Hepworth v. Henshall

Opinion by

Mr. Justice Stekrett,

This contention, in the court below, hinged mainly on the alleged oral agreement recited in the third paragraph of the bill.

Among other things, the bill avers, in substance, that, on November 30, 1886, plaintiff and defendant entered into a written agreement of copartnership, for the term of five years, for the purpose of carrying on the business of machinists in the name of John W. Hepworth & Co. The defendant had theretofore applied for letters patent for a seamless knitting machine, not then completed. Those letters were issued July 31, 1888, and the fees therefor were paid by the firm. Other letters, for improvements on said machine, etc., were issued March 20, 1890, and August 8, 1890. During a considerable portion of the time, after formation of said partnership, defendant Hen-shall was engaged, with the assistance of employees of the firm and aid of the firm’s capital, in completing and making improvements on said machine. The oral agreement, above referred to, is set forth in the third paragraph of the bill thus:

“ It was orally agreed between the plaintiff and the defendant, in consideration of entering into said articles of agreement and in consideration of other matters, that the plaintiff should be the owner of one half interest in said machine and in the letters patent that should be granted therefor, and in all the improvements in said machine and in all letters patent which should be thereafter granted for improvements in said machine.”

It is further averred that the defendant refused to assign said interest to the plaintiff as provided for in said oral agreement. The prayers are for (a) an injunction restraining defendant from assigning or otherwise disposing of a one half interest in said machine and letters patent; (5) a decree ordering him to assign to the plaintiff a one-half interest in said machine and letters patent; and (c) general relief.

In his answer defendant admits the partnership, but expressly denies “ ever having entered into an agreement, either at the time, or before, or after formation of said partnership by virtue of which the plaintiff was to have one half, or any interest whatever, in any of said machines, improvements thereon or letters patent.”

The burden of overcoming this responsive answer and making full proof of the alleged oral agreement according to equity practice, was thus cast on the plaintiff. He assumed that burden, and succeeded in proving to the satisfaction of the learned master and court below that said alleged agreement was made.

After a careful review and properly discriminating consideration of all the testimony bearing on the subject, the learned master states bis conclusion thus : “ that the plaintiff has sustained the averments of the bill by his own testimony and sufficient corroborating circumstances, and that the plaintiff’s proof is sufficient without taking into consideration in any way the testimony of William Hill. The master therefore finds as a fact that it was orally agreed between the plaintiff and de fendant, in consideration of entering into the articles of co-partnership of November 30, 1886, that the plaintiff should be the owner of a one-half interest in the automatic seamless knitting machine, owned by the defendant, and the letters patent which protect the machine.”

This conclusion is so fully vindicated by the master in his clear and convincing report that further discussion of the testimony is deemed unnecessary. An examination of the proceedings before him fails to disclose any error in his findings of fact. The only criticism that was suggested by that examination is his ruling in relation to cross-examination of witnesses called to impeach the credibility of William Hill, one of plaintiff’s witnesses. Speaking for myself, he appears to have held plaintiff to an unduly rigid rule in that regard. In such cases, it is not only due to the impeached witness, but also to the party who called him, that some latitude should be allowed in cross-examination of the impeaching witnesses, excluding, however, such details as would create collateral issues; but of that the defendant, of course, does not complain.

The oral agreement, established by the proofs, does not, in terms, entitle the plaintiff to an interest in improvements on the machine other than those made during the existence of the copartnership aforesaid; nor do we think that any other or further right is implied. Construed in the light of the relation existing between the parties when the agreement was made and their subsequent course of dealing in relation to the subject, we are of opinion that plaintiff’s claim should be restricted to an undivided oue-half interest in the machine, and a like interest in all improvements made thereon during the continuance of the partnership, and in the letters patent, protecting the same, whether applied for or granted before or after the expiration of said partnership. It therefore follows that the decree should be modified to read thus :

1. That a perpetual injunction issue enjoining and restraining the said Samuel Henshall from assigning, selling or in any manner disposing of more than a one undivided half interest in the automatic seamless knitting machine, and in the various letters patent referred to in the third and fourth paragraphs of plaintiff’s bill.

2. That the said Samuel Henshall assign to the said John W. Hepworth a one undivided half interest in said automatic seamless knitting machine and in the letters patent numbers 386,819, 386,820 and 386,821, issued July 31, 1888, and in all improvements in said machine made prior to November 30, 1891, and in all letters patent for said machine and for said improvements whether applied for or granted before or after said last mentioned date.

As thus modified, the decree is affirmed and the appeal dismissed ; and it is further ordered that the costs of this appeal be paid by the appellee.