
    The Peck, Hannaford & Peck Co. v. Ramsey.
    (Decided January 25, 1932.)
    
      
      Messrs. Nichols, Morrill, Wood, Marx & Ginter, for plaintiff in error.
    
      Messrs. Bates, Stewart & Skirvin, for defendant in error.
   Ross, P. J.

This cause is presented to this court as a proceeding in error from the court of common pleas of Hamilton county, wherein judgment was rendered in favor of the plaintiff, James N. Ramsey.

The present defendant in error, James N. Ramsey, brought the suit, alleging a contract whereby he was to receive a certain sum upon each furnace manufactured and sold by plaintiff in error, and a minimum royalty of $25 per month, payable quarterly. The contract provided for cancellation by either party upon notice to the other.

It was further alleged that the contract provided for statements of sales and royalties to be furnished plaintiff, Ramsey, and that none had ever been furnished.

The prayer was for an accounting, and in the alternative for judgment for the total amount of the minimum royalties, and interest, if no sales had.been made.

The contract was entered into on the 27th of September, 1918. The petition was filed December 16, 1929.

An answer was filed, alleging as one defense that the furnace had no beneficial use, and that the installation of such furnaces would be a violation of the municipal ordinances, and that there was, therefore, a failure of consideration for the royalties.

As a second defense it was alleged that no furnaces had been manufactured or sold.

As a third defense it was alleged that the patent was invalid, as being inapplicable to any device having a beneficial use, and had been anticipated by prior inventors, all in contravention of a clause in the contract warranting the patent.

As a fourth defense it was alleged that as the contract was entered into September 27, 1918, and any breach that occurred took place January 7, 1919, ten years and eleven months before the action was brought, the defendant in error was therefore estopped and guilty of laches.

A demurrer was filed by plaintiff to the first, third, and fourth defenses. The demurrer was overruled as to the first defense and sustained as to the third and fourth defenses.

'An amended answer was filed in which the defense of no beneficial use, and failure of consideration, was made, as well as the defense that no furnaces had been made or sold; and, thereafter, a second amended answer was tendered in which the defense of laches was again set up. The pertinent allegations of this pleading are as follows: “Defendant further says that the plaintiff, from the time the contract was executed until shortly before the commencement of this action, took no steps of any kind to enforce his alleged claim under the contract, or to inquire of the defendant as to whether or not the defendant had been able to sell any of the heating devices or systems made under said patent, for the reason that plaintiff asserted no rights under said contract for the period aforesaid and had apparently abandoned said contract. The defendant did not exercise the privilege which it had of terminating said contract by written notice, and the plaintiff is therefore estopped to assert any claims under the contract at this time.”

The court refused leave to file this pleading, and trial was had upon the petition, the amended answer, and reply.

The jury found for the plaintiff, Ramsey, and judgment was rendered for the amount of minimum royalties, with interest from the time each was due.

It is claimed that the verdict is against the weight of the evidence, in that it was testified to hy experts that the furnace was a menace to life, in that fumes might and probably would escape into pipes leading to the rooms, and, therefore, it had no beneficial use. This evidence was met by a number of persons who had and were using these furnaces with complete success. We can find no fault with the judgment on this point.

During the trial it was brought out in evidence, originally upon cross-examination of the plaintiff, by counsel for defendant, that the patentee, for whom plaintiff was attorney, and who, as patentee, was also given a royalty by the same contract, had since died, and that his widow was being paid a portion of the amount provided by the contract.

The court was requested to charge as follows: “I charge you, members of the jury, that you are not to consider the fact that certain payments have been made by the defendant to Abigail Coleman, in determining whether or not the plaintiff in this case is entitled to recover.”

While we consider that no error would have been committed by the court in giving the charge, we do not find that the refusal to give the charge amounted to such error, prejudicial to plaintiff in error, as to demand a reversal of the judgment, in view of the manifest weight of the evidence indicating that the verdict as hereinafter modified was substantially just, and in view of the fact that the case was one in chancery, triable to the court.

It is further contended that the court committed error in excluding the defense of laches and estoppel, as alleged. We conclude on this point that even if the allegations of this defense had been fully proved, they would not constitute a defense, since a period of laches short of that provided by the statute of limitations is alleged, and no act or omission causing the defendant to change his position, and amounting to estoppel, is averred. The allegations cover mere lapse of time. Manifestly the basic proceeding was a case in chancery. The action was for an accounting — an equity case.

The petition did not merely allege complicated items of an account, but the failure of defendant to make reports and render accounts, as provided by the contract, and the court could have rendered a decree requiring the defendant to account.

The defense of laches was, therefore, a proper defense, but, if the defense as alleged and proved would not have been a defense to the cause of action alleged, it would be manifestly unjust to return the case for retrial. Both parties had the right to cancel the contract. Neither did. If the plaintiff was guilty of neglect in the assertion of his claims, the defendant was equally lax in not availing itself of the right to terminate the contract upon notice. What we have said applies as well to the original defense as to the second amended answer.

An examination of the entire record convinces us that as to the principal amount of the minimum royalties, the judgment did substantial justice between the parties, but it would not, in view of the facts of this case, be equitable to permit the plaintiff to recover interest upon the several payments of royalty which he failed to collect or demand for some eleven years.

Regardless of the forum of the trial below, we regard this as a chancery case, and subject, as heretofore indicated, to the rules of equity. Being a case in chancery, it is subject to the rules of equity, and continues its character throughout the entire life of the case. The seeker of equity in this proceeding would not be doing equity if he were permitted to remain quiescent for some eleven years and then be permitted to collect interest as well as the principal sums he had allowed to remain in the hands of the plaintiff in error.

The judgment of the court of common pleas, which was really a decree in chancery, will, therefore, be modified and reduced to the sum of $2,925, and, as so modified, the judgment or decree of the court of common pleas will be affirmed.

Judgment affirmed.

Hamilton and Cushing, JJ., concur.  