Read v. Bowman

READ & WHITAKER were inventors of four improvements in reaping and mowing machines, the principal one being what was called a 'tubular finger-bar;' and in 1856 were in partnership, under the name of Lloyd, Whitaker & Co., with two persons named Lloyd & Bowman; these last-named persons using the improvements with them, though not in any way inventors. On 27th December, 1856, Read & Whitaker applied for a patent; their application giving authority to Mr. Hanna, of Washington, whom they appointed their solicitor, 'to alter or modify the drawings, specifications, and claims thereunto attached, in such manner as circumstances might require, or to withdraw the application altogether should it be deemed advisable, and in that event to receive and receipt for such sums of money as should be returnable under the act of Congress in that case made and provided.' Pending this application, and before any letters were granted, Read agreed to sell out his interest to Whitaker for $4500; of which $1500 was to be paid, and was paid in cash. The instrument of sale recited that, 'Whereas Read & Whitaker have invented an improvement, for which they have applied for letters patent; and whereas, Whitaker has agreed to purchase of Read his interest in and to said invention, in consequence of letters patent, granted or to be granted; now, therefore, I, the said Read, in consideration, &c., hereby assign, &c., to Whitaker, the full and exclusive right to said invention, as set forth and described in the specifications which I, in company with Whitaker, have prepared, executed, and filed with the Commissioner of Patents at Washington, preparatory to obtaining letters patent therefor. To have and to hold,' &c. Then, in a separate paragraph, the assignment proceeds, for the same consideration ($4500), and the further consideration of one dollar, to assign to Whitaker Read's right, title, and interest in and to three claims to inventions made by Read & Whitaker, for which the specifications had not been fully made, describing them.

The specifications above referred to contained a description of all the improvements in the case, which were plainly but parts of one invention.

Contemporaneously with this assignment, Whitaker, as one party, and 'Bowman & Lloyd' signing as another, executed an engagement to Read for $3000, the balance of the consideration of the transfer from Whitaker to him. The contract, in opening, recites, that Read had assigned to Whitaker all his title in certain inventions and improvements (both plural) made by Read & Whitaker, in improvement of grain-reapers and grass-mowers, &c. (for full particulars reference being made to said assignment), 'for which the said Whitaker has agreed to pay the said Read as follows: $1500 on the 1st January, A. D. 1859, and $1500 on the 1st January, A. D. 1860, with interest.' And the contract then thus concludes:

'Now, therefore, we, the said J. Lloyd, F. H. Bowman, and J. T. Whitaker, do hereby agree, for a valuable consideration to us paid by the said Read (the receipt whereof we do hereby acknowledge), as soon as the patent for the improvement in the grainreaper and grass-mower aforesaid is obtained by the said Read and Whitaker, to execute unto the said Read our joint and several notes for the said amounts, payable as aforesaid, with interest as aforesaid.'

The dates when the notes were to come due must be observed. After this time Read retired from business; the three other persons continuing it, and using all four improvements.

The 'specifications' referred to in Read's assignment, as filed by him and Whitaker with the Commissioner of Patents, presented in reality four improvements. Mr. Hanna, their solicitor, withdrew three of the claims; and on the 11th of August, 1857, accepted a patent for one of them only, as specified in a specification amended by him; the patent embracing all the improvements in its specification, but the claim being restricted to the principal improvement, that of the 'tubular finger-bar.' On the 12th of February, 1859,-this date, too, must be noted,-'Bowman & Lloyd,' who now ceased to use any of the improvements, notified to Read that, as more than a sufficient time had elapsed for procuring the patent for improvements, and as the same had not been procured, they (Bowman & Lloyd) considered themselves discharged, and the contract void, so far as they were concerned. About one year after this notice, that is to say, on the 7th February, 1860, Read did obtain four patents-reissues upon the patent of August 11, 1857, which reissued patents, it was admitted, did contain the said four improvements, being all the improvements in the matter.

Read accordingly brought assumpsit against Whitaker, Bowman & Lloyd, for breach of contract in not executing their two notes for $1500 each; the declaration alleging that, subsequently to making the agreement, 'to wit, on the 11th day of August, 1857, the said improvement was duly patented;' nothing being said about any surrender or about the reissues; and the one patent of August 11, 1857, being alone offered in proof.

The question below was, whether this declaration was sustained by the evidence; and whether Lloyd & Bowman were discharged. The court held the declaration sufficient on the reissued patents being granted; that both Bowman & Lloyd were bound, just as Read was; that Bowman & Lloyd were chargeable with notice of Mr. Hanna's authority, and were bound by such changes and modifications as he made. Verdict was given for the amount of the notes with interest. Judgment having gone accordingly, the defendants brought the case here on error.

Goodwin, for the plaintiff in error: The contract about the notes shows plainly that Whitaker was the principal debtor. It is 'the said Whitaker' who 'has agreed to pay the said Read.' Lloyd & Bowman do not contract to pay at all. Indeed there was no equity to raise an obligation for them to pay. Read's assignment was to 'Whitaker,' and to him alone. He alone got a permanent and beneficial interest. What Lloyd & Bowman do is this: they-after that Whitaker has promised to pay-agree that they with him will give their notes. Is it not plain that they did this as his sureties? Where a contract is to pay the debt of another, without any new consideration to the party so contracting, the obligation is to be construed as one of suretyship, and, of course, to be construed strictly. The surety is bound in the manner and under the circumstances pointed out in his obligation. He may stand to its very terms, and if a variation is made without his assent, he is discharged.

This obligation of the sureties was not absolute, but was contingent upon the condition precedent, that a patent for the specified improvements shoud first issue. If no patent ever issued, although Whitaker was still liable to Read for the sum agreed, Bowman & Lloyd could not be called upon for its payment.

Then the issue being a condition precedent, such condition must have been performed within a reasonable time; prior, at least, to the time when the debt for which they thus contingently bound themselves matured: obtaining a patent subsequent to such time was not sufficient. But all the obligation of Whitaker became due on or before the 1st day of January, 1860; the reissued patents all bear date subsequently. From the date of the contract, therefore, to its maturity, the condition precedent to Bowman & Lloyd's liability remained unperformed.

Moreover, by the terms of the contract it was necessary that a patent should issue for all the improvements specified. In their mechanical nature, one may have been greater than another. In their legal magnitude, all stand on one base. The patent of 11th August, 1857, the only patent offered in evidence, being for only one of the four, was not a performance of the condition.

Under the simple allegation of the issue of a patent on that day, it was not competent to prove the surrender of such patent, and the reissue of the four patents nearly three years afterwards. This evidence being excluded, there was nothing before the jury but the patent of August 11th, 1857, and the verdict should have been for the defendants.

The true construction of the last clause of the contract is, to regard it as containing solely the contract of Bowman & Lloyd, in the same manner as if the earlier part had been signed by Whitaker, with the clause omitted; and then the clause indosed upon the contract, or written beneath it, and signed by Bowman & Lloyd only. Any other view involves the absurdity of making Whitaker both absolutely and contingently liable for the same debt by the same instrument. The contract of the respective parties, though contained in the same writing, must in construction be so severed as to be consistent with itself; and any other construction than that for which we contend, either changes the absolute liability of Whitaker to pay, which is clearly fastened upon him by the previous part of the contract, into a contingent liability dependent upon a condition to be performed, or enlarges the obligation of Bowman & Lloyd, which is contained only in this final clause, from a conditional into an absolute liability, a construction which would make the instrument inconsistent and contradictory.

Bowman & Lloyd are not chargeable with notice of the authority of Mr. Hanna. The contract refers to the specifications as containing the description of the inventions for which a patent was to be issued, and is only notice of what such inventions were, and not of the power of attorney. Even if notice of the appointment of Hanna as the attorney, and of his authority, can be implied from the contract, it would be no evidence of the assent of Bowman & Lloyd to the exercise of such power to withdraw or lessen the patent. On the contrary, the notice of such power would no more be evidence of such assent, than the knowledge of the like authority existing in the inventors themselves under the Patent Law would imply such assent. The contract made with Bowman & Lloyd by the patentees would, in fact, restrict both the patentees themselves and their attorneys from the subsequent exercise of such power of withdrawal or modification, so far as Bowman & Lloyd were concerned, without the consent of Bowman & Lloyd, and would require the patent to be obtained for all the specified improvements, as set forth in the agreement, in order to hold Bowman & Lloyd under that contract.

To construe the power given to Mr. Hanna by the patentees as binding upon Bowman & Lloyd, and implying their assent to its exercise, would contradict the terms of the contract, for Bowman & Lloyd were not to be liable unless a patent were first issued, but Mr. Hanna was authorized to withdraw the entire claim and receive back the patent fee. You cannot imply Bowman & Lloyd's assent to the withdrawal of any part of the claim any more than of the whole, for all the evidence of such assent is what is furnished by the writings themselves, and they give the same authority to withdraw all as any part.

Mr. Roberts, contra: There is no evidence that Lloyd and Bowman were sureties. Had the consideration moved wholly to Whitaker, it would not have proved that fact, for a promise is not necessarily that of a surety because the consideration moves to another. But it is evident that Lloyd and Bowman were interested in the purchase, for they received, had, and used the thing bought. The assignment was made to Whitaker, probably, because he was a joint inventor. Even if they were sureties, that makes no difference; for sureties are as much bound by the true intent of instruments as principals.

Had not the pleader in drawing the nar. alleged the issue of a patent, we should have insisted that there was no condition precedent to be performed by Read. The law is that if a promise is made to pay a sum of money at a time fixed, with a condition annexed which may never be performed, the promise is not dependent but absolute. In Harlow v. Boswell, the promise was to pay in twelve months, or so soon as the promisor should sell to the amount of the note out of a certain commodity. Treat, C. J., said the note was payable absolutely at a day certain. In McCarty v. Howell, the note read, 'Four months after date, or so soon as I collect a certain note against A. Davis, I promise to pay,' &c. Breese, J., after stating that the note was to be construed most strongly against the promisor, and that it was payable absolutely, put a quietus upon the defendant's argument by stating their respective positions thus: 'By our construction the note would read, 'Four months after date I promise to pay,' &c., 'but if A. D. pays his note before that time I will pay then." By the other construction it would read, 'I will pay this note at four months, but if A. D. does not pay his note to me I will never pay it.' The reductio ad absurdum would be no less apparent in the present than in that case, if the position indicated were assumed. Mr. Read had parted with property valued at $3000 over what had been paid for it, and with all control over it; the purchasers had it in their power never to perform the condition, on the hypothesis assumed, by delaying the obtaining of the patent until after the time the notes were to be given, and thus to defeat a right of action and still keep the property. And this is the true reason why such a promise is absolute. It is because the promisor has it in his power to defeat the condition. Who can say that the plaintiffs in error did not, in this very case, delay the grant of the reissues, for a month and seven days, upon the idea of saving to themselves $3000?

With regard to Mr. Hanna: By the agreement between Read and Whitaker, it was understood between them that the specifications might be altered, modified or changed by this person. When, therefore, the letters patent were issued, upon the specifications, whether as they originally stood, or as modified, Whitaker was bound, by the letter and spirit of the contract, to execute the notes. This determined the obligation of Bowman & Lloyd. It must be considered that the parties entered into this contract with all the rights with which the patent law clothes inventors, one of which is, that a defective specification can be amended. Hanna modified the specifications, by striking out all but one claim. The parties are presumed in law to have been informed by their attorney that this had been or would be done; and hence the distinction in the assignment, both in respect to the one invention, as distinguished from the other three, and in respect to the consideration of the assignment, by making a class of one claim, and another distinct class of the other three, so that, although the whole were assigned to Whitaker, they well understood, at that time, that the patent then issued or to be issued, covered but the one claim. Read undertook for nothing, except that the inventions were patentable, to be shown by the issue of a patent. He had parted with all his interest in the invention, and had no right to interfere with Whitaker's proceedings in obtaining the patent in any form he wished. If he had interfered to prevent its issue upon the one claim, he would have thereby furnished a perfect defence to this action.

The second patent legalized the rights of the patentee from the date of the first patent. The reissue was still a patent for the original invention, and if these effects can be given to it, it was properly declared on as it was.

Mr. Justice CLIFFORD delivered the opinion of the court.