McGuire v. Hutchison

• Decision Date: 21 April 1947
• Docket Number: 39932
• Citation: 201 S.W.2d 322,356 Mo. 203
• Parties: John S. McGuire, Appellant, v. Frank C. Hutchison; C. Earl Hovey, Trustee; C. Earl Hovey; and the Fairfax Engineering Company, Inc
• Court: Missouri Supreme Court

201 S.W.2d 322

356 Mo. 203

John S. McGuire, Appellant, v. Frank C. Hutchison; C. Earl Hovey, Trustee; C. Earl Hovey; and the Fairfax Engineering Company, Inc

No. 39932

Supreme Court of Missouri

April 21, 1947

Appeal from Jackson Circuit Court; Hon. John R. James Judge.

Transferred to Kansas City Court of Appeals.

Edmund H. McVey, William E. Kemp and J. R. Clagett for appellant.

Nelson E. Johnson for respondents Frank C. Hutchinson and C Earl Hovey, Trustee.

C Earl Hovey for respondent C. Earl Hovey.

OPINION

Leedy, P.J.

Plaintiff appeals from an adverse judgment and decree in this action which he brought to have himself declared to be the sole owner of Letters Patent No. 2307148, covering repair parts for pipe lines, issued by the U.S. Patent Office on January 5, 1943. In 1942, he and Hutchison, who were both engineers, entered into contracts respecting their business relations, and the joint development of their inventions. McGuire was the inventor of the device covered by the patent just mentioned, and he applied for the letters. Defendant Hutchison invented an apparatus for contouring the ends of tubular stock for which, under an arrangement between himself and McGuire, a patent was applied for in the name of McGuire as the inventor, and letters thereon were subsequently issued on September 9, 1942. On July 14, 1942, while both applications for letters (together with a divisional application on the contouring device) were pending, McGuire, by assignment (recorded in the Patent Office on September 12, 1942) conveyed the legal title to the applications, and in the letters patent maturing therefrom, to the defendant Hovey, as Trustee.

On August 1, 1942, Hovey, the trustee, as party of the first part, and McGuire and Hutchison, the beneficial owners, as parties of the second part, entered into a written agreement, called a "Trust Agreement", which provided, in substance, the following:

(1) That the respective interests of each of the beneficial owners was declared to be, and fixed at, 50%;

(2) That Hovey should hold in trust, for the benefit of McGuire and Hutchison, the applications heretofore mentioned in this opinion, and patents arising therefrom, together with any others that might be assigned to him;

(3) That the legal title thereto "shall remain vested in the trustee to the end of the period for which the Letters Patent covering the inventions forming the subject matter hereof, shall be issued, or until sooner terminated as hereinafter provided;"

(4) That the trustee bond himself and his successors "to do as requested in writing, whatever the Beneficiaries may hereafter direct him to do" in the several respects therein enumerated;

(5) That the compensation of the trustee should be $ 50.00 per month, payable monthly;

(6) That the agreement "may be terminated at any time upon written notice to the Trustee from the Beneficiaries," in which event the trustee shall transfer to the beneficiaries, or their assigns, in proper proportions the title to "said inventions, applications for Letters Patent, and any Letters Patent arising from the applications, licenses and royalty agreements, and he shall in like manner distribute the moneys and accounts remaining in his hands."

(7) Provided for the appointment of substitute or successor trustees, and defined the terms "trustee" and "beneficiaries."

Plaintiff's petition is bottomed upon the theory that the foregoing "Trust Agreement" of August 1, 1942 (which he alleges to have been an agreement of partnership between himself and Hutchison), was cancelled by his (McGuire's) and Hutchison's subsequent written agreement of July 8, 1943; or, if this be not so, then alternatively, that the alleged partnership be dissolved, and the interests of the parties determined, and that Hovey, as Trustee, be ordered and directed to reconvey the title to No. 2307148 to plaintiff; and that a certain license agreement to defendant Fairfax Engineering Co., for the manufacture, use and sale of the patented repair parts for pipe lines and the tubular stock contouring device (which was likewise licensed under the same licensing agreement) be cancelled. The petition alleged that certain other contracts were entered into, but for present purposes it is unnecessary to notice them.

Hutchison's answer, like plaintiff's petition, is somewhat lengthy. Of it, it is sufficient to say that it denied the "Trust Agreement" constituted a partnership, or that it was terminated by the agreement of July 8, 1943. It alleged that the latter agreement specifically excepted from its operation the rights and interests of plaintiff and this defendant under the "Trust Agreement," and prayed that the relief asked by plaintiff be denied.

Defendant Hovey filed separate answers and counter-claims in his capacity as trustee and also as an individual. His answer asserted substantially the same defenses as those relied on by his co-defendant, Hutchison. After the evidence had been heard; and the cause taken under advisement, defendant Fairfax Engineering Co., for the first time, filed an answer, and in it, it admitted all of the allegations of the petition, and prayed that "it have equity and its costs."

Upon a trial, the court found against plaintiff, and dismissed his petition, and by its judgment and decree found that the "Trust Agreement" had not been cancelled or set aside by the subsequent written agreement of July 8, 1943, and that the "Trust Agreement" constitutes a valid and subsisting trust "which is not, by its terms, by implication, nor by operation of law an agreement of partnership", and awarded separate money judgments against plaintiff and defendant Hutchison, in favor of defendant Hovey on his counter-claim, in sums, respectively, of $ 825.00 and $ 425.00. Defendant Hutchison filed a motion for new trial as to the $ 425.00 judgment against him, which was overruled, but he did not appeal. Plaintiff appealed from the decree dismissing his petition, and from the portion thereof awarding a money judgment against him on Hovey's counter-claim. All of the parties have filed briefs, except Fairfax Engineering Co.

The evidence shows that plaintiff does not claim any interest in the contouring patent (Hutchison's invention) apart from the trust agreement, nor does Hutchison claim any interest in the repair parts patent (McGuire's invention) except by virtue of the trust agreement, so that, if it has already been terminated, or will be as a result of this suit, no question arises as to their respective interests in the patents which form, exclusively, the property governed by the trust agreement; each tacitly (if not expressly) conceding, in that event, that the other would become the sole owner of the patent covering his own invention. It further appears that no work, development or promotion whatever of the patents was ever done subsequent to August 1, 1942, the date of the "Trust Agreement," this, as we understand it, on account of conditions growing out of the war, and particularly the inability of the parties, and the licensee, Fairfax Engineering Co., to procure steel. Consequently the cause does not involve any money or profits arising out of the inventions.

The question of this court's jurisdiction was raised when the cause was argued and submitted, and it is our duty to determine it. If jurisdiction of the appeal is in this court, it is because the amount in dispute, exclusive of costs, exceeds the sum of $ 7500.00, or because a constitutional question is involved, and hence within the purview of Art. V, Sec. 3, Const. of Mo., 1945. Where the appellate jurisdiction of the Supreme Court is invoked on the first of these grounds, the "amount in dispute" must affirmatively appear from the record. The showing in this connection is nothing further than that defendant Hutchison was permitted to state (subject to vehement objections going to his qualification) that, in his opinion, the value of each of the two patents involved was "in excess of $ 10,000.00."

Assuming without deciding, that this opinion evidence constitutes proof sufficient to establish the value of the patents at the figure mentioned, does this circumstance govern on the question of whether that sum is also the "amount in dispute" within the intent and meaning of the Constitution? The following from Evens & Howard Fire Brick Co. v. St. Louis Smelting & Refining Co., decided by the St. Louis Court of Appeals (48 Mo.App. 634, 635) has been approved in many cases in this court, including the court en banc. It succinctly states the applicable rule thus: "It is settled that, where the right of appeal depends on the value of the matter in dispute, such value must be estimated in money. When the object of the suit, however, is not to obtain a money judgment, but other relief, the amount involved must be determined by the value in money of the relief to the plaintiff, or of the loss to the defendant, should the relief be granted, or vice versa, should the relief be denied. If either is necessarily in excess of the sum within the appellate jurisdiction of this court, then the supreme court has exclusive cognizance of the appeal." See Aufderheide v. Polar Wave Ice & Fuel Co., En Banc, 319 Mo. 337, 4 S.W. 2d 776, 793; Joe Dan Market, Inc. v. Wentz, 321 Mo. 943, 13 S.W. 2d 641, 644; Fleischaker v. Fleischaker, 338 Mo. 797, 92 S.W.2d 169, 170; Higgins...