Israel Kinsman and Calvin Goddard, Appellants v. Stephen Parkhurst
| Decision Date | 01 December 1855 |
| Citation | 18 How. 289,59 U.S. 289,15 L.Ed. 385 |
| Parties | ISRAEL KINSMAN AND CALVIN L. GODDARD, APPELLANTS, v. STEPHEN R. PARKHURST |
| Court | U.S. Supreme Court |
THIS was an appeal from the circuit court of the United States for the southern district of New York.
The facts are stated in the opinion of the court.
It was argued by Mr. Keller, for the appellants, and Mr. Gifford, for the appellee.
Mr. Keller made ten points.
The first three assailed the validity of Parkhurst's patent. The others raised the following questions:——
4. Whether the agreement, preventing one of the parties from making the article and both from selling it under a certain price, was not void as being in restraint of trade and against public policy, if either or both of the parties knew that the patent was not valid.
The 5th, 6th, and 7th related to the responsibility of Goddard.
The 8th. Whether Kinsman and Goddard were responsible for bad debts, provided they were prevented from receiving the money by the interference of Parkhurst.
The 9th again attacked the patent.
The 10th. Whether Kinsman and Goddard were responsible, if the machines which they made did not, in law or fact, infringe the letters-patent.
Mr. Gifford made eleven points.
The first related to the propriety of entertaining the appeal at all.
The 2d, 3d, and 4th. That the agreements between the parties fixed their relation and prescribed their rights and obligations.
5. That Kinsman was estopped from denying the validity of the patent.
6. That Goddard, having come in under the agreement, was in the same situation as Kinsman.
7. That the machines made by Kinsman and Goddard were covered by the patent.
8. That Kinsman had made enough to reimburse himself and fraudulently refused to account for the surplus.
9. That Parkhurst was the inventor of the thing patented.
10. That he never obtained a single feature of his invention from any other person.
11. That he had always acted fairly.
This is an appeal from a decree of the circuit court of the United States for the southern district of New York, in a suit in equity brought by the appellee, Parkhurst, against the appellants. The bill states, and the proofs show, that Parkhurst, being the owner of letters-patent for improvements in the machine for ginning cotton and wool, on the 22d of May, 1845 entered into a written agreement with Kinsman, the substance of which was, that Parkhurst was to be the owner of two thirds, and Kinsman of one third, of the letters-patent; that the business of manufacturing and selling the patented machines should be carried on by the parties on their joint account, in the proportions of two thirds and one third, Kinsman giving his personal attention to the business, and advancing a sum not exceeding one thousand dollars for the purchase of machinery, stock, &c., for which advance he was to be reapid out of the first profits of the business. Kinsman was to pay Parkhurst two thousand dollars in cash, and give his note for one thousand dollars, payable in sixty days. Under this agreement, the manufacture and sales of the machines were begun and carried on until the 9th day of February, 1846, at which time the parties entered into a new agreement, the substantial part of which was as follows:——
'Whereas the party of the first part has advanced moneys, and become responsible for various sums of money which have been expended in getting up machinery, and tools, and stock, &c., for the manufacture of burning and carding machines, which were invented by the said Parkhurst; one third part of which he sold and assigned to the party of the first part: Now, therefore, the party of the first part, in consideration of one dollar in hand paid by the party of the second part, the receipt whereof is hereby acknowledged, hereby covenants and agrees, that, as soon as the profits which have accrued, and which may hereafter arise, from the manufacture and sale of the said machines, so invented by the party of the second part, and so made and sold by the party of the first part, shall be sufficient to pay all legal demands for the purchase of machinery, tools, &c., &c., and other expenses incurred by said party of the first part, then he, the said party of the first part, shall and will discontinue the manufacture and sale of said machines, invented as aforesaid, and that all machines which he shall manufacture and sell after this date should not be sold for a less profit than one hundred dollars each, and that he will be accountable for one hundred dollars profit on each and every machine made and sold from this day, unless he has the written consent of the party of the second part to sell at a less price.'
'The party of the second part, in consideration of one dollar to him in hand paid by the party of the first part, the receipt whereof is hereby acknowledged, and also in consideration of the agreements aforesaid, hereby covenants and agrees with the party of the first part, that he will go on and manufacture the machines aforesaid as soon as the party of the first part discontinues the same, and that he will not sell any macnine for a less profit than one hundred dollars, without the written consent of the party of the first part, and that he will pay over to the party of the first part one third part and share of the said profits upon all machines which he makes and sells hereafter, and that, for any machines which he may manufacture, or have manufactured, before the discontinuing of the building of the same by the party of the first part, shall be subject to the same restrictions of selling for at least one hundred dollars profit on each machine, one third of which shall be paid to the party of the first part.'
The original and supplemental bills aver, that under this agreement Kinsman prosecuted the business, and not only reimbursed himself for the cost of the machinery, tools, &c., and all his other advances, but, in violation of his agreement, continued the manufacture and sale of the machines, so as to receive large profits, of which it prays an account, and also an injunction to restrain the further making or vending of the machines in violation of...
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