Albright v. Teas - 106 U.S. 613 (1883)
U.S. Supreme Court
Albright v. Teas, 106 U.S. 613 (1883)
Albright v. Teas
Decided January 22, 1883
106 U.S. 613
A suit, the parties thereto being citizens of the same state, was brought in a court thereof, for moneys alleged to be due to the complainant under a contract whereby certain letters patent granted to him were transferred to the defendant. Held that the suit, not involving the validity or the construction of the patents, is not one arising under a law of the United Staten, and cannot be removed to the Circuit Court.
This was a suit in equity originally brought in the Court of Chancery of the State of New Jersey by Teas against Albright, Cahoone, and Tompkins. The bill alleged that Teas was the inventor and patentee of certain improvements in coach pads, harness saddles, and saddle trees covered by three certain letters patent issued to him; that on February 1, 1876, he made an agreement in writing of that date with Albright and Cahoone, which was in substance as follows: Teas agreed on his part to make assignments of said letters patent to Albright and Cahoone, and also of certain other letters patent for which he had made application to the Patent Office, and also of any other patents which he might obtain for improvements in gig saddles and coach pads for harness, in consideration whereof Albright and Cahoone agreed that they would "use their best endeavors to have the aforesaid inventions worked, goods manufactured and sold to the best advantage of themselves and said Teas," and to pay Teas certain specified royalties for the use of the patented improvements, and pay "all just and necessary expenses for the purpose of procuring and sustaining all of said letters patent against infringers," provided it be for the mutual interests of and financial benefits to all the parties to the agreement.
The bill further alleged that Teas did assign the patents as stipulated in the agreement and that the agreement was in full force; that a large amount of goods in which the improvements covered by the patents of the complainant were used had been manufactured by Albright and Cahoone under the name of the Cahoone Manufacturing Company and by Tompkins, Albright, and Cahoone under the firm name of Samuel E. Tompkins, Cahoone & Co.;
that the defendants had failed to render proper statements of the quantity of goods manufactured by them; that complainant believed there was a large amount due him under said contract for royalties, and that he had tried without success to obtain an inspection of the account books of defendants to ascertain what was so due him.
The bill prayed for discovery, for an account of the sums due the complainant for royalties under said contract, and for a decree against Albright and Cahoone for the amount found to be due from them to him on said account and for general relief.
Albright and Cahoone filed a joint and several answer and Tompkins a several answer to the bill.
Albright and Cahoone in their answer neither admitted nor denied that Teas was the original inventor of the patents assigned to them, but they denied that he had not free access to their books of account. They averred that they had rendered full accounts and made all payments due to Teas under the agreement set forth in the bill; that if any disputes existed between Teas and defendants, they arose from a wrong construction put in the agreement by Teas and from unfounded claims by him as to his rights under it; that at the time of the agreement, they were in litigation with Tompkins in respect to certain patents held by him for improvements in saddle trees; that the litigation and rivalry impaired the business of all three, and that in October, 1877, they settled their differences with Tompkins and united their business with his, and it had since been carried on by the firm of Tompkins, Cahoone & Co., which had been entitled to use all the patents of both parties, and that the new firm had manufactured many goods without employing any of the improvements described in the patents of Teas, and had manufactured many to which they had applied the improvements covered by the Teas patents, in connection with those covered by patents of Tompkins and others; that Tompkins had always disputed the value and validity of the Teas patents, but that they -- Albright and Cahoone -- had always been anxious to fulfill their agreement with Teas, and had paid royalties on all goods to the manufacture of which it could by any reasonable construction be claimed that the improvements covered by the Teas patents had been applied, and that if Teas claimed more, it was because he insisted that goods made
under the patents of Tompkins were infringements on his patents.
Tompkins made substantially the same denials and averments in his answer. He also averred that he was not a party to the agreement with Teas and denied all obligations under it. He alleged that though he had always disputed the validity of the Teas patents, he had desired to enable his partners, Albright and Cahoone, fairly to fulfill their agreement with Teas, and that it had been fulfilled, and all moneys had been paid him to which he was entitled for goods made under his patents.
Replications were filed to these answers, and the parties proceeded to take testimony. While the taking of the testimony was going on, some correspondence took place between the counsel of the parties in which counsel for defendants specified a large number of articles which they admitted that the defendants were manufacturing under the Teas patents, and gave a list of nineteen other articles manufactured by the defendants, which they contended were not made under the Teas patents and did not therefore fall within the agreement between Teas and Albright and Cahoone. Thereupon the defendants filed a petition for the removal of the cause to the circuit court of the United States in which they alleged that all the parties to the suit were citizens of the State of New Jersey, but that the suit was one arising under the patent laws of the United States, and exclusively within the cognizance of the courts of the United States, and removable under the Act of March 3, 1875, c. 137. Upon this petition the cause was removed to the Circuit Court of the United States for the District of New Jersey. By consent of parties, an interlocutory order was made in the circuit court referring the cause to a master to report the amount due the complaint, if anything, for royalty upon the articles, enumerating them, in the manufacture of which the patented improvements of the complainant were used.
Upon final hearing, the testimony having been closed, the counsel for the complainant moved the circuit court to remand the cause to the state court of chancery, and the court, declaring its opinion to be that the suit was not one arising under any of the laws of the United States, but was one over which the United States courts had no jurisdiction, and that it was a suit for an accounting and
relief for the settlement of controversies under a contract of which the state courts had full cognizance, ordered the cause to be remanded to the state court. To obtain a review of this order, the present appeal was taken by Tompkins, Albright, and Cahoone, defendants in the circuit court.