Lámar v. Granger
| Citation | 99 F. Supp. 17 |
| Decision Date | 03 July 1951 |
| Docket Number | Civ. No. 7726. |
| Parties | LAMAR v. GRANGER. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
William Wallace Booth, Charles L. Albright, Jr., and Harry R. Birmingham (of Reed, Smith, Shaw & McClay), Pittsburgh, Pa., for plaintiff.
Edward C. Boyle, U. S. Atty., Pittsburgh, Pa., Maurice P. Wolk and Andrew D. Sharpe, Sp. Assts. to Atty. Gen., for defendant.
To simplify references which must be made to various parties, the following abbreviations will be used throughout this Opinion:
H. H. Lamar — Taxpayer
Stanley Granger, Collector of
Internal Revenue — Collector
Kerotest Manufacturing
Company — Kerotest
Henry Valve Company — Henry
W. J. Schoenberger Company — Schoenberger
United States of America — United States
Action is brought by Taxpayer for refund of alleged overpayment of income taxes for the years 1944, 1945 and 1946 in the principal amount of $27,687.57.
Counsel for the party litigants have been most vigorous, searching and thorough in the trial of this proceeding, and have presented most learned arguments and carefully annotated briefs in support of their respective positions.
Taxpayer is an individual residing at 2504 Hollywood Drive, Wilkinsburg, Pennsylvania. Collector is and has been the duly qualified Collector of Internal Revenue for the 23rd Collection District of Pennsylvania.
Taxpayer kept his books and filed his income tax returns on the calendar year cash basis of accounting. He timely filed his income tax returns for the years 1944, 1945 and 1946, and paid the taxes reported in these returns to Collector.
On October 2, 1947, taxpayer duly filed claims for refund of a portion of the amounts so paid. No action had been taken on these claims.
From 1930 to 1938, Taxpayer was employed as a designing engineer on a salary basis by Kerotest. Thereafter, he was similarly employed by Superior Valve & Fitting Company and by Henry until April 1, 1942.
While working for Kerotest, Taxpayer invented a number of improvements for valves. These were developed on company time, with company facilities, and as an incident to his duties as a designing engineer for Kerotest. Applications for patents on five of these inventions were filed by Taxpayer and coincident with the filing of the applications, he unconditionally assigned to Kerotest his complete interest in the inventions.
Also during the time that he was employed by Kerotest, Taxpayer began working in his spare time on another valve improvement. A completed sketch of this invention was made on April 22, 1938 and an application for a patent was filed on November 8, 1938.
Taxpayer was issued Patent No. 2,217,842, October 15, 1940, and Letters Patent of the Dominion of Canada, No. 405,411, June 16, 1942.
It is this invention and the resulting patent that give rise to the present controversy.
The patent and invention provide:
In addition to the general expressions set forth in the patent and its relation to high pressure valves, it is claimed the invention can be applied in sixteen different sets of circumstances.
Reduced to simple phraseology, the sixteen claims in the invention have four uses in the industrial or scientific field of mechanics:
(a) Refrigeration
(b) High pressure fluid containers
(c) Airplanes or aviation fields
(d) General application or usages
Various agreements were entered into by Taxpayer with Henry and Schoenberger. Each standing alone is somewhat confusing, and to ascertain the intention of the parties relative to said patent, all the instruments, each referring to the other, must be construed together.
On December 9, 1939, Taxpayer and Henry entered into an agreement wherein Taxpayer granted to Henry an exclusive license to manufacture, use, and sell valves embodying the Taxpayer's invention for a stipulated royalty of 5% of the net selling price of the valves, with guaranteed minimum royalties of $1,500 per year.1
On August 6, 1942 and January 15, 1943, contracts supplementing the December 9, 1939 indenture were entered into between the parties.
Under the August 6, 1942 supplement, Henry gave Taxpayer "the right to license others to make, use and sell and have made" valves embodying the patent: (1) for so-called high-pressure uses, not including, however, the right to make line valves, which is a shut-off valve; and (2) for use in aircraft. Under other provisions of the agreement Henry also reserved for itself a non-exclusive license to use the patent in making valves for high-pressure and aircraft uses after January 1, 1947, or sooner under certain conditions.2
The supplement of January 15, 1943, while substantially duplicating the August 6, 1942 contract, made two important changes: Henry relinquished its previously reserved non-exclusive license to make valves for high pressure and aircraft uses; and Taxpayer agreed to pay Henry Valve Company $1,000 within sixty days after he granted exclusive licenses to others to use the patent.
The sections of the supplement of January 15, 1943 which differ from the supplement of August 6, 1942 are set forth in footnote three.3
The first and second supplemental agreements between Taxpayer and Henry provided that any license of Taxpayer which related to the high-pressure or aviation field would be subject to the right of Henry to an indivisible, non-exclusive and non-assignable license from the licensee or assignee of Taxpayer in the fields of such a license grant to become effective as of January 1, 1947, and at the same royalty rate as such license grant from Taxpayer to the new licensee.
Subsequently, Taxpayer entered into an agreement with Schoenberger wherein Taxpayer granted to Schoenberger a non-assignable, exclusive license under the aforesaid patent to make, use and sell, and have made valve containers for certain high-pressure fluids, but not including line valves of the same general type being made by Henry and for equipment and mechanisms for incorporation in airplanes of all kinds and airships which are lighter than air. The original agreement and two supplemental agreements between Taxpayer and Henry were incorporated and made a part of said agreement.4
It appears that Henry was of the belief that the reservation of the rights in these two fields was not set forth with sufficient clarity in the supplemental agreements between Henry and Taxpayer.
Therefore, after Taxpayer licensed Schoenberger, Henry requested Schoenberger to unequivocally set forth said rights by written agreement in the high-pressure aviation fields.
Said request resulted in an agreement of April 20, 1943 between Schoenberger and Henry, which granted to Henry a non-exclusive, indivisible and non-assignable license under the Letters Patent in the high-pressure field after January 1, 1947.5
I do not believe this Agreement was necessary since Henry already had a joint right of use in said fields with Taxpayer or his assignee.
The request further resulted in an agreement of June 10, 1943 between Schoen berger and Henry which granted to Henry a non-exclusive, indivisible, non-assignable license under the Letters Patent in equipment and mechanisms for incorporation in airplanes of all kinds and airships which are lighter than air.6
The agreements were found confusing and complicated and oral testimony became necessary to understand the purposes of the patent.
The inquiry which the Court conducted or permitted in this matter did in no way seek to secure evidence to alter, modify, abrogate, or change the agreements.
Since the original patent was applicable to sixteen different technical circumstances, which, in turn, were subject to four generalized uses, and since the various agreements stemmed from the terminology of the original patent, this Court found it imperative to request testimony to simplify and clarify those terms used in patent parlance but not understandable to the layman.
Once the terminology was defined and made clear, the agreements spoke for themselves and the issue resolved itself into the application of the agreements to the law.
Where the language of a contract is plain and unambiguous, the court will not resort to construction but will enforce the contract according to its terms. New York Life Ins. Co. v. Jackson, 304 U.S. 261, 58 S.Ct. 871, 82 L.Ed. 1329; Great Lakes Towing Co. v....
To continue reading
Request your trial
-
De Lage Landen Financial Serv. Inc. v. Floors
...render a contract provision ambiguous. Id. (citing Halpin v. LaSalle Univ., 432 Pa.Super. 476, 639 A.2d 37 (1994); Lamar v. Granger, 99 F.Supp. 17 (W.D.Pa.1951)). Under Pennsylvania law, “when the words are clear and unambiguous the intent is to be discovered only from the express language ......
-
Kueneman v. Comm'r of Internal Revenue
...153, 162 (1948); Myers v. Commissioner, 6 T.C. 258, 266 (1946); Avery v. Commissioner, 47 B.T.A. 538, 541—542 (1942); Lamar v. Granger, 99 F.Supp. 17, 41—42 (W.D.Pa. 1951). Sec. 1235 did away with this requirement so that professional inventors became eligible to receive capital gains upon ......
-
Crook v. United States
...234, 236; Green v. Le Clair, 7 Cir., 1928, 24 F.2d 74; Pike v. United States, D.C.D. Conn.1951, 101 F.Supp. 100, 101; Lamar v. Granger, D.C.W.D.Pa.1951, 99 F.Supp. 17, 36; General Spring Corp., 12 CCH TCM 847 (1953); Kronner v. United States, supra, 110 F.Supp. at page 734; Kimble Glass Co.......
-
Taylor v. Commissioner
...S. Rouverol, supra, 42 T. C. 186, 194; Roy J. Champayne, supra, 26 T. C. 634, 638, 640; Lamar v. Granger 51-2 USTC ¶ 9386, 99 F. Supp. 17, 38 (W. D. Pa.). The Commissioner also contends that Broads was not given the right to use the patented invention and that petitioner's retention of such......