Hadden v. Waring

Macohber, J.

The plaintiff’s assignor, Henry Van Hoevenbergh, a relative of the defendant, is ah inventor of electrical devices and instruments. The defendant is a 'manufacturer of electrical cables and under-ground electrical wires at Pittsburgh, Pa., and is a stockholder in what is known as the “Standard Under-Ground Cable Company, ” and vice-president and active manager of that company, the business of which is the manufacture and laying of under-ground cables. In a conversation between Van Hoevenbergh and the defendant upon the subject of inventions to meet the business enterprises of the defendant, Van Hoevenbergh said that he could furnish to the defendant an improved printing telegraph instrument for long distance work, which would operate successfully at a distance of a hundred miles at least. Thereupon Van Hoevenbergh furnished a memorandum in writing to the defend-■ ant dated June 19,1882, signed by Van Hoevenbergh only, which is as follows: “R. S. Waring Company, (Limited,) June 19, 1882. Purchase money $30,-000, in installments as follows: $1,500 to be paid June 26th; $1,500 on or before July 20th; $2,000 within ten days of the date that the patent is allowed; $5,000 six months from above date; $5,000 nine months from above date; $5,000 twelve months from above date; $10,000 in stock of company organized to operate printer. Patent to be assigned on payment of first installment. All improvements on original instrument to be assigned without further compensation. This arrangement to include services for six months dating from October 1, 1882. [Signed] Henry Van Hoevenbergh, care J. H. Bunnell & Company, No. 112 Liberty street, New York.”

The defendant testifies that prior to the execution of any agreement between him and Van Hoevenbergh the project of organizing a company for operating these printers was discussed between them, and that it was arranged by them that such company should be organized, and any invention which might be made by the plaintiff’s assignor, and patented improvements thereon, should be assigned to that company. This testimony is fully corroborated by the preliminary and tentative proposition of June 19, 1882, above quoted, which provides, among other things, that $10,000 of the purchase price of the patents should be paid in the stock of the company to be organized for the operation of the printer. Some time subsequently, probably in the spring of 1883, the defendant wrote to Van Hoevenbergh as follows: “I have got Dalzell to anticipate my payment from him a few weeks for $2,500, and I gladly let you have it to get you out of your trouble. I expect the company to take my contract with you off my hands,— they want to see the printer working,—but Dalzell requested me to lay the contract before the board at their meeting on next Saturday. Please sign and return the inclosed. I will arrange to pay you the stock as agreed upon on the last payments. Please, also, indorse in your own handwriting on the copy of contract returned to me, ‘ The first patent under this agreement allowed' March 7, 1883,’ and place on the contract the date of each payment, and amount, including the last $200. The first payment of $1,500 is in the body of the contract, and therefore needs not to be indorsed. But the remainder of the $6,000 paid—$4,500—you will indorse date and amount as suggested. Send the contract by mail to C. C. Dickey, 100 Diamond street, and I will get it from him.”

With these facts before us we are enabled to understand quite clearly the purpose of the parties in entering into the more formal agreement subsequently, which bears date June 20, 1882, but which was not in fact executed until June, 1883.

The second and third defenses may be considered together. They set up a want of consideration, a failure on the part of Van Hoevenbergh to fulfill the agreement on his part, and that the written agreement, though signed by the parties, was not intended by them to be an effective and binding contract, but, on the contrary, was executed in pursuance of an agreement entered into between the parties in the month of June, 1882, and that the object of the parties to that instrument was the organization of a company to operate it after the same had become perfected by ttie inventor. The evidence adduced in behalf of the defendant,'particularly his own testimony, rendered it incumbent upon the court to submit this question, among others, to the consideration of the jury. The rights of the plaintiff can be no greater than those of his assignor ; and Van Hoevenbergh could have no reason to complain of a failure to recover upon a contract which he knew was entered into for the purpose of enabling the parties to turn over to a company thereafter to be oragnized a complete title to the invention represented by his letters patent. The paroi evidence admitted by the court to show that the intention of the parties was something different from that expressed in the instrument, was, u,nder these circumstances, properly received, and should not therefore have been disregarded by the court. The facts in this case constitute an exception to the general rule that paroi evidence cannot be admitted to vary the terms of or defeat a written instrument.

There is also another ground upon which the defendant had the right to have his case submitted to the jury, and that is the conflicting evidence upon the question whether Van Hoevenbergh had performed all of the duties and obligations assumed by him by the written agreement. The evidence in behalf of the defendant of the refusal of Van Hoevenbergh to proceed with the experiments for which preparation had been made for them at Washington until he had received a thousand dollars more from the defendant, raised a question which could not be dispose^ of by the court alone under objection. All of these matters were properly urged at the trial, under suitable and timely objections, exceptions, and requests, and their consideration necessarily leads to a new trial. Hew trial granted, with costs to the defendant, to abide the event of the action. All concur.