McClary v. Hubbard

122 A. 469, 97 Vt. 222, 1923 Vt. LEXIS 234
CourtSupreme Court of Vermont
DecidedOctober 15, 1923
StatusPublished
Cited by27 cases

This text of 122 A. 469 (McClary v. Hubbard) is published on Counsel Stack Legal Research, covering Supreme Court of Vermont primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McClary v. Hubbard, 122 A. 469, 97 Vt. 222, 1923 Vt. LEXIS 234 (Vt. 1923).

Opinion

*227 Watson, C. J.

The plaintiff seeks to have the defendant enjoined from disclosing, divulging, or disposing of a certain alleged trade secret contained in a certain machine used in the manufacture of diamond-shaped glazier’s points, or in certain mechanism or parts of said machine, concealed and placed out of sight, and which could not be discovered without disassembling the machine; and from exhibiting, divulging, disclosing, or disposing of any sketches, drawings, patterns, or data, which give information relating to said alleged secret parts. The facts were found by a chancellor, and decree rendered dismissing the bill with costs to defendant. The case is here on plaintiff’s appeal.

It appears from the findings that the defendant, who is a mechanical engineer with a thorough mechanical training, both technical and practical, is a son of George W. Hubbard who died February 3, 1918. The plaintiff, Horace P. MeClary, died after bringing this suit, and on August 30, 1921. Horace P. McClary, Jr., executor of his father’s will, has entered to prosecute.

In January, 1877, George W. Hubbard and the plaintiff entered into a partnership under the firm name of Hubbard & McClary, for the manufacture and sale of certain articles. The business of the firm was conducted at Windsor.

*228 George W. Hubbard was a machinist and inventor. Horace P. McClary had no particular part in the running of the shop conducted by the partnership. His part of the business was to look after the financial end, such as sales, advertising, and collections, while his partner ran the shop. He did practically no work in the shops, and during all the latter part of the time covered by the partnership he was principally engaged in the banking business.

The partnership entered upon the manufacture of diamond-shaped glazier’s points at some time subsequent to 1878. About that time Hubbard invented a machine for the manufacture of diamond-shaped glazier’s points, which machine, by reason of its mechanical principles and the efficiency with which it did its work, was useful and valuable. No application was ever made for a patent on this machine. The machines were made in two sizes, or were made to produce two sizes of glazier’s points, the so-called No. 1 machine producing the smaller point. Seven No. 1 machines have been built from that time to the present, of which five are now in the shop and two are practically dismantled and stored at present at the late residence of the plaintiff. One No. 2 machine has been completed and is in the shop, and another not complete is stored at the McClary residence. There is a limited demand for glazier’s points and one of these machines produces a great number of points in a day. At the time of trial, with four machines in operation, approximately 360 packages, each containing 5,000 points, were produced in a day. At the present time there is but one other concern in the United States producing diamond-shaped glazier’s points, that concern being W. H. Maze & Co., of Peru, Illinois.

The glazier point business as developed by Hubbard & McClary became profitable. At times the concern had five or six machines in operation. No patent was applied for on the machine because it was not intended or desired to have the machine on the market for sale as a few machines would make all the diamond-shaped glazier’s points the whole country would use. The plaintiff claims that these machines were kept and maintained by the firm as a trade secret.

On February 10, 1916, the partnership was dissolved by Hubbard’s selling to McClary, for the consideration of $13,118.85, all his interest in the Hubbard & McClary business, *229 including all good-will and material of all kinds some of which was located in Hubbard’s barn, etc. Some findings are made respecting Hubbard’s mental condition at the time of making this sale; but concerning this particular matter the present case has nothing to do. The transaction stands here as effecting a transfer to McClary of Hubbard’s interest in whatever trade secret then existed as property and capable of transfer in connection with the business of the partnership. Pomeroy Ink Co. v. Pomeroy, 77 N. J. Eq., 293, 78 Atl. 698.

In Peabody v. Norfolk, 98 Mass. 452, 96 A. D. 664, sometimes referred to as the leading case on the subject in this country, it is said: “If he (a man) invents or discovers, and keeps secret, a process of manufacture, whether a proper subject for a patent or not, he has not, indeed, an exclusive right to it as against the public, or against those who in good faith acquire knowledge of it; but he has a property in it, which a court of chancery will protect against one who in violation of contract and breach of confidence undertakes to apply it to his own use, or to disclose it to third persons.” To the same effect is Westervelt v. National Paper & Sup. Co., 154 Ind. 673, 57 N. E. 552. And if a trade secret be claimed, it devolves upon the originator or owner himself to protect it from disclosure or publication. Bristol v. Equitable Life Assur. Society, 132 N. Y. 264, 30 N. E. 506, 28 A. S. R. 568; Hamilton Mfg. Co. v. Tubbs Mfg. Co., 216 Fed. 401.

The record shows three series of exceptions. One to findings made, designated by the letter “A” joined by the serial number, as “(A1),” “(A2),” etc. One to failure to comply with requests to find, designated by the letter “B” joined by the serial number in the same manner. And one to rulings on questions of evidence, designated by the letter “C” joined by the serial number in-like manner.

The defendant, both in his answer and by his evidence, denies that the trade secret claimed by plaintiff ever existed, and further denies that it was kept secret by the partnership, and by the plaintiff after he became sole owner of the business. These were the two primary questions of fact contested before the chancellor. They are also the most important questions in review.

*230 It is found that George W. Hubbard and Horace P. McClary, Sr., considered the point machine to be a trade secret. While there is some doubt whether this finding shows the existence originally of such a secret, we treat it as of such force, and pass to the consideration of the question whether the secret was in fact kept as such by them and later by the plaintiff, within the meaning of the law governing that subject. On this question it is found that at the time Mr.

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Bluebook (online)
122 A. 469, 97 Vt. 222, 1923 Vt. LEXIS 234, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcclary-v-hubbard-vt-1923.