Toner v. Sobelman

• Decision Date: 06 April 1949
• Docket Number: Civ. A. No. 6819.
• Citation: 86 F. Supp. 369
• Parties: TONER v. SOBELMAN et al.
• Court: U.S. District Court — Western District of Pennsylvania

86 F. Supp. 369

TONER v. SOBELMAN et al.

Civ. A. No. 6819.

District Court, E. D. Pennsylvania.

April 6, 1949.

COPYRIGHT MATERIAL OMITTED

Wilfred R. Lorry and Charles Lakatos (of Freedman, Landy & Lorry), Philadelphia, Pa., for plaintiff.

Samuel B. Fortenbaugh, Jr. (of Clark, Brown, McCown, Fortenbaugh & Young), Philadelphia, Pa., for defendants.

GANEY, District Judge.

In this action based upon defendants' inequitable appropriation of the right to construct and use devices for mechanically trimming or storing grain in ships, and the patent thereof, the plaintiff seeks that the defendants be: (a) declared trustees ex maleficio of the devices, the patent, and all profits and advantages gained by them as a result of their appropriation; (b) required to account for and pay over to him his share in the profits and savings derived from the devices and patent; and (c) directed to reassign the patent to him, or be enjoined from assigning any interest in the patent to anyone other than the plaintiff.

From the evidence presented to it, the court makes the following special findings of fact:

1. The plaintiff is George E. Toner, a citizen of the State of New Jersey, who has been engaged during practically his entire adult life in work connected with loading and unloading of merchant cargo vessels.

2. The defendants are as follows:

(a) Benjamin H. Sobelman, a citizen of the Commonwealth of Pennsylvania, who prior to January 1, 1943, traded as B. H. Sobelman & Co., with his principal office in Philadelphia and did business as steamship agents and stevedores. As of January 1, 1943, Sobelman formed a partnership with Richard P. Ryan, under the name of B. H. Sobelman & Co., to carry on a similar business. Sobelman's interest in the partnership was eighty percent, Ryan's the remaining twenty. Paragraph 4 of the memorandum of partnership agreement provided: "The final decision in all questions arising in the conduct of the partnership shall be made by Sobelman in his sole discretion, including, but not limited to, the establishment and adjustment of drawing accounts and of profit sharing; the addition of new partners and the financing of operations". Prior to and after Ryan's death in September of 1945, other persons were added to the company.

(b) B. H. Sobelman & Co., Inc., a corporation organized and existing under the laws of the Commonwealth of Pennsylvania. It came into existence on January 1, 1947, and took over the business of the company.

(c) Sobelman Enterprises, Inc., a corporation organized and existing under the laws of the Commonwealth of Pennsylvania. It was organized for the purpose of exploiting the mechanical grain trimmers.

3. The matter in controversy, exclusive of interest and costs, exceeds Three Thousand Dollars ($3,000.00).

4. On February 15, 1913, the plaintiff, then thirteen years of age, was employed by Murphy-Cook & Co., contracting stevedores. He subsequently became a stevedore supervisor.

5. Beginning in 1919, because of the labor shortage and the health hazard involved in such employment, it was difficult to obtain men to trim grain on ships. Grain, which is classified as a semi-liquid, includes wheat, corn, rye, oats, barley and linseed.

6. The manual trimming of grain is performed in connecting with the storing of grain in ships. The grain is poured in bulk from the chute of an elevator on shore into the hatch of the ship. The grain, as it falls, forms an ever increasing conical pile in the center of the hold. When the outer surface of the conical pile reaches the coaming or edge of the hatch so that no more can be poured without it overflowing on the deck, the pouring is discontinued. At this point twenty-five or thirty men manually shovel away or distribute the top portion of the conical pile into the furtherest reaches of the hold so that more grain may be poured therein. This process is repeated until the hold is completely filled. It takes forty men at least eight hours to fill a single hold, which number from three to five on a ship. It entails the raising of a volume of dust thereby creating a health hazard. For this reason, longshoremen prefer other work less perilous to health even though the rate of pay is less.

7. Between 1921 and 1925, the plaintiff conceived the novel idea for a device for mechanically trimming grain. Sometime in 1939 or 1940, with the exception of engineering details which remained to be perfected, he fully developed his idea for the device.

8. Between 1925 and 1940 grain exports dropped to almost nothing. During these years there was no need for a mechanical grain trimmer. As a consequence, plaintiff could not obtain anyone to finance the building of such a mechanical device, which required a fairly large investment. Plaintiff was not in a position financially to transform his idea into reality.

9. Shortly after leaving the employ of Murphy-Cook & Co. on March 15, 1943, and upon being offered employment by Sobelman on behalf of B. H. Sobelman & Co., the plaintiff, on April 16, 1943, accepted the position of assistant manager of the stevedoring department. Under an oral agreement, he was to start at Eighty Five Dollars ($85.00) a week and was required to be on call, in addition to the time spent by him in the office or on the waterfront, at any hour of the day or night. He later became manager of the stevedoring department.

10. Because of his prior experience, he was not instructed as to what his duties were. These included the devising of plans or routines for loading or unloading the ships so that the weight of cargo thereon would be distributed properly at all times; the observing of the ship's trim during the loading or unloading operations in order to forestall a listing and a resulting shift of cargo; the seeing to it that the storing of cargo complied with all the rules and regulations promulgated by the marine underwriters; and the employing of proper and sufficient labor to accomplish these purposes.

11. However, his duties did not include the conducting of experimental work, or the inventing or developing or constructing appliances with the view of ultimately manufacturing devices or machines to aid in loading or discharging cargo vessels.

12. Soon after plaintiff joined B. H. Sobelman & Co., he was divorced almost entirely from grain ships, because his talents were needed to supervise the handling of more cumbersome cargo.

13. Sobelman looked after the executive end of the business and did not concern himself with the details of stevedoring which were left to the plaintiff.

14. In February of 1944, at a time when skilled employees were obtained only at a premium, plaintiff signed a document designated as a "Memorandum of Partnership Agreement". According to this document, which was made retroactive to January 1, 1944, plaintiff was not required to make any capital contributions at the time, and it was contemplated for the year 1944 that he was to receive five percent of the net profits of the business, withdrawals and payments made to him during the year were to be considered as advances, and a signatory could withdraw from the organization upon giving six months notice, or at any time upon the unanimous consent of the remaining members. Paragraph 6 of the memorandum provided: "During the continuance of the partnership, each of the signatories agree to devote himself faithfully and exclusively to the conduct of the business and to behave in all matters with temporate and becoming demeanor". Paragraph 7 stated: "Nothing herein shall be construed to limit or amend the powers of control for the operation of the partnership as set forth in Paragraph Four of the original partnership agreement (see Paragraph 2(a) supra), and the provisions thereof are adopted by the four signatory partners as constituted herein".

15. In the summer of 1944, at a time when exporting of grain had increased and men who were willing to manually trim grain on ships were difficult or almost impossible to obtain, the plaintiff suggested to Sobelman that while working for Murphy-Cook & Co., he had conceived the idea of a device for mechanically trimming grain. After he had outlined the highlights of the device and had explained how it would drastically lessen the number of men needed to load a ship with grain, and had mentioned the fact that it would be profitable for both of them, Sobelman, doubtful of its practicability told the plaintiff to work on it with the thought of having it manufactured.

16. Plaintiff submitted drawings, prepared by him at his home, to Sprout, Waldron & Co., manufacturing engineers in Muncy, Pennsylvania, which agreed to make the blueprints and supply some practical engineering details. The company did not promise to build the device at that time because of priority regulations then in effect and a backlog of orders.

17. The blue prints were not completed until March of 1945 when they were sent to B. H. Sobelman & Company's principal office. After plaintiff showed them to Sobelman and told him that he approved them, Sobelman directed plaintiff to go ahead and get the device made.

18. About this time plaintiff mentioned to Sobelman that they ought to enter into some definite agreement so that their respective interests in the device would be protected. The latter brushed the suggestion aside and told plaintiff to get the device made and not to worry about a definite agreement for he would talk about that later.

19. Later, plaintiff proposed that they form a company to exploit the grain trimmer. In response to this proposal, Sobelman reminded him that the manufacturing of the device and putting it into operation would require a large outlay of capital and that he (plaintiff) was unknown in financial circles, that there was a problem of obtaining a priority for its manufacture, and that, moreover, he was not sure whether it would be a success. In addition to reminding him again that his interest was protected, but could not decide...