15 was the last day to file same in the Court of Civil Appeals he approve and file same in said court not later than April 14. On April 12, appellees' counsel returned the entire statement of facts to appellant's lawyer without approving the same. On that same day it was filed in the appellate court by appellant's attorney. The record does not disclose any objections made by appellees that the statement of facts does not truly disclose what occurred in the trial court. There is no showing that the trial court's approval lessened the time for approval by counsel for defendants. The clerk of this court properly accepted such statement of facts for filing, and appellees' motion to strike is overruled. Rule 377, Texas Rules of Civil Procedure.

The evidence discloses that by the close of the year 1952 Dr. M. H . Chandler had conceived or invented a device to be worn in the mouth during contact athletic games (football, for instance) to protect the teeth, which will be designated as a Teeth Protector. Shortly prior to the execution of the contract here involved, he had applied for a patent on such device. In March, 1953 the two Chandlers went to Houston and had conferences with Stern, some of his associates, and his lawyer, Mr. Aaron Hessel, with reference to the execution of a contract such as the one which was subsequently entered into by Stern and Dr. Chandler. In these conferences, as well as in all other transactions between the parties, Sidney Chandler acted as his brother's lawyer. These discussions ultimately led to the contract between the parties of April 11, 1953 . We shall hereafter at times refer to the two Chandlers as M. H. and Sidney.

Both M. H. and Sidney testified in the trial court that prior to the discussions leading to the contract M. H. had orally assigned to Sidney a quarter interest in the invention and the royalties as attorney fees in consideration of Sidney's services as his lawyer in all legal matters in connection with the Teeth Protector. They further testified that they discussed Sidney's ownership of said quarter interest with Stern and his attorney prior to the execution of the contract. This was denied by Stern and Hessel, both of whom testified that before and at the time the contract was signed M.H. stated and represented to them that he was the sole owner of all rights in and to the Teeth Protector and the application for the patent, as in the contract he represented...