Volk v. Volk Mfg. Co., Inc.
| Decision Date | 12 December 1924 |
| Court | Connecticut Supreme Court |
| Parties | VOLK v. VOLK MFG. CO., INC. |
Appeal from Superior Court, Fairfield County; Isaac Wolfe, Judge.
Suit by Joseph A. Volk, Jr., against the Volk Manufacturing Company Inc., for an accounting. Judgment for plaintiff, and defendant appeals. No error.
Plaintiff and the Volk Manufacturing Company of Connecticut hereafter called Connecticut company, on July 9, 1918 entered into a written contract by which plaintiff agreed to sell and transfer by written assignment all his interest in patents No. 924,860 and No. 981,038, and the right and title to the fuse, the subject of these patents, and the sole and exclusive right to manufacture and sell the same; that any subsequent invention or improvement of the fuse should be the sole and exclusive property of Connecticut company, and that during the continuance of the contract plaintiff would not engage in the manufacture and sale of any style or type of fuse except at the request of Connecticut company, and would give it all information in his possession regarding the fuse, and Connecticut company in consideration of the agreements of plaintiff agreed to pay him as a royalty 10 per cent. of all monthly sales, payable monthly, and that it would employ plaintiff to assist in the manufacture of this fuse and pay him a salary of $50 a week with the option on the part of Connecticut Company at any time to discontinue his employment and engage plaintiff as a salesman at a compensation of 10 per cent. of list price of all sales made, the plaintiff to pay his own expenses. The parties further mutually agreed in this agreement that Connecticut company should have the right at its option to cancel this agreement at any time, and upon this being done all the patent rights and title to the fuse should be reconveyed and assigned to plaintiff, and all rights of either party under this agreement should become void. Prior to the execution of this agreement the plaintiff had made two types of renewable fuses, one known as the " ferrule" fuse and the other as the " knife-blade" fuse, and these were in the hands of Connecticut company. At the time of the execution of this agreement the plaintiff duly assigned these patents to Connecticut company. The " ferrule" patent is covered by letters patent No. 981,034, but the " knife-blade" fuse is not covered by either of these patents, nor are any of its parts so covered, nor are they patentable. Both fuses contain a link, but the link is not covered by these letters patent, and is not patentable. Both the knife fuse and the link are the result of plaintiff's suggestions and ideas, and are an improvement or change over the ferrule type, which is also the idea of the plaintiff. Both of these types of fuses, with the links, were manufactured by Connecticut company, and royalties paid plaintiff from the time of execution of this agreement and until the organization of defendant company, and the covering or label on all the fuses contained plaintiff's name and the word " patented," and the name of plaintiff was also stamped on the link.
The defendant, Volk Manufacturing Company, was incorporated in New Jersey, and took over the entire capital stock and assets and liabilities of Connecticut company, and continued the business and manufacture as its predecessor had done, and duly paid to plaintiff, as its predecessor had done, royalties upon both ferrule and knife-blade types of fuses until about March, 1921. About this time defendant notified plaintiff that it would no longer pay him royalties upon the so-called " link" in both fuses or the knife-blade fuse, upon the ground that they were not covered by these letters patent, and it therefore ceased to pay royalties to the plaintiff upon such product, and has not since this time paid royalties to plaintiff upon such product, although it has continued and still continues to manufacture and sell both the ferrule and knife-blade types of fuses and links. Defendant has continued to pay the agreed royalties to plaintiff upon its manufacture of the ferrule type of fuse. The word " improvements" on invention covered by a patent may be an addition thereto which is adopted to increase its value, or it may be a substitute therefor which is adopted to supplant it entirely by performing its function more efficiently and more inexpensively.
Plaintiff has duly performed his part of this agreement. Neither Connecticut company nor this defendant at any time exercised its option and right to cancel this agreement or to reconvey or reassign such patent rights of plaintiff, but has at all times and up to the trial continued to manufacture and sell both types of fuses and the links herein described. Defendant has sold knife-blade fuses on which it has not paid any royalties in the sum of $16,473.25, and links in the sum of $8,181.42.
The following conclusions were reached by the trial court: (a) That under the terms of the agreement, Exhibit A, and in view of the foregoing facts, the plaintiff is entitled to receive the agreed royalties on all knife-blade fuses and links sold by defendant, as well as on the ferrule type of fuse. (b) That the words subsequent " invention or improvement" in article 3 of the agreement are not to be limited in their interpretation and construction to inventions or improvements that are clearly patentable. (c) That, even if the knife-blade fuse and the links are not clearly patentable, a due consideration of such agreement, read in the light of the surrounding circumstances, discloses a valuable consideration moving from the plaintiff to the defendant, entitling the plaintiff to the payment of the royalties in question. (d) That the defendant, having taken full advantage of all of the terms of the contract, and having continued to manufacture and sell both the knife-blade fuse and the links, and at no time having offered to exercise its option and right to cancel the agreement and restore the plaintiff to his former rights, but continued to hold the plaintiff to the strict terms of the agreement upon his part to be performed, is now estopped from making the claim that it is not bound to pay royalties on such links and knife-blade fuses. (e) That plaintiff is entitled to judgment as on file.
Arthur L. Shipman, of Hartford, for appellant.
Leo Davis and Minerva M. Davis, both of Norwalk, for appellee.
Argued before WHEELER, C.J., and BEACH, CURTIS, KEELER, and KELLOGG, JJ.
WHEELER, C.J. (after stating the facts as above).
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