Hubert v. Apostoloff

• Decision Date: 24 September 1921
• Citation: 278 F. 673
• Parties: HUBERT et al. v. APOSTOLOFF.
• Court: U.S. District Court — Eastern District of New York

278 F. 673

HUBERT et al. v. APOSTOLOFF.

United States District Court, E.D. New York.

September 24, 1921

C Bertram Plante, of New York City (Herman Aaron, of New York City, of counsel), for plaintiffs.

Borris M. Komar, of New York City (Robert P. Levis and L. E Schlechter, both of New York City, of counsel), for defendant.

GARVIN District Judge.

Three actions have been tried together by consent-- a suit in equity to rescind two contracts made by one of the plaintiffs, Conrad Hubert (hereinafter referred to as the plaintiff) with defendant, dated June 23, 1919, and September 8, 1919, and to compel defendant to deliver to plaintiffs certain stocks and securities received by him pursuant to said contracts; plaintiffs claiming that the contracts were made as a result of fraudulent misrepresentations by defendant. When the action was brought, defendant's wife was made a codefendant, but at the close of plaintiff's case, she was eliminated by consent.

The other two actions are brought by the defendant in the foregoing action against each of the plaintiff companies respectively, to compel the issuance to him of certain specified shares of stock in each of said companies, which were organized pursuant to said contracts to finance develop, and market defendant's alleged invention.

This matter first came before the court on a motion by plaintiffs for an injunction pendente lite restraining the defendants from transferring any of the stocks and securities received pursuant to the contracts above mentioned. When that application came on for hearing, both sides filed voluminous affidavits. The court decided that plaintiffs should have the relief sought, and set forth its conclusions somewhat at length, after a review of the facts. After hearing the testimony the court is satisfied that the plaintiffs have established the material allegations of the bill of complaint, not merely by a fair preponderance of evidence, but by clear and convincing proof.

In the fall of 1918 defendant made a contract with the Interstate Electric Novelty Company, granting the latter a license which he had obtained from the United States government to manufacture samples of battery cells, after representations to that company by defendant that he had invented a cell that would last for all time. The negotiations leading up to the execution of this contract were conducted, to a great extent, by Block, the vice president of the Novelty Company, who, in May, 1919, introduced the plaintiff Hubert to the defendant. Then followed a series of representations by defendant to plaintiff-- that defendant had invented a new method of construction of a battery for flash lights, applicable to small as well as large cells, by which the elements necessary to generate electricity were kept apart until the battery was to be used, when they would be pushed together; that the life of the battery would be unlimited; that the electrolite, a necessary part of the battery, would not dry up, but would remain soft; that this condition of the electrolite would be brought about by adding thereto agar-agar, by which, not only would the electrolite be kept moist and pliable, but the zinc cup in which it was contained would be unaffected (ordinarily zinc is injured by electrolite); that he had been making these batteries for several years, having some perfect specimens more than two years old, and that he had manufactured more than 5,000 of them for the Interstate Novelty Company.

In view of the fact that the life of a flash light battery is at most but a few months, it is manifest that such an invention would revolutionize the industry. Plaintiff's interest was at once aroused, and he finally made the contracts with defendant which he seeks to have set aside, claiming that they were procured by the misrepresentations aforesaid. The defendant denied that he made these statements, but they have been clearly proved in whole or in part:

(1) By the testimony of plaintiff and other witnesses, some of whom are disinterested.

(2) By the application for latter's patent, which defendant admitted he gave to plaintiff, and which he admitted that plaintiff read, which application contained these claims:

'A further object of my invention is to provide a new electrolytic mix of a semi-solid nature that will retain its form when moulded, pressed or otherwise formed into a desired shape or mass until forcibly disturbed therefrom; that will retain its semi-solid nature for an indefinite period of time until required for use, and that at the same time will possess a sufficient degree of fluidity to yield and flow freely upon force or pressure being applied to it.'

'My electrolytic mix 18 is placed in the bottom of the outer container 12. I form this mix in a semi-liquid state of materials, which include elements which are by nature non-drying, so that the mix will remain in whatever shape it is molded, pressed, or otherwise formed into, and at the same time possess a sufficient degree of fluidity to yield and flow freely upon sufficient force or pressure being applied to or upon it.'

'I prepare this mix from the usual salts at present in general use, which I dissolve in water and

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