Gottfried v. Miller/Opinion of the Court

The appellant rests his right to a decree in this case upon these grounds: First, that Stromberg never owned any part of the patent sued on; and, second, that if he did, his ownership could not inure to the protection of the defendant Miller. We shall consider these contentions in the order stated.

Upon the first point we remark that it is entirely clear that the assignment of his interest in the patent by Comegys to Stromberg, dated June 7, 1876, transferred to the latter an interest therein, provided the retransfer of the patent by the Barrel Pitching Machine Company to Holbeck, Smith, and Comegys vested the title to the patent in them. Briefly stated, the following is the chain of title: Gottfried and Holbeck are the joint patentees; Gottfried conveys all his interest in the patent to Holbeck, who, becoming thus the owner of the entire patent, conveys one undivided third to Smith and another to Comegys. Holbeck, Smith, and Comegys convey the entire interest in the patent to the Barrel Pitching Machine Company. The company reconveys its interest in the patent to its assignors, Holbeck, Smith, and Comegys; Smith conveys his interest to Gottfried and Holbeck, and Comegys conveys his to Stromberg.

The contention of the appellant is that the assignment of Dec. 11, 1875, by the Barrel Pitching Machine Company to Holeck, Smith, and Comegys was not properly executed, and was, therefore, ineffectual to pass any title.

The assignment declares that in pursuance of a resolution passed by the Barrel Pitching Machine Company, and in consideration of $500 received by it from Smith, Holbeck, and Comegys, the said company has granted to them all its title and interest in said letters-patent. It is officially signed by Smith as president of the company, who declares the setting of his hand thereto to be the act of the company.

The resolution referred to in this assignment is in the record, from which it appears that the company decided to make the assignment, and directed Smith to execute and deliver the same to Smith, Comegys, and Holbeck on behalf of the company, on receiving from them the sum of $500.

On account of the want of the corporate seal and of the manner of its execution, it is insisted by appellant that this assignment was not the transfer of the Barrel Pitching Machine Company, but the personal deed of Smith.

There is no ground whatever for this contention to stand on. Assignments of patents are not required to be under seal. The statute regulating their transfer simply provides that 'every patent, or any interest therein, shall be assignable in law by an instrument in writing.' 16 Stat., p. 203, sect. 36; Rev. Stat., sect. 4898.

A corporation may bind itself by a contract not under its corporate seal, when the law does not require the contract to be evidenced by a sealed instrument. Bank of Columbia v. Patterson, 7 Cranch, 299; Fleckner v. Bank of the United States, 8 Wheat. 338; ''Andover, &c. Turnpike Corporation v. Hay'', 7 Mass. 102; Dunn v. ''The Rector, &c. of St. Andrew's Church'', 14 Johns. (N. Y.) 118; Kennedy v ''Bultimore Ins. Co.'', 3 Har. & J. (Md.) 367; Stanley v. Hotel Corporation, 13 Me. 51. Even the parol contracts of a corporation made by its duly authorized agent are binding. Fanning v. Gregoire, 16 How. 524; Fleckner v. Bank of the United States, supra. The absence, therefore, of the corporate seal from the contract of assignment does not render it invalied or void.

The assignment is executed in the manner required by law of an agent when making a simple contract in writing for the corporation any by its authority. The rule as laid down by the authorities is that the agent should, in the body of the contract, name the corporation as the contracting party, and sign as its agent or officer. This is the mode in which bank-bills, policies of insurance, and many other contracts of corporations are ordinarily executed. Mott v. Hicks, 1 Cow. (N. Y.) 513; Bowen v. Morris, 2 Taunt. 374; Shelton v. Darling, 2 Conn. 435; Brockway v. Allen, 17 Wend. (N. Y.) 40.

The assignment under consideration purports on its face to be the contract of the Barrel Pitching Machine Company. It declares that the consideration has been received by the company; that it is executed in pursuance of a resolution passed by the company; and it purports to be signed by Smith, president of the company, who declares that he signs it as the act of the company.

It would be an absurdity to hold that this instrument is the individual contract of Smith, and not of the Barrel Pitching Machine Company.

It is not the company which asserts that this instrument was ineffectual to divest it of title to the patent, and the record shows that the assignees therein named acted upon the assumption that the assignment vested them jointly with the title.

We are of opinion, therefore, that the assignment was well executed by the Barrel Pitching Machine Company, and transferred the letters-patent to Holbeck, Smith, and Comegys, and that Stromberg, on June 7, 1876, by virtue of the assignment made to him on that day by Comegys, became vested with an undivided interest in the patent.

It is contended by counsel for appellant that the attachment of the stock of Comegys in the Barrel Pitching Machine Company, at the suit of Smith, in the Superior Court of Baltimore City, prevented Comegys from acquiring any interest in the patent by the assignment thereof to Smith, Holbeck, and Comegys by the Barrel Pitching Machine Company, and, therefore, Comegys could convey no interest in the patent to Stromberg. This position seems to be founded on the clause of the instrument by which the patent was transferred to the Barrel Pitching Machine Company, to wit, that any reassignment of the patent to the assignors should be subject to the lawful rights of the creditors of the company.

The answer to this contention is, that Smith was the creditor of Comegys, and not of the company, and the clause in the instrument of transfer to the Barrel Pitching Machine Company gave Smith no claim on the patent to secure a debt due him, not from the company, but from a stockholder in the company.

The fact that Comegys held stock in the company gave him no title to its property, and the attachment of his stock did not in the least incumber the property of the company, or prevent the assignment of the letters-patent by it to Smith, Holbeck, and Comegys, or the transfer by Comegys to Stromberg. Morgan v. The Railroad Company, 1 Woods, 15; Bradley v. Holdsworth, 3 Mee. & W. 422; Arnold v. Ruggles, 1 R.I. 165.

It remains to consider whether the sale by Stromberg to the defendant, Miller, of one of the pitching machines, containing the improvement described in the patent, protects him from liability for its use in this suit.

By the contract of sale, Stromberg warranted not only the title to the machine itself, but the right to use it. If, at the time of the sale, he had been the owner of the patent, the sale would have constituted a license to Miller to use the machine as long as it lasted. But Stromberg dd not acquire any interest in the patent until long after the date of his sale to Miller.

If he had subsequently become the sole owner of the patent, his previous sale to Miller of a machine embodying his patented invention would have estopped him from prosecuting Miller for an infringement of the patent by the use of the machine. In analogy to estates in land by estoppel, Miller would have acquired a right to use the machine which could not have been controverted by Stromberg.

But having acquired only a part interest in the patent, we do not undertake to decide that his previous sale of the machine to Miller bound the other joint owners of the patent. It is clear, however, that such sale was a license to Miller to use the machine so far as Stromberg could grant a license. And in our opinion the covenants of Gottfried and Holbeck, in the contract by which Stromberg assigned his interest in his patent to them, are sufficient to protect Miller from this suit. In that contract it is declared to be part of the consideration of the transfer by Stromberg of his interest in the patent to Gottfried and Holbeck 'that he should be released from all claims which Gottfried or Holbeck, or either of them, or any person to whom they, or either of them, may have assigned an interest in said letters-patent, might or could have against him,. . . or against any person or persons to whom Stromberg may have granted licenses to use the said patented improvement.' And by said instrument Gottfried and Holbeck, for and in consideration of the premises, declare that they do release said Stromberg from all claims they or either of them may have against him or the parties to whom he may have granted licenses to use said patented improvement.

We think there can be no doubt that it was the purpose of all the parties to this instrument, and it is clearly expressed therein, that, as a part of the consideration of the transfer, Stromberg was released from claims against him arising out of his transaction in reference to said patent, and that all licenses granted by him were in effect confirmed. This contract, therefore, affords complete protection to Miller, the appellee, and is an effectual bar to the prosecution of this suit.

Decree affirmed.