Pickrell v. Wilson

• Decision Date: 01 May 1923
• Parties: PICKRELL ET AL. v. WILSON ET AL.
• Court: Kentucky Court of Appeals

250 S.W. 135

199 Ky. 20

PICKRELL ET AL. v. WILSON ET AL.

Court of Appeals of Kentucky.

May 1, 1923

Appeal from Circuit Court, Jefferson County, Common Pleas Branch Fourth Division.

Action by William Wilson and another against Otis W. Pickrell and another. Judgment for plaintiffs, and defendants appeal. Reversed and remanded.

Helm Bruce and Duffin, Vance & Duffin, all of Louisville, for appellants.

J. M Chilton and Edwards, Ogden & Peak, all of Louisville, for appellees.

McCANDLESS J.

For brevity, William Wilson and H. C. Dunavent will be referred to hereinafter as the appellees, and J. E. Zinsmeister and Otis Pickrell as the appellants.

The appellees were owners of certain letters patent No. 1032917 issued by the United States Patent Office to one Robert Lynch, covering an invention for an alleged new and improved sanitary milk strainer. By a writing dated June 14, 1914, and executed by all the parties, appellees granted to the appellants the exclusive right to manufacture and sell the articles covered by the letters patent for a period of five years, in consideration of certain royalties to be paid them on the goods sold and delivered; they being guaranteed a certain annual minimum in royalties, with a stipulation as to how the latter should be regulated. Alleging a violation of this contract, the appellees brought suit in October, 1915 for the minimum royalties then due on the first year's business thereunder. Various motions and pleadings were filed by both parties, and the case finally reached submission and trial in January, 1920, resulting in a verdict and judgment for the appellees in the sum of $4,927.94.

Appellants claim that, in the negotiations leading up to the execution of this paper, appellees produced a sample strainer of their manufacture and assured them that the patent was a basic one, and that it protected and gave a monopoly on the manufacture and sale of the particular device shown. Appellants were not familiar with patent law, and by agreement sent the sample strainer and letters patent to a firm of lawyers in Chicago, with the request that they investigate and inform them if the patent was valid, and if it would protect them in the manufacture of this particular strainer. There was some delay in securing this information, and at the request of appellees and for their convenience the paper filed in suit was signed and a copy delivered to each of the parties, but with the distinct understanding and agreement that it was not to become effective until and unless the attorneys reported favorably and in the event of an adverse report the signed papers were to be returned and destroyed.

Shortly afterward the attorneys did report unfavorably. Appellees were informed of this and acquiesced therein and all concerned agreed that the matter was at end, and other arrangements were made for the manufacture of the strainers, in which the appellants assumed no individual liability.

The matters thus claimed were elaborately pleaded in the answer, and traversed in the reply, and evidence introduced in support thereof; but later the court excluded evidence as to conditional delivery of the instrument, and this issue was not submitted to the jury.

While there is conflict in the decisions upon this question, it seems that in part it is due to a failure to distinguish between a condition precedent, upon which the existence of the contract depends, and a condition subsequent, which admits the existence of the contract, but superimposes additional conditions therein. In the latter class of cases the evidence is clearly inadmissible, but in the former practically all the text-writers and the great majority of the decisions are in accord that such evidence is admissible.

The ruling of the lower court was based on the conclusion that such evidence tended to vary or contradict the terms of the written instrment, and, if it does, there can be no question as to its propriety. It will be observed however, that the proposed evidence did not introduce any new conditions in the writing, or vary any of its terms, or alter or contradict it in any particular. Its purpose was to show that the papers were signed and transferred between the parties, not as the delivery of an executed contract, but to take effect upon certain conditions, and in default of such conditions there was no contract. Burke v. Dulaney, 153 U.S. 228, 14 S.Ct. 816, 38 L.Ed. 698; Ware v. Allen, 128 U.S. 590, 9 S.Ct. 174, 32 L.Ed. 563; McCormick Harvesting Machine Co. v. Morlan, 121 Iowa 451, 96 N.W. 976; Cleveland Refining Co. v. Dunning, 115 Mich. 238, 73 N.W. 239; Burns & Smith Lumber Co. v. Doyle, 71 Conn. 742, 43 A. 483, 71 Am.St.Rep. 235; Bedell v. Wilder, 65 Vt. 406, 26 A. 589, 36 Am.St.Rep. 871; Michels v. Olmstead, 157 U.S. 198, 15 S.Ct. 580, 39 L.Ed. 671; Reynolds v. Robinson, 110 N.Y. 654, 18 N.E. 127; Pym v. Campbell, 6 El. & Bl. 370, 373; Reiner v. Crawford, 23 Wash. 669, 63 P. 516, 83 Am.St.Rep. 848; McFarland v. Sikes, 54 Conn. 250, 7 A. 408, 1 Am.St.Rep. 111; Wilson v. Powers, 131 Mass. 539; Gilroy v. Everson-Hickok Co., 190 N.Y. 551, 83 N.E. 1125; Wigmore on Evidence, §§ 2409, 2410; Bishop on Contracts, §§ 349-357; Williston on Contracts, § 632; Elliott on Contracts, 1636; 22 Corpus Juris, p. 1150, and cases cited; 10 R.C.L. p. 1055; Browne on Parol Evidence, § 32.

The case of Hubble v. Murphy, 62 Ky. (1 Duv.) 278, on the authority of Moss v. Riddle, 5 Cranch, 357, 3 L.Ed. 123, held that a bond could not be delivered to the obligee as an escrow, and suggestions of this character may be found in a number of our opinions, but in that case, and in an unbroken line of decisions since, it has been held that, when a purchaser or payee takes a note with notice that a surety thereon executed it, with the understanding that another surety, or additional security by way of mortgage was to be taken before negotiation, in default thereof such fact may be pleaded as a defense by way of counterclaim, and the surety recover the damages sustained thereby. Smith v. Moberly, 49 Ky. (10 B. Mon.) 266, 52 Am.Dec. 543; ...