Kenyon v. Automatic Instrument Co., Civil Action No. 509.

• Decision Date: 10 November 1945
• Docket Number: Civil Action No. 509.
• Citation: 63 F. Supp. 591
• Parties: KENYON v. AUTOMATIC INSTRUMENT CO.
• Court: U.S. District Court — Western District of Michigan

63 F. Supp. 591

KENYON v. AUTOMATIC INSTRUMENT CO.

Civil Action No. 509.

District Court, W. D. Michigan, S. D.

November 10, 1945.

Oltsch & Knoblock and Hammerschmidt & Johnson, all of South Bend, Ind., and Bidwell & Schmidt, of Grand Rapids, Mich., for plaintiff.

Clarence J. Loftus and Fred W. Potter, Jr., both of Chicago, Ill., and Uhl, Bryant, Snow & Slawson, of Grand Rapids, Mich., for defendant.

RAYMOND, District Judge.

This case is before the court upon motion by defendant for judgment upon the pleadings. On oral argument, it was agreed that this should be treated as a motion to dismiss, and that the record for the purposes of the motion should consist of the complaint; the bill of particulars; the agreement dated December 7, 1925, a copy of which is attached to the bill of complaint; a supplemental order, dated December 20, 1932, confirming sale by the receiver in consolidated cause No. 2413, entitled Sligh Furniture Company, Plaintiff, v. Automatic Musical Instrument Company, Defendant, a Delaware Corporation, to Automatic Musical Instrument Company, a Michigan corporation; an order, dated February 2, 1933, authorizing the receiver of the Delaware corporation to execute an assignment of patents; and an assignment from said receiver to the Automatic Musical Instrument Company, a Michigan corporation, defendant herein.

Upon the oral argument, it was stipulated that the court take judicial notice of the records in the receivership proceedings, and of later proceedings in this court under Chapter X of the Bankruptcy Act, 11 U.S. C.A. § 501 et seq. in which defendant herein was petitioner.

In the instant suit, plaintiff, as executrix under the last will and testament of Bertram C. Kenyon, deceased, seeks to recover royalties under the contract of December 7, 1925, between Bertram C. Kenyon and the Delaware corporation.

The issue presented is whether defendant is obligated to pay the royalties provided for in said contract, by reason of its acquisition by assignment from the receiver of the Delaware corporation, of the invention and patent upon a multiple disc phonograph of which Bertram C. Kenyon is alleged to be the inventor.

Paragraph 3 of the agreement of December 7, 1925, reads:

"Said second party represents that he is the inventor of the said multiple disc phonograph above referred to and represents that he will attempt, or the said first party may in his name attempt to cover the mechanism and operation and the functioning of said phonograph as hereinbefore noted, by proper letters patent to be issued as soon as may be by the United States of America. In the event that said patents are obtained by either said first or second party the title thereto and all interest therein shall be the property of and belong to said first party, and the said second party does hereby give and grant, sell and assign unto said first party the exclusive right to make, manufacture, market, vend, and operate the said phonograph, under his present rights and under future letters patent, according to the terms hereof, in any manner which it may desire to do, and covenants to and with the said first party that performing its obligation under this contract it shall have, hold, and enjoy all the rights, benefits, titles, and returns of and from said invention, and that he will when so requested by said first party, duly and properly sign, seal, execute and deliver unto said first party proper assignments and any rights which may hereafter accrue under and by virtue of said invention."

Paragraph 4 of said agreement reads:

"In consideration of the foregoing assignments and licenses, the said first party agrees that for each of said machines manufactured by it, it will on or before the tenth day of the month succeeding the completion of such machine, pay to the order of the said second party, in good and lawful money of the United States of America, the sum of five dollars ($5.00). The terms, agreements, and covenants in this contract contained are made contingent upon the assurance of the said second party that his invention and the application for patents thereon may not be attacked before any court, commission, department, or bureau for infringement of other patents, and should such difficulties or litigation arise, then the terms of this contract shall be, from that moment, null and void, unless the said second party shall be vindicated in such action."

Paragraph 6 of the complaint recites the assignment to the Michigan corporation of all...