Pratt v. Weeks

• Decision Date: 06 December 1932
• Citation: 1 F. Supp. 953
• Parties: PRATT et al. v. WEEKS et al.
• Court: U.S. District Court — Southern District of Florida

1 F. Supp. 953

PRATT et al. v. WEEKS et al.

District Court, S. D. Florida, Jacksonville Division.

December 6, 1932.

Watkins, Asbill & Watkins, of Atlanta, Ga., and Walter F. Rogers, of Jacksonville, Fla., for plaintiffs.

James H. Bunch, of Jacksonville, Fla., for defendants.

STRUM, District Judge.

Following the decree of the Circuit Court of Appeals in Weeks v. Pratt, 43 F.(2d) 53, denying, without prejudice, specific performance of the contract here involved, plaintiffs instituted this suit seeking rescission and cancellation of said contract, the restitution of certain moneys advanced, and the value of services performed pursuant to said contract, and an equitable lien upon the subject-matter thereof to secure the amount decreed to be due them.

Substantially the same underlying facts appear as in the former suit for specific performance, supplemented by additional facts pertinent to relief by rescission.

During July, 1927, Weeks represented to the plaintiffs that he (Weeks) had devised an apparatus for attachment to internal combustion engines used in automobiles which would greatly increase the mileage obtained from ordinary gasoline. Weeks also represented that he had devised a new fuel for such engines, the use of which would produce results as to mileage far superior to ordinary gasoline. Plaintiffs did not rely upon these representations, however, but made numerous tests of both the supposed apparatus and supposed fuel before entering into the contract now sought to be canceled.

Weeks is a retired locomotive engineer, of very little learning or technical skill. Both the plaintiffs are men of high education, special training, and many years' experience in engineering pursuits. Plaintiff George L. Pratt is a mechanical engineer of some thirty years' experience, with many years' experience in the design, construction, and operation of internal combustion engines. Plaintiff Nathaniel P. Pratt is a mechanical engineer with years of experience in the manufacture and use of chemicals.

Weeks exhibited to the Messrs. Pratt an automobile on which he claimed his fuel-saving apparatus was installed. Mr. George Pratt, upon Weeks' invitation, fully inspected the installation on Weeks' car, satisfying himself that there was no fuel in the main tank, and no spurious means of conveying fuel to the carburetor, and that the only place from which the motor could obtain fuel was from the vacuum tank. After this, a measured "quart" of gasoline was put into the vacuum tank in the presence of Messrs. Pratt and Weeks, and the car was driven "something over forty-nine miles" before exhausting this supply. Mr. Pratt testified: "There was no effort to conceal anything; on the other hand, apparently he (Weeks) was anxious for me to make a thorough inspection, and without hesitation opened up for inspection every part of the car that I asked for."

Some time later, in the presence of Mr. George Pratt and a patent attorney who had been brought down from Washington, Mr. Weeks' appliance was removed from the car, completely disassembled, and laid out for inspection. After Mr. Pratt and the patent attorney, Mr. Parry, had inspected the apparatus to their satisfaction, it was reassembled and reinstalled, and another demonstration was had, with like results as before. These tests, according to both the plaintiffs, and others which were made, "were carefully, accurately, honestly, and intelligently made."

Mr. Weeks also exhibited to the Messrs. Pratt what he (Weeks) claimed was a fuel discovered by him which would also produce extraordinary mileage. Supposedly using this fuel, several test runs were made in ordinary automobiles belonging to persons other than Mr. Weeks and which were brought in by the plaintiffs and employed for the purpose of the tests. The results apparently obtained were approximately 60 per cent. greater with the supposed Weeks' fuel than with ordinary gasoline. The Messrs. Pratt also conducted several ignition tests of the fuel with which they were apparently content.

After these and other tests were made, the contract of September 13, 1927, was executed. The contract is executory. It is under seal, and contained covenants by which Weeks agreed to assign to the Pratts "undivided interests" in said fuel processes, the fuel-saving apparatus, and other inventions, which interests therein, together with the interest retained by Weeks, were to be later assigned to a proposed corporation. Weeks agreed to continue his study and development of the apparatus and fuel, and to disclose the details of the construction of the apparatus and the formula of the fuel when he should be requested so to do by the plaintiffs, in order that patents for the apparatus could be obtained, and so that the fuel could be further developed. The plaintiffs covenanted to advance certain moneys to the defendant Weeks, and to bestow certain labor and services in the development of the apparatus and fuel, and in securing patents for the former; the object of the contract being "for the purpose of perfecting and utilizing, and making commercially profitable, the patents, discoveries, inventions, and processes" referred to. The contract contained certain other provisions by which the plaintiffs would acquire a 49 per cent. interest in the corporation mentioned. The contract also recites: "The said Weeks, realizing the desirability of obtaining financial, technical and business assistance and co-operation in order to fully develop his ideas, has negotiated with the other parties to this contract, and they have agreed to become interested with him, and to aid him in making the discoveries, inventions, and processes available and marketable and to put them into commercial use and to realize profits therefrom."

Plaintiffs thereafter undertook to manufacture one of the fuel-saving attachments, and installed it on Mr. George Pratt's car. Although sporadic and intermittent bursts of additional power was evidenced, the apparatus produces nothing approximating the results obtained in the apparatus on Mr. Weeks' car. If Mr. Weeks has developed such an apparatus as he purported to demonstrate to the plaintiffs, he has withheld disclosure of some very important functioning part which critically disturbs its efficiency. There is no doubt that the plaintiffs have been unable to construct, with the information given by Mr. Weeks, an apparatus which would duplicate the results apparently obtained on the tests with Mr. Weeks' car.

Mr. Weeks purported to disclose what he claimed was the formula for his fuel, but the description thereof given by Mr. Nathan Pratt, and which is undisputed, approaches the fantastic. A mixture made from the supposed formula produces a liquid that will not even ignite, and is of utterly no value as a combustible fuel.

If Mr. Weeks ever had any such apparatus and fuel as he represented, he has never disclosed the construction of the former, nor the formula for the latter, as he agreed to do in his contract. Also, Mr. Weeks has never executed the assignments of an interest therein to plaintiffs as he agreed to do, and has declined to further co-operate or work with the Pratts in the further development of the supposed discoveries, and securing patents thereon, which was the whole object of the contract.

The plaintiffs have fully performed their covenants. They have advanced all sums of money they were obligated to advance. They have made faithful efforts to perfect the fuel, and to construct and improve the apparatus and to obtain patents therefor, on such information as was given them by Mr. Weeks, but without success. After much negotiation with Mr. Weeks, and upon his failure or refusal to furnish further information, relations were finally broken off on December 26, 1927. Mr. Weeks assigned as the reason for his refusal to perform the contract that he had discovered a clause therein permitting the Pratts to withdraw upon certain conditions after notice to Weeks, but which the Messrs. Pratt had not then attempted to do, which provision of the contract Weeks claimed was contrary to his intention in executing it; also due to the fact that Mr. Weeks was of the opinion that the stock subscription recited in the proposed charter of the corporation and method of corporate organization provided for therein did not conform to the contract. The withdrawal clause objected to by Mr. Weeks, however, plainly appears in the contract as executed by him after full examination thereof, and it does not appear that the proposed charter for the corporation in anywise ran counter to the contract provision.

Defendant American Speed Corporation, to which an effort has been made to convey the patent rights, was organized by Mr. Weeks, and is but an alter ego for him. It is chargeable with knowledge of all the facts here found. This is a corporation other than the corporation contemplated in the contract between Mr. Weeks and the Messrs. Pratt.

As grounds for relief by rescission, plaintiffs rely upon: (1) Fraud on the part of Mr. Weeks in procuring the contract; (2) abandonment of the contract by Mr. Weeks, rendering further performance by plaintiffs impossible.

Mr. Weeks' claims were of such an extraordinary nature as to inspire most critical examination before relying upon them. The claims are such a severe tax upon credulity, and so decidedly contrary to common experience, that a person of even ordinary intelligence would have been led to make a most exhaustive test before going into the venture. Plaintiffs realized the advisability of such tests. They are highly educated and experienced engineers, fully capable of making such tests. They tested the apparatus and fuel to their satisfaction. The parties dealt at arm's length, and traded on an equal footing, unless the scientific knowledge and experience of plaintiffs put them in a superior position. Plaintiffs had equal, if not superior, opportunity to know the whole facts before they...