Forncrook Manufacturing Co. v. E. T. Barnum Wire & Iron Works

29 N.W. 537, 63 Mich. 195, 1886 Mich. LEXIS 649
CourtMichigan Supreme Court
DecidedOctober 14, 1886
StatusPublished
Cited by2 cases

This text of 29 N.W. 537 (Forncrook Manufacturing Co. v. E. T. Barnum Wire & Iron Works) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Forncrook Manufacturing Co. v. E. T. Barnum Wire & Iron Works, 29 N.W. 537, 63 Mich. 195, 1886 Mich. LEXIS 649 (Mich. 1886).

Opinion

Campbell, C. J.

Defendant made a general assignment, and the present proceeding was had to establish a claim under the statute.1 During the active business of defendant, it was, among other things, engaged in making and selling different kinds of cheese-safes, and previous to December, 1882, had made them, to some extent, under patents issued to one Gordon. The plaintiff company had been organized to make and sell cheese-safes according to certain patents issued to Isaac S. Forncrook, the chief stockholder and president.

On the twenty-third day of December, 1882, plaintiff and defendant entered into an agreement, which was, in substance, this: Plaintiff was to transfer to defendant an exclusive right for five years in the Forncrook patents. In consideration thereof defendant agreed to use all reasonable diligence in the manufacture of such glass cheese-safes, embracing the novel features of the patents, as the demands of the markets may require in the United States, and fill all orders for glass safes, including either or both of such patent improvements, and to advertise the same in the annual circular of defendant, and to pay fifteen cents for each safe with glass sides, having either or both of said improvements, as a royalty. Statements and payments were to be rendered every six months. Defendant had the right to make and sell any other cheese-safes having either or both said improvements, by paying fifteen cents royalty on each sale. [199]*199Royalties were to cease if the patents were declared void. Plaintiff was bound, at its own expense, to suppress infringements. Plaintiff was to turn out all orders to defendant, which was not bound to sell the safes or supply the market below $3.25 for each safe.

By a second agreement defendant agreed, as soon as may be; to sell all the cheese-safes which plaintiff had on hand, finished and unfinished, at not less than the circular schedule prices, — -No. 1, $75 a dozen; No. 2, glass, $40 a dozen; No. 2, wire, $36 a dozen; No. 4, glass, $24 per dozen, — less 15 per cent., and 2 per cent, for cash.

At the same time Mr. Forncrook entered into defendant’s employment for five years, as a traveling salesman, for $1,200 a year and expenses, and three cents for each safe sold having his improvements, and for each square cheese-safe known as Gordon’s .patent. Deductions of commissions were to be made in case the patents were invalid, or sales made of necessity at less than regular prices.

The present claim is based on both of the agreements between plaintiff and defendant. Damages are sought and were given because of a failure to sell the safes turned over to defendant. Royalties were asked and given for sales of several thousand safes, alleged to have contained part or all of the Forncrook improvements.

The court below, trying the issues without .'a jury, made several findings of fact, which it is claimed are- not, in important particulars, supported by evidence. Objection is also made to rulings upon testimony, and to the construction of the contracts and of the patents.

As the proceeding is put by the statute on the -footing of a common law-suit, and is the same as if so prosecuted in the absence of any assignment, -we are not authorized to find facts ourselves or to determine them; but'some matters considered below as questions of fact are claimed to be substantially questions of construction and of law.

[200]*200The two contracts were treated separately on the argument, and may be so treated here.

Damages were given based on the full value of the safes turned over to defendant for sale, on the ground that the sales were lost by defendant’s fault, and this fault is laid to failure to push the sales. It appears that prior to June, 1883, but a small part of these safes had been sold, and they were then taken by plaintiff, and sold at a low price. Defendant claimed to have used proper diligence, but that, by reason of the price, and also of the want of demand for safes of those patterns, they were not disposed of because of no purchasers seeking them.

From the rulings made upon the reception of certain testimony, especially of Mr. Forncrook, it is evident the findings were based partly, if not altogether, upon the idea that defendant was bound to use peculiar diligence in selling these safes, and in withholding others from competition. It appears that they were advertised in the same way as the others, and that they were sold whenever a purchaser applied for or wanted one.

We do not think these rulings consistent with the contracts. Defendant was largely engaged in making and selling safes of different patterns. These contracts were simultaneous in date, and should be treated as bearing more or less on each other, although, in the particulars now referred to, the effect of reading them singly would not be different. It may fairly be deduced from these transactions that defendant expected, by getting control of plaintiff’s patents, to get rid of some rivalry, as well as to enlarge its variety of goods. So far as the safes on hand are concerned, it was merely an ordinary case of sales on commission, for a compensation of 15 per cent., which would amount, in all, to between $300 and $250 on the 743 safes. Mr. Forncrook was employed as traveling salesman at $1,300 a year and expenses, and other agents were also sent out. The annual sales of [201]*201all kinds are claimed to have reached 12,000 to 15,000, and the defendant was not required by either contract to abstain from making and selling any kind it chose to put in the market.

It would be grossly unreasonable to hold defendant bound to put these safes on any other footing than other articles kept oh sale, or to force them on the market at the expense of other interests. There was no obligation to give them a preference, or to use more than usual diligence to dispose of them. If the trade was informed of them, and of their price, in the usual manner, then defendant fulfilled its duty by'selling them when applied for. If other safes were regarded by dealers and purchasers as cheaper or better, defendant was justified in selling what was demanded. In all such matters, facts are more reliable than opinions, and if articles were given a fair chance, and are not sold, defendant cannot be held responsible for not using extra efforts to sell them. Testimony was received, under objection, which would only have been admissible on that ground, and it is evident the findings could not have been- made as they were on any other. It was the right of defendant to have findings which would show their basis specifically. Enough appears to show that the theory complained of determined a large share, if not all, of the damages for not selling the safes.

The other questions arise under the claim that defendant has made safes including some of the Forncrook inventions, and is responsible for the stipulated royalties. Some discussion was had upon the question whether defendant could dispute the validity of plaintiff’s claims as an inventor, and use the devices without royalty, if not original.

The contract containing the transfer or license to defendant has this provision:

“In case either or both of such patents shall be declared invalid by the court, this agreement shall be thereby so mod[202]

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Bluebook (online)
29 N.W. 537, 63 Mich. 195, 1886 Mich. LEXIS 649, Counsel Stack Legal Research, https://law.counselstack.com/opinion/forncrook-manufacturing-co-v-e-t-barnum-wire-iron-works-mich-1886.