Union Switch & Signal Co. v. Johnson

• Decision Date: 04 February 1896
• Docket Number: 36,37.
• Citation: 72 F. 147
• Court: U.S. Court of Appeals — Third Circuit
• Parties: UNION SWITCH & SIGNAL CO. v. JOHNSON. JOHNSON v. UNION SWITCH & SIGNAL CO.

72 F. 147

UNION SWITCH & SIGNAL CO. v. JOHNSON.

JOHNSON v. UNION SWITCH & SIGNAL CO.

Nos. 36, 37.

United States Court of Appeals, Third Circuit.

February 4, 1896

S Schoyer, Jr., for Union Switch & Signal Co.

George W. Miller, for Georgina M. Johnson.

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

WALES District Judge.

This was an action brought by Charles R. Johnson, in his lifetime against the Union Switch & Signal Company to recover the amount of certain moneys alleged to be due to him under the terms of a written contract which had been executed by the parties on the 20th of September, 1886. The action was begun on the 19th of April, 1893. On November 13, 1893, on suggestion of the death of the plaintiff, Georgina M Johnson, the executrix of his last will and testament, was substituted as plaintiff on the record and the cause continued. The clauses of the contract which are involved in the present controversy are as follows:

'First. Said Charles R. Johnson is hereby appointed general manager of the said company. He shall have an equal voice with the vice president in all matters relating to the details of the company's business; and, in case of disagreement between him and the vice president, the matter in dispute shall be submitted to the president or board of directors for final and conclusive decision.

'Second. As general manager of said company, said Johnson shall receive pay at the rate of five thousand dollars per year, exclusive of traveling expenses, which are (as in the case of other officials) to be considered as a part of the expenses of the operation of the company.

'Third. Said Charles R. Johnson hereby grants, sells, and conveys to the said company the exclusive right, except as hereinafter provided, to the use of all the inventions that he (the said Johnson) now has relating to the signal business, or that he may hereafter make or acquire, and also the right to use the present inventions of Mr. Henry Johnson relating to signals and switches, and any other which he may hereafter make, or may hereafter so acquire.

'Fourth. Said company hereby covenants and agrees to pay, for the use of said inventions, the sum of three thousand dollars per annum, settlements to be made quarterly.'

'Sixth. Said company further hereby agrees to pay to said Charles R. Johnson, in addition to the aforesaid compensation for patents and salary, a sum equal to ten per cent. of the net profits of the company, after having provided for all the expenses of the operation of the company; but, in reckoning these expenses, it is understood that the interest charge for the company's bonded and present floating debt shall not in any case exceed nine thousand dollars per year, nor shall the salaries of the other officers be increased without the consent of the said party of the second part.

'Seventh. It is mutually agreed that this contract shall continue for a period of ten years, subject to termination by either party, however, by one year's notice, in writing, to the other party at any time after the second year, or by the death of Charles R. Johnson, or his permanent inability to perform his duties as general manager.

'Eighth. It is further mutually covenanted and agreed that, in the event of the termination of this agreement, the said company, by reason of the expenditures that shall have been made during the continuance of this agreement, shall have a license, not exclusive, to use all the inventions that may have been used in carrying on the business of the company, on the payment of sixty-five hundred dollars per year, said sum to be paid quarterly, and shall be entitled to purchase from the said Charles R. Johnson, or his executors, the exclusive right to use all the inventions upon as favorable terms as he or his executors may be willing to grant to any other parties.'

Charles R. Johnson had been in the employment of the defendant company prior to the 20th of September, 1886, and it was stipulated in the contract that the payments under it should date from July 1, 1886. No change was made in the terms of the contract, and both parties continued to act under it until on or about the 1st of January, 1888, when, after several letters had passed between Charles R. Johnson and the president of the defendant company in reference to some new arrangement, it was finally agreed by them that the contract should cease and determine on July 1, 1888. This action on the part of the president was ratified by the directors of the company, and notice of the fact given to Mr. Johnson. On the 1st of March, 1888, the defendant peremptorily dismissed the plaintiff's decedent from its service, on the ground of his alleged unfaithfulness to its interests.

In his statement of demand, the plaintiff's decedent claimed-- First, that under the fourth clause of the contract there was due to him, on the 1st day of July, 1888, the sum of $1,500 for license fees for the six months ending June 30, 1888, being two quarters' dues, at the rate of $3,000 per year; and, secondly, that by virtue of the eighth clause of the contract, the defendant, having continued, after the 1st day of July, 1888, to exercise the license to use the inventions mentioned in the contract, and to make, use, and sell appliances thereunder, there were justly due to him 19 quarterly payments of royalties or license fees, of $1,625 each, from the 1st day of July, 1888, to April 1, 1893, with interest on each payment from the time it fell due.

The circuit court directed the jury to render a verdict for the first, and to disallow the second, claim of the plaintiff. Both parties have filed exceptions to the charge of the court.

1. At the trial below the defendant company produced an exemplified copy of the record of the proceedings had in an action in the superior court of the city of New York, brought by Charles R Johnson against the Union Switch & Signal Company, and which terminated in a judgment for the plaintiff in the action for the sum of $4,155.67, which was fully paid and settled by the defendant. This judgment having been obtained for a breach of the contract of September 20, 1886, the defendant's counsel requested the circuit court to instruct the jury that it was a bar to the recovery by the plaintiff in the present action, of any sum of money now claimed under the fourth clause of the agreement; and the refusal of the court to so charge is assigned for error. The position of the defendant company is that the judgment obtained in the New York court was in full satisfaction and discharge of all claims and demands growing out of the fourth clause. An inspection of the record shows that the complaint in the New York action originally embraced two causes of action,--the first one being for royalties or license fees alleged to be due under the fourth clause of the...