Virtue v. Creamery Package Manufacturing Company
| Citation | 142 N.W. 930,123 Minn. 17 |
| Decision Date | 22 August 1913 |
| Docket Number | 18,038 - (149) |
| Parties | D. E. VIRTUE and Another v. CREAMERY PACKAGE MANUFACTURING COMPANY and Another |
| Court | Minnesota Supreme Court |
Petition on Rehearing Filed October 31, 1913
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.
Infringement of patent -- action for false representations.
1. Defendant Owatonna Manufacturing Company manufactured a combined churn and butter worker. It owned a patent upon a device known as the "two speed," by the use of which the churn was turned rapidly for making butter and slowly for working it. Plaintiffs used a device upon a combined churn and butter worker manufactured by them that would have been an infringement had defendant's patent been valid. But it was void. Defendants made representations to plaintiffs' customers that plaintiffs' churn was an infringement on their patent and threatened prosecution for infringement. Such representations and threats were actionable.
Misrepresentation of competitor's merchandise.
2. The laws of competition do not countenance misrepresentation of the business or goods of a competitor.
Liability for agent's tort -- question for jury.
3. There was evidence for the jury, on the question whether the agents making such representations bound defendants, under the rule that a principal is responsible for the torts of his agent committed in the course of his employment or in the line of his duty with a view to the furtherance of his master's business and not for a purpose personal to himself.
Warning against infringement of patent.
4. The owner of a patent may, in good faith, warn against infringement and give notice of intention to enforce his rights. But, if his patent is void, he may not make representations of infringement or threats of prosecution to the injury of another.
Misrepresentations -- evidence of damage.
5. These representations were material. The "two speed" principle was essential to any successful combined churn and butter worker. There is evidence that they damaged plaintiffs.
Misrepresentations.
6. Such representations were not rendered harmless by the fact that plaintiffs' churn was afterwards found to infringe a different patent owned by the other defendant.
Malicious prosecution of civil action -- evidence.
7. An action will lie for malicious prosecution of a civil suit though there is no interference with the person or property of the person sued. To maintain such action, plaintiffs must prove malice and palpable want of probable cause.
Accrual of right of action.
8. The right of action does not accrue until such suit is terminated favorably to the defendant therein.
Action for infringement -- interlocutory decree.
9. In the patent infringement suit commenced by the Creamery Package Manufacturing Company against these plaintiffs, an interlocutory decree was entered sustaining that company's claims in substantial particulars. This decree is not res judicata, but it is decisive that these plaintiffs have not yet prevailed.
Question for jury.
10. As to the patent suit prosecuted in the name of the Owatonna Manufacturing Company, the evidence is sufficient to require submission to the jury of the question whether the prosecution was malicious, and probable cause is not conclusively proven.
Letters patent -- presumption of validity -- burden of proof.
11. A patent is presumed valid until the contrary is proven beyond a reasonable doubt, and its issuance, when fairly procured justifies suit by the patentee for infringement against one using the same device; but, when it is proven that an invention was in use prior to the issuance of the patent, the burden of proof is on the patentee to establish its validity.
Prior letters patent -- evidence.
12. There is evidence that after commencement of the suit for infringement of the "two speed" patent, a conference was had and defendants' attorney showed to the attorney and an officer of the complainants other letters patent which had been issued prior to the complainants'. This evidence was insufficient to show that the complainants thereafter continued such suits with knowledge that their patent was void, in the absence of proof as to the nature of the prior patents which were so produced.
Advice of counsel -- question for jury.
13. Advice of counsel is a complete defense to an action for malicious prosecution of a civil action only when it appears that the prosecutor fully and fairly stated all the facts within his knowledge, or which by reasonable diligence he might have learned, to a reputable attorney, and that in bringing the action he, in good faith, acted on the advice given him. The question whether in this case these defendants acted in good faith and in reliance on the advice of their counsel, was, under the evidence, for the jury.
Limitation of action -- governing statute.
14. A claim for malicious prosecution of a civil action is ruled by Revised Laws, § 4076, subd. 5, allowing six years for commencement of an action for any injury to person or rights not arising on contract and not by § 4078, limiting action for libel, slander, assault, battery, false imprisonment or other tort resulting in personal injury, to two years.
Prior action not res judicata.
15. A judgment for defendants in a prior action in the Federal courts to recover treble damages for alleged combination in restraint of trade, in violation of the Sherman Anti-trust Act, was not res judicata of plaintiffs' right to maintain a common-law action for interference with their business by false representations, threats, and malicious prosecution.
Prior action not res judicata.
16. Combination in restraint of trade was the gist of the action in the Federal court. It is not the gist of the common-law action.
Joint tort.
17. A joint tort may be committed without the existence of any conspiracy or combination in restraint of trade.
Joint tort -- question for jury.
18. The false representations charged in this case were all made by officers or agents of the defendant Creamery Package Manufacturing Company. The infringement suit which failed was in the name of the defendant Owatonna Manufacturing Company. There was evidence to go to the jury as to the liability of both defendants, under the rule that all who actively participate in the commission of a tort, or who procure, command, direct, advise, encourage, aid or abet its commission, or who ratify it, are jointly and severally liable even though they act independently or without concert of action or common purpose, provided their acts concur in tending to produce one resulting event.
Evidence -- verdict excessive.
19. There was evidence that plaintiffs owned some patents. There was none that their value had been destroyed by the alleged wrongs or as to the extent to which it had been injured. There was evidence that plaintiffs owned a manufacturing plant, but none as to the amount it had been damaged. There was evidence that plaintiffs expended time and money in the defense of the infringement suit. The evidence is vague as to the necessity thereof, and there is no evidence of the value of plaintiffs' time. Plaintiffs claim damages for injury to their business and its good will. Their total sales from the inception of this business were less than $8,000, and the total profits less than $3,000. Held, a verdict awarding $57,500 was so excessive as to indicate passion and prejudice.
Proof of damage.
20. Damages must be proven with reasonable certainty. To recover damages for injury to property, there must be fair proof of the existence and amount of damage. To recover for expenditure of time and money, there must be evidence of the necessity thereof, and of the value of such time; upon proper proof there may be a recovery for injury to business, its reputation, standing and good will. Such damages must not be speculative and conjectural; yet, where it is certain that damages have accrued to plaintiffs from defendants' wrongful acts, plaintiffs will not be denied a recovery of any damages whatever, solely because of uncertainty as to the amount of damages sustained.
Admissible evidence.
21. An exclusive sales contract existing between defendants was admissible to show the relation between them at the time of the acts complained of. The prior contracts between them were immaterial and inadmissible.
Inadmissible evidence.
22. Evidence of defendants' prices and profits on churns, and evidence that plaintiffs did not intend to infringe defendants' patents and believed they were not doing so, was inadmissible.
Inadmissible evidence.
23. A copy of a writing not shown to have emanated from either of the defendants was inadmissible.
Inadmissible evidence.
24. A judgment of dismissal is not evidence in a subsequent suit between the same parties for the same cause.
Election of remedies.
25. A suit on an alleged cause of action that does not in fact exist, is not an election of remedies.
Charge to jury erroneous.
26. It was error to instruct the jury that their verdict must be for or against both defendants and that the only question for them to determine was whether or not there was a conspiracy between them to injure plaintiffs.
Evidence of collateral facts.
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