National Gypsum Products Co. v. Buttonlath Manufacturing Co.

YORK, J.

This is an action to recover royalty—$4,000 for the year June 3, 1928, to June 3, 1929, and $1,000 for the quarterly period from June 3, 192'9, to September 3, 1929,—alleged to be due from defendant to plaintiff, under the terms of a contract entered into between the said parties under date of June 3, 1924. This contract provided for the sale by plaintiff to defendant of certain specified machinery and raw materials for the manufacture of tile, and for an exclusive license to defendant to use and manufacture plaintiff’s patented machines. Under the terms of the contract, the license fees or royalties were graduated to the tile manufactured through the use of plaintiff’s patents, to wit:

“Provided, further, that in no event shall the royalties to be paid to the Licensor herein by the Licensee, whether said royalties shall be derived from tile manufactured by the Licensee or from that manufactured by others to whom

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■Licensee may give such right, he less than the following amounts per year: . . .

“Four Thousand Dollars ($4,000) during the fifth year, and each year thereafter during the term of this contract.” It is for the royalty alleged to be due for the fifth year and royalty .for an additional quarter period that the plaintiff prosecutes this action. The court denied relief for the “additional quarter”, but the plaintiff does not appeal.

The answer asserted that the contract had been terminated by notice dated January 11, 1929; that all royalties due from defendant to plaintiff had been paid, and that defendant had fully complied with all the conditions in that behalf upon its part to be performed.

The contract provided for termination as follows:

“Fifth: This contract license may be terminated by either party hereto in the following manner under the following conditions, to wit: ... (b) By the Licensee, at any time during the term of the contract upon ninety (90) days written notice of intention to terminate; provided, however, that Licensee shall have no right to terminate as aforesaid unless the full amount of the royalties owing to Licensor have been paid in full, or any balance owing on account thereof is tendered to Licensor, together with notice of intention to terminate.”