Young Reversible Lock-Nut Co. v. Young Lock-Nut Co.

• Decision Date: 22 January 1896
• Citation: 72 F. 62
• Parties: YOUNG REVERSIBLE LOCK-NUT CO. v. YOUNG LOCK-NUT CO. et al.
• Court: U.S. District Court — District of New Jersey

72 F. 62

YOUNG REVERSIBLE LOCK-NUT CO. v. YOUNG LOCK-NUT CO. et al.

United States Circuit Court, D. New Jersey.

January 22, 1896

Edwin H. Brown and Louis O. Van Doren, for complainant.

Alexander Thain, for defendant.

ACHESON Circuit Judge.

The ruling in White v. Rankin, 144 U.S. 628, 12 Sup.Ct 768, is decisive against the objection made to the jurisdiction of the court. Here, as there, the case presented by the bill is based upon the patent exclusively, and upon the face of the bill the court has cognizance of the case. The answer here, as there, sets up an agreement in writing between the patentee and one of the defendants under which the defendants claim to have the right to make, use, and sell the invention. The issue here does not differ materially from the issue in White v Rankin, where the supreme court held that the circuit court erred in dismissing the bill for want of jurisdiction, and remanded the cause with directions to the court to hear the case upon the merits. Indeed, jurisdiction is clearer in this case than it was in the case cited, for the plaintiff's position is that the instrument set up by these defendants as their justification was null and void ab initio. A hearing upon the merits, of course, involves an inquiry into the validity of the agreement which is set up as a defense to the charge of infringement.

By letter of attorney, dated March 30, 1892, Levi H. Young, the grantee of United States letters patent No. 447,224, dated February 24, 1891, for a device for locking nuts, constituted Ira Abbott 'irrevocably' his attorney to conduct negotiations for sale or other disposition of said patent, or for the formation of a company to manufacture and sell the patented articles, with power to transfer and deliver the patent for such consideration as he might deem advisable and think fit and proper in Young's interest, and to execute all necessary documents for the purposes specified, and to utilize and convey, if necessary, the franchises concessions, and privileges which Young had at Newport News Va., or elsewhere. The allegation in the answer that this power of attorney was made irrevocable, because it was coupled with an interest in the patent to the extent of one-twelfth part thereof, assigned by Young to Abbott, is not supported by any evidence. On the contrary, it is shown that Abbott never had any interest whatsoever in the patent. The power, then, undoubtedly was revocable (Hunt v. Rousmanier, 8 Wheat. 174; Blackstone v. Buttermore, 53 Pa.St. 266); but whether it was effectually revoked by Young before Abbott undertook to act under it need not be considered in the view I take of the case. By an instrument of writing dated March 31, 1892, signed by Young and Abbott, and executed before the delivery of the power of attorney, it was stipulated that Abbott should not dispose of the patent unless he secured to Young the sum of $50,000 by direct payment or by deposit in bank to his credit, half thereof, at least, 'spot cash,' and the balance in approved notes at three, six, nine, and twelve months, together with the one-quarter of the capital stock of the company to be formed. The power of attorney and the collateral paper were executed in anticipation of Young's going abroad for a short time on business connected with his European patents for the lock-nut invention. Young sailed for England on April 2, 1892, not expecting to be absent from the United States more than 60 days, but he was detained abroad until October, 1893. On April 19, 1892, Abbott wrote to Young,-- then in London,-- suggesting that $50,000 was an excessive cash payment, and that it might be well for Young to take '33 1/3 per cent. of the stock and $10,000 spot cash, and $25,000 with 6 per cent. at the end of the year after the stock has had a 10 per cent. dividend. ' Upon the receipt of this letter, Young, on May 3, 1892, cabled Abbott his assent to this suggestion. It is argued by the defendants that in the subsequent transaction on April 24, 1893, about to be mentioned, between the Young Lock-Nut Company and Abbott, the latter was acting in pursuance of Young's cablegram. This view, however, is quite inadmissible, for not only had Young withdrawn his assent, but, as respects the $10,000 spot cash,' Abbott's suggested plan was not carried out, as we shall see. By an agreement in writing dated and made on April 24, 1893, executed by Ira Abbott,...