Laver v. Dennett

• Court: U.S. Supreme Court
• Writing for the Court: MATTHEWS
• Citation: Laver v. Dennett, 109 U.S. 90, 3 S.Ct. 73, 27 L.Ed. 867 (1883)
• Decision Date: 29 October 1883
• Parties: LAVER v. DENNETT and others

109 U.S. 90

3 S.Ct. 73

27 L.Ed. 867

LAVER v. DENNETT and others.

October 29, 1883.

John F. Swift, for appellant.

R. E. Houghton and Frank W. Hackett, for appellees.

MATTHEWS, J.

This appeal is from a decree dismissing the complainant's bill, and the record discloses the following as the facts material to the determination of the controversy:

The appellees, in 1870, being British subjects, were owners of letters patent of the United States bearing date January 4, 1870, granted to one Dennett, for the term of 17 years from August 13, 1863, for an improvement in the construction of concrete arches for building. On November 2, 1870, they entered into a written contract with the appellant, an architect, then residing in Albany, New York, but at the time of filing this bill a citizen of California. By this contract the appellees granted to the appellant, his executors, administrators, and assigns, during the residue of the unexpired term of the letters patent, 'full and free liberty, license, and authority to make, use, and sell, or vend to others to be sold,' the said invention within the divisions of the United States, as thereinafter specified, or one or more of them, in the manner and according to the provisions and agreements thereinafter contained, and upon the payment of the sums of money as therein provided, and not otherwise. For the purposes of the license the territory of the United States was divided into four districts, named, A, B, C, and D, respectively, and a royalty of 10 shillings sterling per square of 100 square feet was to be paid for all work actually done under the patent, and which, from certain specified dates, it was agreed should amount to an annual minimum sum of 500, and not to be payable in excess of an annual maximum sum of 1,000 in each of such divisions. It was also stipulated that the appellant might surrender the license at any time upon giving six months' notice, and that the appellees might revoke it upon any default of the appellant after 30 days' notice. It appears that this contract was entered into after many conversations between the parties, and after a draft agreement had been prepared, and submitted to the appellant for examination. Upon his suggestion it was amended and finally executed.

Various unsuccessful efforts appear to have been made by the appellant while at Albany, and after his removal to San Francisco, and also by one Fuller, who acted as his agent at Albany, to introduce the patent; and some correspondence took place between the parties in regard to its progress and prospects. This correspondence, as well as the negotiations which led to the execution of the contract, was conducted on the part of the appellees by Frederick Ingle; and it was to him that the following letter was addressed by the appellant:

'SAN FRANCISCO, April 26, 1873.

'Frederick Ingle, Esq., 5 Whitehall, London, England:

'DEAR SIR: It now turns out, just as Mr. Fuller and myself are about to close negotiations for the sale of your patent-right, that I have no power to sell. Will you, therefore, send me the proper papers from your firm, stating that you will not grant licenses to any one else in the United States? I inclose you an eminent legal opinion thereon. Mr. Fuller had arranged for the sale of Massachusetts, which includes Boston; but we wait for your proper authority, which must be exclusive, or no value can be attached to the license I hold. Of course I am aware of the understanding which I have stated your firm would not go back on, but then the parties purchasing hold that it is not exclusive. In like manner I am unable to close with parties here for section D. I have had so much trouble with this matter, and now that it appeared to be in a good way to be productive of profit, this annoyance arose. You can, however, remedy it in the way prescribed.

'Yours, very truly,

AUGUSTUS LAVER.

'P. S. Send the papers to Mr. Fuller, at Albany, and then he will send me duplicates.

A. L.'

This letter seems to have been received by Ingle, and in reply he sent by cable the following:

'MAY 6, 1873.

'Fuller, Architect, Albany, New York:

'Dennett will alter agreement, giving Laver exclusive right.

'ROBERT DENNETT & CO.'

Fuller had evidently written a letter to Ingle, to the same effect, about the same time, for, although it is not contained contained in the record, Ingle's reply to it, written the day he sent the cable message, was produced and read in evidence. In this letter, dated May 5, 1873, he says, referring to the objection to the terms of the license, that 'there is no objection on our part to alter it in any way to suit the requirements of the case.' He adds: 'You will bear in mind that this lease was granted to Mr. Laver to pay as an annual royalty. If it had been proposed then to purchase out and out, I dare say the terms to the exclusive right would have been more precise; at any rate, our intention was for Mr. Laver to have the exclusive right, (in all our negotiations,) and when the document was signed we looked upon it as so settled, unless he elected to throw it up before certain dates for the respective sections as specified in the agreement. He had the document to examine before signing it, and could have made the objection then. At any rate you will, I think, give us credit for having faithfully carried out both the letter and spirit of the agreement. We have had many applications from parties for permission to work the patent in the United States since October, 1870, the date of our agreement, but have had to reply in each case that our arrangements as to licensing were made. * * * I shall write to our solicitor, Mr. Van Santvoord & Hauff, of Times Building, Park Row, New York, and instruct him to get whatever you require with regard to the specification. I don't know in what respect it is incomplete. The agreement can be altered to give any parties who propose to purchase the most absolute rights, on payment of the purchase money of section B.' He then proceeds, in answer he says to a request to that effect, to give the prices for each division, upon an out and out purchase of a gross sum; and referring to Laver's statement that Fuller was on the point of completing the negotiations for division B, he says: 'To faciliate completion of the matter, had you not better write to or see Mr. Van Santvoord, whom we will instruct to give you as much assistance as he can. We could not, of course, undertake any litigation in respect of infringements, after we had disposed of our rights for a fixed sum.' He says, further: 'Our wishes have always been to give him exclusive rights, and I thought that the agreement expressed as much before you raised the question. At any rate we are willing to alter it to faciliate your negotiations. The question is, how is it to be done? One plan is for us to send power of attorney out to Mr. Van Santvoord, and tell him to alter the agreement and sign for us. Another, and I think a preferable plan, is to write to him to prepare two fresh copies of agreement,...