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creditors, to which the assignees were parties, whereby, upon certain stipulations, his creditors, parties to this composition, agreed to release their demands. Koops did not, however, perform his part of this agreement, so that it proved to be ineffectual and null. But while he expected to be able to fulfil it, calculating, probably, on the success of his manufactory, he sold a share of the patent, and also of the establishment, to .Stevenson, and the latter sold a part of the share to Hesse. About a year after making the agreement for a composition, the manufacture having probably proved unsuccessful in the mean time, his assignees took possession of the establishment under the bankruptcy proceedings, and had it disposed of for the benefit of the creditors. Hesse, who had bought his share of Stevenson, then brought an action against Stevenson to recover back what he had paid for the share, on the ground that Stevenson had warranted the title.
The question was thus raised whether the assignees had a right to transfer the property, and it was held that where a patent right is obtained by an uncertificated bankrupt, it is affected by the previous assignment of the commissioners, and vests in the assignees. Lord Alvanly. “It is contended, that the nature of the property in this patent was such, that it did not pass under the assignment; and several cases were cited in support of this proposition.
It is said that although, by the assignment, every right and interest, and every right of action, as well as right of possession and possibility of interest is taken out of the bankrupt and vested in the assignees, yet that the fruits of a man's own invention do not pass. It is true that the schemes which a man may have in his own head before he obtains his certificate, or the fruits which he may make of such schemes, do not pass, nor could the assignees require him to assign them over, provided he does not carry his schemes into effect until after he has obtained his certificate. But if he avail himself of his knowledge and skill, and thereby acquire a beneficial interest, which may be the subject of assignment, I cannot frame to myself an argument, why that interest should not pass in the same manner as any other property acquired by his personal industry. Can there be any doubt, that if a bankrupt acquire a large sum of money, and lay it out in land, that the assignees may claim it? They cannot indeed take the profits of his daily labor. He must live. But if he accumulate any large sum, it cannot be denied that the assignees are at liberty to demand it; though until they do so, it does not lie in the mouth of strangers to defeat an action at his suit in respect of such property, by setting up his bankruptcy. We are, therefore, clearly of opinion that the interest in the letters-patent, was an interest of such a nature as to be the subject of assignment by the commissioners."15
Though many of the States in the United States have insolvent laws, no question appears to have been raised under them similar to the one raised in the above case.
The question occurred in an English case, whether the condition of an English patent that it shall be void on its being assigned to more than five proprietors, is forfeited by an assignment under the bankrupt act for the benefit of the patentee's creditors, being more than five in number, and it was held not to be such a forfeiture.16
As to an insolvent or bankrupt debtor's interest in machinery, apparatus, and property subject to the patent right, and intended to be used in pursuance of the exclusive privilege given by law, there seems to be no ground of question that it will pass under the assignment of his effects, with the privilege of using it, under the patent, since the patent itself so passes where the debtor is the proprietor of it. It cannot be supposed, that all the property of a bankrupt invested in such articles, could be locked up from his creditors, or that they can avail themselves of such machinery and apparatus only as materials to be used for other purposes than the manufacture for which they were intended, and for which, only, they are, perhaps, of any value. At least, if the debtor has an assignable right under his own patent, or that of another, there does not appear to be any ground of doubt that his creditors may avail themselves of the full value of the property, accompanied with the right of using it under the patent.
15 Hesse v. Stevenson, 3 Bos. & Pul. 565. 16 Bloxam y. Elsee, 6 Barn. & Cres. 169.
Very nearly allied to the question just stated is that of the seizure and sale of the patented articles on execution. One question arising in this case, is, whether the sale by the sheriff, in such case, transfers to the purchaser the right which the debtor has to use the machines, under the authority and right of the debtor, as patentee, or as his assignee, or having a license from the proprietor of the patent.
If the debtor has no such right, then, undoubtedly, such a right cannot be transferred under such a sale. If, for instance, the debtor has made the articles with the consent of the proprietor of the patent, to be sold upon
certain terms and conditions thereafter to be fulfilled and complied with by the maker on such sale, the purchaser of the articles certainly cannot, at the best, pretend to any greater right than the debtor had. The question would arise, in such case, whether the right of the debtor was assignable and transferable by himself, or by a sale under an execution against him. But in case of a general, unconditional, unrestricted right of the debtor to use the machines, or to sell them for use, it is obviously a very equitable construction in favor of both the debtor and his creditors, in respect to the proprietor of the patent, where he is a third party, that the privilege should pass with the articles.
A case before Mr. Justice Story suggests, without however deciding, whether the purchaser under such a sale obtains all the right of the debtor to use such machine. It was held that, under the statute, the sale by a sheriff of the complete materials of a patented machine, while such machine is in operation, on an execution against the patentee, does not render the sheriff liable to an action for an infringement of the patent right. In an action by a patentee against a deputy-sheriff for such a sale, the court said, that “if such a sale were construed to be illegal under the statute, it would be practicable for a party to lock up his whole property from the grasp of his creditors, by investing it in profitable patented machines ; and, upon the same construction, this consequence would follow, that every part of the materials of the machine might, when separated, be seized on execution, and yet the whole could not be, when united; for the exemption from seizure is claimed only when the whole is combined and in actual operation under the patent. By the laws of Massachusetts, property like this is not exempted from seizure on execution; and an officer who neg