Neufeld v. Jordan
| Citation | 38 N.W.2d 601,240 Iowa 1063 |
| Decision Date | 05 August 1949 |
| Docket Number | 47516. |
| Parties | NEUFELD et al. v. JORDAN, Judge. |
| Court | United States State Supreme Court of Iowa |
Abramson & Myers, of Des Moines, for petitioners.
Hallagan & Lucier, of Des Moines, for defendant.
The petition of William J. Marks alleged that he was the owner and inventor of a windshield spray device of a certain numbered and filed patent application (which application is still pending) and that on July 5, 1946 he entered into a license agreement with the Neufeld Enterprises, Inc. A copy of the license agreement was attached to the petition. It was signed by Marks and Leonard C. Neufeld as president of the Neufeld Enterprises, Inc. In this license agreement the parties agree that Marks is the sole inventor and owner of the patent application and the licensee is given the exclusive right and license to make, use, and vend the device, which was covered in the patent application, throughout the United States and its territorial possessions, including the right to sublease all on a royalty basis of a certain per cent, of the licensee's selling price to be paid to Marks.
The petition goes on to allege that this license agreement was prepared by one Lowell, a patent attorney who at the time was representing both parties. Other paragraphs of the petition state that Leonard C. Neufeld and others organized a corporation on April 15, 1947 called the Saf-T Spray Corporation; 'that the general nature of the business to be transacted by the said corporation being the manufacture, sale and distribution at retail or wholesale of the said windshield device'; and that on April 29, 1947 the articles of incorporation were amended and changed from Saf-T Spray Corporation to the Delman Corporation.
In one paragraph of the petition there is an allegation, probably of little interest here, that plaintiff was induced by Lowell to sign a contract to pay Lowell 20% of all royalties he received under the license agreement. The petition then alleges the license agreement was terminated on or about July 15, 1947 and a copy of this termination agreement is set forth. It is a short instrument executed by the Neufeld Enterprises Inc., by its president, Leonard C. Neufeld and the plaintiff, completely cancelling and terminating the license agreement by 'mutual consent' and each party releases the other from 'any and all liability under the license agreement.'
In the remaining paragraphs of the petition plaintiff charges a combination and conspiracy on the part of all the defendants (petitioners here) for the purpose of cheating and defrauding plaintiff, alleging they procured the termination agreement from him by false representations and alleging that it was procured at a time when the defendants had already obtained contracts and agreements for the manufacture, sale and distribution of the spray device and that since the termination agreement the defendants have 'engaged extensively in the manufacturing, selling and distributing of the same to the exclusion of plaintiff from any and all rights, interests, profits, or royalties from the said windshield spray device.'
The prayer of the petition was for an injunction against defendants from manufacturing and selling 'said windshield spray device' and for an accounting, and damages.
The separate but identical answers of Leonard C. Neufeld, Neufeld Enterprises, Inc., and the Delman Corporation admit the formal allegations of the status of the parties, the execution and termination of the license agreement and deny all other allegations, and with respect to the termination agreement defendants each allege the execution of this instrument was at plaintiff's special instance and request.
Following the filing of defendants' answers plaintiff filed his Application for Inspection of Books and Papers, under Rule 129, Rules of Civil Procedure, alleging that it was necessary that he 'be granted authority to inspect the accounting and sales books and records, papers, drawings, blueprints correspondence, including telegrams of the defendants * * * with all persons, firms and corporations with whom the defendants have carried on business with and for the use, manufacture, sale, and distribution of the windshield spray device being manufactured, sold and distributed by them, which accounting and sales books and records, papers, drawings, blueprints, correspondence and telegrams are in the possession and under the control of said defendants, and to make copies and photostats of the same as they are material to the just determination of this cause.' The application alleged that such accounting and sales books and records and papers would reveal and show the firms that the defendants have contracted with for the use, sale, manufacture and distribution of the windshield spray device 'alleged to be owned and invented by the plaintiff'; the number and money received for same; the costs and profits; that all blueprints and drawings that the defendants are and have been using in the use, manufacture, sale and distribution of their said windshield spray device are the same as those of the windshield spray device owned and invented by the plaintiff; the fraud and conspiracy perpetrated by the defendants; the confidential knowledge acquired by the defendant, Leonard C. Neufeld and Neufeld Enterprises, Inc., from the plaintiff and the violation of the faith and trust reposed in said defendants; and other material allegations of plaintiff's petition.
The defendants Leonard C. Neufeld, Neufeld Enterprises, Inc., and the Delman Corporation filed their resistence to the above application on the ground that it fails to identify the books and papers sought to be inspected or to disclose that they are material to a just determination of this cause; that the applicant is engaged, at least indirectly, in the business of making, manufacturing and selling a windshield spray device in that he has licensed a Chicago corporation to...
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