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advanced by John McCrea to him at the date of the obligation and the assignment to him of the letters-patent just mentioned.

The allegation of the complainant is that the letters-patent were assigned to him by John McCrea under such circumstances as that he has a right to rescind the contract and to be relieved of his obligation upon equitable terms.

Those equitable terms are, he says, that he should reassign the patent; that he should pay back to John McCrea, or Nellie McCrea, the $3,000 which he borrowed, and which he received, with interest, and that having done this he should have delivered up to be canceled the mortgage and have the policy of insurance so framed as to inure to his own benefit.

The contest, then, is over the validity of the deal or contract by which the complainant agreed to purchase from Mr. John McCrea the letters-patent in question.

Now, the allegation of the complainant is that that sale by McCrea to him of the letters-patent was procured by misrepresentations of fact; also, as he alleges, by misrepresentations of the value and the prospective profit to be derived from the ownership of the letters.

Now, the law on that subject is, I think, as I remarked at the start, thoroughly settled.

There must be proof that the vendor made some untrue representation of a matter of fact-present fact. The cases cited by counsel of complainant of transfers of patents indicate a disposition on the part of the courts to include in the classification of misrepresentation of present facts many matters which can hardly be brought strictly within that category, and the temptation to judges to do that is very great, and they sometimes call a misrepresentation of present fact what is nothing more than a promise of what will occur hereafter, a prediction in the nature of a speculation. But I take the law to be as I have stated it. There must be a misrepresentation of a present fact, or of a fact which though not immediately present will be in the future, and the principal matter dealt with in such cases is the cost of the patented article-what it will cost to manufacture it-which is

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what may be termed a continuing fact, and not a mere prediction of results.

I say the disposition of courts is in that direction, because, as everybody knows, the putting on the market and sale of patent rights is one of the means by which persons of not over good sense of right and wrong have heretofore in many cases deluded persons of weaker mind out of a good deal of money; they have made rosy predictions as to what could be done with the patent; that it would do this, and that and the other, and have deluded people in that way, so that the selling of patent rights, at one time, was a notorious branch of the business of getting money without giving an equivalent for it.

But, as I said, I think the law in New Jersey, as it stands, must be confined to this-there must be a misrepresentation of a present continuing fact as distinguished from a mere prediction of speculative results.

Now, applying that law to the facts, we come to this:

Mr. John McCrea, in the month of October, 1900, was the owner of a patent for the manufacture and sale of what is called a burglar alarm and door check. Samples of the device have been handed up and were carefully examined during the production of the evidence to the court, and I have two or three of them in my hands at this moment. The article is somewhat of the character of a gun lock-is of a wedge-shape—so that when placed just before a door or behind it—I do not know which is the proper expression-in such position that when the door is opened the bottom of it will slide up on the inclined plane and will spring a lock, or the catch of a lock, which will act like a trigger and release the hammer, which in turn strikes against the end of a blank cartridge and creates a slight explosion, which is supposed to alarm the people in the house, and also, perhaps, scare the proposed burglar.

I say that Mr. McCrea was the owner of this patent. It was a recent affair, and he had procured to have made up two different working models or actual productions of the patent-that is, two kinds-one made of cast-iron, which is called throughout the case the cast-iron model, and the other made of sheet-steel.

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The one is cast in a mould-the greater part of it—the springs being made, of course, by a different process, and after being cast in a mould is smoothed off and partly burnished with nickelI think nickel-plated.

The other is made of sheet-steel, the parts being stamped out by a stamp and fastened together with rivets and screws-mainly rivets, I believe; there are one or two screws in it. The two products are in appearance very much alike, but when you come to examine them carefully they are quite different in some very material respects, as I think, and found when under examination during the production of the evidence.

McCrea found the cost of manufacturing the cast-iron alarm considerably greater than that of manufacturing it out of sheetsteel, and it is an admitted fact in the case. He applied to a manufacturing concern called the Woodbine Company, located at Woodbine, New Jersey, to see at what price they would manufacture a lot of these sheet-steel ones. He had also, however, had a good many manufactured in Philadelphia-some three hundred, I think, in round figures of the cast-iron, and a less number of the sheet-steel.

Now, I notice, in reading the evidence, a little confusion on that subject. At one place it seemed to be admitted that the number of the sheet-steel which he had manufactured at the time mentioned was greater than those of the cast-iron. contrary is the fact.

But the

He had

a lot of

In October, 1900, that was the situation of affairs. put a few of the cast-iron ones on the market and had them ready for the market, and a few of the steel ones. I do not recollect that the evidence shows that he had put any of the steel ones on the market.

Mr. McCrea had a friend in New York-a Mr. Lodge-an elderly gentleman, who was in the same business, so to speak, with McCrea, but was really nothing but a broker, and Mr. McCrea wrote him a letter, on the 17th of October, 1900, in which he informs him that he owns this patent. He says: "I send you by mail a sample of a burglar alarm and door check that I own the patent on, which has considerable merit." Then

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he goes on to suggest that Mr. Lodge should assist to put it on the market-to make a sale of the whole thing. The material point in that is that he says he sent the article as a model or a "sample"-that is the word he uses of the article of which he holds the patent. The sample actually sent was of cast-iron. He also says that they can be manufactured from sheet-steel. "The one I send you is cast-iron and it only weighs four ounces, I can have them made in large numbers for nine cents each." Now, I am not quite sure whether, by a correct construction of his language, he referred to the cast-iron or the sheet-steel, but he says he can have them made for nine cents each. I think somewhere else he says in the correspondence that the cast-iron ones cost twenty-five cents. But he says that they could be sold to agents at twenty-five cents, who would in turn retail them at fifty cents. Here he undoubtedly referred to a cost of nine cents. He proceeds:

"Suppose there were agencies opened in all the large cities of the country, simply places where agents could be supplied in that way, one thousand canvassers could be selling; and suppose each would only sell five a day, that would be five thousand, at a profit of sixteen cents each, or a net profit of nine hundred dollars per day."

That profit is to the owner, but if the agent sold them at fifty cents, and made twenty-five cents, it would be $1.25 a day to the agent.

Then he goes on (in the letter of October 17th) to say he will sell the whole thing, with the tools and all, for $5,000, and he says he will allow Mr. Lodge twelve and one-half per cent. commission that would be $625.

Now, two or three days later he wrote Mr. Lodge again, and there is no date on that letter, but it acknowledges one of the 19th from Lodge. In it he says he will send him two more of the alarms, and it is admitted he did send one more, and the clear weight of the evidence is that such second shipment was also a cast-iron one. Mr. Lodge's evidence is clear on the subject, and I read Mr. McCrea's evidence on the subject carefully, and he does not say that he has any confidence in the idea that

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the next one he sent him was a steel sample. He then also states that he thinks he can have them made for eight cents each, and in both the letters he praises it up highly-tells what great profits there is to anybody who owns it.

Now, about that time Mr. Lodge came in contact with the complainant herein. The complainant had borrowed on his interest in his father's estate a sum of $600 or $800 from a Philadelphia gentleman by the name of Deacon through the brokerage of a Mr. Paul Smith of New York City, a broker who had an office in the same building with Mr. Lodge, and he called to see Mr. Smith about getting more money. Mr. Lederer was a gentleman who seemed to be in a chronic state of impecuniosity. The income of his father's estate was not sufficient for him, and he was doing what, I suppose, his father, if he had anticipated he could do, would have prevented him from doing, by putting in his will a clause against anticipation of the income of his estate-Mr. Lederer was trying to borrow more money through Mr. Smith, and there he accidentally met Mr. Lodge. Mr. Lodge says, "Here, don't you want to buy this patent?" He submitted to him one of these cast-iron samples. "No," Mr. Lederer says, he didn't want that; he wanted to borrow more money. "Well, perhaps I can help you," Mr. Lodge says, and negotiations were entered into between them which finally led to the contract in question.

Now, on the 22d of October Mr. McCrea received from the Woodbine Company, of which a Mr. Bayard was president, a letter in which they give him prices on the door check and burglar alarm "according to the sample furnished us," and they are willing to sell in lots of five thousand at seven and onequarter, ten thousand at six and three-quarters, twenty-five thousand at six and two-fifths; fifty thousand, six; one hundred thousand at five and four-fifths cents each; the man who orders to keep in order the dies from which they were cut out. The sample shown the Woodbine Company was admitted to be the sheet-steel sample which Mr. McCrea had had made in Philadelphia. And I may as well say here that Mr. McCrea says (and I do not doubt its truth) that he himself invented a little

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