Pressed Steel Car Co. v. Hansen

• Decision Date: 27 April 1905
• Docket Number: 28.
• Parties: PRESSED STEEL CAR CO. v. HANSEN.
• Court: U.S. Court of Appeals — Third Circuit

137 F. 403

PRESSED STEEL CAR CO. v. HANSEN.

No. 28.

United States Court of Appeals, Third Circuit.

April 27, 1905

William C. Strawbridge and John R. Bennett, for appellant.

George B. Gordon and D. T. Watson, for appellee.

Before ACHESON, DALLAS, and GRAY, Circuit Judges.

GRAY Circuit Judge.

Suit was brought by the appellant, the complainant below, the Pressed Steel Car Company, against Hansen, the appellee, to compel the assignment of six applications for patents made by him when in appellant's employ as chief engineer. The complainant was engaged in the manufacture of steel cars. As summarized by the court below, the allegations upon which the complainant based its right to the relief sought are, in substance, set forth in its bill as follows: That Hansen was for several years previous to the complainant's incorporation employed by the Schoen Manufacturing Company, its successor, the Schoen Pressed Steel Company, and finally became chief engineer of the last-named company; that complainant succeeded to the business and good will of the Schoen Pressed Steel Company whereupon Hansen 'entered your orator's employ as its chief engineer, under an agreement and understanding to devote his entire time, ability and skill to your orator's business and its advancement, and that all inventions and improvements that he might make during the period of his employment, and all letters patent that might be obtained therefor, should be the sole property of your orator'; that 'it was a condition of the salary paid him as such, and his employment as such implied, and was upon the express understanding and agreement by him, that all designs, inventions and improvements and he might make or develop, while in your orator's employ, and all letters patent that might be obtained therefor, should become and be the sole and exclusive property of your orator, and that for all such designs, inventions and improvements, if found or regarded as patentable, he would, from time to time, as he made or developed such designs, inventions or improvements disclose the same to your orator's solicitor, and, through him, and at your orator's expense, make all necessary and proper applications for letters patent, and execute all necessary and proper papers to that end, and that he would, from time to time, as such applications were executed and filed, likewise execute and deliver to your orator, with such applications, properly executed assignments, of all such applications, inventions therein specified and letters patent that might be granted thereon and therefor, with directions to the Commissioner of Patents to issue all such letters patent to himself as assignor to your orator, of all his right, title and interest in and to all such letters patent, which should be the entire right, title and interest therein; that such being the terms and conditions of the respondent's employment by your orator, and in full appreciation and consideration therefor, and of the inventions and improvements that he might make and letters patent that he might obtain therefor, he was paid by your orator a salary at the rate of $4,000 per year to January 1, 1900; at the rate of $5,000 per year to September 1, 1900; at the rate of $6,000 per year to October 1, 1901; and at the rate of $10,000 per year down to January 1, 1902, when he left your orator's employ'; that thereafter and while performing his duty as chief engineer, he made the inventions in question and made applications for patenting the same; that he subsequently left the employ of complainant and refused to assign the same.

The prayers of the bill are (1) that the respondent may be ordered and compelled to specifically convey and assign to the complainant, by proper assignments and instruments in writing, each and every of the specified pending applications for letters patent to be granted thereon, and (2) that respondent may be restrained and enjoined, pendente lite and perpetually, from conveying or assigning to any party or parties whomsoever, other than the complainant, the said inventions or improvements embodied in said six pending applications for letters patent, or the letters patent that may be granted or issued therefor or thereon, either in whole or in part, or any right, title or interest therein, thereto, or thereunder. The answer of the respondent and appellee generally and specifically denies that there was any contract, express or implied, to assign these patents, or that there was any equity in the complainant, by reason of the relations between the parties or of the facts in the case to demand such an assignment. Testimony was taken at great length by both parties, and in due course went to final hearing upon bill, answer, proofs and exhibits. The case, as stated by the court below, involved three inquiries: First, whether any express contract by Hansen to transfer the patents to the complainant was proved to have been made; second, whether the facts proven were such as to warrant a presumption that a contract existed; and third, whether a contract to transfer is to be implied in law from the relation between the parties.

There is no assertion of the existence of a written contract, but the complainant did assert and attempt to prove an oral contract by the respondent to assign the applications for the patents in question, or the patents themselves, to the complainant. As to the existence of such a contract, there was much conflicting testimony. On the one hand, the president of the complainant company testified to conversations with Hansen, which, if true, tended to show that there was a mutual understanding that these patents belonged to the complainant, and that upon proper demands therefor, they would be assigned. No specific agreement in definite terms, setting forth consideration and specific promise on the part of Hansen, was proved. The principal reliance on the part of complainant to establish such a contract as its president testified to, were facts and circumstances relating to the employment of hansen as chief engineer, and his own admissions that he had charge of all the departments, so far as operations of the works (the mechanical end of the business) was concerned, and that it was within his duties 'to improve or assist in improving the manufactured products of the company,' as was also 'the matter of devising, designing cars, or parts thereof. ' Hansen himself, in his testimony, absolutely denied that any such conversations as were testified to by the president of the company ever took place, and positively asserted that no contract of any kind existed between complainant the patents in question. In this respect, he was fully supported by the testimony of W. T. Schoen, president of the appellant company down to 1901, as well as organizer and president of the predecessors to complainant company. The fact is much relied upon by the complainant, that in numerous other cases applications for patents made by appellant had been transferred to the company, as a matter of course, and, in fact, all patents up to the six here in question had been so transferred. Hansen explained this, by saying that he was very young when first employed; that he was grateful to both the present company and its predecessor, which first employed him, and that out of good feeling, and as a matter of routine, he continued to assign applications made by himself for patents to his employer; that as to the six applications here demanded by complainant, they were made just before the termination of his employment by complainant, the inventions were worked out at his own home, and not at complainant's shops, and he then for the first time had occasion to assert his ownership. There was much other testimony bearing upon the issue, which it is needless to recapitulate.

The bill being for the specific performance of a contract, such contract must be clearly and unequivocally proved, as stated. As proved, its terms as to subject-matter, consideration and all other essentials, must be explicit and unambiguous. The court below, after an extensive review of the testimony, has reached the conclusion (1) that no express contract by Hansen, to transfer patents, has been proved, and (2) that the facts proven are not such as to warrant the presumption that such a contract existed. These findings of fact by the court below must receive the respect and consideration to which such findings are always entitled in a reviewing court. They are prima facie conclusive, and nothing but a showing that the preponderance of evidence is clearly and unmistakably against them, would justify this court in reversing them. After a careful reading of all the testimony in the record bearing upon this question, we do not discover ground for such reversal.

The important question remains, whether, from the relation of the parties, there resulted to the complainant, as a conclusion of law, such an equitable title to the entire patent monopoly, as would make enforceable a conveyance of the legal title. It should be borne in mind, that what the bill claims is the whole and exclusive title to these inventions, and the patents therefor, and the only relief prayed would, if granted, convey the entire property right and monopoly of these inventions to the complainant, stripping the defendant of all right therein. It is not sought by complainant to establish a shop right, or irrevocable license, for the manufacture and sale of the inventions covered by the patents, or any less interest than the whole and exclusive property right therein, and it is as to the existence of a specific contract to convey such entire interest, that the court below found there was a failure of proof, direct or circumstantial. Notwithstanding, complainant contends that, in the...