Kulesza v. Blair, 5106.

• Decision Date: 22 May 1934
• Docket Number: No. 5106.,5106.
• Citation: 70 F.2d 505
• Parties: KULESZA et al. v. BLAIR et al.
• Court: U.S. Court of Appeals — Seventh Circuit

70 F.2d 505 (1934)

KULESZA et al. v. BLAIR et al.

No. 5106.

Circuit Court of Appeals, Seventh Circuit.

April 17, 1934.

Rehearing Denied May 22, 1934.

Jacob G. Grossberg and Harry H. Hitzeman, both of Chicago, Ill., for appellants.

James M. Sheean and Weymouth Kirkland, both of Chicago, Ill., for appellees.

Before ALSCHULER, SPARKS, and FITZHENRY, Circuit Judges.

SPARKS, Circuit Judge.

Appellants filed a bill in equity in behalf of themselves and of 2,000 creditors of one Elbert R. Robinson. Robinson was an inventor who died in 1925. He had secured a series of patents on his inventions, including No. 886,541, issued in 1908, for the infringement of which appellants instituted this suit in October, 1929, against the receivers of the Chicago Railways Company, who were appointed in 1926. Appellants claimed that the right to bring the action in their own names arose out of the fact that Robinson had created a mortgage on all his patents in favor of all those persons who furnished the money needed by him to patent his inventions and to carry on the litigation started by him to protect his patent rights. Two notes, alleged to be specimens of a series of several thousand aggregating a total amount of $85,000,000 held by the 2,000 creditors represented by appellants, were introduced in evidence. One of them is as follows:

$12525.00 Chicago May 14, 1919

"When Suit end after date I promise to pay to the order of Joseph M. Wosik Twelve Thousand Five hundred and Twenty five Dollars When suit end in the U. S. Supreme Court Case 26618 against The American Car and Foundry Company for value received

"E. R. Robinson "No. 594286 Due When suit end."

The payee of this note testified that he actually paid $25 for it, and there was testimony that other notes for thousands of dollars were given to persons who paid $25 or $50 for them. Appellants' claim to a mortgage was based on the fact that Robinson stated many times in meetings of the noteholders that those notes constituted a first mortgage on all his patents. The District Court rightly held that such evidence did not establish the existence of a mortgage, and that the appellants therefore had no right to bring the action for the infringement of the patent.

After the District Court announced its decision in favor of appellees, appellants presented a motion for rehearing or an additional hearing on the ground of newly discovered evidence. This evidence consisted of an assignment as follows (our italics):

"Whereas I, Elbert R. Robinson, city of Chicago, County of Cook, State of Illinois, did obtain letters patent of the United States for an improvement in molding, as well as other patents, which letters patent are numbered 594-286, as well as other patents granted to me on different dates and times; and,

"Whereas, it became as was necessary for me to obtain a large sum of money to be used in the prosecuting of certain lawsuits for infringements of the said patents granted to me as aforesaid, and certain people have loaned to me various sums of money to be used to prosecute the said lawsuits as aforesaid, hereinafter designated as Creditors, and have received my promissory note as evidence of indebtedness against the said patent, due and payable when the suit ends; and,

"Whereas, I am desirous of giving the people furnishing the money further security for the money advanced and to be advanced to me, as above set forth, and feeling that it is my duty to do so;

"Now, therefore, to all whom it may concern, be it known that for and in consideration of the sum of moneys advanced and to be advance to me in the future for the prosecution of the lawsuits and for the purpose of defending lawsuits, to me in hand paid, the exact amounts being unknown to me, but the notes amounting to several thousands of dollars, the receipt of which is hereby acknowledged, I, Elbert R. Robinson, inventor, have sold, assigned and transferred, and by these presents do sell, assign and transfer, unto the said Creditors or noteholders the undivided one-half part of the whole right, title and interest in and to the said invention, and in and to the letters patent therefore aforesaid; the said undivided one-half part to be held and enjoyed by the said Creditors or Note-Holders for their own use and behoof, and for the use...