
    Allison Bros. Co. v. Allison et al.
    
    
      (Supreme Court, General Term, Fifth Department.
    
    October 19, 1889.)
    1. Injunction—Violation of Contract.
    Two brothers assigned to one C. a one-third interest in two patents, one for an improvement in cigarettes and one for an improvement in cigarette machines, and “any improvements, renewals, or reissue of said cigarettes, cigarette machines, or” patents, “meaning hereby to invest in” C. “an undivided one-third of said patents, extension, or improvements thereof. ” By another agreement an undivided one-fourth interest was conveyed to A. by the brothers and C. in the patents and stock owned by them under the firm name of A. Bros. & Co., “as well as new patients, machines, etc., which may be” used in the business; the intent being to give A. a one-fourth interest in all.“the patents and improvements on the same, which may hereafter be made, machines, stock, ” etc., of A. Bros. & Co. This firm, and ■all the above parties, transferred to plaintiff all the property of the firm, “together with all patents owned by any or either of said firm for improvements in cigarettes ;and cigarette machines. ” By a fourth agreement the brothers and C. transferred to ■plaintiff the “respective interests which we have heretofore enjoyed as members of said firm” in two patents for cigarettes and machines, “this transfer to include ■any improvements, renewals, or reissues ” of the patents. Held, that these agreements did not so clearly transfer to plaintiff or assure to it the right to any interest in any invention of one of the brothers not already patented, or which should be patented as improvements on the former patent, as to justify a temporary injunction for violation of the contract by using any improved machine of defendant’s invention pending the trial of such issue.
    3. Same—Reformation of Contract.
    Where a contract, as set out in a petition for a preliminary injunction5for its violation, is not sufficient to justify its issuance, one will not be granted under a second count in the complaint, alleging a mistake in the contract, and asking for its reformation where equities alleged as ground for its reformation are denied in the answer, but plaintiff must await the reformation of the contract before he can obtain affirmative relief based on the contract as reformed.
    3. Same—Temporary Injunction—Discretion of Court.
    Where the answer was not interposed when the preliminary injunction was granted by a county court ex parte, the discretionary power of the court in granting or refusing the injunction is for the first time exercised by the court, after issue joined, on appeal to the special term.
    Appeal from special term, Monroe county.
    Action by Allison Bros. Company against Oscar M. Allison and others. Plaintiff obtained from the court a temporary injunction against defendant Allison for the violation of a contract. The injunction was vacated by the special term, and plaintiff appeals.
    Argued before Barker, P. J., and Dwight and Macomber, JJ.
    
      John Van Voorhis, for appellant. Theodore Bacon, for respondent.
   Dwight, J.

The injunction, pendente lite, restrained the defendant. Alli-

son from using, or permitting others to use, and from receiving pay for the use of, any machine of his invention for the manufacture of cigarettes, and it restrained the other defendants from paying Allison, or any person other than the plaintiff, for the use of such machines. It was granted solely on the ground, as stated in the order, that the plaintiff was entitled to the exclusive use of all such machines by virtue of agreements of the defendant Allison with the plaintiff and its assignors, which agreements, as we find by reference to the complaint and proofs, were four in number. By the first of these instruments, made in October, 1882, Allison and a brother, J. A. Allison, each assigned to one F. Dewitt Clarke an undivided sixth of his interest in two patents owned by them jointly, one for an improvement in cigarettes and one for an improvement in cigarette machines, “and,” to quote the language-of the instrument “any improvements, renewals, or reissue of said cigarettes, cigarette machines, or letters patent, * * * to the full end of the term for which said letters patent are granted, and for the term of any improvements therefor, reissue, or reissues thereon, * * * meaning hereby to-invest in said F. Dewitt Clarke an undivided third of said patents, extension, or improvements thereof;” and the parties agreed that neither should “sell-,, dispose of, or license or grant any portion of our interest in and to the same,” to anybody without the written consent of the other two. By the second agreement, in February, 1883, the two Allisons and Clarke sold to one Frederick P. Allen “an undivided one-fourth part of all patents, machines, machinery, stock, etc., now used and owned by the said parties of the first part in-the manufacture of tobacco, cigarettes, etc., under the firm name of Allison Bros. & Co., as well as new patents, machines, machinery, or appliances-which may be obtained or used in connection with said business, * * * the intention of this agreement being that each of said parties of the first and second parts shall have an undivided one-fourth interest in-all the patents and improvements on same which may hereafter be made, machines, stock, and business of the firm of Allison Bros. & Co.” The third agreement, executed November 9, 1883, by the firm of Allison Bros. & Co. and the four individuals above named, who are described as composing the- firm, transferred to-the plaintiff, described as a corporation duly organized, etc., all the property of the firm, machinery, tools, manufactured stock, material,, etc., “together with all patents owned by any or either of said firm for improvements in cigarettes and cigarette machines, and machinery for manufacturing same.” The fourth agreement, under date of November 19, 1883, ran from the two Allisons and Clarke to the plaintiff, and, after reciting that the firm of Allison Bros. & Co. had theretofore “ used and enjoyed cigarette machines and improvements thereon, as well as improvements in cigarettes covered by letters patent of the United States, numbers 231,947 and 261,576,” purports to-assign to the plaintiff corporation “our, and each of our, respective interests therein which we have heretofore enjoyed as members of said firm, and which have been used by said firm, this transfer to include any improvements, renewals, or reissues of said patented improvements or letters patent numbers-231,947 and 261,576.”

The foregoing extracts contain all the provisions of the several agreements, as executed between the parties, relating to the transfer of or the title to any patents for cigarette machines, issued or to be issued to, or improvements to-be made thereon by, any of such parties. The complaint alleges “ that by reason of the premises the plaintiff became and was and is the owner of the patents hereinbefore mentioned, and entitled to have assigned to it any invention or device which the said Oscar W. Allison, or any other of said parties, had theretofore invented or should thereafter invent or devise or obtain, patents for.” The latter branch of the conclusion seems scarcely to result from the premises above stated. It is at least doubtful whether any or all of the agreements executed between the parties purport to assure the right to or transfer any interest in any invention not already patented, or such as should. ' thereafter be patented strictly as improvements upon the former; and. so the plaintiff seems to have apprehended, for in the second count of the complaint it is alleged that the agreements as executed did not express the intention of the parties in this particular respect, but that a provision was omitted, by mutual mistake, from each of those agreements, to the effect that the assignee or assignees in each case should have the absolute and exclusive right to any and every invention which should thereafter be made by the assignors, or either of them, for use in the manufacture of cigarettes, and the plaintiff demands judgment that each of said agreements be reformed by incorporating such a provision therein. The acts of the defendant Allison, alleged to be in contravention of his agreements with the plaintiff and his assignors, which are relied upon as furnishing ground for this action, consist in making and furnishing to the other defendants cigarette machines of his invention not yet patented, without the consent of the plaintiff, and in receiving compensation for the use of such machines by way of royalty on the product manufactured thereby. It is alleged in the complaint that these machines “are the same machines covered by the letters patent aforesaid, but, if they differ in any respect from the machines referred to in said letters patent, such alteration or improvement, or improved machine, and the exclusive right to use the same, are the property of this plaintiff.” The positive allegation of the identity of the machines in question with those covered by the letters patent owned by the plaintiff might create the impression that the plaintiff intended to charge the defendant with an infringement of the patent, and that the action was, in effect, to restrain such infringement; and this impression seems to have been received by the court at special term, where the injunction was vacated solely on the ground of the want of jurisdiction in the courts of the state, to enjoin the infringement of a patent even in, and pending, an action to determine the title to a patent alleged to be infringed. But this we do not understand to be the character or purpose of the plaintiff’s action. Indeed, upon the argument here counsel for the plaintiff entirely disclaim the intention to charge an infringement, and frankly admit that the machine furnished by Allison to the other defendants is not an infringement of any patent already transferred to plaintiff, but, on the contrary, that it is a new and independent machine, of novel device, and not to be denominated an improvement on that of the plaintiff unless in the sense of being a better machine. neither does the plaintiff contend that the use of the new machine by the defendant Allison, and his license of its use by the other defendants, is an infringement of any patent which the plaintiff is entitled to have assigned to it, for the obvious reason that a patent for the new machine has not yet been issued. In short, as counsel, for the plaintiff not only admit, but insist, there is no question of infringement in the case; but the plaintiff relies upon its alleged right, by virtue of the agreements of Allison, to the exclusive use and benefit of any and every invention made by him in the line of cigarette machinery, whether patented or unpatented, and whether an improvement upon or independent of those in existence when the agreements were made; and the plaintiff contends that, pending its action to establish this right, it was entitled to the provisional remedy granted by the county judge. To this conclusion there are several objections, which, though not reached in the consideration of the motion in the court below, we think justified its action in dissolving the injunction, and require an affirmance of its order to that effect. The first of these has already been indicated. The language of the agreements in this respect is very inartificial, and sometimes, perhaps, of doubtful sense, but nowhere do we find in them a clear expression of an intent to assure to the assignee the right to future inventions disconnected with and independent of those already secured by letters patent, and assigned to the plaintiff. Without finally adjudicating the question of the proper construction of the instruments in this respect, we are of opinion that a case was not made upon the terms of the instruments themselves which warranted the granting of an injunction in advance of a trial of the issue. To justify the exercise of that power of the court q clear case should be made, at least by the allegations of the complaint. If it be conceded that a case was not made for a preliminary injunction upon the terms of the agreements as they stand, it is very clear that such remedy was not allowable under the second count of the complaint. The equities there alleged as ground for the reformation of the contracts are fully denied by the answer, and the evidence afforded by the writings themselves, under the hands and seals of the parties, is not easily overcome by ex parte affidavits which the defendant has had no opportunity to meet. The plaintiff must be content to await the reformation of the contracts before it can have affirmative relief based upon the contracts as reformed. It is to be observed that the answer had not been interposed when the injunction was granted ex parte, and that the merits of the application were not considered at special term, so that the discretionary power of the court in granting or refusing the preliminary injunction is for the first time since issue joined exercised on this appeal. A more radical objection is made to the maintenance of the injunction in this case to the effect that, whether the action is to be determined upon the agreements as they stand, or as the plaintiff may procure them to be reformed, the fact remains that the right which the plaintiff seeks to maintain is to an invention not patented, and in which, therefore, no right of property can exist which can be enforced by law. It is not questioned, in this connection, that a valid contract may be made for the sale of an invention before it is patented, and that such a contract may assure to the purchaser the right to an assignment of letters patent after they are issued. But it is contended that no property right is acquired until the issue of the letters patent, there being no such thing as property in an unpatented invention; but, as this objection goes to the maintenance of the action, and would not affect the disposition to be made of the preliminary injunction, we are not disposed to pass upon it on this appeal. For the reasons previously stated, we are of the opinion that the order dissolving the injunction pendente lite was properly made, and should be affirmed. All concur. Order affirmed, with $10 costs and disbursements.  