{ "id": 1650214, "name": "Ben Pearson, Inc., v. The John Rust Company", "name_abbreviation": "Ben Pearson, Inc. v. John Rust Co.", "decision_date": "1954-05-24", "docket_number": "5-340", "first_page": "697", "last_page": "705", "citations": [ { "type": "official", "cite": "223 Ark. 697" }, { "type": "parallel", "cite": "268 S.W.2d 893" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "14 L. Ed. 683", "category": "reporters:federal", "reporter": "L. Ed.", "case_ids": [ 3481838 ], "opinion_index": 0, "case_paths": [ "/us/56/0252-01" ] }, { "cite": "204 Ark. 427", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1444138 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/204/0427-01" ] }, { "cite": "126 A. 847", "category": "reporters:state_regional", "reporter": "A.", "opinion_index": 0 }, { "cite": "101 Conn. 594", "category": "reporters:state", "reporter": "Conn.", "case_ids": [ 1643663 ], "opinion_index": 0, "case_paths": [ "/conn/101/0594-01" ] }, { "cite": "116 N. E. 2d 417", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "160 Ohio St. 288", "category": "reporters:state", "reporter": "Ohio St.", "case_ids": [ 1676901 ], "opinion_index": 0, "case_paths": [ "/ohio-st/160/0288-01" ] }, { "cite": "203 Ark. 417", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1447036 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/203/0417-01" ] }, { "cite": "202 Ark. 1077", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1449939 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/202/1077-01" ] }, { "cite": "197 Ark. 95", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8718252 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/197/0095-01" ] } ], "analysis": { "cardinality": 749, "char_count": 14790, "ocr_confidence": 0.506, "pagerank": { "raw": 1.7314528551725513e-07, "percentile": 0.7054687358220498 }, "sha256": "69c5b3756533586d89bc72c03a1f47cc63b55de5d5a39aed8518926fd4ecf75b", "simhash": "1:32d821e28a1d8974", "word_count": 2520 }, "last_updated": "2023-07-14T21:02:33.600099+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Ben Pearson, Inc., v. The John Rust Company." ], "opinions": [ { "text": "J. Seaborn Holt, J.\nThis suit was brought by appellees against appellant to recover approximately $150,-000 alleged due as royalties on cotton picking machines accruing under a \u201cLicense Agreement,\u201d or contract, executed by the parties April 1, 1949. This action covers the period from January 1, 1950, to June 30, 1951. The trial court, at the close of all the testimony held, in effect, that the terms and provisions of the License Agreement were plain and unambiguous, that no issue was made for the jury, that only a question of law was involved, that the construction and meaning of the contract was for the court to determine and directed a verdict for appellees. This appeal followed.\nThe pertinent parts of the License Agreement were:\n\u201cWHEREAS, Bust an inventor and patentee, is the individual and sole owner, subject to contracts hereinafter referred to, of the inventions and patent rights to improvements in cotton picking machines for which letters patent of the United States were issued to the said Bust, with serial numbers and dates of issue as follows: (Nine patents covering period from Jan. 1,1935, through Jan. 11,1949) and as joint inventor and patentee is joint owner of the improvements in cotton picking machines for which letters patent of the United States were issued to the said Bust and his brother jointly, with serial numbers and dates of issue as follows: (Nine patents covering period from Jan. 10, 1933, through Jan. 17, 1939), and\n\u201cWHEBEAS, Bust, as inventor, is the individual and sole owner, subject to the aforesaid contracts, of any letters patent of the United States which might be issued to the said Bust on the applications now on file in the United States Patent Office which bear serial numbers and dates as follows: (Fifteen patents covering period from Mar. 29, 1944, through Jan. 12, 1948). # * *\n\u201cWHEBEAS, Pearson desires to obtain a license for manufacture and sale of Bust Cotton Pickers under the aforesaid patents, issued and pending, and any future patents that may be issued to Bust for any other inventions covering improvements in cotton picking machines. * * *\n\u201cSaid Foundation grants to the said Pearson a license to manufacture and sell cotton picking machines embodying the inventions and improvements covered by the aforesaid patents, issued or pending, and all other patents or inventions covering cotton picker improvements that have been or may be issued to the said Rust by the United States Patent Office; all rights granted herein to extend throughout the life of the said Letters Patent or any reissue of same, subject only to the terms hereinafter provided. * * *\n\u201c2. Royalty. It is stipulated and agreed that on each and every cotton picking machine and all cotton picker parts and equipment embodying the invention or inventions of said Letters Patent, manufactured in whole or in part and sold by Pearson said Pearson shall pay to said Foundation a license fee, or royalty as follows: On the first one thousand (1,000) machines, ten per cent (10%) of the retail price, and on each machine thereafter, five per cent (5%) of the retail price; and on parts and equipment, five per cent (5%) of the retail price.\u201d\nThe record is voluminous, comprising some 750 pages. However, the issues presented are fairly simple. Appellant, Pearson, says: \u201cThe entire controversy centers about the question \u2014 -What are \u2018cotton picking machines embodying the invention or inventions of said Letters Patent\u2019 and what are \u2018cotton picker parts and equipment embodying the invention or inventions of said Letters Patent,\u2019 and the controversy therefore centers upon a determination of what devices come within the scope of the patents licensed? Thus it will be seen that the question is primarily a two part question: first,what is the scope of the patents, and second, what devices fall within the scope of those patents so as to form the basis for the computation of royalties?\u201d and argues that the controversy involves mixed questions of law and fact which should be submitted to the jury.\nAppellees say: \u201cThe simple issue before the court is this: giving the words their \u2018 ordinary meaning, \u2019 when appellant agreed to pay a royalty on the retail price of a \u2018cotton picking machine,\u2019 did it agree to pay on the whole machine, or just a part of it?\u201d\nThe court\u2019s directive to the jury was: \u201cThe jury is instructed to find that the term \u2018Cotton Picking Machine\u2019 as used in paragraph 2 of the License Agreement of April 1,1949, between the parties hereto, and as used elsewhere in said agreement means and meant at the time of the signing of the contract the whole assembly manufactured and sold by the defendant under the name of \u2018Bust Cotton Picker,\u2019 \u201d and to return a verdict for appellees.\nSince the trial court directed a verdict for appellees at the close of the evidence, we must consider the testimony in the light most favorable to appellant, the party against whom the verdict was directed, in determining whether there was any substantial evidence to make a jury question.\nWe agree with the trial court\u2019s conclusion that the License Agreement here is couched in plain, understandable, and unambiguous language, and that it was the court\u2019s dutAr to discover and interpret its meaning and enforce it.\n\u201cThe rules applicable to the construction of contracts generally apply to the construction of license agreements. Such contracts will be construed according to the intention of the parties as expressed in the contract as a whole * * *.\n\u201cThe language used is to be given its ordinary meaning, and a license agreement should be interpreted so as to give meaning to all of its terms if possible. Particular terms used in the license must be interpreted in connection Avith the other Avords employed.\u201d 69 C. J. S., 249, p. 770.\nWe said in Dent, Adm\u2019r. v. Industrial Oil & Gas Co., 197 Ark. 95, 122 S. W. 2d 162: \u201cThe interpretation of a contract is the determination of the meaning attached to the Avords * * * which make the contract. It is the duty of courts to discover the meaning of a specific contract, and to enforce it without leaning in either direction, when the parties stood on an equal footing and were -free to do what they chose.\u201d\n\u201c \u2018The parties having made this contract in clear and unambiguous language, it is the duty of the court to construe it according to the plain meaning of the language employed, and not to enlarge or extend its terms on any theory.\u2019 \u201d Rains Coal Corporation v. Southern Coal Company, Inc., 202 Ark. 1077, 155 S. W. 2d 348.\n\u201c \u2018rphe first rule of interpretation is to give to the language employed by the parties to a contract the meaning they intended. It is the duty of the court to do this from the language used where it is plain and unambiguous.\u2019 \u201d Lee Wilson & Co. v. Fleming, 203 Ark. 417, 156 S. W. 2d 893.\nWe think it clear that throughout the four corners of this License Agreement and in the various patents held by appellees, the words (or terms) \u201cCotton Picking Machine,\u201d \u201cRust Cotton Pickers,\u201d and \u201cMachine\u201d were used by the parties synonymously and meant the same thing as appellees stoutly insist. Prom the entire record, we are convinced that appellant was in full agreement with appellees that these terms as used in the contract were synonymous and meant the same thing and that the parties so intended.\nMr. Haun, appellant\u2019s president, who negotiated and signed the License Agreement here on behalf of appellant, in a self explanatory letter to appellees, dated March 9, 1949, less than a month before the contract was signed, clearly revealed that these terms meant the same thing to him. The letter recites: \u201cDear Mr. Rust: In accordance with our conversation of today, we propose the following arrangement for the manufacture of the Rust Cotton Picker. Ben Pearson, Incorporated will do as follows:\n\u201c1. We will pay you a royalty of 10% of our selling price on the first 1,000 machines manufactured. After this, the royalty will be 5%.\n\u201c2. We will pay you the sum of $6,000.00, above taxes, (figured on the basis of being your sole income) per year for your services as consultant, 'and the use of your knowledge and ability in future improvements and development of the machine; also for promoting the sale of this machine. Your entire time would not be required.\n\u201c3. Providing there is not too long a delay in securing materials and dies, and completion of this agreement; and provided we are not hindered from reaching these minimums, due to conditions beyond our control, we agree to manufacture a minimum of 100 machines in 1949; a minimum of 500 machines in 1950; a minimum of 1,000 machines annually thereafter, with the understanding that if we fail to do so, you will have the right to license the manufacture of this machine to others.\n\u201cWhile the above are set out as minimums, we will expect to be able to, and will use every effort to produce far in excess of them, and production of these minimums is based on being able to sell and deliver the machines when they are finished.\n\u201cYou agree as follows: 1. You agree to license us for the sole manufacture of this machine, with the exception of the license you now have out to Allis-Chalmers,. providing we produce the minimums mentioned above. 2. You agree to work toward the improvement and future development of the machine, and to furnish us with the benefits derived therefrom.\n\u201cWe are mutually agreed that the idea of marketing these machines through the co-ops is sound, and this procedure should be followed.\n\u201cBefore final agreement, we are to be furnished orders for 100 machines, with cash deposit of $1,000.00 per machine, balance to be paid when ready for deliveiy.\n\u201cIt is our understanding that you own all the patents and have the right to license us, and that you will protect us against any damage that' may arise from our manufacturing the Rust Cotton Picker under this license.\n\u201cThese machines are to be marketed under your name. Yours very truly, Ben Pearson, Inc. (Signed) Carl B. Haun, President.\u201d\nAt the trial, Mr. Harm testified: \u201cMr. Harm, how do you obtain your orders for a Bust Cotton Picker \u2014what I am asking is, when a person orders it, the purchaser, don\u2019t they just order a Bust Cotton Picker at a certain price? A. Yes, ordinarily they do. Q. That is the way they order it? A. Yes. Q. Then you send the entire assembly, don\u2019t you? A. Yes. Q. Can you tell me during the entire 18 months period involved in this case, from January 1, 1950, through June 30, 1951, when you invoiced a sale of a Bust Cotton Picker, that you made an invoice setting forth separately the items, in one single instance, for a picking unit or a tractor? A. The dealer wasn\u2019t interested in that. Q. I am not asking you if the dealer was interested in that \u2014did you? A. I don\u2019t think we did.\u201d\nAppellant was simply required to pay a certain royalty on \u2018 \u2018 every cotton picking machine and all cotton picker parts and equipment embodying the invention or inventions of said Letters Patent, manufactured in whole or in part and sold by Pearson, said Pearson shall pay to said Foundation a license fee, or royalty, as follows, etc.\u201d Obviously, he was not required to pay a royalty on any unpatented, separate part of the machine, or cotton picker, when sold as a separate part. The Cotton Picking Machine as a complete unit contained many unpatented parts, such as tires, bolts, nuts, springs, chains, wire, sheet metal, etc., but when sold as a complete machine, single or double unit, Pearson, appellant, must pay the royalty.\n\u201cThe term \u2018royalties,\u2019 had its origin in the designation of the payments made to a monarch or sovereign by his subjects for privileges granted by the former and enjoyed by the latter. * * * In modern usage, * * * signifies sums paid to the owner of a patent for its use or for the right to operate under it, and may also refer to the obligation giving rise to the right to such sums.\u201d Taylor v. Peck, 160 Ohio St. 288, 116 N. E. 2d 417.\nIn Volk v. Volk Manufacturing Co., 101 Conn. 594, 126 A. 847, it was said: \u201cThe use of the term \u2018royalty\u2019 as applied to a patent is a tax or duty paid to the owner of a patent for the privilege of manufacturing or using the patented article. * * * But this is not its exclusive meaning * '* * it is likewise an appropriate term as applied to improvements which are nonpatentable. \u2019 \u2019\nThe fact that unpatented parts are sold as components of an entire machine, embodied in a picking unit, and everything necessary to pick cotton does not relieve Pearson of the royalty on the complete machine. When such parts are assembled and sold together, they, in effect, lose their identity as parts and become fractions of the entire unit or machine on which the royalty must be paid.\nWe adopted this definition of Webster\u2019s of \u201cMachines\u201d in Blankenship v. W. E. Cox & Sons, 204 Ark. 427, 162 S. W. 2d 918: \u201cPopularly and in the wider mechanical sense, a machine is a more or less complex combination of mechanical parts, as levers, gears, sprocket wheels, pulleys, shafts and spindles, ropes, chains, and bands, cams and other turning and sliding-pieces, springs, confined fluids, etc., together with the framework and fastenings supporting and connecting them, as when it is designed to operate upon material to change it in some preconceived and definite manner, to lift or transport loads, etc.\u201d\n\u201cThe term machine includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result.\u201d Corning v. Burden, 56 U. S. (15 How.) 252, 14 L. Ed. 683.\nIt was stipulated that \u201cmost of the Rust Cotton Pickers manufactured by appellant during the period in question contained the lettering and name \u2018Rust Cotton Picker, manufactured by Ben Pearson, Inc., Pine Bluff. Ark.\u2019 * * * Prior to the period in suit, appellant had manufactured and sold only 99 Rust Cotton Pickers, all of the single-row model.\u201d\nAppellant\u2019s answer further admitted the number and retail prices of all Rust Cotton Pickers (both single-row ajid tandem or two-row) manufactured and sold during the period involved here.\nAfter a review of this record, without attempting to detail the testimony, we are unable to find any disputed material fact question, or any substantial evidence whatever, tending to support appellant\u2019s theory of this case, to make a jury issue. We hold that the question presented was solely one of law for the trial court, in the circumstances, and that the instructed verdict in favor of appellees was correct.\nAffirmed.", "type": "majority", "author": "J. Seaborn Holt, J." } ], "attorneys": [ "}!eishell Weatherford, Jr., and Jay W. Dickey, for appellant.", "John H. Sutherland, Bridges & Young and Henry W. Gregory, Jr., for appellee." ], "corrections": "", "head_matter": "Ben Pearson, Inc., v. The John Rust Company.\n5-340\n268 S. W. 2d 893\nOpinion delivered May 24, 1954.\n[Rehearing denied July 15, 1954.]\n}!eishell Weatherford, Jr., and Jay W. Dickey, for appellant.\nJohn H. Sutherland, Bridges & Young and Henry W. Gregory, Jr., for appellee." }, "file_name": "0697-01", "first_page_order": 719, "last_page_order": 727 }