Lowry v. Cowles Electric Smelting & Aluminum Co.

• Decision Date: 13 May 1893
• Citation: 56 F. 488
• Parties: LOWRY v. COWLES ELECTRIC SMELTING & ALUMINUM CO. et al.
• Court: U.S. District Court — Northern District of Ohio

56 F. 488

LOWRY v. COWLES ELECTRIC SMELTING & ALUMINUM CO. et al.

United States Circuit Court, N.D. Ohio, Eastern Division.

May 13, 1893

Statement by TAFT, Circuit Judge:

This cause came on for hearing on the second amended plea to the bill. The bill averred that the complainant, Grosvenor P Lowry, was a citizen and resident of the state of New York and that the Cowles Electric Smelting & Aluminum Company was a corporation under the laws of the state of Ohio, and that Osborn, the codefendant, was also a citizen of Ohio, both residing in the northern district of this state. The bill alleged that Charles S. Bradley was the first and true inventor of certain new and useful improvements in electric metallurgical processes; that upon the 23d day of February 1883, he filed his application in the patent office, and that such proceedings were had that on the 8th day of December 1891, there was issued to him, upon a division of said application, patent No. 464,933, for the process of obtaining metals from their ores or compounds by electrolysis, and also another patent, upon the main division of his application numbered 468,148 for the process of separating aluminum from its compounds; that in February, 1892, said Charles S. Bradley duly assigned these patents to the complainant; that the assignments are duly recorded in the records in the patent office.

The bill further averred that prior to March 14, 1885, Francis B. Crocker and Charles S. Bradley were inventors of certain improvements relating to electric smelting processes and furnaces, and that at that date they filed an application for a patent, numbered 158,805, and that while the application was pending an interference was found to exist, by the commissioner of patents, between it and the application previously filed by Eugene H. Cowles and Alfred H. Cowles, associated as the Cowles Electric Smelting & Aluminum Company; that thereupon negotiations were entered into by the defendant the Cowles Electric Smelting & Aluminum Company and said Crocker and Bradley for the purchase of their said invention, which resulted in the execution of an agreement dated May 18, 1885, by which said Crocker and Bradley sold the Cowles Company the invention disclosed and covered by their application; that this agreement was recorded in the United States patent office June 2, 1885; that thereafter letters patent were issued, No. 335,499, to said Crocker and Bradley, as assignors of said Cowles Company, for the process of heating and reducing ores by electricity.

The bill then charged that the defendant the Cowles Company, for the purpose of depriving the complainant of the full enjoyment of the patents Nos. 464,933 and 468,148, transferred to him by Bradley as aforesaid, pretended to execute an instrument in writing transferring these patents to defendant Osborn, and containing a recital that the Cowles Company had become the owner of said patents by virtue of the agreement between the Cowles Company and Crocker and Bradley of May 18, 1885; that the conveyance to Osborn was in trust to be reconveyed to the company, or to such parties as the company should designate, on demand. The bill charged that this assignment was a fraudulent instrument, that no consideration was paid for it, and that the sole object was to create a cloud upon the complainant's title. Then followed this averment: 'That while the language in said agreement between said Crocker and Bradley and said the Cowles Electric Smelting & Aluminum Company is broad enough in its terms to cover other inventions of said Crocker and Bradley than that embraced in said application No. 158,805, it was not intended to, and did not in fact, embrace any other inventions; that the occasion of making said contract was the existence of said interference between said application and the application of said Eugene H. and Alfred H. Cowles; that said Crocker and Bradley never made any invention, or filed any application, which interfered with any application of the said Eugene H. and Alfred H. Cowles, except the one last aforesaid; that the application of said Charles S. Bradley, No. 85,957, upon which said patents 464,933 and 468,148 were issued, was never in interference with any application of said Eugene H. and Alfred H. Cowles, and was not, by any act, understanding, or contract of the parties, included in said agreement of May 18, 1885, all of which was well known to said defendants at the time when they executed, and placed upon the record of the patent office the said false and fraudulent instrument of writing aforesaid.'

The bill further averred that the two patents belonging to the complainant were of the value of $5,000 and upwards; that the invention they disclosed was an important step in the art of reducing aluminum from its ores, in which art there was a recent and extended activity; that the existence upon the record of the patent office of the said false and fraudulent pretended assignment of said patents operated as a cloud upon complainant's title, and greatly impaired the value of the patents in his hands, and made them wholly unsalable by him. Wherefore he prayed that the assignment of the two patents by the Cowles Company to Osborn be set aside, declared fraudulent, null, and void, and that the defendants be required by the court to enter upon the record of the patent office a cancellation of the same.

The defendants, the Cowles Company and Osborn, filed a joint and several plea, and fortified the same by an answer denying fraud or conspiracy or combination. An amended plea was subsequently filed, and then a second amended plea, which presented the question for hearing. The plea averred that prior to and on April 8, 1885, the defendant the Cowles Company, being then engaged in the business of reducing ores by electricity, by means of electric smelting processes or furnaces, and having then pending in the patent office applications for certain letters patent made and filed by Eugene H. and Alfred H. Cowles, was informed that Charles S. Bradley had made certain improvements relating to electric furnaces, and the reduction of ores by electricity; that Francis B. Crocker was his solicitor or attorney for the purpose of procuring patents for the said invention; that accordingly the Cowles Company, by its agent, Colgate Hoyt, purchased and obtained an option for the purchase of the said inventions, of which a copy was filed as an exhibit with the plea. This was as follows:

'New York, April 8, 1885.

'By and between Charles S. Bradley and Colgate Hoyt, both of Yonkers, in the state of New York, it is agreed as follows: Said Bradley shall, upon demand of said Hoyt, made at any time within 90 days from the date hereof, assign to said Hoyt, or his order, for the consideration of ten thousand dollars cash, an undivided 1/4 interest in all inventions which he had hitherto made in electric furnaces, and in the reduction of ores by electricity, and of all patents to be granted therefor, whether applications for such patents have already been filed, or shall herafter be filed, in the patent office of the United States; and, in consideration of the option being granted, said Hoyt, or the party to whom he may have assigned the same, shall pay to said Bradley, at the date hereof, the sum of five hundred dollars.

'Charles S. Bradley.

'New York, April 8, 1885.

C. S. Bradley.'

'Received of Colgate Hoyt five hundred dollars.

The plea further averred that afterwards, on May 8, 1885, the Cowles Company, believing that the price named in the option was too large, but still being desirous of preventing any interference with its business, and having no definite knowledge of the exact inventions of said Bradley, but being informed that said Crocker was connected therewith, either as attorney, part owner, or otherwise, but not knowing the exact capacity, and with no knowledge of the number or character of their applications for patents, obtained from Bradley and Crocker, by a certain assignment in writing, all their interests, joint and several, in all their discoveries and inventions relating to said electric processes and furnaces. The agreement was as follows:

'This agreement entered into this 8th day of May, 1885, between F. B. Crocker, of New York city, N. Y., and C. S. Bradley, of Yonkers, N. Y., constituting the first party, and the Cowles Electric Smelting and Aluminum Company, of Cleveland, Ohio, a corporation organized under the laws of the state of Ohio, constituting the second party, witnesseth, that, whereas, the first party have made certain discoveries and inventions relating to electric smelting processes and furnances, and have made some applications for patents therefor in the United States patent office, and, whereas, said party is desirous of becoming the owner of all such discoveries and inventions, it is therefore agreed between the parties as follows: I. For the consideration hereinafter mentioned, the receipt of which, to our full satisfaction, is hereby acknowledged, the said party does hereby sell, assign, and set over to the said second party all interest in any and all discoveries and inventions relating to electric smelting processes and furnaces, and all patents they have obtained therefor, and all applications now pending, and caveats on

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