Demurrer Allowed

DECISION IN THE SUIT BETWEEN THE TWO BIG ELECTRICAL SUPPLY COMPANIES OF THE COUNTRY.

Utica, May 22. — In the action brought last March in the United States Circuit Court by the Westinghouse Electric & Manufacturing Company against the General Electric Company, charging that the defendant had violated its contracts with the plaintiff, the defendant’s counsel interposed a demurrer in April. The demurrer set forth that by the complainant’s own showing in the complaint the complainant was not entitled to the relief prayed for or any part thereof and that the complainant had not made such a case in its bill as entitled it in a court of equity to the relief prayed for in the bill or any part thereof.

Judge Coxe today filed his decision allowing the demurrer. In closing his decision, Judge Coxe says:

The contract provides for a broad interchange of licenses, carefully guarding, however, the vested rights of existing licensees. As to them, the situation was delicate and complicated, and it was evidently deemed best to leave it precisely as it existed before the contract was signed. They gained no new rights and lost no existing rights by reason of the agreement between their principals.

That the defendant could have sold the multiphase apparatus to its New York licensee prior to March 21, 1896, is beyond dispute. It can do so now, unless it has agreed that it will not make such sales. The agreement will be searched in vain for such a covenant. In making the sale prior to March 31, 1896, the defendant took the risk of an infringement suit. It takes the same risk now.

The court understands that the complainant does not pretend that the contract contains an express covenant not to sell, but it is argued that this agreement may be implied. In order to reach such a construction it is necessary to torture the provision that sales by defendant to the New York company of multiphase apparatus shall not be deemed to be authorized by the agreement, and the provision that such apparatus shall not be licensed under the Tesla patents into a positive covenant that defendant will not make such sales. No rule of interpretation familiar to the court will permit this to be done. There is a vast difference between a provision which declines to sanction an act and one which forbids it. The one is passive and inert; the other active and enforceable.

The demurrer is allowed.