U.S. Supreme Court
Kennedy v. Hazelton, 128 U.S. 667 (1888)
Kennedy v. Hazelton
Submitted December 3, 1888
Decided December 17, 1888
128 U.S. 667
APPEAL FROM THE CIRCUIT COURT OF THE UNITED
STATES FOR THE NORTHERN DISTRICT OF ILLINOIS
Specific performance cannot be decreed of an agreement to convey property which has no existence, or to which the defendant has no title, and if the want of title was known to the plaintiff at the time of beginning the suit, the bill will not be retained for assessment of damages.
One who agrees to assign to another any patents that he may obtain for improvements in certain machines, and who afterwards invents such an improvement, and, with intent to evade his agreement and to defraud the other party, procures a patent for his invention to be obtained upon the application of a third person, and to be issued to him as assignee of that person, and receives profits under it, cannot be compelled in equity to assign the patent or to account for the profits. chanrobles.com-red
This was a bill in equity for specific performance, filed November 12, 1887, by a citizen of New York against a citizen of Illinois, and contained the following allegations:
On July 10, 1884, the defendant, in consideration of the sum of $10,000 paid by the plaintiff to him, made an assignment to the plaintiff of an interest of one-half in two patents previously obtained by the defendant for steam boilers, and also made a written contract, acknowledged before a notary public and recorded in the Patent Office, by which the defendant agreed to assign to the plaintiff any and all patents which the defendant might thereafter obtain from the United States or the Dominion of Canada for inventions in improvements in steam boilers, and further agreed not to assign such inventions, or the patents obtained therefor, to any other person. In 1885, the defendant publicly stated that he had invented such an improvement, and explained its general plan and construction, and afterwards combined and confederated with one Goulding to avoid and evade the effect of the contract of July 10, 1884, and for that purpose the defendant caused to be prepared at his expense, but in the name of Goulding, the necessary papers to procure letters patent for this invention, and Goulding, without any consideration received from the defendant therefor, assented to be used in that regard as the alleged inventor of the improvement, and at the request and by the procurement of the defendant, filed an application under oath for a patent for it, which application was allowed, and Goulding, before the issue of the patent, assigned in writing to the defendant all his interest in the improvement and in the patent therefor, and on December 14, 1886, a patent was issued to the defendant accordingly, as assignee of Goulding, a certified copy of which was made part of the bill. The bill further alleged that the defendant was, and Goulding was not, the original and first inventor of the improvement so patented; that the defendant had engaged in the manufacture and sale of boilers under this patent, and had received, and was receiving, great benefits therefrom; that the patent was of value exceeding the sum of $5,000, exclusive of interest and costs. chanrobles.com-red
The bill prayed for a decree that the defendant assign this patent to the plaintiff, for an adjudication that the title to it equitably vested in the plaintiff at the date of its issue, for an account of profits received by the defendant from its use, for a preliminary injunction against transferring or encumbering the patent or manufacturing or selling boilers containing the improvement described therein, and for further relief.
The defendant demurred to the bill (1) for want of equity; (2) for multifariousness in embracing two separate and distinct causes of action, one to enforce specific performance of a contract, the other for the infringement of a patent; (3) because, as appeared by the allegations of the bill, the patent was absolutely void, and no suit could be maintained, either to compel its transfer or for infringement thereof.
The circuit court sustained the demurrer for the third reason, and dismissed the bill. 33 F.2d 3. The plaintiff appealed to this Court. chanrobles.com-red
MR. JUSTICE GRAY, after stating the facts as above, delivered the opinion of the Court.
The case, as stated in the bill and admitted by the demurrer, is shortly this:
The defendant agreed in writing to assign to the plaintiff any patents that he might obtain for improvements in steam boilers. He did invent such an improvement, and, with intent to evade his agreement and to defraud the plaintiff, procured a patent for this invention to be obtained upon the application under oath of a third person as the inventor, and to be issued to him as assignee of that person, and has made profits by manufacturing and selling boilers embodying the improvement so patented. The plaintiff seeks by bill in equity to compel the defendant to assign the patent to him, and to account for the profits received under it.
A court of chancery cannot decree specific performance of an agreement to convey property which has no existence or to which the defendant has no title. A bill by vendee against vendor for specific performance which does not show any title in the defendant is bad on demurrer, and if it appears by the bill or otherwise that the want of title (even if caused by the defendant's own act, as by his conveyance to a bona fide purchaser) was known to the plaintiff at the time of beginning the suit, the bill will not be retained for assessment of damages, but must be dismissed, and the plaintiff left to his remedy at law. Columbine v. Chichester, 2 Phillips 27, 1 Coop.Temp.Cottenham 295; Ferguson v Wilson, L.R. 2 Ch. 77; Kempshall v. Stone, 5 Johns.Ch. 193; Morss chanrobles.com-red
v. Elmendorf, 11 Paige 277; Milkman v. Ordway, 106 Mass. 232, 256.
The patent law makes it essential to the validity of a patent that it shall be granted on the application, supported by the oath, of the original and first inventor, or of his executor or administrator, whether the patent is issued to him or to his assignee. A patent which is not supported by the oath of the inventor, but applied for by one who is not the inventor, is unauthorized by law and void, and, whether taken out in the name of the applicant or of any assignee of his, confers no rights as against the public. Rev.Stat. §§ 4886, 4888, 4892, 4895, 4896, 4920.
The patent issued by the Commissioner to the defendant as assignee of Goulding is only prima facie evidence that Goulding was the inventor of the improvement patented, and the presumption of its validity in this respect is rebutted and overthrown by the distinct allegation in the bill, admitted by the demurrer, that the defendant, and not Goulding, was the inventor. This fact is not brought into the case by any answer or plea of the defendant, but it is asserted by the plaintiff himself as a ground for maintaining his bill. As the patent, upon the plaintiff's own showing, conferred no title or right upon the defendant, a court of equity will not order him to assign it to the plaintiff -- not only because that would be to decree a conveyance of property in which the defendant has, and can confer, no title, but also because its only possible value or use to the plaintiff would be to enable him to impose upon the public by asserting rights under a void patent. Post v. Marsh, 16 Ch.D. 395; Oldham v. James, 14 Irish Ch. 81.
The bill cannot be maintained for an account of profits received by the defendant from the use of this patent, because a decree for profits can only proceed upon the ground that the plaintiff is at least the equitable owner of the patent, and there can be neither legal nor equitable ownership of a void patent. The same reason is a sufficient answer to the suggestion of the plaintiff that the bill may be maintained as a bill to remove a cloud upon his title in this patent. chanrobles.com-red
In Ambler v. Whipple, 20 Wall. 546, cited by the plaintiff, the suit was based upon articles of partnership between Ambler and Whipple by which it was agreed that all patents obtained by either partner should be owned by both in equal shares. The bill alleged that the two jointly had obtained a patent for a joint invention, and that another patent, afterwards obtained by Whipple upon the application of a third person, embodied the same invention with only a colorable variation. Neither of the patents was in the record, and the questions now presented were not suggested by counsel or considered by the court, but the decree for the plaintiff proceeded upon independent grounds. The result is that the present bill cannot be maintained, and that the plaintiff must be left to any remedy that he may have to recover damages in an action at law.
THE CHIEF JUSTICE and MR. JUSTICE BRADLEY dissented.