Meissner v. Standard Ry. Equipment Co.

• Decision Date: 01 April 1908
• Citation: 109 S.W. 730,211 Mo. 112
• Parties: EDWARD C. MEISSNER v. STANDARD RAILWAY EQUIPMENT COMPANY, Appellant
• Court: Missouri Supreme Court

109 S.W. 730

211 Mo. 112

EDWARD C. MEISSNER v. STANDARD RAILWAY EQUIPMENT COMPANY, Appellant

Supreme Court of Missouri, First Division

April 1, 1908

Appeal from St. Louis City Circuit Court. -- Hon. Matt. G. Reynolds Judge.

Reversed and remanded.

Carr & Carr for appellant.

(1) An assignment of a void patent or a license under a void patent is not a legal consideration for a promise to pay for same. Applicable to the second defense: Shepherd v Jenkins, 73 Mo. 510; Jollife v. Collins, 21 Mo 343; Keith v. Hobbs, 69 Mo. 84. (2) State courts have jurisdiction to determine the validity of a patent, when the invalidity thereof is set up as a defense to a suit on a contract for royalties. Applicable to the second defense: White v. Lee, 14 F. 789; Harlow v. Putnam, 124 Mass. 553; Marston v. Swett, 82 N.Y. 526; Angier v. Eaton, etc., 98 Pa. St. 594; Billings v. Ames, 32 Mo. 272; Keith v. Hobbs, 69 Mo. 90; Pratt v. Gas Light Co., 168 U.S. 261. (3) Under the Patent Law an employer has a license, free and clear of royalties, to use such inventions as his employee may make in the line of his duty as an employee. The fourth defense is predicated upon this proposition. McClurg v. Kingsland, 1 How. (U.S.) 202; Solomons v. United States, 137 U.S. 342; Lane & Bodley Co. v. Locke, 150 U.S. 193; Gill v. United States, 160 U.S. 426; Walker on Patents, secs. 313 and 313a. (4) The Missouri courts have repeatedly held in equity cases that they have the right to fix their own "price for their decree;" and they have uniformly required that he who seeks equity should do equity. The fifth defense is predicated upon this doctrine, as plaintiff seeks relief in respect of a supposed license upon the faith of which defendant invested large sums of money, the benefit of which plaintiff tries to confiscate by fraudulently rescinding the license, and transferring the patent to defendant's rival to be used for the purpose of harassing defendant and destroying its investment. Whelan v. Reiley, 61 Mo. 565; Kline v. Vogel, 90 Mo. 239; Woodward v. Mastin, 106 Mo. 364; Plow Works v. Ross, 74 Mo.App. 445; Southworth v. Hopkins, 11 Mo. 338; Phillips v. Phillips, 50 Mo. 608; Cravens v. Moore, 61 Mo. 184; Alden v. Gross, 25 Mo.App. 123; Morrison v. Juden, 145 Mo. 300; Duretts v. Hook, 8 Mo. 374; Manhattan Medicine Co. v. Wood, 108 U.S. 218; Paul on Trademarks, sec. 315. (a) It is common doctrine, repeatedly affirmed in the Missouri cases, that whoever rescinds or seeks to rescind a contract shall restore to the other party the consideration received from him; and that rescission will not be permitted where the plaintiff is unable to reinstate the defendant in statu quo. In the present case, the very purpose of rescinding is to confiscate the product of defendant's efforts and expenditures. Poe v. Stockton, 39 Mo.App. 550; Roetzer v. Packing Company, 58 Mo.App. 264. (b) It has been repeatedly held that a license cannot be revoked after the licensee has upon the faith of the license made improvements or otherwise expended money which would be rendered useless by the rescission of the license. Harnelson v. Railroad, 151 Mo. 498; Sease v. Cleveland Foundry Co., 141 Mo. 497; School District v. Lindsay, 47 Mo.App. 34; Gibson v. St. L. A. & M. Assn., 33 Mo.App. 165. (5) The Patent Law (sec. 4888, R. S. U. S. 1878), requires an inventor to make a specific claim for his invention; and such claim is the sole measure of his invention. The purpose of the claim is to fix the limits of the monopoly for the benefit of the public and of parties wishing to enter into contracts with respect thereto. Evans v. Eaton, 7 Wheat. 356; Brooks v. Fiske, 15 How. 215; Morrill v. Yeomans, 94 U.S. 570; Grant v. Walter, 148 U.S. 554; McClain v. Ortmayer, 141 U.S. 424; Railroad v. Mellon, 104 U.S. 117; Bridge Co. v. Iron Co., 95 U.S. 278; National Enameling & Stamp Co. v. New England Enameling Co., 151 F. 23; Cimotti Unhairing Co. v. American Fur Refining Co., 198 U.S. 410. (6) In a suit for royalties, the claim of the licensed patent is the measure of the defendant's liability. This follows logically from the doctrine of the next preceding point. Thorn Wire Co. v. Washburn & Moen Co., 159 U.S. 451; Fox Solid Pressed Steel Co. v. Schoen Mfg. Co., 84 F. 545; Covell v. Bostwick, 39 F. 426; Wright v. Fitz Bros. Co., 133 F. 394. (7) The doctrines established by the Federal courts for the interpretation of patents have become rules of property, with respect to which the contract should be interpreted. Brown v. Duchesne, 19 How. 195. (8) For the purpose of aiding the court in arriving at the true meaning and scope of a patent, the same evidence is admissible in a suit where the defendant is estopped to deny validity as in a case where defendant is a perfect stranger. The patent claim has a fixed meaning which cannot vary with the nature of the controversy or the relation of the parties. This doctrine is engrafted into the Patent Laws and defendant herein is entitled to the benefit thereof. Missouri Lamp & Mfg. Co. v. Stempel, 75 F. 583; Martin & Hill, etc., Co. v. Martin, 62 F. 272, 67 F. 786; Ball & Socket Co. v. Ball Glove Fastening Co., 58 F. 818; Essex Button Co. v. Paul, 48 F. 310; Babcock v. Clarkson, 63 F. 607. (9) The obligation to pay royalty should not be pushed beyond the words of the contract promising payment therefor. Eclipse Bicycle Co. v. Famous, 199 U.S. 581; Thorn Wire Co. v. Washburn & Moen Co., 159 U.S. 423; White v. Lee, 14 F. 789; Covell v. Bostwick, 39 F. 421; Andrews v. Landers, 72 F. 666; Fox, etc., Co. v. Schoen Mfg. Co., 84 F. 545; Moore v. National Water Tube Boiler Co., 84 F. 346; Ross v. Fuller & Warren Co., 105 F. 510; Todd v. Wheeler, 173 Pa. St. 128. (10) Both reason and the cases which invoke "practical interpretation" agree in limiting the doctrine to cases where the contract is ambiguous, and to cases where the acts of the parties are contemporaneous or long continued. So far as we know, there is no case where isolated acts are regarded as a practical interpretation. St. Louis Gaslight Co. v. St. Louis, 46 Mo. 121; Jones v. DeLassus, 84 Mo. 541; Scott v. Scott, 95 Mo. 300; Union Depot Co. v. Railroad, 131 Mo. 291; St. Louis v. Laclede Gas Light Co., 155 Mo. 1; Wetmore v. Crouch, 150 Mo. 683. (11) A plea in equity partakes of the nature of a demurrer, in that its admissions are made provisionally or hypothetically for the purpose of securing a decision on some one vital question. Its function is to protect the defendant from answering the entire bill of complaint, and it opens with a formal protestation that it does not confess the allegations of the bill of complaint. Such a plea is not admissible in evidence. Greenleaf on Evidence, sec. 551; U. S. Gramophone Co. v. National, etc., Corp., 107 F. 129.

Adolph E. Methudy and Kehr & Tittmann for respondent.

(1) A demurrer was sustained to the second, fourth and fifth defenses and no exception was taken or saved or term bill of exceptions filed. Hence, there is nothing for this court to review as to any of those alleged defenses. Smith v Baer, 166 Mo. 401; Tobacco Co. v. Walker, 123 Mo. 669; State ex rel. v. Johnson, 132 Mo. 110; Asphalt P. Co. v. Ullman, 137 Mo. 564; Vette v. Geist, 155 Mo. 35. (2) Defendant did not except to the finding of the referee on the third and sixth defenses nor allude to it in its motion for new trial. Hence, these defenses were also not open to review. Tufts v. Latshaw, 172 Mo. 372. (3) In its motion for new trial, the defendant does not except to the judgment of the circuit court or assign any action taken by the court as error; nor does it make the overruling of the exceptions to the referee's report a ground for new trial. Bosley v. Cook, 85 Mo.App. 422; Arkansas Land Co. v. Ladd, 103 Mo.App. 89; Maloney v. Railroad, 122 Mo. 115. (4) The report of the referee is equivalent to a special verdict, and where there is evidence to establish the fact and the referee's findings have been approved and confirmed by the circuit court, they will not be disturbed. Wiggins Ferry Co. v. Railroad, 73 Mo. 389; Woodrow v. Younger, 61 Mo. 395; Lingenfelder v. Brewing Co., 103 Mo. 578; Howard County v. Baker, 119 Mo. 407; Berthold v. O'Hara, 121 Mo. 97; Tufts v. Latshaw, 172 Mo. 372; Bank v. Donnell, 172 Mo. 402. (5) Exceptions to the referee's report should show specifically wherein the finding of the referee is not supported by the evidence. A general exception that the referee admitted illegal and improper evidence is of no avail. Hornblower v. Crandall, 78 Mo. 581, 7 Mo.App. 220; Dallas v. Brown, 60 Mo.App. 496; Singer Mfg. Co. v. Givens, 35 Mo.App. 610. (6) All inventions on the subject of pneumatic hammers or improvements therein then possessed or thereafter invented or acquired by Meissner are within the express terms of the contract. If there were any doubt upon the subject, the action and conduct of the parties under the contract would remove it. The construction which parties place upon their contract by their acts is its best interpretation. St. Louis Gas Light Co. v. St. Louis, 46 Mo. 128; Union Depot Co. v. Railroad, 131 Mo. 307; Williams v. Railroad, 153 Mo. 534; Sedalia Brewing Co. v. Sedalia W. W. Co., 34 Mo.App. 56. (7) The contract of December 7, 1898, grants the defendant an express license; hence, there is no room for an implied license in this case. The employer acquires no right to the invention made by his employee. The latter may, however, by his conduct estop himself from afterwards making a claim. The authorities cited by appellant do not support its claim to an "implied" license. Gill v. U.S. 160 U.S. 426; Walker on Patents (4 Ed.), sec. 313a. (8) Appellant's point that where one sells a void patent to another, the consideration fails, has no application here. Having used and enjoyed plaintiff's...