Porter Pin Co. v. Sakin

DORAN, J. The action herein is for an accounting under a license agreement whereby plaintiff, the owner of certain letters patent on safety pins, granted to the defendants, Charles P. Sakin and Leo L. Sehaumer, “the exclusive' right to manufacture, cause to be manufactured, sell, cause to sell, distribute and cause to be distributed, said safety pin containing said patented improvement, and any and all improvements and extensions thereon, to the end of the term, for which said letters patent were granted, . . . for which said defendants agreed to pay the plaintiff an amount equal to five per cent (5%) of the net sales of all safety pins manufactured, sold or distributed, . . . with a minimum guarantee as and for said license fee of $300.00 per month, to be paid monthly [761]thereafter so long as the defendants should sell and distribute safety pins produced thereunder. ...”

It was further agreed that defendants should have the right to assign the contract to a corporation to be organized. This was done and the contract assigned to the defendant, Safe Safety Pin Corporation of America, the individual defendants becoming officers and directors. Subsequently, by agreement, the guaranteed royalty was reduced to $100 per month, to be later increased to $200, and then to $300 per month, “said respective payments to be made monthly so long as the parties of the second part (Sakin and Schaumer) shall sell and distribute safety pins. ’ ’ It appears that the individual defendants, Sakin and Schaumer, never did manufacture, sell or distribute safety pins, but that the Safe Safety Pin Corporation did so manufacture, sell and distribute until about July 31, 1947.

No service of summons was had upon the defendant Charles P. Sakin and said defendant made no appearance in the case. The trial court, sitting without a jury, rendered judgment in favor of plaintiff against the Safe Safety Pin Corporation for $4,340 with interest, and against the plaintiff in favor of the defendant Leo L. Schaumer. Plaintiff has appealed from that part of the judgment denying relief against defendant Schaumer, appellant’s brief stating that the corporate defendant was “execution proof.”

Appellant’s first question on appeal is phrased as follows: “Were defendants Sakin and Schaumer, released from liability by assigning all benefits thereunder to the corporate defendant?” The appellant claims that this should be answered in the negative, citing section 1457 of the Civil Code, which provides that “The burdens of an obligation may be transferred with the consent of the party entitled to its benefits, but not otherwise. ...”