Hazen v. Garey

212 P.2d 288, 168 Kan. 349, 84 U.S.P.Q. (BNA) 99, 1949 Kan. LEXIS 471
CourtSupreme Court of Kansas
DecidedDecember 10, 1949
DocketNo. 37,730
StatusPublished
Cited by8 cases

This text of 212 P.2d 288 (Hazen v. Garey) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hazen v. Garey, 212 P.2d 288, 168 Kan. 349, 84 U.S.P.Q. (BNA) 99, 1949 Kan. LEXIS 471 (kan 1949).

Opinion

The opinion of the court was delivered by

Price, J.:

This is an action on an 'oral agreement pertaining to the sale and assignment of patent rights. The petition, as amended, [350]*350sets forth three causes of action — (1) For specific performance; (2) for damages in the nature of quantum meruit recovery in case specific performance be denied; and (3) for damages by reason of unjust enrichment in the event specific performance be denied.

Defendant’s demurrer to each of the three causes of action set out in the petition, as amended, was overruled and it is from that order this appeal was taken.

The petition, which was filed November 20, 1948, recites the following story:

Plaintiffs’ residence and principal place of business is Beloit, where they conduct a business under the firm name of Sunflower Manufacturing Company. In 1941 the United States patent office issued to defendant a patent for a “diamond packer,” the same being a farming device and appliance invented by defendant, consisting of a metal wheel with an arrangement of spiked wedges or knobs on its circumference and used in packing ground in the preparation of land for farming purposes. Defendant, by virtue of his patent, owned a monopoly on the manufacture, sale and distribution of this device, and on or about July 6, 1948, in the cities of Downs and Osborne, Kan., plaintiffs and defendant orally agreed that plaintiffs should thenceforth have the exclusive right in the United States, during the life of such patent, to manufacture, sell and distribute all machines and implements wherein and whereby such new and novel principles so patented should or could be used. Plaintiffs promised and agreed to pay defendant one dollar royalty up to the number of 3,000 which they would manufacture and sell, and the sum of eighty-five cents per wheel on all those manufactured and sold above 3,000, said royalty payments to be paid defendant by the 10th of each succeeding month; and plaintiffs further agreed that they would manufacture and sell at least 600 of such wheels during the remainder of 1948, at least 3,000 during 1949, and that thereafter they would proceed with the manufacture and sale with due diligence to the end that the demand for such implements would be met with all reasonable dispatch. It was further agreed that in the event plaintiffs should fail to pay the royalty payments when due, or should fail to manufacture and sell the number of wheels as agreed during the years 1948 and 1949, or in case they should thereafter fail to use due diligence in the manufacture and sale of the implements to satisfy the demand, all rights acquired by them in such invention under the contract should revert [351]*351to defendant and they would have no further right, title or interest in the same. Plaintiffs further agreed to use their best efforts in advertising the implements so as to create a demand, and they further agreed to keep records of all sales which would be open to inspection by defendant at all times.

The defendant agreed and promised to plaintiffs that he would cause the oral agreement to be reduced to writing, execute the same and present it to plaintiffs for execution so that the latter would have written evidence of their right to manufacture and sell the implements in order to enable them to procure adequate financing for the carrying on of such venture; that plaintiffs’ lack of adequate financing at the time of making the oral agreement was well known to defendant, and that the further purpose of the parties in agreeing to execute the contract in writing was to put plaintiffs in possession of evidence such as would assure prospective dealers and agents of their right and ability to furnish such implements as would be necessary to supply the demand.

That on July 6, 1948, plaintiffs and defendant went to the office of defendant’s attorney in Osborne for the purpose of drawing up the written contract and were informed by the attorney that he would require several days to familiarize himself with the subject matter and the law applicable and that he would then reduce the agreement to writing, to which both the plaintiffs and defendants assented. That defendant then asked plaintiffs to proceed with the manufacture and sale of the implements, as orally agreed between them, and promised that he would procure the written contract as soon as possible. That pursuant to such assurance plaintiffs, at the request of defendant, took from the premises of defendant in Osborne county to plaintiffs’ place of business in Beloit the small number of wheels and parts which defendant had previously caused to be manufactured, and immediately thereafter, at defendant’s request, took over such wheels, parts and machinery as had been previously manufactured at the request of plaintiffs by a manufacturing concern in Salina; that oh July 20, 1948, plaintiffs paid defendant for the wheels and parts thus furnished by him the sum of $102.08, which was accepted by him in satisfaction of the royalty payments upon the wheels so furnished, and that plaintiffs likewise assumed and paid to the Salina manufacturing concern all obligations of the defendant.

The petition further alleges that immediately subsequent to the [352]*352making of the oral contract sued on plaintiffs proceeded in good faith and with due diligence to manufacture, advertise and sell the implements; accumulated a stock pile of iron and steel necessary to their manufacture; that in order to establish a long range advertising and selling program, attended eight of the principal agricultural fairs held in Kansas where they advertised and demonstrated the implements at an expense of $800; that they made numerous visits to various dealers in Kansas, Nebraska, Oklahoma, Colorado and South Dakota, established fifteen dealerships, and in sq doing have expended more than $5,000 in traveling more than twelve thousand miles in the prosecution of such work, the expense of which amounted to $1,200; and that since making the oral contract they have devoted their business building in Beloit as headquarters for the advertising, sale, distribution, storage and as an assembly plant for the implements, and that the building was of the reasonable rental value of $150 per month.

That plaintiffs purchased materials to be used in the manufacture of the implements in the sum of $10,352.10, have paid out other necessary expenses for advertising in the sum of at least $5,000 and that they have on hand implements and material for manufacturing them of the value of $8,445, which would be practically valueless unless sold as completed implements.

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Cite This Page — Counsel Stack

Bluebook (online)
212 P.2d 288, 168 Kan. 349, 84 U.S.P.Q. (BNA) 99, 1949 Kan. LEXIS 471, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hazen-v-garey-kan-1949.