Contract, Performance and breach. Option. Evidence. In an action for the alleged breach of a contract in writing to purchase at an agreed price one fourth of the capital stock of a corporation formed to utilize an invention of a machine for cutting cloth in case a certain lawyer should give an opinion that the invention was patentable, it appeared that the lawyer named gave an opinion in writing in substance to the effect that the invention was a new one but that whether it was patentable or not depended upon the practical question to be determined by experts whether the device was an important one for use in cloth cutting machines. Held, that this was not an opinion that the invention was patentable and that the defendant was not bound to purchase the stock.
In an action for the alleged breach of a contract in writing under seal to purchase at an agreed price one fourth of the capital stock of a corporation which the plaintiffs were about to form to utilize an invention of a machine owned by them in case a certain lawyer should give an opinion that the invention was patentable, and providing further that, if the lawyer should give an opinion that the invention was not patentable, the defendant should have an option to take and pay for the stock, and that the defendant should determine whether he would or would not purchase the stock as soon as the opinion of the lawyer was received, provided the opinion was unfavorable, it appeared that the corporation was formed in the manner contemplated and represented all the interest of the plaintiffs in the invention, that before the opinion of the lawyer was given there was in the stock book of the corporation an unissued certificate for one quarter of the shares of the capital stock of the corporation made out in the name of the defendant, that the lawyer gave an opinion which was not an opinion that the invention was patentable, that thereupon the defendant told one of the directors of the corporation, who was the son of the treasurer of the corporation, that he had decided not to go on with the contract, that the son of the treasurer narrated this conversation to the treasurer, who was one of the parties to the contract, that the defendant himself afterwards stated his decision to the treasurer, that thereupon the treasurer had the defendant sign an indorsement on the back of the unissued certificate in the stock book which had been made out in his name, that thereafter the shares were treated as stock in the treasury of the corporation, and that for eight years the plaintiffs, although seeing the defendant frequently, never questioned his determination or suggested that he was liable under the contract. Held, that the defendant was not required by the contract to give formal notice to the plaintiffs either in writing or orally of his determination not to purchase the stock, and that his indorsing the certificate, thereby relinquishing his right to the stock, was an overt act sufficiently communicating such determination. Held, also, that the conversation between the defendant and the son of the treasurer, afterwards communicated to the treasurer, in which the defendant told the son of his decision not to go on with the contract was admissible in evidence against the plaintiffs.
Where a letter of a deceased person contains statements which under R.L.c. 175, § 66, are admissible in evidence for the purpose of contradicting the material testimony of a witness, the fact that the letter also contains irrelevant matter does not make the relevant portion of it inadmissible.
KNOWLTON, C.J.
This is an action upon a contract in writing, whereby the defendant agreed with the plaintiffs and one William L. Coolidge, who were the owners of an invention and of the capital stock of a corporation formed for the purpose of utilizing the invention, to pay $11,500 and receive one fourth of the capital stock of the corporation in case Fish, Richardson and Storrow should give an opinion that the invention was patentable. Under the contract the defendant also had an option to pay the money and take the stock if Fish, Richardson and Storrow should give an opinion that the invention was not patentable, and in reference to that the language of the contract is as follows: "Said Claflin shall determine whether he will or will not purchase said stock as soon as the opinion of Fish, Richardson and Storrow is received, provided the opinion is unfavorable."
The first question which arises is whether they gave an opinion that the invention was patentable. As to this the presiding justice instructed the jury as follows: "It is not a question whether the invention is patentable or not, but whether Messrs. Fish, Richardson and Storrow will say that it is in terms; and what they say, in substance, about it, as I construe it, is that this is a new invention, but that whether it is patentable or not depends upon certain practical things, the value of certain practical things, which they know nothing about; and if they are sufficiently valuable then it is patentable, and if not, then it is not. So they do not give, it seems to me, an opinion that the invention is patentable." There is little to be added to this brief characterization of the opinion given by Fish, Richardson and Storrow. An examination of it will show that, while the writer of it found in the invention much to commend, he carefully refrained from giving an opinion upon certain questions which he stated, and which should be answered affirmatively in order to render the invention patentable. He made the patentability of the invention depend on whether "such a `scissors' cut . . . is a substantial advance in the art." He then said, "It is a practical question to be determined by mechanical experts as to whether or not there is in this class of machines such a decided advantage in a `scissors' cut. I myself express no opinion on that point, for it is outside of my province." He stated as his conclusion "that if, as a matter of fact, the peculiar arrangement and combination of the cutting blades of the Morse machine is very important in cloth cutters, the first nine claims are of corresponding importance and would protect the manufacturer of the Morse machine against the competition of other machines having this peculiar cutting organization. If a reciprocating cutter having a long plunging stroke and toward the end of its stroke cooperating with a stationary blade to make a `scissors' cut is not important, then the claims are not important."
We are of opinion that this instruction of the justice was correct, and we thus dispose of the plaintiffs' three requests for rulings, and of their exceptions to the rulings given on this part of the case.
The next question is whether there was error in the instructions in regard to the defendant's determining whether he would or would not purchase stock. The jury were instructed that there was nothing in the contract that required him to give notice to anybody whether he made that determination or not, and that "it is not necessary that he should give an explicit notice, either in writing or orally, either to all of the signers or to any of them. It is necessary that, in addition to making the decision in his own mind, he should do something so that that might become properly known, and so that thereafter he could not dispute but that he had made that decision." He further told the jury that, if, deeming the opinion unfavorable, he decided in his own mind that he would not go on, and "if, having come to that determination in his own mind, he did communicate that to Mr. W.H. Coolidge, and it came to the knowledge of Mr. W.L. Coolidge, who was treasurer at that time of the corporation, and thereupon, having that knowledge, Mr. W.L. Coolidge, the treasurer, had him sign the assignment on the back of the certificate in the book, and that was considered between them as an act which he had done in relinquishing his right to the stock, that would be such an overt act as would be a sufficient communication of his determination." This had reference to an assignment of one fourth of the capital stock of the corporation, for which there was an unissued certificate in the stock book standing in his name, and which he indorsed over for use by the corporation soon after the receipt of the opinion from Fish, Richardson and Storrow. This is to be taken in connection with the undisputed evidence that, long before that time, a corporation had been formed by the plaintiffs and their associate W.L. Coolidge, with whom the defendant contracted; that this corporation represented all the interest of the plaintiffs in the invention; that W.H. Coolidge, a son of W.L. Coolidge, who had acquired a half interest in his father's stock, was one of the directors, who acted for himself and others in the business, and to whom the opinion of Fish, Richardson and Storrow was given, and with much other evidence from which it ought to be inferred that all the plaintiffs very early had knowledge of the defendant's determination not to purchase the stock. We are of opinion that the justice was right in ruling that no formal notice to the plaintiffs was necessary, and that it was enough if the defendant promptly came to the determination, and did some overt act which would bind him so that it might become properly known. There was uncontradicted evidence that the plaintiffs went on without him, for nearly eight years, and that, although seeing him frequently, no one of them ever questioned his determination or suggested that he was liable under the contract.
The conversation with W.H. Coolidge was competent. He was acting in the interest of himself and the plaintiffs in procuring the opinion, and he was one of the directors of the corporation. He narrated the conversation to his father, W.L. Coolidge, another of the directors and the treasurer of the corporation, and one of the joint signers with the plaintiffs of the contract on which this action is brought.
The letter from Durrell to W.H. Coolidge was competent. It was the declaration of a deceased person, and it tended to contradict material testimony of R.H. Randall, one of the plaintiffs. That it contained irrelevant matter does not render the whole letter inadmissible.
Exceptions overruled.