Hartz v. Cleveland Block Co.
Hartz v. Cleveland Block Co.
Opinion of the Court
after making the foregoing statement of facts, delivered the opinion of the court.
The hearing was upon the plea, a general replication, and the evidence taken in support of the plea. Such a plea is a special answer to the bill, and nothing is put in issue, so far as the plea extends, but the truth of the matter pleaded. Farley v. Kittson, 120 U. S. 303-315, 7 Sup. Ct. 534; Dalzell v. Manufacturing Co., 149 U. S. 315, 13 Sup. Ct. 886. The original plea was set down for argument as insufficient in law. The court permitted the plea to be amended. To the •plea, as amended, the complainant took issue by a general replication. Upon the evidence bearing upon the issue thus made the court found that the plea was supported, and dismissed the complainant’s bill. No error has been assigned upon the ruling of the court in sustaining the plea as sufficient in law. The only question thus -open is as to whether the court erred in holding that the plea was sustained by the evidence. If it was not supported, it should have been overruled, and the defendant ordered to answer. Dalzell v. Manufacturing Co., 149 U. S. 315, 326, 13 Sup. Ct. 886; Farley v. Kittson, 120 U. S. 303, 315, 318, 7 Sup. Ct. 534.
The evidence does not, in our judgment, support the plea. The plea avers that the contract was made “in or about 1888,” — a most vague and indefinite date. The evidence, if possible, leaves it still more uncertain, and leaves it probable that the conversation relied upon as constituting the agreement sought to be set up occurred some time in 1887. The plea makes no averment touching the duration of the alleged agreement. The evidence is that nothing was said
“It was confined to the aciual cash outlay for the obtainment of the patent. Q. Did that include nothing more Uian the expense that attorneys might charge? A. Whatever expense was necessary to obtain the patent. I don’t know what they are. Q. Wasn’t it talked over that: there would have to be various expenses in making' patterns and making experiments, to see whether-the invention was really a practical one, before the patent was applied for? Wasn’t that talked over between you and Hartz? A. Yes, sir; and Hartz didn’t desire any pay for that. Q. Did lie say he did not to yon? A. Ha did. (2- Is it not a fact that ho. presented accounts to you to cove,r the expense of patent 387.071, coveting just such items of expense, and that the block com pany reimbursed him for the same? A. Not to my knowledge.”
The fact was that complainant did undertake to get out a metal snatch block some time in 1888, being the device covered by patent No. 387,071, and that every expense incurred by him for material and labor in the course of his experiments, as well as the entire cost of tools, dies, patterns, etc., used in working out his ideas or in preparation for the practical manufacture of his improved tackle block was presented to the defendant company from time to time as the expense accrued, and paid. These items aggregated, including
The alleged agreement of 1887 or 1888 was not even the origin of the business relation of Hartz and the block company. The plea avers that those - relations had begun in 1886. The evidence shows that for years prior to 1886 the same relation had existed between those who became incorporated in 1886, and who, as a corporation, continued to have their metal blocks made by Hartz as theretofore. Hartz was an independent manufacturing mechanic, having his- own machine shop, and doing work at all times for all who applied. He made blocks from 1886 to 1892 for the block company, at prices agreed upon, from time to time, prior to 1888. The superintendent of the block company was one Ford, who was perhaps looked to for suggestions as to improvements in the articles dealt in by the corporation. In 1888 Ford sold his stock to the daughter of Hartz, and the latter, though never a stockholder, was made a director in Ford’s place. He explained that he was never qualified, but ‘the other directors said it made no difference, he could act as one anyhow. The stock held by Hartz’s daughter was but 10 shares, and of no significant interest. Hartz says that while occupying this doubtful relation he was asked if he could not devise for the company a metal snatch block which would enable them to compete with makers of wooden blocks, and that he did get out a model, charging them with labor and material. That then, at their request, he made patterns, dies, tools, etc.,'for which he was paid his expenses from week to week, and that he caused this invention to be patented, and assigned the patent the next day after he received it, they paying every expense incident to its issuance,
“Tlie models were left to be shown to the directors of the company. We couldn’t take the responsibility of going ahead and making the block without*686 showing and consulting with the directors. Q. After you had consulted with the directors, what talk did you have with Mr. H. about manufacturing the steel block? A. Why, they wanted an estimate from him as to the probable cost of it, or the machinery to make them. Q. Mr. Hartz has stated that after you had seen these two models, you, in behalf of the Cleveland Block Company, declined to put any money into the making of tools and patterns for these blocks. And he 'says that you didt not tell him, as a reason for this refusal, that the manufacturers of wood blo'cks had raised their price so that the block company could now compete with profit with their malleable blocks. You may state whether Mr. Hartz was correct in this statement of his, and, if not, say what, if any, conversation upon this subject you did have with Mr. Hartz. A. I can’t remember conversation on that point. Q. Do you remember having any conversation with him on that point? A. Very likely we did.”'
Mr. Lyman, when asked why Hartz did not go on with his invention, and make the dies, patterns, etc., necessary for the practical manufacture of the new steel block, said:
“A. The expense — I don’t know just how I want to state that — the expense of manufacture, or rather the preparation to manufacture, the new block, was such that I had not considered it necessary to make a change in our snatch block, except as regarded the extra large sizes, which were made by hand, of which very few were made. Q. In what manner was the block company interested in the expense you have referred to in your last answer? A. To the extent that I considered it necessary for any one to put any more money into machinery for new styles of blocks, and also into expense of advertising and introducing new blocks, as long as the profits on the style we were using, and the sale of it, were satisfactory.”
It is plain that “necessary,” in tbe answer last set out, was “unnecessary.” This is the plain meaning of the witness. But even stronger corroboration of Mr. Hartz’s statement as to the attitude of the company towards his new steel block exists. The record book of the Cleveland Block Company contains these two entries:
“Cleveland, March 1, 1892.
“The adjourned meeting of stockholders was held, Mr. McLaughlin in the chair. Mr. H. F. Lyman made a statement in relation to the new steel block which it was proposed to introduce to the trade in competition with the steel block made by other parties, and several suggestions were made with the view of buying certain machines made by Mr. Hartz. No action was taken, but the matter was referred to the directors to consider.”
“Cleveland, March 1, 1892.
“A meeting of the directors was called to consider the question, which was overlooked, of sharing with Mr. Hartz the expense of building machines for making the steel blocks, and the treasurer was authorized to guaranty at least $500.00 toward the expense. Said amount, in case of success, to apply upon the purchase of such machines.”
Bearing upon the indefiniteness and onesidedness of the agreement sought to be set.up by defendant’s plea, is the fact that Mr. Hartz’s only compensation for the assignment of all patents taken out by him consisted in his having-the business of the block company in the making of the blocks needed by them. We have already commented upon the indeterminate character of this agreement in respect to time. It is equally so in regard to price. The plea says that Hartz was to have the right to make all blocks required at a “reasonable profit.” The evidence does not support this. The testimony of Lyman and Upson is that prices for one year were settled, but that afterwards there were to be such prices as could
Tlie contract set out in the plea is both indefinite and improbable. The evidence introduced in support of the plea tends to establish an agreement still more indefinite and unconscionable. The truth of the agreement as averred is not proven to our satisfaction. The probabilities are with the statement made by Hartz that his agreement was limited to the specific device assigned by him to the defendant in 1888. But independent of all question as to the defmitenss and fairness of the contract deposed to by the members of the defendant corporation, and as to the sufficiency of the evidence to support the plea, we hold that the conduct of the defendant company in refusing to furnish Hartz with the tools, dies, patterns, and machinery necessary to make for them the blocks needed by them was an abandonment of their agreement to pay him “all the costs and expenses of making and perfecting such invention and obtaining patents.” That term of the agreement, as interpreted and applied by the parties in respect to the invention of 1888, covered by patent No. 387,071, included the necessary plant for manufacturing the devices covered by the patents to be assigned to them. If it be true, as claimed, that the company asked Hartz to devise a newT steel block, which in strength and cheapness would compete with anything known, and he did so, the company was bound to prepare for the practical use of the invention if they wished the benefit of the device. To say that liariz should have gone to an expense of ,88,000, as he did, in experimenting and perfecting such a block, and in making tools, dies, patterns, etc., for its practical manufacture, with no chance of a return save in the profit he might make upon such blocks as they might choose to take from him, is incredible. If defendant's contention is true, the company might have left Hartz with all such machinery on his hands, with no right to make a block under his own patent. But tlie learned counsel for appellee denies that the block company refused to bear the expenses incident to the development and manufacture of the new steel blocks. To quote from brief of counsel:
“As a, matter of fact, it did not refuse. Its managers, knowing tlie condition of the market, said, in substance: ‘This is not the time to go to such expense. For tlie present, and while we can make money with our present tackle blocks in competition with the wooden blocks, sneli expense is unbusiness-like. Later, we may; but, for reasons stated, not now.’ ”
Reference
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- HARTZ v. CLEVELAND BLOCK CO.
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