Union Switch & Signal Co. v. Johnson Railroad Signal Co.

• Decision Date: 24 May 1894
• Docket Number: 18.
• Citation: 61 F. 940
• Parties: UNION SWITCH & SIGNAL CO. v. JOHNSON RAILROAD SIGNAL CO.
• Court: U.S. Court of Appeals — Third Circuit

61 F. 940

UNION SWITCH & SIGNAL CO. v. JOHNSON RAILROAD SIGNAL CO.

No. 18.

United States Court of Appeals, Third Circuit.

May 24, 1894

George H. Christy and S. Schoyer, Jr., for appellants.

George W. Miller and Wm. R. Blair, for appellees.

Before DALLAS, Circuit Judge, and BUTLER and GREEN, District Judges.

BUTLER District Judge.

The plaintiffs filed a bill against the defendants for infringement of the Sykes patent for 'improvement in electric railroad signal apparatus,' granted to Frederick CheesWright (assignee of the inventor, Sykes), numbered 221,246, dated May 10, 1881. The defendants answered denying the right set up and, under a claim of title and charge of infringement by the plaintiffs, filed a cross bill. Issues were duly formed and proofs taken; and after hearing a decree was entered in the plaintiffs' favor-- for an injunction and an account of profits since October 31, 1889.

From this decree the defendants appealed, and filed the following specification of errors:

'(1) That the court erred in finding that the original complainant, the Johnson Railroad Signal Company, had a good title to, or was the lawful owner of the patent for infringement of which the suit was brought, and as such could maintain an action against this appellant for the infringement thereof.

'(2) That the court erred in not finding that this appellant, the Union Switch & Signal Company, was the lawful owner of, or had a good title to the exclusive right under the patent for an alleged infringement of which the suit was brought.

'(3) That the court erred in finding that the assent of Frederick Cheeswright was essential as a condition precedent to the validity of the right and title claimed by this appellant.

'(4) That the court erred in finding that the proofs failed to show that Cheeswright assented to, or ratified the instrument of March 21, 1882, under which this appellant claims the exclusive right under the patent sued on, or that he acquiesced therein after knowledge.

'(5) That the court erred in not finding that the proofs show that Cheeswright had knowledge of the said instrument of March 21, 1882, and that he acquiesced therein after knowledge.

'(6) The court further erred in finding that the grant of exclusive license from D. M. Yeomans to this appellant, by instrument dated March 21, 1882, was a sale of the patent.

'(7) The court erred in failing to hold that a grant of an exclusive right under a patent was a proper and lawful method of working and developing the business of the patent in question.

'(8) The court erred in construing the instrument of September 10, 1881, executed under the hand and seal of Cheeswright to D. M. Yeomans, and in pursuance of which, the said Yeomans, by the said instrument of March 21, 1882, conveyed to the appellant an exclusive right to the use of the patents therein described, to be a power of attorney merely, and that the same created an agency personal to the said Yeomans alone, and not to his assigns, and, therefore, not transferable.

'(9) The court erred in not holding that the instrument of September 10, 1881, was a valid vesting in Yeomans of the rights and interests therein described, for the purposes in said instrument mentioned, and that said rights and interest so vested were irrevocable.

'(10) The court erred in finding or holding that the right or license under the patent in suit, granted to this appellant by the Yeomans' instrument of March 21, 1882, was revoked or terminated under the authority purported to be granted to one Bezer by Frederick Cheeswright.

'(11) The court erred in holding that the instrument executed by Yeomans on March 21, 1882, was not binding upon Frederick Cheeswright.

'(12) The court further erred in not holding that the attempted revocation by Cheeswright, by the instrument dated October 31, 1889, of Cheeswright to Henry Bezer, was ineffective, as against the appellant.

'(13) The court erred in not finding that the alleged revocation by Cheeswright, by the instrument dated October 31, 1889, or by his alleged agent, Bezer, was ineffective as against this appellant prior to notice of revocation duly given to this appellant.

'(14) The court further erred in not holding that by the instrument of September 10, 1881, the said Yeomans acquired an interest which was irrevocable by the said Cheeswright.

'(15) The court erred in finding that this appellant had done any act in infringement of the patent sued on.

'(16) The court erred in not finding and holding that the Johnson Railroad Signal Company had infringed the letters patent in suit, and violated the exclusive rights vested in this appellant, as set forth in the cross bill.

'(17) The court erred in allowing an accounting of all sums of money due from this appellant under the instrument in writing between defendant and D. M. Yeomans, dated March 21, 1882, and unpaid on October 31, 1889.

'(18) The court erred in failing to find the original complainant was estopped by the acts of certain of its officers from bringing the original action against this appellant, or from asking for an injunction or an accounting or other relief therein.

'(19) The court erred in allowing complainant costs under the original bill.

'(20) The court erred in failing to sustain the cross bill, and in not granting to this appellant the relief therein prayed or grantable thereunder, with costs.

'(21) The court erred in failing to dismiss the original bill for want of jurisdiction in equity.'

It is unnecessary to consider these assignments separately. Collectively, they present the following questions:

First. Have the plaintiffs title? If they have, then,

Second. Have the defendants rights under it? other subordinate questions raised will be considered in answering these.

As respects the first, we agree with the circuit court; the plaintiffs have title, and no more need be said on the subject at present.

As respects the second question we are unable to agree with that court. We believe the defendants acquired rights under the patent, through their contract with Yeomans, which still exist. To determine what the rights are requires a construction of Cheeswright's contract with Yeomans, which is as follows:

'To All to Whom These Presents shall Come:

'I, Frederick Cheeswright, of St. Dunstan's Buildings, St. Dunstan's Hill, in the city of London, notary public, proprietor and assignee of 'Sykes' Patent Lock and Block-Signals for Railways,' under and by virtue of patent for the United States of America, dated the 26th April, 1881, and numbered 240,622, and patent also for the United States of America, dated the 10th May, 1881, and numbered 241,246, do hereby for myself, my heirs, executors, administrators and assigns, appoint D. M. Yeomans, esquire, of Lexham Gardens, South Kensington, London, gentleman, my sole agent for the United States of America, for the purpose of working and developing the business of the said patent in those parts, for and in consideration of a payment to be well and truly made by the said D. M. Yeomans to me, the said Frederick Cheeswright, my heirs, executors, administrators and assigns, as royalty, of four pounds per lever, British money, for every lever fitted upon any railway in the United States to which 'Sykes' System of Signaling' may be attached or connected, with power for the said D. M. Yeomans to negotiate the sale of the said patents, upon terms to be agreed upon.

'In witness whereof I have hereunto set my hand and seal, this 10th day of September, one thousand eight hundred and eighty-one.

'(Seal.)

Frederick Cheeswright.'

This language, as the circuit court justly says, 'is somewhat indefinite; and involved the exercise by Yeomans of a reasonable degree of discretion. ' The instrument is not a simple power of attorney; it has many of the characteristics of an exclusive license. Yeomans is to 'work and develop the business of the patent * * * for and in consideration of the payment ' of four pounds for each lever used. By the terms 'work and develop,' the parties contemplated the...