American Electric Const. Co. v. Consumers' Gas Co.

47 F. 43, 1891 U.S. App. LEXIS 1385
CourtU.S. Circuit Court for the District of Western Pennsylvania
DecidedJuly 15, 1891
StatusPublished
Cited by3 cases

This text of 47 F. 43 (American Electric Const. Co. v. Consumers' Gas Co.) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Western Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Electric Const. Co. v. Consumers' Gas Co., 47 F. 43, 1891 U.S. App. LEXIS 1385 (circtwdpa 1891).

Opinion

Reed, J.

The plaintiff’s statement of claim avers an agreement "between the plaintiff and defendant for the sale and erection by the former of an electric light plant. The agreement is contained in a written proposition by the plaintiff to furnish the apparatus set up and in operation for a certain consideration, and a written acceptance by the defendant-company, in which acceptance is stated,the time by which the plant is to be completed, and the manner and time of payment of consideration stated in the proposition. The plaintiff sues for the balance due it under the agreement of $7,749.25. An affidavit of defense has been filed by the defendant, and the plaintiff'has moved for judgment for want of a sufficient affidavit of defense. It is not necessary to cite authority for the rule that the affidavit of defense should state specifically and at length the nature and character of the defense relied on, and should set forth such facts as will warrant the legal inference of a full and legal defense to the plaintiff's cause of action, nor of the equally well-settled rule that upon the hearing of a motion for judgment all the material averments of the affidavit must be taken as true. The affidavit avers as matter of defense that at the time of entering into the contract the plaintiff agreed with the defendant to fully indemnify and save it harmless as against any and all demands growing out of letters patent of the United States, and against any and all suits for infringement of any patents, [44]*44which might be incurred by reason of its use of the electric light plant or any of its parts, and on demand to give the defendant a good, sufficient, and satisfactory bond so to do; that a bond was tendered by the plaintiff in recognition of its obligation, which was not accepted by the defendant, as it was neither good, sufficient, nor satisfactory; that a bond has been repeatedly demanded by the defendant, but has not been given by the plaintiff. The affidavit further avers that since the construction of the plant the defendant has been served with notice of a claim for damages by the owner of a patent for a regulator, which is an essential feature of the plant, and which patent has been sustained by a circuit court of the United States; that $5,000 damages are claimed in this matter; that another patent for double carbon lamps, likewise a portion of said plant, has been sustained by a circuit court of the United States, and the defendant is liable to suit for infringement by the owners of the patent for the use of said lamps. This defense, the plaintiff contends, is insufficient: (a) Because the alleged agreement is at variance with the written agreement between the parties, and there is no allegation that it was omitted from the written agreement by fraud, accident, or mistake; (6) the affidavit does not allege any reason why the bond tendered was not good, sufficient, or satisfactory; (c) there is no allegation that the defendant has paid any money or sustained any loss by reason of the alleged infringements, and therefore the same constitute no defense.

By the original agreement, for sale there arose an implied warranty on the part of the plaintiff of title to the property sold. Assuming that this included a warranty that it had the right to manufacture and sell appliances and machinery which others might claim an exclusive right by virtue of patents to manufacture and sell, what are the respective rights and obligations of the parties, as vendor and vendee, under the written agreement? This question was before the supreme court of Pennsylvania in the case of Geist v. Stier, 134 Pa. St. 216, 19 Atl. Rep. 505. There the maker of certain promissory notes defended upon the ground that their consideration was the purchase of a certain business, the principal value of which lay in a peculiar process of etching on glass, and that he was obliged to give up the business by reason of a written notice of a person claiming to be a patentee of said process to discontinue the use of the same, or he would “be dealt with according to law.”* The court said:

“Conceding the correctness of the general proposition, that a warranty of the seller’s title is implied in every sale of personal property where there is no understanding to the contrary, it is not applicable to the facts of this case. At most the defendant’s right to use the process was challenged and suit threatened, but no suit was brought, nor was the defendant prevented in any way from continuing to use the process. A purchaser of personal property, in full possession thereof, cannot refuse to pay for it because a third party has asserted a superior title, and threatened to bring suit for the recovery of the property or its value. The notice and threat to sue, without more, did not absolve the defendant from his liability to pay his notes.”

It is true that in that case it did not appear affirmatively .that the claimant had a patent, but I do not understand that that fact influenced [45]*45the court in its decision. In the case of Krumbhaar v. Birch, 83 Pa. St. 426, the court say: ,

“Where defense is made to the payment of the purchase money for breach of warranty of title there should be proof of eviction, or of an involuntary loss of possession. The warranty of title is part of the consideration. While the vendee holds the covenant and retains the possession ho cannot withhold the purchase money. The right to detain purehaso money is in the nature of an action on the covenant. A vendee who seeks to detain by virtue of a covenant of warranty of title, in the absence of fraud, is as much bound to prove an eviction as if he was a plaintiff in an action of covenant.”

This was a suit for consideration for the sale of personal property! In Warner v. Truly, 17 How. 584, the court say:

“ The rule of the courts of Mississippi, as well as of this court, is that, except in specific cases, a vendee in possession cannot, at law or in equity, contest the payment of the purchase money stipulated in a contract of sale by an alleged defect of title, but reliance must be placed on the covenants it contains.”

And this seems to be the general rule. 2 Benj. Sales, pp. 829, 1151, notes. Based upon its rights under the written agreements, the affidavit of defendant discloses no defense in this respect, for it does not show a breach of the implied warranty of title.

The defendant, however, alleges that, at the time the written agreements were made, another agreement was made between the parties, whereby the defendant was to receive from the plaintiff a good, sufficient, and satisfactory bond of indemnity against demands and claims for infringement, which has not been given, although demanded by the defendant. One such bond was tendered, but was not satisfactory to the defendant, and plaintiff has failed to give such security before bringing suit. If this additional agreement is binding upon the parties, and can be shown in evidence in this case, it would defeat plaintiff’s action, because it should he given or tendered before the plaintiff’s right of action would be complete; and the defendant would have the right to refuse to accept the bond tendered upon the ground that it was unsatisfactory, whether such dissatisfaction was based upon reasonable grounds or not. Campbell, etc., Co. v. Thorp, 36 Fed. Rep. 414; Seeley v. Welles, 120 Pa. St. 69, 13 Atl. Rep. 736. The alleged agreement must be presumed to have been verbal, because the affidavit does not allege it to have been written, nor set forth a copy of it, if written.

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Cite This Page — Counsel Stack

Bluebook (online)
47 F. 43, 1891 U.S. App. LEXIS 1385, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-electric-const-co-v-consumers-gas-co-circtwdpa-1891.