Bennett v. Iron Clad Manufacturing Co.

121 A.D. 133, 105 N.Y.S. 593, 1907 N.Y. App. Div. LEXIS 1724

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: July 9, 1907
• Status: Published

Opinions

Robson, J.:

That plaintiff’s complaint states facts sufficient to constitute a cause of action against defendant has been determined by this court on an appeal by plaintiff from a judgment obtained at the Herkimer Trial Term in favor of defendant which dismissed the complaint on the ground that the complaint did not set forth facts sufficient to support the action which plaintiff sought to maintain. (Bennett v. Iron Clad Manufacturing Co., 110 App. Div. 443.) In the prevailing opinion, delivered on the former appeal, the allegations of the complaint are referred to at length and it is unnecessary to restate them here.'

Plaintiff was the owner of certain patents covering a'certain kind of metal baskets, and in, September, 1896, entered into an agreement with defendant' by which plaintiff gave defendant the exclusive right to manufacture .these baskets, and defendant agreed to pay plaintiff a royalty of ten cents for each basket it should manufacture under the permission of the agreement. Plaintiff before the commencement of the present action had recovered a judgment for the. royalties unpaid at the time the first action was begun. The present action is brought to recover unpaid royalties on baskets manufactured by defendant after the commencement of the first action.

The action was begun. by the service of a' summons without a complaint, and plaintiff shortly after the service of the summons obtained an' order requiring defendant to make discovery of its books of account by producing or depositing with the clerk of Herkimer county all books of entry kept by defendant, containing entries of solid sheet metal baskets and pieced sheet metal baskets between the 30th day of September, 1902, and the 10th day of October, 1904, and books showing the whole number of baskets sold or offered for sale or in defendant’s possession between said dates, and permitting plaintiff to- examine said books and take extracts therefrom as to the number of baskets on hand, sold, or offered for sale, or in the possession of defendant between said dates. The order further provided that defendant, in lieu of making discovery of its books as aforesaid, might within ten days from the service of the order serve upon plaintiff’s attorneys a verified state-' ment containing the “ whole number of .'solid sheet metal baskets manufactured and the whole number of pieced metal baskets manufactured and the date of said manufacture between September 30, 1902, and the 10th day of October, 1904, and also containing a statement of the number of .all baskets sold and the dates of such sales.” . ■

■ Availing itself of the option accorded to it by the order, defendant prepared a “ statement of metal baskets of all kinds made and sold by the Iron Clad Manufacturing Company from the 30th day óf September, 1902, to the 10th day of October, 1904,” which was verified by its manager, in whose affidavit it is set forth that the statement contains “ a true and correct statement of all the metal baskets of every kind and description, manufactured and sold by ” defendant between the specified dates. This statement gives the number of baskets in separate lists of “seamless” and “pieced” baskets, with the number of each kind manufactured each month during the period covered by the statement. The total number included in the statement is 6,441. • After receiving this statement plaintiff prepared the complaint in this action, to .which reference has been already made. • Practically the single issue of' fact, litigated in any way on defendant’s answer, was whether the 6,441 seamless and pieced metal baskets set out in. the statement referred' to above as having been manufactured by "defendant between the dates covered by the statement are within thé terms of the contract. Defendant’s answer expressly denies that they are. Plaintiff on the trial relied for ■ proof of his- cause of action upon the- statement of defendant,-taken in connection with the order, pursuant to which the statement was furnished, together with the findings of the referee, judgment entered thereon, and proceedings taken in the former action on appeal in' that ..action, all of which were introduced in' evidence, as establishing an admission by defendant of plaintiff’s cause of action for royalties on the 6,441 baskets. Defendant introduced no evidence and the court directed a verdict for $644.10 in favor of plaintiff-, which is the .royalty upon that number of baskets at the rate specified in the contract.-

The determination adversely to plaintiff of the question whether or not the statement of baskets manufactured by defendant, taken, in connection with the other .facts, circumstances and conditions existing, at the time 'the statement was made and with the'answer of defendaiit. afterwards served, is an admission by defendant that-the'baskets listed in the statement were manufactured .by it under- the contract; is decisive of "defendant’,s. right to a. reversal of the judgment and order appealed from. It -will be observed .that no information is given as to the grounds upon which the order, directing the defendant to make discovery of its- books was made. The affidavits ' used on the. application for the order were not offered in evidence, and, therefore, do not appear in the printed record- on this appeal. - While it may be inferred that the applica-. tion for the order was made, and the order" granted, for the purpose. of furnishing plaintiff with facts as to the-number of baskets manufactured by' defendant during the period ’.in- question, in order, that from the information thus obtained he might frame his complaint in the action, yet nowhere in the record does it appear that, the ■ ^defendant was required to furnish, or that-it did in fact furnish, a statement of-baskets it had manufactured, which either embodied the special features or designs which were covered by plaintiff’s patent, or which were within the terms of the contract it had with plaintiff,, upon which plaintiff’s.action is founded. Defendant complied strictly, with the terms of the option given it by the order, and gave plaintiff a statement of all metal baskets it had. manufactured during the period in question. Defendant’s answer, however, expressly denies that these baskets were within. the' terms of its contract with plaintiff. Ho information having been furnished from which we can determine, either what are the special features in metal baskets which plaintiff’s patents cover, or that the baskets, Avliich defendant admits it made, did in fact embody these features, and the case presented for our consideration showing simply that defendant has manufactured 6,441 metal baskets, in order to sustain' the judgment we would necessarily be compelled to.hold that all solid and pieced metal baskets of whatever design or special construction were covered by plaintiff’s patents. Of that fact there is no evidence and it undoubtedly is not the ease. Besides there is no burden imposed bn defendant to free itself from a liability under its contract with plaintiff, predicated only on the admitted fact that it manufactured metal baskets. It is only for royalties' oh metal baskets, manufactured by it, which are within the scope of and are covered by plaintiff’s patents, that liability to answer to plaintiff can arise.' The defendant, admitting that it manufactured the number of metal baskets shown in its statement, made in pursuance of the order, but denying that such baskets were within the scope of plaintiff’s patents, no presumption arises that they were such baskets, and, therefore, within the terms of its contract with plaintiff. The burden still rested on plaintiff to show that the metal baskets which defendant manufactured were within the scope of his patents, and defendant could not, therefore, be required to prove that they were no.t. (Hyatt v. Ingalls, 124 N. Y. 93, 107.)

Another serious objection to the judgment which defendant urges' is the amendment of the pleadings, made after the direction and rendition of the verdict to conform the pleadings to the proof. As a new trial inust be granted upon the first ground above stated, and as the objection on the last ground affects only a part of the recovery, it does not seem to be material to discuss this point at present.

Thé judgment and order-appealed from should be'reversed, with costs to appellant to abide the event. ■

All concurred, except McLennan, P. J,, who dissented in an opinion, ■