Western Union Telegraph Co. v. American Bell Telephone Co.

Citations

• 187 F. 425
• 1911 U.S. App. LEXIS 5405

Syllabus

<p>1. TELEGRATUFS AND TELEPHONES (§ 16*)-CONTRACT BETWEEN COMPANIESAccoctnting.</p> <p>Complainant transferred to defendant all of its telephone business and patents relating thereto, under a contract by which defendant agreed to pay to complainant 20 per cent, of all rentals or royalties received from licenses or leases for telephones. Defendant granted perpetual licenses to local companies and exchanges, receiving without other payment therefor a proportion of the stock of each local company and also rentals for the instruments used by it. Held, on an accounting between the parties under the contract, after a decree of the court holding that such stock received for licenses was rentals or royalties within the meaning of the contract for which defendant was required to account as trustee, that defendant was not relieved from accounting for 20 per cent, of the same by tiic fact that the licenses also included the right to use subsidiary inventions, such as call bells and switchboards, and to do an extraterritorial' business by means of long-distance lines; such rights being merely incidental, and to a large extent a necessary incident, to the main grant, which was of the right to use telephones, and defendant also having received a separate consideration for such minor grants, in the way of rentals and royalties.</p> <p>[Ed. Note. — For other cases, see Telegraphs and Telephones, Cent. Dig. ' § 10; Dec. Dig. § 16.*]</p> <p>2. Telegraphs and Telephones (§ 16*) — Contract Between Companies— Accounting.</p> <p>The value to the local companies of a connection with 'defendant, which was a large and wealthy corporation interested in exchanges throughout the country and controlling many patents, was too general and indeterminate in character to entitle defendant to have it considered on the accounting as a part consideration which it paid for the stock.</p> <p>[Ed. Note. — For other cases, see Telegraphs and Telephones, Dec. Dig. § 16.*]</p> <p>3. Telegraphs and Telephones