Screw Products Corp. of America v. Arenz

8 R.I. Dec. 138
CourtSuperior Court of Rhode Island
DecidedDecember 11, 1931
DocketEq. No. 8289
StatusPublished

This text of 8 R.I. Dec. 138 (Screw Products Corp. of America v. Arenz) is published on Counsel Stack Legal Research, covering Superior Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Screw Products Corp. of America v. Arenz, 8 R.I. Dec. 138 (R.I. Ct. App. 1931).

Opinion

BAKER, J.

Heard on amended bill, amended answer, replication and proof.

The respondent in this case had a contract of employment with the complainant corporation. The relief sought in the bill is, first, that the respondent be required to cancel his notice of his intention to cancel said contract and that the complainant be reinstated in its rights under the contract; further, that the respondent be enjoined from transferring, assigning, encumbering, or in any way interfering with the rights of the complainant in and to certain patent applications and patents; further, that the respondent be restrained from interfering with the complainant in the making, using and selling of the inventions covered by the applications and patents, and finally, that the respondent be ordered to execute the necessary documents to remove any clouds upon the right of the complainant to make use of any of said inventions.

The basis of the bill is tha-t the contract above referred to was entered into and attempted to be carried out following certain alleged frauds and misrepresentations on the part of -the respondent in -matters about which the complainant had no knowledge and upon which it relied to its loss and damage.

-Some of the more important facts of the case are as follows: Early in 1925, the respondent was employed in the sales department of the Interstate Iron & Steel Company, with which he had a contract relating to the manufacture and sales of double -thread, double point screws under a certain patent known as the Caldwell patent, controlled by him. Mr. Arenz for some time had been experimenting with [139]*139screws and bad invented a double thread, single point screw for wbicb be bad filed patent application. Early in tbe year 1925, be came in contact, more or less casually and accidentally, with a Mr. De Vellier of Alexander Otis & Co., promoters and industrial engineers. As a result of tbis acquaintanceship, following correspondence and negotiations, an option agree ment, wbicb apparently was prepared by a Mr. 'Straub, an attorney connected with Mr. De Vellier, was executed by Mr. Arenz in June 1925, to a man named Hoffacker. This option agreement was never -taken up. Later, through tbe activities of Mr. De Vel-lier and Mr. Straub, various business men of Taunton, Massachusetts, became interested in tbe production of tbe new double thread, single point screw, and in November, 1925, after numerous conferences and much correspondence, Mr. Arenz executed an option agreement-in their favor. In tbe latter part of October and early November, 1925, a corporation was formed in Massachusetts to manufacture these new screws. Two Townsend screw machines were purchased and one of them was sent, in December, 1925, to Mr. Arenz to be changed so -that it could be used in turning out bis new screws. In January, 1926, there was certain correspondence with tbe Manville Company in relation to tbe Interstate Company having an exclusive right on machinery to point and cut double thread screws. In tbis connection Mr. Arenz expressed bis views and opinions as to these rights.

In May, 1926, a contract of employment, tbe one involved herein, was executed between tbe complainant corporation and the respondent and certain payments of money were made to tbe latter. According to tbe terms of this contract, tbe respondent’s patent rights were not turned over to tbe complainant, but tbe latter merely obtained tbe right to manufacture under said patent applications.

Alexander Otis & Company thereafter conducted a campaign in and about Taunton for the purpose of selling stock in tbe new corporation. In tbe latter part of July, 1926, Mr. Arenz gave up his position with the Interstate Iron & Steel Company and came to Taunton to assist in getting tbe new corporation running, as called for under bis contract. Thereafter* on August 5, 1925, 50 screw machines were ordered from tbe Townsend Company and a small payment was made on account. About the middle of August, Mr. Townsend came to Taun-ton to talk matters over with tbe officers of tbe. company, and on August 23rd tbe order above referred to was cancelled. In tbe meantime, on August 18th, respondent bad correspond ence with tbe Cooke Company in connection with screw machines and received quotations. Not long after this tbe Townsend Company brought suit against tbe complainant because of tbe cancellation of tbe order and attached all its funds. Certain payments were made to Mr. Arenz by complainant during August and September, but tbe payment of $7,500 due under tbe contract on October 1st was not made him. On October 21, 1926, Mr. Arenz gave notice that be would cancel bis contract and after ninety days, no action having been taken by tbe complainant, by letter dated January 18, 1927, be gave final notice that the contract bad been terminated. On tbe same date eertan patent applications were transferred by him to bis wife and later a new corporation was organized under tbe laws of tbe -State of Delaware. The present sui-t was begun January 19, 1927, and in August of that year a receiver for tbe complainant corporation was appointed in Massachusetts.

Tbe evidence further shows that under the contract involved herein, Mr. [140]*140Arenz was paid by the complainant approximately $20,000, as follows: three monthly salary checks of $700 each, $37,500 on account of the $25,000 due him according to the terms of the contract,- and the rest in smaller checks (o cover expenses.

The complainant’s first claim, in relation to the fraud which it says Mr. Arenz perpetrated, relates to the formation of the option agreement and final ■contract. between the parties and, in particular, concerns the alleged use by Mr. Arenz of a false contract with the Interstate Company which the complainant says became the basis of the contract involved herein.

The complainant urges very strenuously that by oral statements as to his arrangement with the Interstate Company and by the production of a document which purported ,to be a signed contract wth that company, Mr. Arenz induced it to enter into the contract now in suit. The complainant’s claim is that the respondent removed the last page, containing the signatures of himself and the officers of the Interstate -Company, and attached thereto an entirely different -set of pages containing terms and figures materially different from the actual contract between himself and the Interstate Company and insisted that this false contract was the true contract.

The respondent denies any such action on his part. The evidence on this question is very conflicting. Several apparently reliable witnesses support the complainant’s contention in this connection. The respondent relies chiefly on his own testimony, that of his wife, and such inferences and deductions as may be drawn from the frame and scope of the option and contract herein. The respondent’s claim is that the Hoffacker option and not the Interstate contract was the basis for the option and contract now involved in this case.

This question brings the Court to a consideration of the amount of credibility to which the respondent’s testimony is entitled. Mr. Arenz was not a good witness. His manner on the stand was bad. He could not refrain, Whenever an opportunity offered, from attacking in rather intemperate language the officers of the complainant corporation, Mr. Townsend, Mr. De Vellier, and others. His feeling and bias were clearly shown. His credibility -was severely shaken by the testimony of numerous witnesses involving different points in the case. In this connection, the Court may refer to the evidence of Mrs. Leonard, Mr. Clark, Mr.

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Bluebook (online)
8 R.I. Dec. 138, Counsel Stack Legal Research, https://law.counselstack.com/opinion/screw-products-corp-of-america-v-arenz-risuperct-1931.