Opinion
07-30-1909
COLLINS v. LEARY et al.
Robert H. McCarter, for complainant. John M. Enright, for defendants.
Bill by Sara D. Collins against Mary C. Leary and others for specific performance of an alleged contract. Decree for complainant.
See, also, 71 Atl. 603.
Robert H. McCarter, for complainant. John M. Enright, for defendants.
HOWELL, V. C. (orally). Let it be understood at the outset that there is to be an immediate amendment of the bill by making the heirs at law of Mr. Collins parties complainant, and the personal representative of Mr. James D. Leary, Sr., as a party defendant. The case was tried with the idea that that amendment would be made; it has not been made, and it ought to be made now.
Mr. McCarter: Do it right away, Sir.
The Court: This bill is filed for the purpose of enforcing specifically an agreement which the complainant alleges was made some time in 1895 between James D. Leary and William A. Collins, both now deceased. The contract relates to an invention made by Mr. Collins, and it is asserted that Mr. Collins, having invented a new form of dredging bucket, agreed with Mr. Leary to assign the invention to him or to the company in which he was the largest stockholder, viz., the defendant, the Morris & Cumings Dredging Company, and that in consideration thereof he would convey to Mrs. Collins a piece of land in Bloomfield, and he would also see to it that Mr. Collins received in addition thereto a reasonable sum of money as compensation for the use of this dredging bucket by the Morris & Cumings Dredging Company. Shortly, these are the facts alleged in the bill. There was a demurrer to the bill on various grounds, on about all the grounds there are, I think; the demurrer was overruled, and the decree overruling the demurrer was affirmed on appeal. The frame of the bill, therefore, is well established, and the question is whether the complainants have proved the bill. If they have proved the bill, they are entitled to a decree, and if they have not, they are not.
The evidence shows that some time in 1895 Mr. Collins went with George Leary to South Carolina, where the Company was doing some work. Mr. Collins was superintendent of the company at that time, and while he was there the idea occurred to him of getting up a new form of bucket which would dig more effectually the hard bottom that they were at work on at that point. It is claimed on the part of the complainants that Mr. Collins alone made the invention which subsequently became the subject-matter of this controversy. At any rate it fully appears that Mr. Collins made an application for a patent on the bucket in question on October 23, 1895, and that the patent was actually granted to him on December 8, 1896. It likewise appears that these letters patent came into the possession of George Leary, who was one of the defendants, and who was at that time, I think, one of the heads of the company very shortly after the patent came into the possession of Mr. Collins, so that it must have come into the possion of Mr. Leary probably in December of 1896, or possibly as late as January, 1897. The document itself has been in the possession of Mr. Leary from that time to the present, and I take it from his statement, and from the general current of the testimony, that it was in his possession not as an individual but as one of the officers of the corporation of which he has been for a number of years president. I think the claim that Mr. Leary makes of having made the invention himself is absolutely and forever negatived by his action in relation to the patent papers. He is a man of intelligence, and he must have known, at least I am going to charge him with knowledge, of what that patent contained, and for him to take those papers into his possession as early as December, 1896, or January, 1897, and retain them in his possession until Mr. Collins' death in 1900, and make no claim whatever that he was the inventor, is to my mind an absolute confession that he considered at that time that Mr. Collins was the inventor of the bucket. At any rate Mr. Collins had title to it. Now during the time that the patent application was pending in the patent office at Washington the agreement in question must have been made. If it was made at all, it must have been made during thatperiod, because, as is claimed by the complainants, on the 15th day of May, 1896, several mouths before the patent was actually issued, the Collins family moved into the Bloomfield property.
Now let us go back and see what the allegations are about the contract. The complainants say that Mr. Collins had made an application for the letters patent for his invention; that Mr. Leary. who was the principal stockholder of the Morris & Cumings Dredging Company, desired to procure the use of the patented article in the business of the corporation; that in pursuance to that idea he stated to Mr. Collins that he would give him the Bloomfield house in question, and would compensate him otherwise fairly for the use of the bucket. Now it is said that it was in pursuance of that agreement that the Collins family moved into the Bloomfield house; at any rate they did move there, and they have been there ever since, and have never paid any rent or acknowledged any owner of the property other than Mrs. Collins. On May 20, 1898, while Mr. Leary and Mr. Collins were both living, Mr. Leary and his wife, both of whom then resided in the city of New York, executed a deed of conveyance to Mrs. Collins, one of the complainants, for the very property in question. That conveyance is expressed to be in consideration of $1 and other good and valuable considerations. The execution of the deed was acknowledged before Mr. Pitz, one of the witnesses, in the month of May, 1898, and was retained in the possession of Mr. Leary in an envelope on which he wrote with his own hand "W. A. Collins' papers." Now I do not see any reason for the execution of that deed from any of the facts that have been adduced in this case, unless it was in pursuance of some agreement by which Mr. Leary intended to convey, and so agreed to convey, the property in question to Mrs. Collins. I do not think that the entries which Mr. Leary appears to have made on the margin of the deed will go so far as to satisfy any one that it was a plain bargain and sale between Mr. Collins and Mr. Leary, by which Mr. Leary intended to agree for so much money and for such and such a mortgage to transfer this property. I do not think that was it at all, and I think the evidence bears me out in that conclusion that there was an agreement that this property was to be conveyed to Mrs. Collins as consideration, or as part consideration, for the use by the Morris & Cumings Dredging Company of the patented bucket, the title to the patent for which Mr. Collins owned. A very significant fact is one that I mentioned a short time ago on that very point, and that is that the Collins family have been in possession of this property ever since, and not until long after Mr. James D. Leary's death was there any effort made by his heirs to take the property away from Mrs. Collins. He died some time in 1906; the ejectment suit was brought a year or thereabouts afterwards.
Now the evidence in the case satisfies me also that the conveyance of the Bloomfield property was not the only consideration that was to be paid to Mr. Collins for the use of the patented article. I think the insistment made on the part of the complainants that the deed was held back and was not delivered is some evidence that there was something behind, something that remained to be done, and three or four of the witnesses have stated what that was; and I am convinced from the testimony that it was a cash consideration to be paid in addition to the conveyance of the Bloomfield property. Now I do not now propose to go over that testimony. In case there shall be an appeal, I will then probably be obliged to do it; but, for the purposes of deciding the matter now, I simply refer to it in the general way in which I have referred to it.
As to the compensation, I am satisfied that there was an agreement for compensation, an express agreement between Mr. Leary and Mr. Collins, by which Mr. Leary agreed that there should be compensation in addition to the conveyance of the land at Bloomfield. The only thing that remains is to fix the amount of that compensation, and I think the reason why the whole thing was held up so long was because the parties had not been able to agree upon that amount. I think, therefore, that the contract ought to be specifically performed. The complainant has shown an oral contract for the conveyance of the property, which is taken out of the statute of frauds by the part performance, which consisted in the complainant taking possession of the property and making full payment of the consideration. I think the contract for the conveyance of the laud itself is very clear, and that there has been an equitable transfer of the patent itself by the handing of it to Mr. Leary as an officer of the company, and by the use to which the company has put the invented machine.
The decree, therefore, should be very much in the form that Mr. McCarter suggests, first, an injunction against the prosecution of the action at law; second, a conveyance of the real estate in Bloomfield to Mrs. Collins; and, third—I have doubt about the third proposition as to whether the decree should be against Mr. Leary's estate, or whether it should be against the Morris & Cumings Dredging Company—I will reserve that question for further consideration; my mind has not settled down on it. I do not know but what I may have to ask counsel for a further argument on it. On the other questions, however, I am very clear, and think that there ought to be a decree for the complainant, I will take the reserved question into consideration, and let counsel know what I conclude about it. I would like to have all your authorities now.
Supplemental Opinion.
At the close of the final hearing I reserved the question whether the charge for additional compensation should be made against Mr. Leary's estate or against the Morris & Cumings Dredging Company. I have no doubt but what Mr. Leary meant to provide that the dredging company should pay for the use of the invention, for the reason that it was the dredging company that would have the right to use it and to profit by such use as it might make of it, and that he did not mean to bind himself personally. It is plain that the original contract was made with Mr. Leary, and that he intended that Mr. Collins or his representative should get a profit out of it from the corporation, yet while Mr. Leary was the principal stockholder of the dredging company, he was not an officer and had no authority to bind it. The decree cannot therefore be against the company.
There will, however, be a reference to a master to ascertain what would be proper compensation from the company to Mr. Collins under the circumstances and in accordance with the agreement, and the amount so ascertained will be charged against Mr. Leary's personal representative, and there will be a decree against him for the amount of it.