!ebts be created under an order or decree in cha.ncery, and the creditors come in to avail themselves of it, the rule of aquity then is that they shall be paid in pari pal'U, or upon .. footing of equality. But, when the law gives priority, equity will not destroy it; and especially where legal assets a.re created by statute they remain so though the oreditors be obliged to go into equity for &slJistance." But it is not necessary to invoke the doctrine of equity in this case, as the bankrupt aot preserves all legal liens, and furnishes 8. oertain 8.nd just rule for the distribution of the assets of .. partnerIJhip and the members thereof. Sections 5075, 5121, Rev. St. By this rule the property of the partnership is to be first applied to the payment of partnership debts, and the property of each member thereof to the payment of hiB individual Idebts. Whether the proper application of this rule would exclude 'he lien of a judgment obtained against the members of the drm for 8. partnership debt from the property of the indi"idual partner, as contended by counsel for the assignee, it is not necessa,ry now to consider. Having arrived at the conclusion that none of the judgin this case were a lien upon the property in question, Ithe proceeds of the sale are individual assets, and under· the. /bankrupt act must be first applied to the payment of Estes' bldividual debts i and it is so ordered.
and others 'V. THE CELLULom MANUPA.OTUJUNG Co.
D.J:VtIW J"fIl"611. July 18, 1880.)
PATENT-AMIG1IOOIXT-LIOZXIllI.-Auyassignment of a patent mon' Gf the entire and unqualified monopoly I.e a mere license. LlclIxlI&U-8trn:&lIlImlllR.-The surrender of a license by part of .the lioensees does not avoid the license &s to the remainder of the,licensees·. 0.. LICBXSB-PA.BTDIllL-The licensees who have bee. ft1eased by suoh eurrender need not be joined with the remainder 01 the UoeDaees in an action on the lioQnse. .
Philip W. Cross, for plaintiffs. Kays d; Coult, for defendant. NIXON, D. J. This is an action for breach of covenant, brought originally in the circuit court of the county of Essex. New Jersey, and removed by the plaintiffs into this court under the provisions of the act of congresd regulating the .reinoval of causes, approved March 3, 1875. There was a. general demurrer to the declaration filed in the court below, which the court, after argument, sustained, and leave was granted to the plaintiffs to amend. An amended declaration was thereupon filed, to which the defendant, after craving oyer of the writing or agreement mentioned in the declaration, again put in a demurrer, and the question to be determined depends upon the nature character of the contract on which the suit is brought. The declaration in substance alleges that the defendant corporation was the owner of the two several patents, one for an improvement in treating and moulding pyroxyline, and the other for making a certain valuable substance or compound known as celluloid, and, being such owners, on the tenth day of March, 1872, by a certain indenture hetween the defendant corporation of the one part and Charles M. Theberath, Jacob H. Theberath, George M. Drake, Samuel J. Coursen, Jr., and Martin M. Drake, of the other part, sealed with the seals of the respective parties, granted, conveyed, and made over to the plaintiffs, as well as to the said George M. Drake, Samuel J. Coursen, Jr., and Martin M. Drake, and to each of them, the full and exclusive right to use the said material within the United States for the purpose of its application to harness, carriage, and trunk trimmings, and for no other use or purpose whatever, as a license under the above-named letters patent, Or any other United States letters patent, or parts of the same, or privileges that might then or thereafter be in the possession of the defendant corporation; that the said defendant therein and thereby promised and agreed' to prosecute, at their own cost and expense, every P:1.11:Y unlawfully infringing said letters patent, or anyone or parts of the same, in so far as said letters patent pertained
THEBERATH V. CELLULOID lIIAN"OF'G 00.
to carriage, harness, and trunk trimmings, and to afford ample protection to the plaintiffs, as well as to said Coursen and the Drakes, and to each of them, their licensees; that the parties of the second part to the said agreement, in consideration for said license, agreed to give to the defendant corporation the sum of $1,000 in cash, and as payment for the material specified in the writing, they, and each of them, agreed to give to the defendant $2.75 for each and every pound delivered to the party of the second part ordering the same, to be delivered at Albany, N. Y., and to be paid for. within 10 days after the delivery; that the said parties, and each of them, agreed faithfully to use their best endeavors to introduce the application ·of the said material to harness, trunk, and carriage trimmings throughout the United States, and to make such application and use a profitable branch of business. It further alleges that it was provided by the said agree-. ment that if, from any cause, the said defendant corporation should fail to furnish 100 pounds of celluloid per day, if requested so to do, on 10 days' previous written notice, or any other amount, up to 500 pounds per day, on 60 days' notice in writing, then the said parties of the second' part, or either of them, should be at liberty to prepare the material for the purpose set forth in the agreement, and should keep books of account showing the a,mount by weight of said ma.terial so made and used by them, or either of them, and should make returns under oath, on the first days of Janua.ry, April, July, and October, of each year, during the continU5tllCe of the said manufacture, of all the material thus made, and within 10 days after each date of return should pay to the defendant corporation the sum of one dollar as royalty for every pound of the material specified in the said agreement. The declaration then alleges that although the plaintiffs have always kept and performed all things in the license contained on their part to be kept and performed, and although the defendant corporation was bound to furnish to the plaintiffs celluloid' in such colors and quantities as desired, not to exceed 100 pounds per day, upon 10 days' notice, nor v.3,no.3-10
500 pounds per day, on 60 days' notice, yet the defendant, disregarding the rights of the plaintiffs, refuse to deliver to the plaintiffs any celluloid, though often requested so to do, Recording to the terms of the said license, and in quantities less than 100 pounds per day, and have revoked, or pretended to revoke, said license, and have granted another license for the same thing, covering the same territory as the license herein described and set forth, to other persons, who have established a large and profitable business thereunder, and .have deprived plaintiffs of the use of the said license for a long time, to-wit, from the time of granting the same to the end and term of the patents under which the same was granted; that previous to the refusal of the defendant corporation to furnish to the plaintiffs celluloid as therein set forth, the said George M. Drake, Samuel Coursen, Jr., and Martin M. Drake surrendered all their right, title, and interest to and in the said license to the defendant; that the defendant accepted the surrender, whereby the plaintiffs became the sole owners thereof; and that Jacob H. Theberath has, before the commencement of this suit, transferred and assigned all his right and interest to and in the same to the said Charles M. Theberath, whereby the said Charles has become and now is the sole owner'thereof. The issue raised by the demurrer turns upon the question whether the contract on which the suit is brought is joint or several. The counsel for the demurrants insists that it is a license, authorizing the licensees jointly to use the patented article in the manner and upon the terms specified in the agreement, and that no action is maintainable thereon by any number of the licensees less than the whole number. The counsel for the plaintiffs, on the other hand, contends that the contract is, in fact, an assignment of a portion of the patent to grantees; that the several owners of a patent are not partners, but tenants in common, and that each part owner has the right to order and use the patented article without the can. sent of the other, and hence that the grantor is severally liable to each one of the grantees for the breach of the cove. nants of the agreement.
'IHEBERATH V. OELLULOID MANUF'a
pound for every pound manufactured by them. A contra.c' with such provisions falls fairly within the definition of a license. 2. Whether it is a joint contract with a.ll the licensees, or several with each, is a more difficult question to answer. The difficulty arises from two sources: First, from the loose and careless use of words in the agreement itself; and, second, from the fact that the law determines whether a covenant is joint or several much more from the subject-matter of the ilontract than from the words employed. Williams on Personal Property, 304. The contract on its face is said to be between the defend. Ant party of the first part, and George M. Drake, Samuel J. Coursen, Jr., Charles M. Theberath, Jacob H. Theberath, and Martin M. Drake, party of the second part, "for themselves, t,heir heirs, executors, a.dministrators, !'Lnd assigns, respecttvely. " The obvious and most usual meaning of the word respect. ively is "as relating to each." It is not easy to say what the parties meant by its use in the foregoing connection. If it has .reference to the persons composing the party of the second part, as well as their heirs, executors, administrators, and 'I.ssigns, do not each of the individuals have a separate and distinct interest in the license, and is not each one entitled to the use of the invention in the manner and upon the condi· tions expressed in the contract? And why should there be a. covenant with the assigns respectively of the licensees, if each one had not the right to individually use or individually assign his ifiterest without the concurrence of his co-licensees? But it may be admitted that the words used prima facie import a joint covenant; yet, if the covenantees have a separate interest in the SUbject-matter, each may have a separate cause of ac· tion, and to this effect are all the authorities. Windham's Cas" lS Rep. 8a; Slingsby's Case, ld. 19a; Eccleston v. Clipsham, 1 Saund. R. 158-154, (1;) James v. Emery, 8 Taunt. 129-245 j Thomas v. Pyke, 4 Bibb, 418-420. Does the agreement oonvey to these licensees a. separate interest in the subject-matter of the grant? It licenses them
THEBEBATD f'. OELLULOID MANUF'G 00.
all as individuals to use the patented article. It does not say, in express terms, whether they are to act jointly or severally. They are to have the full and exclusive right of using t}J.e material within the United States and their territories in its application to harness, carriage, and trunk trimmings, and for no other use or purpose whatever. It was the interest and design of the patentee to have the material applied as largely as possible to such purpose. To this end the defendant corporation required the licensees to covenant and agree to use their best endeavors to make such application and use a profital]le and extensive branch of business. In view of this fact, it would seem that the licensor ought not to complain of any construction which would most extensively introduce the patented article into general use, by its application to harness, <larriage, and trunk trimmings. But, without expressing any opinion on this point, I think there is another fact appearing in the case that did not appear in the court below, and which estops the defendant from objecting to the non-joinder of the other licensees as plaintiff" in the suit. The declaration alleges that, previous to'the defendant's refusal to furnish celluloid to the plaintiffs, the said George M. Drake, Samuel Coursen, Jr., and Martin M. Drake surrendered all their right, title, and interest to and in said license to defendant, and the defendant accepted said surrender, whereby the plaintiffs became the sole owners thereof. The demurrer admits the fact alleged, and we have thus presented this interesting question, where five persons are licensed to use a patented article, and the licensor afterwards agrees that three may surrender their interest, whether the remaining two may still exercise the rights and privileges conferred by the license. r can perceive no reason why they should not be allowed to do so, nor why the defendant, after agreeing to such severance of interest, should not be estopped from setting up that the released licensees did not join in the suit upon a contraot in which, by their voluntary act, and with the assent of:the defendant, they had no further concern.
It was urged by the learned counsel of the defendant, on the argument, that if the surrender and release took place, as aUegell, such act rendered the whole contract void, and the plaintiffs were out of court; and in support of this view the well-recognized principle of law was quoted, that where there are mutual covenants and joint covenantees a release of one is a release of all. It is true that if several covenantees enter into joint covenants, and the covenantor afterwards release one or more, he will not be permitted to maintain a suit on the covenants against the remaining covenantefls, because such a release destroyed his right of action against the survivors; but that is not this case and the principle does not apply. Here, five men acquire certain rights and privileges in a patented article; they pay $1,000 in cash for the license, and agree to pay a stipulated royalty, besides, for all that they can use in a designated business. The patentee subsequently agrees with three of the licensees that they shaH be released from the contract, and this is done without any consultation with the remaining two. These two, faithfully performing aU their covenants and agreements, insist that the licensor shall continue to perform his, as to them, and, upon failure, institute their suit for its breach of covenants. Why should the defendant be allowed to claim that thofle whom it has released, and who have no interest, should be parties, and to defeat the recovery because they are not joined? Nothing but the most absolute necessity would justify the court in permitting the defendant corporation thus to plead and take advantage of its own act to escape responsibility. I do not perceive such necessity, a.nd am constrained to overrule the demuner, with costs.
T:rEBEUTB: V. BUBBER oil CELLULOID. ETa·· 00.
& CELLULOID HAB!fBss-TBIIIIIING
(CirC'Uit CO'Urt, D. NetlI Jl'IT'S611.
On Bill, etc. D. J. This case bas been heard on bill, plea, replication, and proofs. The bill alleges that the complainant is the original and first inventor of three several patents, to-wit: one ,for the "improvement in the covering of harness trimmings," da.ted January 18, 1870, and numbered 99,082; one for a "new and useful design for harness trimmings," dated June 18, 1871, and numbered 5,006; and one for "improve: ment in harness mountings," dated August 24, 1875, and numbered 167,040; and charges that the defendant corporation has made, used, and vended to others to be used, a large number and quantity of an article of harness trimmings which infringe the three several patents. The plea denies that the three alleged inveutions are, in point of fact, connected together in use or operation, and conjointly embodied in any of the harness trimmings and other articles manufactured, used, or sold by the defendant, on which denial the complainant has taken issue by replying. The complainant's replication is an admission by him of the sufficiency of the plea as a defence, if the facts which it alleges are established by the evidence. Myers v. Darr, 18 BIatchf. 22-26; Story's Eg. PI. § 697. The issue, then, is as to the truth of the allegations of the plea, that no one article manufactured and sold by the defendant infringes the three patents on which the suit is founded. The patents occupy very narrow ground. They refer to new methods of covering harness trimmings, and to new designs in the formation of rings and terrets. The teaNIXON,