Virtue v. Creamery Package Mfg. Co.
| Citation | 123 Minn. 17 |
| Decision Date | 22 August 1913 |
| Docket Number | Nos. 18,038 - (149).,s. 18,038 - (149). |
| Parties | D. E. VIRTUE and Another v. CREAMERY PACKAGE MANUFACTURING COMPANY and Another.<SMALL><SUP>1</SUP></SMALL> |
| Court | Supreme Court of Minnesota (US) |
Action in the district court for Steele county by D. E. Virtue and the Owatonna Fanning Mill Company against the Creamery Package Manufacturing Company and the Owatonna Manufacturing Company to recover $165,000 actual damages and $60,000 exemplary damages, in all $225,000. The case was tried before Childress, J., and a jury which rendered a verdict for $57,500 in favor of plaintiffs. From an order denying their separate motions for judgment notwithstanding the verdict or for a new trial, defendants appealed. Reversed and new trial granted.
Cohen, Atwater & Shaw, W. A. Sperry and A. C. Paul, for appellants.
Harlan E. Leach, for respondents.
Plaintiffs recovered a verdict. Defendants appeal separately from an order denying their alternative motion for judgment notwithstanding the verdict or for a new trial. Together they make 334 assignments of error. It is hardly to be expected that we will take all of these seriously. We will accordingly refer mainly to those argued in the briefs of counsel.
The issues in the case are simple. The Owatonna Fanning Mill Company was incorporated in the early nineties, and has since been engaged in the manufacture of fanning mills and some other farm machinery. Plaintiff Virtue has been the principal factor in the company, financially and otherwise. In 1903 or 1904, Virtue and the company, acting together under an agreement, the details of which are not important, commenced the manufacture of a combined churn and butter worker. They claim that these defendants, conspiring together, wrongfully and maliciously interfered with this business by misrepresentation, threats of litigation, and the malicious prosecution of two patent infringement suits, and by these acts caused substantial damage. This action is brought to recover actual damages, and punitive damages as well. Defendants deny these charges, and for a further defense allege that some of the issues have been determined by previous litigation. These simple issues are presented by pleadings, which, with amendments and exhibits, fill a volume of 526 pages. It is needless to say that such plethora of allegation serves few of the useful purposes of pleadings, which are by statute required, on the part of plaintiff, to make "a plain and concise statement of facts constituting a cause of action, without unnecessary repetition"1 and on the part of defendant to consist of "a denial of each allegation of the complaint controverted by the defendant, or an averment that he has not knowledge or information thereof sufficient to form a belief," and "a statement, in ordinary and concise language, of any new matter constituting * * * a defense."2
There is evidence tending to prove the following facts:
In 1903, the defendant Creamery Package Manufacturing Company owned a patent upon a combined churn and butter worker, known as the "Victor." This machine had, as part of the mechanism for working butter, four rolls located in pairs parallel with the drum.
The defendant Owatonna Manufacturing Company was engaged in manufacturing a combined churn and butter worker known as the "Disbrow," under several patents originally procured by one Disbrow. This defendant owned another patent, known as the Howe, Ames & La Bare patent, known also as the "two speed" patent. The merit of the device covered by this patent was that it had a "two speed" gear, so that the churn turned rapidly for making butter, and slowly for working butter. This principle was used in the manufacture of the Disbrow churn.
These defendants were at this time operating under a contract, by the terms of which the Creamery Package Manufacturing Company was to handle, as sole agent, the combined churns and butter workers manufactured by the Owatonna Manufacturing Company; the Creamery Package Manufacturing Company was not to manufacture the Disbrow churn, but might manufacture and sell others, and the Owatonna Manufacturing Company was entitled to furnish 55 per cent in value of the churns and butter workers sold by the Creamery Package Manufacturing Company. Together these two companies practically controlled the business of the country in this line.
In 1903, plaintiffs commenced the manufacture of a combined churn and butter worker which they named the "Owatonna." This machine embodied the "two speed" principle which was covered by the Howe, Ames & La Bare patent. Instead of four rolls in two pairs, as in the Victor machine, it had three rolls, one on each side of the axis of the churn, and one in the center coincident with the axis and operated with each of the others.
Plaintiffs established some agencies for the sale of these churns, and sold some direct to creameries. They did very little advertising, except to print circulars and send them through the mail to jobbing houses, hardware men, or anybody that they thought might handle their product. Plaintiffs sold 22 machines before July 16, 1904, and 40 during the next 2½ years, at an average price of $126.50, and an average profit of $46.50 each. Plaintiff Virtue testified that in 1903 and 1904 the business was well known for a business that had been run only so long. There was a good market for combined churns and butter workers extending over the dairy and creamery districts of the United States.
Plaintiffs claim that defendants set out to destroy their business. There is evidence tending to prove this, as follows:
In 1901, one Martin Deeg went to Chicago to confer with the officers of the defendant Creamery Package Manufacturing Company in regard to a contract originally made between Virtue and Deeg, on the one hand, and the Cornish, Curtis & Greene Manufacturing Company on the other, defendant Creamery Package Manufacturing Company having taken over the business of this latter concern. Deeg testified that in the course of the negotiations he said: "If they don't want to fulfil their contract, why, we will go to work and build our churns ourselves;" that Mr. Gates, the president of the Creamery Package Manufacturing Company then said, that Mr. Higgs, who was vice-president and general-manager of the Creamery Package Manufacturing Company, said:
In May or June, 1904, C. P. Cooper, representing the defendant Creamery Package Manufacturing Company, called upon plaintiff Virtue and said he wanted plaintiffs to handle the Disbrow churn and their creamery supplies in the territory tributary to Owatonna; Mr. Cooper had with him a contract which contained prices at which the goods were to be sold; these prices were higher than the prices which plaintiff was then selling; in the course of the conversation Mr. Cooper said, "You had better take the Disbrow churn and make this contract; we think we own the creamery supply business around here."
In March, 1904, the Pratt Creamery Association was considering the buying of a churn from plaintiffs. Mr. Rice, representing the Creamery Package Manufacturing Company, came before its board of directors and told them that they were liable to be sued if they bought that churn; the association accordingly bought the Disbrow churn.
At about this time, the Columbus Co-Operative Creamery Company, of Elgin, Minnesota, installed one of plaintiffs' churns; soon thereafter Mr. Stone, representing the Creamery Package Manufacturing Company, came along and wanted to put in a Disbrow churn, and said he thought they would have to put in one before long, because it might be that the creamery would be held liable for using a Virtue churn on account of an infringement on the Disbrow churn; that plaintiffs' churn was then taken out and the Disbrow churn put in.
On July 16, 1904, two suits were commenced against plaintiffs for patent infringements, one on behalf of the Creamery Package Manufacturing Company for infringement on the patents embodied in the Victor churn, and one on behalf of the Owatonna Manufacturing Company for infringement upon the Howe, Ames and La Bare, or the "two speed" patent. Both suits were commenced at the same time and the same attorneys represented both plaintiffs. Plaintiffs claim that both of these actions were prosecuted maliciously and without probable cause.
Thereafter and in the latter part of July, 1904, the Coon River Creamery Company, at Newell, Iowa, purchased one of plaintiffs' churns from W. H. Monroe, representing a creamery supply house at Cedar Rapids, Iowa; soon thereafter Mr. Woodring, representing the Creamery Package Manufacturing Company, endeavored to induce the company to take out the plaintiffs' churn and install a Disbrow; he stated that the Creamery Package Manufacturing Company was about to sue the Owatonna Fanning Mill Company for infringement of the Disbrow patents, and that, if the creamery company used this churn, they would be sued for infringement, and he further stated that plaintiffs' churn was an infringement on the Disbrow patent. Mr. Monroe testified that after this incident he did not push plaintiffs' churn any more; that he didn't want to be bothered with that kind of a fight; that he got another churn to handle principally because he deemed it more than the churn was worth to keep it in a creamery when he got it there, because competitors "laid down"...
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