298
FEDERAL REPORTER.
propedy conveyed by the other. The authority conferred on the trustee to sell the property at public or private sale, and for cash or otherwise, and with or without notice of any kind, is in conflict with the statute of this state and renders the assignment void. Section 387, Gantt's Digest, in terms provides that the "assignee shall be required to sell all the property assigned, at public auction, withiil120 days, and shall give at least 30 days' notice of the time and place of such sale." The court has uniformly held that an assignment which in terms directed or authorized the assignee to execute the trust and dispose of the property in a mode not authorized by the statute, or contrary to its requirements, avoided the assignment. In Schwab v. Hollowell, (April term, 1879,) the language of the deed was, "to sell at public or private sale, at wholesale or retail, for cash or on a credit;" and the court (Judge Dillon presiding) held the deed void because it authorized a private sale of the property in contravention of the statute. The same ruling was made in Bartlett v. Teah, 1 FED. REP. 768, and in many other cases; The former circuit judge concurred in these rulings, and they are undoubt· edly supported by the current of authorities on the question. Rapalee v. Stewart, 27 N. Y. 310; Woodburn v. Mosher, 9.Barb. 255; Keep v. Sanderson, 12 Wis. 391; McCleery v. Allen, 7 Neb. 21; Sumner v. Hicks, 2.Black, 532.
WESCOTT and another v. WAYNE AGRICULTURAL WORKS and others. (Cirouit Oourt, D. indiana. February 14, 1882. PATENTS-JOINT INTEREST-TITLE.
Where a party holding the title to patents absolutely conveys tllcm to others jointly as trustees, with full power to dispose of them at their discretion to enable them to take upon themselves the entire and exclusive management of the business, they can exercise the power only jointly, and a contract by one of the parties conveys no title.
H. C. Fox and Wood If Boyd, for plaintiffs. Hillet Dixon, for defendants. GRESHAM, D. J. The following agreement was entered into on the sixth day of October, ;1.874, between the plaintiffs and Hiram Moore: "Whereas. sundry letters patent of the United States heretofore have been granted to said Moore. which letters patent are respectfully numbered, entitled, and dated as foHows,to-wit: No. 30,685, .dated November 20, 1860,
WESOOTT V. WAYNE AGRICULTURAL WORKS.
299
and entitled ·improvement in seed drills,' and No. 81.819, dated March U, 1861, and entitled' improvement in seed drills; · and whereas, the said Moore is justly indebted to the said Charles W. West in the sum of $10,000 for money advanced to aid him, the said Moore, in perfecting his inventions, arid is desirous of securing the repayment or the same; and whereas, the said Wascott is desirous of securing an interest in the inventions and letters patent aforesaid, and in any reissue, renewal,or extension thereof; now, therefore, " Know all men by these presents, that for and in consideration of the premises, and of the sum of five dollars, in lawful money, to me in hand, by the said Wescott and West, before the execution hereof, paid, and of other valuable considerations, me thereunto moving, I, the said Hiram Moore, do hereby assign, sell, and set over, unto the said Charles W. West and John M. Wescott, the entire right, title, and interest in and to the letters patent aforesaid, and in and to the inventions and improvements represented, shown, or described therein, including any renewal, reissue, or extension thereof, the same to be held and enjoyed by the said West and Wescott, arid their legal representatives, as fully and entirely as the same would have been held and enjoyed by me had this assignment and sale not been made, to the full end of any term or terms for which the letters patent aforesaid, or either of them, have been, or hereafter may be, granted, reissued, renewed, or extended. .. I hereby further agree to sign such lawful papers and do such lawful acts as may, by the counsel, learned in law, of the said West and Wescott, be deemed necessary or expedient in order to obtain an extension or reissue of the patents aforesaid, or to asselt, maintain, or defeat the rights secured by said letters patent. It is expressly understood, however, that the costs and charges of the proceedings aforesai\l shall be defrayed by said West andWescott, as hereinafter provided. "In consideration of the premises I hereby further make, constitute, and appoint the said Charles W. Wilst and John M. Wescott my true and lawful attorneys in law and in fact, with power irrevocable, giving and granting to them full and exclusive'and unreserved power and authority for me, and in my name, place, and stead, to assume and take upon themselves the entire and exclusive management and control of the aforsesaid letters patent, and of each and every of them, and to dispose of all the right, title, and interest which I have under the same, and under each and every of them, for such price or prices, upon such terms. and to such persons, and for such place or places as they, my said attorneys; shall deem proper, and in my name, place, and stead, and as my own proper act and deed, to sign, seal, deliver, and acknowledge all such deeds and instruments of writin/l; as shall be necessary or proper for the granting or licensing to others the said rights under the said letters patent, and to each and every of them, and to ask, demand, sue for, and receive the price or fees, or any part or parts thereof, paid or payable tor such grants or licenses, and in my name t() execute and deliver receipts and acqUittances therefor, and in my name to bring to account and reckoning, and to ask, demand, sue for, a.nd recover and receive of and from· all and any person whomsoever who may have been or may be manufacturing or selling said drills containing the improvements aforeasaid, or by any or either of them, such reasonable price or fee for sucb use of said improvements, or eitberof them, as
300
:/EDERAL REPORTER.
my saId attorneys shall deem proper and reasonable; and on receiptor recovery thereof, or of any part or parts thereof, to execute in my name such good and sufficient receipts, releases, and discharges for the same as my attorneys shall deem proper, and to liquidate and discharge the saUle; and on the neglect or refusal of any such manufacturer or manufacturers as aforesaid hiwfully to account for the use of said improvements, or of any or either of them, and to pay such reasonable price or fee for such use, and to agree to pay a reasonable royalty therefor or for the right to continue the use of said improvements, or of any or either of them, to take all such legal ways and means for securing and enforcing the payment thereof, or to stop the unauthorized use of sucb improvements, or of any or either of them, by action, suit, or otherwise, as they, my said attorneys, may deem expedient. and in my name to prusecute, as they may deem expedient, all or any actions or suits, at law or in equity, or other proceedings before any tribunal, against any person or persons, brought by or under my said attorneys, and thereon to proceed to judgment or to discontinue, or to compromise the same, as they, my said attorneys, shall deem expedient, hereby authorizing and empowering my said attorneys to substitute and appoint under themselves one or more special attorneys to do or perform any act, matter, or thing which they themselves might lawfully do by virtue hereof, and generally to do and perform and execute in my name as aforesaid all and whatever other acts, matters, and things that they may deem expedient and requisite. or may be advised to do in and about the premises, fully and effectually, to all intents and pnrposes, as if I myself were present and did the same; I, the said Hiram Moore, hereby ratifying, allowing, and confirming and agreeing from time to time, and all times hereaftel" to ratify, allow, and confirm as good and valid all and whatsoever the acts,matters, and things which my said attorneys, or their substitutes, shall lawfully do or cause to be done in and about the premises by virtue of these presents; and I, the said Hiram Moore, hereby consent and agree with the said West and Wescott to do no act or thing to diminish the powers herein conferred upon them, or to hinder or embarrass them in the execution of this power, which is hereby intended and declared to be irrevocable. I hereby revoke, annul, and disallow any and all, powers of attorney heretofore given by me in this behalf. " It is hereby agreed by,the parties hereto, that this agreement is to supersede and take the place of any heretofore made between said Moore and J. M. Wescott. aforesaid; and that the entire right, title, and interest in the letters patent aforesaid has been, up to the execution of these instruments, vested in the said Hiram Moore. .. The said J obn M. Wescott, for his part, agrees. at his own cost and charges, to procure the extension of said letters patent, November 20, 18GO, now pending, if. practicable, including the expenses already incurred, as well as those which hereafter may be incurred, in said behalf; which sum is to be paidabsolutely, whether said extension is granted or not, and in no event is any part of said sum to be reclaimed from, or refunded, or by, said Moore, or to be deducted from the sum or sums collected under !laid, patents. "It hereby covenanted and agreed by and between the parties hereto as follows: That from the sum or sums collected under the letters patent aforesaid, from sales, royalties, or settlements, or from any other source, shall first
WESCOTT
v.
WAYNE AGRICULTURAL WORKS.
801
be deducted tIle costs, charges, and expenses of collecting the same, including all litigatioll expenses, save those of the extension application, and then the net profits or proceeds shall be divided as follows: To Hiram Moore, or his legal representatives, one-fourth part; to C. W. West, or his legal representatives, one-fourth part; to John M. Wescott, or his legal representatives, onehalf part. In case of loss or failure to realize any profit under said patents, all litigation expenses aforesaid are to be paid by said Wescott; it being exby the parties hereto that under no circumstances are said pressly Moore or West to incur any obligation, or to be under any liabilities, for said expenses. It is further agreed that John M. Wescott is to make no charge for his own time spent in this behalf, nor is said West to make any charge for his servi ces. .. It is also expressly understood that said Moore's interest is to continue during and throughout the extended time of the patent of November 20, 1860. Should such extension be granted, the parties hereto hereby agree in good faith to perform the covenants between them made. .. In testimony Whereof the parties hereto have affixed their hands and seals the day and year first above written. "HIRAM MOORE. [Seal.] "C. W. WEST. [Seal.l "J. M. WESOOTT· L Seal.l . .. In presence of" WM. D. BALDWIN, MARY
T.
PAL1\1ER."
On the tenth day of November, 1874, John M. Wescott enteren into an agreement with Isaao Kinsey and Aaron Morris. This agreement, after reciting that by the terms of theoontraot of Ootober 6, 1874, Hiram Moore oonveyed to West one-fourth interest in the patent; and to Wescott one-half interest, and retained to himself one-fourth interest, proceeds· as follows: "And whereas, consideration of the foregoing, Isaac Kinsey and Aaron Morris, of Milton, in Wayne county, Indiana, are desirous of obtaining an inter..: est in said letters patent, they hereby agree, 'to and with said John M;Wescott, of the same place, to severally take an equal interest with him in the same-: " Therefore, this article of agreement witnesseth: That said John M. Wescott hereby agrees, to and with said Isaac Kinsey and Aaron Morris, and. does hereby set over and assign to each of them one-third part of his one-half interest, retaining one-third part himself in said letters patent; and said Kinsey and Morris, fully understanding the original agreement mentioned, do hereby agree, to and with said Wescott, to be at one-third expense each with said Wescott, jointly, as set forth in said agreement, and shall be equally entitled an,d receive one-third profit or proceeds, if any, in said one-half intereBt, and in all things pertaining hereto, to be gov(,r!led by this and the inal contract and agreement." .
302
., FEDERAL REPORTER.
On the fourth of February, 1879; Isaac Kinsey undertook to 8Ssign in writing to Levi L. Lawrence and the Wayne Agricultural Works one-half of the interest he had acquired in the patents, namely, one undivided twelfth part. These instruments were all acknowledged and recorded in the patent-office. The bill charges that the defendants are manufacturing and selling seed-drills covered by the patents, and that they are asserting an interest in thEl. patents as part owners. The prayer is for an injunction and an accounting. The defendants demur to the bill for want of equity, and because Hiram Moore and Aaron Morris are not made parties. It is urged by counsel for the defendants that the contract of October 6, 1874, made West and Wescott trustees for themselves to the extent of threefourths of the patents, and trustees of Moore to the extent of the remaining fourth, with powers of attorneys to control and dispose of Moore's equitable interest; that to the extent that they were trustees for their own benefit in the net proceeds, West's and Wescott's legal and equitable estates merged, and that, having thus acquired an assignable interest in the patents, Wescott could and did convey to Kinsey'and Morris each one undivided sixth p;lrt; and that Kinsey assigned to Lawrence and the Wayne Agricultural Works half of his interest, namely, the undivided twelfth part. Having carefully' studied the contract between Moore and West and Wescott, and given due weight to its different parts, I think it was the intention of the parties to invest West and Wescott with the entire legal title to the patents, jointly, as trustees, with full power to dispose of them at their discretion. This was done to enable them to "take upon themselves the entire and exclusive management'· of the business, for the purposes specified. They were to dispose of the patents for the mutual benefit of all the parties, without any hindrance whatever from Moore. In doing this, and in otherwise executing the trust, the trustees were authorized to use Moore's name; but this was Dot necessary. Moore reserved no power to himself in the of the business, and the truBtees were not bound to consult him in carrying out the trust. He reserved nothing but an interest in the net profits. ,His power to convey title. grant licenses, collect royalties, and bring suits, ceased with the execution of the contract between him and West and Wescott. But the power that Moore granted to West and Wescott was a joint one-a personal confidence was reposed in their mutual judgment and discretion. They could exercise the power C'Onferred upon them only
BARKER ,V. STOWE.
as directed. It required the joint oeed of both' to convey any title to, or interest in, the patents. The contract between Wescott and Kinsey and Morris conveyed no title to the patents to the latter. It may have entitled Kinsey and Morris to share equally with Wescott in one-half of the net profits of the business. It follows, of course, if Kinsey acquired no interest or title to the patents, that he conveyed no title to Lawrence and the Wayne Agricultural Works. This suit is brought to protect the trust property, and to collect a debt due the trust. H it were a suit to wind up the trust and divide the proceeds among those entitled to them, Moore, and perhaps Morris, would be necessary parties. When a suit is brought to recover a trust fund, with a view to its distribution by the court, all the parties beneficially entitled should be brought before the court. Moore is in all things represented by the trustees, and he will be bound by the judgment of the court in this case. He has no authority to make conveyances, collect royalties, employ counsel, or control litigation. Why, then, make him a party? Garey v. Brown, 92 U.S. 171; Kerrison v. Stewart, 93 U. S. 155. What has already been said disposes of the proposition that by the terms of the contract between Moore and Wescott and West, Wescott took both a legal and equitable estate, which merged, he thereby becoming the absolute owner in his own right of an undivided half of the patents. Moore owned the patents absolutely, and for the purposes of the trust he conveyed his "entire right, title, and interest" to West and Wescott, by a single instrument. It would be a palpable disregard of the intentions of the parties, and the defeat of the trust, to hold that the contract of October 6, 1874, called for the application of the law of merger in favor of Wescott and West. Demurrer overruled.
BARKER
STOWE.
(Circuit Oourt, No D. New York. January 4, 1882.) PATENTS-FORMER ADJUDICATION AS A BAR.
Where, in a prior suit between the same parties, founded on an infringement of the same patent, the. prayer for relief was the same, and. the issues the same, the present suit is barred by a decree of dismissal entered in the prior , . suit. ..
