United Cigarette Mach. Co. v. Winston Cigarette Mach. Co.

• Decision Date: 07 March 1912
• Docket Number: 1,055.
• Citation: 194 F. 947
• Parties: UNITED CIGARETTE MACH. CO., Limited, v. WINSTON CIGARETTE MACH. CO. et al.
• Court: U.S. Court of Appeals — Fourth Circuit

194 F. 947

UNITED CIGARETTE MACH. CO., Limited, v. WINSTON CIGARETTE MACH. CO. et al.

No. 1,055.

United States Court of Appeals, Fourth Circuit.

March 7, 1912

[Copyrighted Material Omitted]

J. T Coleman and A. B. Kimball (Coleman, Easley & Coleman and King & Kimball, on the brief), for appellant.

William P. Bynum (Manly, Hendren & Womble, on the brief), for appellees.

Before PRITCHARD, Circuit Judge, and McDOWELL and SMITH, District judges.

McDOWELL District Judge.

The appellant was complainant below. The bill cannot be so condensed as to adequately state the case, and it is here set out in full:

'Bill of Complaint

'In the Circuit Court of the United States on America for the Western District of North Carolina.

'United Cigarette Machine Company, Limited, v. Winston Cigarette Machine Company et al. In Equity.

'To the Honorable Judges of said Court:

'The United Cigarette Machine Company, Limited, a corporation created, organized, and existing under the laws of, and a citizen of, England, brings its bill of complaint against W. T. Brown, a citizen of the state of North Carolina, and residing in the Western district thereof, and the Winston Cigarette Machine Company, a corporation created, organized, and existing under the laws of, and a citizen of, the said state of North Carolina, having its principal office and place of business at Winston, in the Western district of the said state of North Carolina.

'I. And thereupon your orator charges, avers, complains, and says that heretofore, to wit, on the 24th day of August, 1899, the Winston Cigarette Machine Company (hereinafter referred to as the Winston Company) entered into an agreement with your orator whereby the Winston Company sold, assigned, granted, and conveyed to complainant certain schedule patents set forth in a schedule attached to the said agreement, and also each and every other patent relating to or covering cigarette machinery of which the Winston Company was the owner or to which it was entitled, including each and every pending application for such patent or patents, and also and particularly the invention in cigarette machinery known as the Briggs cigarette machine, together with each and all improvements in cigarette machinery which the Winston Company then owned or was entitled to or might thereafter acquire or become entitled to, with the exclusive right to sell, hire, or otherwise dispose of the same or any of them throughout the world, except the United States and Canada, and also the right to apply for and obtain patents covering them or any of them, or any parts thereof, in any country or countries.

'The Winston Company, by the same contract, also granted, sold, and assigned to your orator the complete set of working drawings and patterns of its improved cigarette machinery, and all other drawings and patterns thereof; it being provided, however, that the same should, subject to certain provisions and conditions set out and expressed in said contract, remain in the possession of the Winston Company. And it was further provided that the Winston Company should from time to time, to the extent that such machines should be desired by the plaintiff or its successors and after reasonable notice to do so, construct and deliver, securely packed on board cars at Winston, N.C., complete cigarette machines equipped with latest improvements, for each of which said machines, substantially of the then present type, so packed and delivered, your orator should pay to the Winston Company the sum of $450, with the understanding that should any material additions or improvements of such machines be authorized, your orator should pay a reasonable and fair price therefor in addition to the $450 per machine; the cost of such additions or improvements to be agreed upon between the parties before the same were made. Each machine constructed and delivered as aforesaid was to be in first-class working condition, made of good material and in a workmanlike manner, and should be thoroughly tested by the Winston Company before delivery. Each and every Briggs machine sold or hired by your orator was to be constructed by the Winston Company for the price, and on the conditions, hereinbefore stated; but your orator was to be at liberty, nevertheless, to have constructed elsewhere pieces and parts of such machines if it should desire to do so.

'The Winston Company agreed that the persons from time to time engaged by it to construct and build cigarette machines should at no time furnish any of said machines to any party other than the Winston Company and its licensees, for use in the United States and Canada, and to your orator and its licensees for use in the rest of the world; and to this end the Winston Company covenanted that it would securely obligate by contract every person engaged then or thereafter in constructing such machines, and that such contracts should inure to the benefit of your orator for the entire world, except the United States and Canada.

'In the event of any breach of the agreement on the part of the Winston Company or its successors in properly constructing and promptly delivering such machines and parts as might be ordered as aforesaid, or in the event of any other breach, your orator was thereupon to have the right to have delivered to it all of said drawings and patterns (which were to embrace the latest improvements), and thereafter your orator or its successors should be at liberty to construct such machines and parts thereof at any other place; but before withdrawing said drawings and patterns, reasonable time was to be given to the Winston Company in which to have duplicate drawings and patterns made to be retained by it, to be used only in constructing machines the use of which was to be confined to the United States and Canada; and no other copies or duplicates of drawings or patterns, or any part thereof, were to be made, or permitted to be made, except with the written consent of your orator.

'It was further provided, among other things, that your orator should succeed to the rights of the Winston Company in certain contracts in said agreement mentioned between the Winston Company and W. C. Briggs, as well as in any other contract or contracts it had or might thereafter acquire with any person, firm, or corporation relating to the acquisition by the Winston Company of inventions in cigarette machines, or by which any person, firm, or corporation should be debarred from or restricted in acquiring or otherwise becoming interested in cigarette machines, or the handling of the same, but with the proviso that your orator should thereby incur no obligation or liability to pay anything on account of any such contract.

'It was further provided in said agreement, in effect, that the Winston Company should account for and pay over to your orator all moneys theretofore received, as well as such moneys as should be thereafter received by or become due to the Winston Company on account of certain machines enumerated in a schedule attached to the said contract and sold by the Winston Company since June 13, 1899; the Winston Company reserving to itself on account of each such machine the cost price thereof of $415 per machine.

'It was further provided in said agreement that if your orator should desire to sue any user of the Briggs machine, it should notify, by letter, the Winston Company, and thereupon the Winston Company should promptly furnish to your orator copies of all papers relating to or evidencing the sale of any machine involved in any such contemplated suit, and in due time should furnish your orator the original papers to the extent needed as evidence in any such suit.

'It was further provided in said agreement that, except as therein otherwise provided, the United States and Canada should be excepted from the operation of the contract, but that all cigarette machines placed by the Winston Company in the United States and Canada should be so placed in pursuance of a contract, distinct in its terms, providing that the parties with whom such machines should be placed should in no event operate the same or permit the same to be shipped outside of the United States or Canada.

'It was further provided in said agreement that the Winston Company should turn over to your orator all letters and other papers giving information as to cigarette machine business and would-be purchasers or hirers thereof, except such papers and letters as relate to the use of the machines in the United States or Canada, and that the Winston Company should thereafter, from time to time, furnish to your orator all letters received by it, and communicate all inquiries made of it, relating to the cigarette machine business for any part of the world outside of the United States and Canada; and further that the Winston Company should forthwith furnish to complainant full particulars as to any machine or machines it may have sold, other than those enumerated in certain schedules attached to the contract, giving the names of the parties to whom sold, their residences, the numbers of the machines, and the prices at which sold, and that the Winston Company, and all other necessary parties should, from time to time, as requested by your orator and at its instance, execute and do all assurances and things necessary for giving your orator the full benefit of the said agreement.

'It was stipulated in the said agreement that the term 'United States' as used therein should be construed to mean that section of country designated and known as the United States just prior to the late war with Spain, and should not include any of the West Indies, Philippine Islands, or Sandwich Islands.

'The consideration for the said sale and for the

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