par and the common stock, which had been declared by him and the other directors of the company to be "full paid and nonassessable," was being issued as a bonus to purchasers of said preferred stock who had

why the fees of receiver's counsel should be separately taxed as a part of the costs. Inasmuch, however, as such is the established practice in this state the court are not disposed to change it. It is not certain in many cases that services of counsel will be requir-nothing to do with the management of the ed, and even if they should be it is impossible to tell even approximately, in advance of the service, what counsel will be entitled to receive. The court are of the opinion that the sum estimated by the Chancellor for receiver's compensation and expenses, and the fees of their counsel, as well as the estimate for interest on creditors' claims, is largely in excess of what they will be entitled to receive; | that said sums should be substantially reduced, and the assessments modified accordingly.

[16] In conclusion, we say that, while we have no doubt the court below had power to require a resident stockholder to pay the entire assessment, we think it inequitable under the facts of this case, and, therefore, hold that the receivers should have been ordered to collect every assessment they should find to be collectible, and that would justify the expense of collection. The entire burden of payment should not, in the first instance, have been imposed upon a single stockholder, even though there be no other found in the jurisdiction. The course adopted may be the most convenient for the receivers and expeditious for the creditors, but in our opinion hardly fair to the resident stockholder. And, moreover, it may very well be that statutory receivers appointed by the court would be more successful in collecting claims out of the state than a stockholder who might be subrogated to their rights by an order of said court. But whether that be so or not, it is manifestly unfair that the resident stockholder should in this case pay not only all the indebtedness but also the costs of collecting from other stockholders their proportional parts of the assessment. Under the peculiar facts and circumstances of this case the fair and equitable proceeding would be for the receivers to collect all the assessments, so far as practicable, and by so doing the burden would fall on all stockholders alike according to their holdings.

The decree of the Chancellor will be affirmed except as modified by this opinion.

HEISEL, J. I concur in the opinion of the court, excepting as to the claims of Mr. Taft and Mr. Chapin.

Briefly and without argument I desire to state my conclusions as to those claims. Mr. Taft was a director and promoter of the company from its beginning and was fully advised of all actions taken in issuing the common stock as bonus for the preferred stock and participated therein. He knew that the preferred stock was being sold at

company, to induce them to purchase the preferred stock. He could not, therefore, in good faith, have relied upon any assessment from such holders of common stock to repay advances made by him to the company in the event of the failure of the company to repay him such advances. Mr. Chapin was counsel for the company and advised and directed the steps taken by Mr. Taft and the other directors in pursuing the course they did pursue. He directed them in the action they took to make the common stock, as he thought, "full paid and nonassessable," and knew that as such, it was being issued as a bonus to purchasers of the preferred stock, who had no part in the management of the company, as an inducement to purchase that stock. He now claims the right to have this same common stock assessed in order that he may be paid for his services.

Excepting in the state of New Jersey, where the proceeding was under a statute which the court there said put the creditor's right on a different basis from that under the general law, the overwhelming weight of authority is opposed to such proceeding.

Whether the proceeding in the case at bar for the purpose of assessing the stockholders is under the liability imposed by section 20 of the Incorporation Act, or is under the liability that existed prior to that section, can be of no importance, because section 20 imposed no new liability upon the stockholder, but simply stated or declared a liability that existed prior to its passage.

Therefore, it seems to me that the law as generally applied by the courts outside New Jersey should be applied here.

on which the judgment issued lacks consideration.

3. JUDGMENT

The bill prays for injunctive relief against the sale. A restraining order was granted

34-WARRANT OF ATTORNEY to stay the sale, security being given, and a -Securing FUTURE ADVANCES. rule for preliminary injunction issued.

A bond, with warrant of attorney to confess judgment, to secure the obligee for moneys that he should advance to the obligor with which to purchase scrap iron for the obligee, held to be valid, in the absence of any showing as to bad faith.

4. EVIDENCE 419(14)-PAROL EVIDENCECONSIDERATION.

Where a bond, with warrant of attorney to confess judgment, does not show that it was given to secure future advances to the obligee, that it was so given may be shown by evidence aliunde.

an execution.

Afterwards the bill was amended by allegations that the bond on which the judgment was entered was signed by Caplan, the obligee, as well as the obligor, Margolin; that the debt will not be due until May 18, 1919, and, therefore, the execution issued on the judgment in July, 1918, could not issue, meaning should not have been issued; and that the complainant has recovered a judgment against Margolin for $187.17.

The hearing, then, is on the rule for a preliminary injunction on bill, supplemental bill and affidavits submitted.

Charles L. Moore and Robert G. Houston, both of Georgetown, for complainant. Charles W. Cullen and Howard J. Cooke, both of Georgetown, for defendants.

THE CHANCELLOR. [1] The complainant is not entitled to injunctive relief to restrain the sale under the execution issued on the judgment of the defendant, Caplan, against Margolin by reason of the fact that the debt was not due. An execution cannot properly be issued until the judgment is due and payable. But, as Judge Woolley said in 2 Woolley on Delaware Practice, § 954, p. 616, if execution be issued before the debt secured by the judgment becomes due and payable, the execution can be avoided by the defendant. "If the defendant sees proper not to resist the execution, the court will permit the execution to stand, and will not allow other creditors to attack it collaterally." For this he cites an unnamed and unreported case heard in 1890 in New Castle county. The learned author might also have cited State, use of Roe, v. Platt, 5 Har. 429. In that case there was a judgment payable in installments and execution was issued after one installment was due and before the othexecution was void, but the court held otherers were payable. It was claimed that the wise. On the back of the writ was a statement of the several amounts of the installments, and the dates when they fell due, and as stated by the court in the charge to the jury, this was regarded as instructions from the plaintiff to the sheriff as to the amount due. At an earlier stage of the case the court in considering the same matter

Bill and supplemental bill for an injunction against proceeding on Philip Caplan, one of the defendants, on July 27, 1918, obtained a judgment by confession against one Meyer Margolin on a bond dated May 18, 1918, for $1,000, due and payable May 18, 1919, with interest, and under a fi. fa. on said judgment, issued August 9, 1918, personal property of the defendant, Margolin, was levied on and advertised for sale by the sheriff on September 10, 1918. On August 9, 1918, the complainant, O'Connor, brought before a justice of the peace an attachment suit against Margolin as an absconding debtor, the date of the hearing thereon being September 14, 1918, which would have been after the sale. It was alleged that the judgment of Caplan against "The distinction is between void and voidable Margolin was without consideration, fraud-process-between such as is merely irregular ulent and void, and that the judgment note and such as is absolutely void. Process issued on which the judgment was entered was ob- on a judgment payable by installments, after tained from Margolin by fraud and collu- any of them, but before all of them, are due, and commanding the sheriff to levy the whole sion, and is null and void. The character of debt, would be merely irregular, and it would the fraud, or the facts constituting it, are not be competent for any one collaterally to not alleged in the bill. question it, much less the sheriff, who executes

said:

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106 A.-4

it; but it is even doubtful whether the writ is received, with interest from January 10, irregular." 1917.

The effect of this is to support the view of Judge Woolley, and is a declaration that an execution on a judgment not due is not void, and cannot be attacked collaterally by

another creditor of the defendant in the execution.

In the case of Otwell v. Messick, 4 Houst. 542, the defendant in the judgment took a certiorari on the ground that the execution was issued before the debt was due, and the court simply set aside the execution.

[2] In the present case there is no objection to the premature execution made by the defendant in the judgment. It is claimed that the judgment in question was invalid on ac

count of fraud; but there was no allegation

[5] It does not appear whether Caplan or O'Connor first acquired a lien on the goods, for though it appears that the execution of Caplan was issued on the same day that the attachment in the suit of O'Connor, the complainant, against Margolin was made, viz., on August 9, 1918, it does appear at what time the writ was delivered to the sheriff, from which time it bound the goods of the defendant in the execution actually levied on within 60 days.

[6] Assuming, however, which is probably the case, for otherwise the complainant would not need relief here, that the lien of Caplan's execution was prior to that of O'Connor, it seems at this time to be clear

that Caplan is entitled to enforce his lien as to the matters constituting the fraud, and no evidence was offered to show it, or to at least to the extent of all advances aggrecontrovert the presumption as to the exist-gating $666.20 made before O'Connor's attachment suit was begun. Whether Caplan ence of a consideration for the bond on which the judgment was issued. On these has a lien for the later advances may be unpoints the complainant has the burden of important, for that will depend on the price at which the property is sold. It was approof. By the affidavit of Caplan, the obligee in praised at $282.00 in the attachment suit of the complainant.

I propose, therefore, to dissolve the restraining order and deny the motion for a preliminary injunction, which will enable the defendant, Caplan, to sell by execution the property levied on, and in case it is important to do so, may by supplemental order retain control of the proceeds of sale in excess of the amount necessary to pay him the above mentioned advances aggregating $666.20, with interest and costs. An order will be entered accordingly.

the bond, it appears that it was given on May 18, 1918, to secure him for moneys which he should advance to the obligor, Margolin, to purchase for the obligee scrap iron, and that between May 26 and August 5 several sums stated in the affidavit were so paid to Margolin aggregating $1,166.20; but that the obligee had not received iron or repayment of the advances. Whether the iron levied on is that so purchased for the obligee does not appear. It does appear that at the time judgment was entered on the bond, July 27, 1918, $1,066.20 had been so advanced, and that at the time the attachment suit of the complainant against Margolin was begun, July 9, the advances amounted to $666.20, O'NEIL v. E. I. DU PONT DE NEMOURS and that all of the advances had been made before the complainant had recovered a judgment in his suit.

[3, 4] A mortgage to secure future advances is valid if made in good faith. If it does not appear by the mortgage that it was for advances to be made, it may be so shown by evidence aliunde. There appears to be no reason why future advances cannot be secured by a bond with warrant of attorney to confess judgment, as well as by mortgage. There is nothing to impeach the bona fides of the transaction in this case. No allegation by reply affidavit was made as to any injury to the complainant by the transaction between the obligor and obligee, nor that the complainant was misled into giving credit to Margolin by reason of the transaction. It does appear, however, that the debt of Margolin to the complainant probably existed as early as January 10, 1917, for the judgment which the complainant recovered against Margolin was for money had and

& CO.

(12 Del. Ch. 76)

(Court of Chancery of Delaware. Jan. 29, 1919.)

1. ACCOUNT

12-BREACH OF CONTRACT REMEDY AT LAW-ADEQUACY.

Where an inventor, having discovered a new formula for making powder, disclosed it to his employer, relying on promises of compensation if it proved valuable, and the employer without his knowledge used it and made large profits, and also obtained for a nominal consideration an assignment from him of applications for patwhich he deemed insufficient, he has an adeents, and thereafter tendered him compensation quate remedy at law for breach of contract, and therefore cannot maintain a suit in equity for an accounting.

5. CANCELLATION OF INSTRUMENTS 14 REMEDY AT LAW-BREACH OF CONTRACT.

plosives, which was of great value, and submitted to one of the directors of a certain powder corporation a full report of the process "for the purpose of selling the same" to that corporation. About December 15, 1915, the complainant entered into the employment of the defendant company, which in October, 1915, had purchased all the assets and assumed all the liabilities of the powder corporation above mentioned. In 1914 the powder corporation, without the knowledge or consent of the complainant, manufactured extensively and sold in great quantities powder made in accordance with the complainant's formula, and after the powder company sold out to the defendant, the defendant company continued such manufacture and sale. The

Where an inventor for a nominal consideration assigned applications for patents to his employer, which in addition thereto agreed to compensate him, if the invention proved valua ble, and the employer used the invention and derived a profit therefrom, the employé could not maintain a bill in equity for cancellation of the assignment; there being no fraud, actual or constructive, and his remedy being at law on the agreement to compensate. 4. EQUITY 21 BREACH OF CONTRACT CONFIDENTIAL RELATIONS. Where an inventor disclosed his invention complainant until December, 1915, "was not and assigned his applications for patents there- fully aware" of this use by the two corpoon for a nominal consideration to his employ-rations of his process. He had not theretoer, which agreed to compensate him, failure to fore applied for letters patent on his process so compensate him would not in itself give a because of lack of money and because he was right to equitable relief, on the ground of the waiting to hear from the powder company existence of a confidential relation between the whether his process was of practical value. parties. As soon as he learned of the use made of his process, the complainant made inquiries, and on August 9, 1915, the defendant presented to him applications for patents of his process, with assignments to be executed by him to the defendant company of the full and exclusive right to the process and invention, "with express understanding that your orator would be compensated for the value of the said process and invention, and relying upon the promises and inducements so held out to him, and relying further upon the bonus plan which had been pro mulgated by the said defendant company, and the promises of reward therein contained," he executed and delivered the assignments. The consideration named in the assignments was $5, but the complainant had not received that sum, or any consideration for the use of the process, or for the assignments, although request therefor had been made.

Where an inventor assigned his applications for patents for a nominal consideration to his employer, which in addition thereto agreed to compensate him if the invention proved valuable, his employer's mere failure to compensate him under such agreement is not ground for rescission of the agreement or cancellation of the assignments, affording relief in equity.

6. PATENTS 182-CONTRACTS PRIOR TO PAT

ENT-ENFORCEABILITY.

An inventor has a property right, before patent is obtained, in an invention, which right is enforceable in a court, where he has agreed that another may use the invention in consideration that compensation be paid him in case the invention is found valuable. 7 EQUITY 141(1) — PLEADING TIONS AS TO Fraud.

-ALLEGA

Allegations of a bill in equity as to fraud must show the subject-matter constituting the fraudulent conduct, as distinct from the evi dence to prove the subject-matter.

8. PLEADING ~8(15)—CONCLUSIONS-FRAUD. Though a bill in equity characterizes defendant's acts by the expressions "fraud," "fraudulently," "fraudulent conduct and practices," where it avers no substantive facts as to fraud, no case of fraud is made out, so as to bring the case within equitable jurisdiction.

Bill by Arthur Samuel O'Neil against E. I. Du Pont de Nemours & Co. Demurrer by defendant sustained, with leave to complainant to apply to amend within a fixed time.

Statement of the Case.

The fifteenth paragraph of the bill as to fraudulent deception, is as follows:

"That your orator was fraudulently deceived by the said defendant company, through and by its said bonus plan and by promises of the said defendant company to properly compensate and pay your orator for the use of his said process and invention, and as a result of the said fraudulent deception and promises, your orator executed the said assignments of the applications for the patents aforesaid, without consideration therefor, with the understanding that he would be amply paid and rewarded by the said defendant company for said assignments to it of the said applications for patents as aforesaid."

Since making the assignments he was inThe bill alleges that in 1909 and 1910 the formed by the company that the bonus plan complainant, while employed by the govern- did not apply to him. About July 2, 1918, ment of Brazil, discovered an improved he received from the defendant company process for the manufacture of propellant ex- a notice that certain benefits under the bonus

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plan of the company had been granted to Boiled down, the case of the complainant him, but he refused to accept the benefits as not being fair or adequate compensation for the assignments.

It was alleged that by reason of undue advantage taken by the defendant company of the confidential relations between employer and employé, and of the distressful financial condition at the time the assignments were made, the assignments were secured by the defendant without consideration, and as the result of the fraudulent promises and practices of the defendant company, he had been deprived of the use of the process, and by the fraudulent use thereof the defendant company had made large profits to which he was entitled, and the powder company also made large profits, and that the defendant company is chargeable with the profits it made, as well as with the profits made by the powder company, by the fraudulent use of the process.

The prayers of the bill are for an injunction against the taking of any steps to obtain the patents on the process; for a reassignment of the applications for patents; and for an accounting by the defendant of its profits and those of the powder company by use of the process.

To the bill a general demurrer is filed, based on a want of ground for equitable relief or discovery, and also special demurrers as to the insufficiency of the allegations as to the fraudulent conduct of the defendant company towards the complainant.

Robert Penington, of Wilmington, for complainant.

William S. Hilles and J. P. Laffey, both of Wilmington, for defendant.

is this: Having discovered a new formula for making powder, he disclosed it to his employer, relying on promises of reward or compensation by sale or otherwise if it proved valuable, and the employer, with the knowledge of the complainant, used it and not only made large profits by the use of it, but also obtained for a nominal consideration an assignment from the inventor of an application for letters patent on the formula. [1] Assuming that these facts gave to the complainant a right to enforce compensation from his employer, the vital question raised by the general demurrer is whether his remedy is in a court of law, or in equity. If he has a full, adequate and complete remedy in the former, he has no right to relief in this court. Clearly his right to compensation can be as readily enforced in a court of law as here. In either court he must prove the contract, or facts from which one will be implied, and his damages, or compensation, for the use of his invention. At law he has power to examine the books of the defendant company as fully as in equity. Indefiniteness in the terms of the agreement, or his inability to prove the making of it, do not entitle him to equitable relief. The demand for payment would not create a right in equity, or at law. Neither would the tender of certain benefits under some undefined system of the defendant of giving a bonus to its officers and employés have any greater weight in equity than at law if used as evidence of a recognition of a duty to compensate the complainant. The prayer for an accounting of the profits derived by the use of the process does not of itself give jurisdiction to this court. Pomeroy's quity Jurisprudence, vol. 1, §§ 176, 178, and volume 4, §§ 1420, 1421; Dargin v. Hewlitt, 115 Ala. 510, 22 South. 128; Badger V. McNamara, 123 Mass. 117; Norwich, etc., R. R. v. Storey et al., 17 Conn, 364, 390; Schwalber v. Ehman et al., 62 N. J. Eq. 314, 49 Atl. 1085.

THE CHANCELLOR. It appears by sufficient allegations in the bill demurred to that the complainant had discovered a process for making powder and communicated the process and formula to the powder company; that it and the defendant company, which latter company acquired all the assets and assumed all the liabilities of the former company, used the process to make great quantities of powder profitably; that the complainant made applications for patents of the process, and at the request of the defendant company assigned to it the applications for a nominal consideration, and has received no compensation therefor; that so far as appears no patents have been granted; that the complainant communicated the process and formula, made the applications for patents and assigned the applications without consideration, expecting to receive compensation for his invention if it proved to be [3] The injunctive relief sought and the valuable; that his right to payment for the prayer for a cancellation of the assignments use made by the defendant and its prede- of the applications for patents are, of course, cessor, the powder company, of his process distinctly grounds for relief in a court of was denied, though subsequently compen- chancery. But does the complainant show sation, which he deemed inadequate, was that he is entitled to this relief?

[2] No reason has been shown why compensation to the complainant cannot be adequately obtained in an action at law, whether the agreement was to pay the complainant a fixed sum for the use of his process, or according to some other gauge for estimating the value of the process to the defendant was agreed upon. If the price was fixed, the amount of the damages were fixed thereby, and if no price was fixed, a quantum meruit would afford relief. There is, therefore, no right to relief in this court based on a right to compensation for the use of the process.