Allison Bros. v. Allison

23 N.Y.S. 1065, 77 N.Y. Sup. Ct. 27, 53 N.Y. St. Rep. 492, 70 Hun 27
CourtNew York Supreme Court
DecidedJune 23, 1893
StatusPublished

This text of 23 N.Y.S. 1065 (Allison Bros. v. Allison) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allison Bros. v. Allison, 23 N.Y.S. 1065, 77 N.Y. Sup. Ct. 27, 53 N.Y. St. Rep. 492, 70 Hun 27 (N.Y. Super. Ct. 1893).

Opinion

LEWIS, J.

The plaintiff is a domestic corporation. Its business is that of manufacturing and selling cigarettes and cigarette machines. The defendant, prior to the times hereinafter mentioned, had invented new and useful improvements in machines for manufacturing cigarettes. He had also invented improvements in cigarettes. Letters patent had been issued to him for said inventions, and, in connection with a Mr. Kimball, of the city of Rochester, he had been engaged in business relating to said inventions. Thereafter, and in the year 1882, the defendant and his brother, John A. Allison, (who had, by assignment from Oscar, become the half owner of the patents,) and Mr. F. De Witt Clark,. formed a copartnership for the manufacture and sale of cigarettes and cigarette machines in the city of Rochester. Clark put in as working capital $5,000, and the Allisons, in consideration of said advancement by Clark, assigned to him an interest in said patents. The business was started, and in a short time the money invested by Clark was exhausted, and thereupon a written contract, dated October ■ 9, 1882, was made by the parties, by the terms of which the Allisons, for a good consideration paid by Clark, each assigned and transferred to Clark one-sixth of their respective interests in and to said letters patent “for an improvement in cigarettes and cigarette machines, and any improvements, renewals, or reissues of said cigarettes and cigarette machines or letters patent, same to be held and enjoyed by said F. De Witt Clark for the whole of the United States, and to the full end of the term for which said letters patent are granted, and "for the term of any extension or any improvements thereof or reissue or reissues thereon, as fully and entirely as the same would have been held and enjoyed by us [the Allisons] if this assignment and sale had not been made, meaning hereby to vest in said F. De Witt Clark one undivided third of said patents, extensions, or improvements thereof, and we do each of us, said Oscar W. Allison, John A. Allison, and F. De Witt Clark, each mutually agree with the • other that neither of us will sell, dispose of, license, or grant any portion of our said interest in and to same to any person or persons or corporation without the written consent of the other two being first obtained therefor, and any such transfer shall be void in the absence of such written consent being obtained.” Clark thereupon advanced the further sum of $10,000, which was put in and used [1067]*1067in the business; and, the exigencies of the business requiring more money, on the 5th day of February, 1883, the Allisons and Clark entered into a written agreement with one Frederick P. Allen, by which Allen became the owner of a quarter interest in the patents and business, paying therefor the sum of $25,000. The agreement recites that, • in consideration of that sum, paid by Allen, the Allisons and Clark, of the first part, “do hereby sell, assign, and convey to the party of the second part, [Allen,] the machinery, stock, etc., now used and owned by said parties of the first part in the manufacture of tobacco, cigarettes, etc., under the firm name of Allison Brothers & Company, as well as new patents, machines, machinery, or appliances which may be obtained or used in connection with said business; and the parties of the first part do hereby covenant and agree to make all proper assignments of patents, etc., for that purpose whenever desired; the intention of this agreement being that each of said parties of the first part and second parts shall have and hold each, respectively, an undivided one-fourth interest in all the patents and improvements on same which may hereafter be made, machines, stock, and business of the firm of Allison Brothers & Co.” Allen advanced the $25,000, and the business was continued in the name of Allison Bros. & Co. Clark and Allen continued to make advances for the benefit of the business until all the advances aggregated about $75,000. Thereafter, by mutual arrangement between the parties, a corporation was formed by the name of the Allison Bros. Company, being the plaintiff herein, and the entire assets of the firm of Allison Bros. & Co., including the patents and all the interests acquired by the contracts, were transferred to the plaintiff corporation. The capital stock of the corporation was fixed at the sum of $250,000, which was equally divided among the four partners.

During all the times mentioned the defendant was the general manager of the business, and was engaged in inventing improvements in the cigarette machines, and during such time he invented an improvement in the cigarette machine, which was duly patented in the name of the plaintiff, and he also prepared plans for still another improvement, which was thereafter patented, and was one of the five patents hereafter mentioned. The defendant. was paid a salary by the firm for his services. The Allisons, soon after the formation of the corporation, sold and transferred to Allen and Clark the most of their stock in the corporation. John soon thereafter died, and Oscar practically severed his relations with the company, and devoted his attention to inventing improvements in cigarettes and cigarette machines, and thereafter applied for and obtained five different patents for improvements in said machines in his own name. It was conceded upon the trial of the action that neither of these five patents was an infringement upon any of the prior inventions of the defendant which had been patented. The defendant finally entirely severed his relations with the plaintiff, and, after obtaining said five patents, he entered into agree[1068]*1068ments with, other parties to manufacture and use his improved machines, and sold said five patents to parties in ¡New York for the sum of $100,000. These patents having been obtained by the defendant after the commencement of this action, an order was granted permitting the plaintiff to serve a supplemental complaint, so as to include the said five patents in the relief asked for in the complaint, and the supplemental complaint was accordingly served. In the specifications for each of said five patents Allison states that he had invented new and useful improvements in cigarette machines, and describes the characteristics of the improvements. The oral evidence quite satisfactorily establishes that it was represented by the defendant from time to time during the negotiations of the parties prior to executing the several contracts that the machines were still crude and imperfect, and that the skill and genius of the defendant would be requisite, and would be at the service of the company, in inventing improvements and perfecting the machines, and that the company should have the use and advantage of the defendant’s inventions in the business; and it is apparent that Clark and Allen would not have consented to invest in the enterprise the considerable amount of money they did had there-not been such an understanding. The contention of the parties arises over the construction to be given to these various contracts, the plaintiff contending that they not only vest in it the machines and patents in existence at the dates of the contracts, respectively, but that, in addition thereto, they include any and all patents which might at any time thereafter be obtained for inventions for improvements in cigarette machines or cigarettes made by the defendant. The defendant, on the contrary, claims that the contracts only cover the inventions and machines in existence at the date of the contracts, respectively. The contracts were unskillfully drawn. The phraseology used does not with entire clearness sustain the construction claimed by the plaintiff.

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Bluebook (online)
23 N.Y.S. 1065, 77 N.Y. Sup. Ct. 27, 53 N.Y. St. Rep. 492, 70 Hun 27, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allison-bros-v-allison-nysupct-1893.