Pope Manufacturing Company v. Gormully (144 U.S. 224)

STATEMENT BY MR. JUSTICE BROWN.

This was an appeal from a decree dismissing a bill in equity, wherein the plaintiff sought an accounting upon a contract, and an injunction prohibiting the defendant from manufacturing and selling bicycles and tricycles containing certain patented devices, in violation of a contract entered into between the parties on December 1, 1884. A copy of this contract is printed in the margin.

The bill alleged that the plaintiff was engaged in the manufacture and sale of bicycles and tricycles of superior quality; that these machines embodied in their construction inventions covered by letters patent owned by the plaintiff; that, in pursuance of a plan adopted by it, it reserved to itself the right to manufacture and sell the highest grades, and among others a style of bicycle known as the 'Standard Columbia Bicycle;' that under the agreement entered into with the defendant the latter was granted the right to make, use, and sell bicycles 52 inches in size and upwards, and of certain style and finish, and embodying the inventions set forth in certain patents named; and that he should not manufacture bicycles embodying the features of certain other patents specified in the agreement; that said defendant expressly agreed that he would not manufacture or sell, directly or indirectly, bicycles, etc., containing any of the inventions or claims in either of said letters patent, nor make, use, or sell, directly or indirectly, certain parts of bicycles specified in the contract, other than according to the conditions and terms in said license.

That it was provided by the eleventh clause of said contract that the defendant might surrender the license at any time by written notice, but it was provided in the same clause that no revocation, surrender, or termination of said license, or any part of it, should release or discharge said Gormully from any liability which might have accrued, become due, or arisen prior to, or at the date of, said surrender, or from the obligations, admissions, and agreements contained in sections 6, 7, 8, 9, and 11; that such admissions and agreements were a part of the consideration for the granting of the license, and were irrevocable except by the written consent of the licensor; that it was provided in said clause 11 that if the licensee should continue, after the termination of said license, to make, sell, or use any of the machines or parts thereof containing either of the parts referred to in section 9, plaintiff should have the right to treat the defendant as a party to, and in breach of, the contract; and that defendant, by said section 9, consented that if he did make, use, or sell any machine containing such parts, an injunction might issue in favor of the plaintiff restraining him from so doing.

After setting forth an immaterial modification of such contract subsequently agreed upon, it further averred that the defendant entered upon the manufacture of bicycles under said license, made returns thereof, and paid royalties to plaintiff in accordance with the same, and that said license in respect to the clause claimed to have been violated is still in full force and effect. The bill further charged that since March 1, 1886, defendant has violated the ninth clause of the contract in constructing bicycles of a kind prohibited by the contract, in violation of the first and ninth clauses of said contract.

For which reasons the plaintiff prayed for an account of the machines made in violation of the agreement, and for an injunction.

The court below found that there was no contest between the parties as to the execution of the instrument set out in the bill; that the terms of the contract were such as to prohibit the defendant from making the high-grade styles and kinds of bicycles and tricycles complained of; that, if the contract was valid and in force, it was being violated by the defendant; but that the contract was not of such a nature as to entitle the plaintiff to any relief in a court of equity. 34 Fed. Rep. 877. From a decree dismissing the bill for the want of equity, the plaintiff appealed to this court.

L. L. Coburn and Edmund Wetmore, for appellant.

C. K. Offield and W. C. Goudy, for appellee.

Mr. Justice BROWN, after stating the facts in the forgoing language, delivered the opinion of the court.