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Verdery v. Barrett

Supreme Court of Georgia1892-05-25
89 Ga. 349

Summary

Holding. The judgment of the trial court is affirmed.

Barrett entered into an agreement with the American Electric Light Company of New York in December 1881, obtaining an exclusive license to manufacture and sell the company's patented electric inventions within Georgia. As part of this arrangement, Barrett agreed to organize a Georgia corporation within one year and to introduce the inventions into practical use. To fund this enterprise, Barrett solicited subscriptions from local investors, including the defendant Verdery, who agreed to pay $500 for a proportionate interest in the patent rights. Barrett issued a certificate to Verdery evidencing this interest, conditioned on Verdery's payment of the subscription. Verdery failed to pay the $500 and did not participate in organizing the resulting Electric Light Company of Augusta.

Verdery was subsequently sued by Barrett, apparently for the unpaid subscription or related claims. Verdery demurred to the amended petition, arguing that Barrett had not adequately alleged ownership of the patent rights at the time of the alleged transaction and had failed to attach the necessary deed documentation. The trial court overruled Verdery's demurrer after Barrett amended the petition to include copies of the relevant agreements and to clarify the nature of the transaction.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether the plaintiff adequately alleged ownership of patent rights at the time of the alleged sale
  • Whether failure to attach documentary evidence to the petition was fatal to the claim
  • Whether a conditional certificate of interest in patent rights constitutes a valid basis for recovery when the subscriber failed to pay

Procedural posture

The defendant demurred to the plaintiff's petition as amended; the trial court overruled the demurrer and the defendant excepted to that ruling.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Judgment affirmed,.

The defendexxt then demurred to the petitioxx as amended, because (1) it appears that at the time of the alleged sale the plaintiff did not own the patent rights the purchase money of which is sued for, and it is not alleged that he ever delivered or . tendered any interest in them, or complied or offered to comply with his contract of sale; and (2) he has not annexed to the petition a copy of the deéd to himself under which he claims to have the title to the patent rights alleged to have been sold to the defendant. Thereupon the plaintiff offered the following amendment, to come in after the word “reimbursement”: He having given his notes for said $15,000 at or about the time of the payment of the said $10,000. Prior to this suit he offered to the defendant the original of a paper executed by the plaintiff under his hand and seal on February 18, 1882, (which is attached as an exhibit) stating that the plaintiff entered into articles of agreement December 10, 1881, with the American Electric Light Company of New York, and has paid for the rights, privileges and property therein conveyed, the 8am of $25,000, and that the defendant desires to become interested with the plaintiff under the provisions of said instrument to the extent of $500 ; and therefore the plaintiff acknowledges to have received from the defendant said sum, and that he is from this date interested to that extent proportionately with the plaintiff under the provisions of said agreement, and entitled, upon the organization of the corporation therein contemplated, to be a corporator to the extent of said proportionate payment to the amount paid out by the plaintiff. This was and is the same in fact as that given to all other subscribers named in said application who paid their subscriptions to the plaintiff, it being the certificate or deed from plaintiff to defendant and each of them to show their interest in the property conveyed to the plaintiff by the deed named in said obligation, a copy of which is the second exhibit to this amendment. The defendant failed to pay the $500 subscribed for by him, and did not join in the enterprise or become a corporator in the corporation known as the Electric Light Company of Augusta, which was afterwards oi’ganized by the plaintiff and those subscribers who had paid their subscriptions. The subscription of the defendant never became the property of the said corporation, but remained and still is the individual property of the plaintiff, who did not deliver to the defendant the original of the paper first hereto exhibited, because of his non-payment of said $500. The second exhibit to this amendment purports to be an agreement dated December 10th, between the American Electric Light Company, a corporation of New York, of the first part, and T. G. Barrett (the plaintiff) of Augusta, Ga., of the second part, and recites that the party of the first part are the owners and proprietors of several named patents of electric machines, etc.; that the party of the second part desires to obtain from the party of the first part a license for the exclusive right to manufacture, sell and license others to manufacture and sell these patents, inventions, etc., during the continuance of patents in the State of Georgia; that in consideration of $1.00 and other good and valuable considerations, the party of the first part hereby grants to the party of the second part during the residue of the terms of the letters patent, full and free liberty, license, power and authority to make, vend or sell, and to license others to make, vend or sell the sole and exclusive right within the State of Georgia, but in no other place, all the patents, inventions, etc., now owned and to be owned, held and enjoyed by the party of the first part; that in consideration of such license the party of the second part agrees, within one year from the date hereof, to organize under the laws of Georgia a corporation which shall succeed to his lights, and he agrees forthwith to introduce the inventions in a practical and satisfactory manner in Georgia ; that the party of the first part shall have the right at all times to examine into the books and accounts of the party of the second part and the company to be organized, and to make such other examination of its business as the party of the first part may deem proper for the protection of its general interest; and that if any person shall infringe the letters patent, the party of the second part or the company when organized may, in the name of the party of the first part and for the joint benefit of the parties hereto, sue and prosecute all such actions as may be expedient against such infringement, etc. This is signed by the American Electric Light Company by E. W. Andrews, president, and by T. G-. Barrett, each under seal. Then follows an acknowledgment by E. W. Andrews, president, before a notary public in New York, of the affixing of the corporate seal of the American Electric Light Company by order of its board of directors ; also, an acknowledgment before a notary public of Richmond county, Georgia, by T. G. Barrett, of his execution of the contract.

. To this amendment the plaintiff objected on the same grounds urged against the first amendment. The court overruled the objections, and also overruled a demurrer to the petition as finally amended, to which rulings the defendant excepted.

Twiggs & Yerdery and J. C. C. Black for plaintiff in error.

William K. Miller, contra.