Pleatmaster, Inc. v. Consolidated Trimming Corp.
| Decision Date | 01 April 1958 |
| Docket Number | No. 13323.,13323. |
| Citation | 253 F.2d 694 |
| Parties | PLEATMASTER, Inc., and Bert P. Solomon, Appellants, v. CONSOLIDATED TRIMMING CORPORATION, Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
John W. Babcock, Detroit, Mich., Clarence B. Zewadski, Detroit, Mich., on brief, for appellant.
William E. Friedman, Detroit, Mich., Harness, Dickey & Pierce, Detroit, Mich., on brief, for appellee.
Before SIMONS, Chief Judge, MARTIN, Circuit Judge, and JONES, District Judge.
Appellee brought an action in the District Court to have appellants' patent declared invalid and not infringed by appellee. Appellants' answer contained a general denial and the usual defenses, but also included a counterclaim for infringement, injunction and accounting in one count, and a second count alleged a breach by appellee of a license agreement between the parties respecting the patent made the subject of the declaratory action.
At the trial, upon motion of the appellee, the District Court dismissed the second count of appellants' counterclaim which alleged the breach of a valid license agreement entered into between the parties on October 28, 1953 (Exhibit 3), and evidentially supported by Exhibits 6 and 11. Upon entry of the order of dismissal by the District Court the trial was halted and this appeal taken.
Thus, the single question presented here is whether these parties entered into a valid contract. Appellants urge that the District Court erroneously dismissed count two of their counterclaim and contend that a valid license agreement was fully and completely executed by both parties, as evidenced by Exhibit 3, and that evidential support to such a valid agreement may be found in Exhibits 6 and 11; that all of the essentials of a patent license agreement are present in Exhibit 3; that there was adequate consideration to support the contract in the release from liability for infringement on the one side and an obligation to pay for the release in royalties on the other side.1
Appellee asserts that the instrument under consideration is no more than a memorandum confirming an oral agreement, requiring proof as to what the parties agreed to, or that it is incomplete as the agreement of the parties until a written license agreement has been prepared and executed, relying upon the law of New York State where the instrument was executed or the agreement was entered into.
A New York case, Friedman & Co. v. Newman, 1931, 255 N.Y. 340, 174 N.E. 703, 73 A.L.R. 95 () relied upon by appellee has to do with a stock broker's confirmation of a purchase order for a customer. It is correctly called, and was a memorandum of an oral agreement. It was not a completed contract binding upon the parties. The facts in that case are as follow:
Plaintiff corporation was a dealer in bank and insurance company stocks. As a result of telephone negotiations, plaintiff agreed to sell to defendant ten shares of Chase National Bank stock. Then, in accordance with practice plaintiff prepared a "Confirmation of Sale," on plaintiff's business stationery, signed by plaintiff, and addressed to defendant, and thereafter signed by defendant, reading:
Plaintiff refused to deliver the stock under the terms in the confirmation, claiming the agreed price was $1,160 rather than $1,060, which latter figure was inserted by mistake. Defendant denied the mistake and insisted upon performance of the contract in accordance with the terms contained in the confirmation.
Both parties sued for damages resulting from the failure of the other party to perform the agreement. The actions were consolidated. Neither party urged that this writing constituted a contract between the parties, but only that it was a memorandum sufficient to satisfy the statute of frauds.
The rest of the case concerns whether the parol evidence rule prevents the modification of a written memorandum of an oral contract, where the writing is inconsistent with the oral agreement, and whether such memorandum, if proved inconsistent with the oral contract, is sufficient memorandum to overcome the bar of the statute of frauds.
The court held that if a written memorandum of an oral contract does not reflect accurately the oral agreement, such memorandum does not satisfy the statute of frauds.
We are unable to find any case on the facts like, or analogous to the agreement here under consideration either in the New York reports or elsewhere that would destroy or impair the binding effect of the instrument under consideration here.
The mutual obligations expressed specifically in the present instrument are something more and different in legal effect than the broker's confirmation of a purchase order for a customer. In the case of the broker's confirmation it was a memorandum, and so regarded by the parties and in the market place. Here a completed contract was executed by the acceptance of a proposal or offer which became binding upon both parties.
All the essentials of a patent license agreement are present in Exhibit 3; there was adequate consideration to support it in the release from liability for infringement in the past and permission to manufacture the patented product in the future without liability in damages; but with an obligation to pay royalties for such release of past liability and provision for future use. Exhibits 3, 6 and 11 express and evidence what seems to us to represent a meeting of the minds, a mutuality of obligations, which is another way of finding adequate consideration.
Whatever was originally agreed to was merged into the instrument duly executed by acceptance of the offer. Every agreement between parties evidenced by a writing setting forth specific and mutual obligations, in a very real sense, could be called a confirmation of some earlier oral agreement.
Upon another ground the appellee seeks to sustain the ruling below; i. e., that the agreement, Exhibit 3, was not signed by the hand of appellant Pleatmaster, Inc.'s agent or attorney Cullen, although the name of appellant Pleatmaster, Inc. was typewritten on the offer, as was Cullen's; and Cullen's intention thereby to bind Pleatmaster, Inc. was neither...
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Commonwealth Film Processing v. COURTAULDS US
...to the statute of frauds. See Packet Co. v. Sickles, 72 U.S. (5 Wall.) 580, 595, 18 L.Ed. 550 (1867); Pleatmaster, Inc. v. Consolidated Trimming Corp., 253 F.2d 694 (6th Cir.1958); Schick Service, Inc. v. Jones, 173 F.2d 969, 977 (9th Cir.1949); Matthews v. Continental Roll & Steel Foundry,......