Fageol & Tate v. Baird-Bailhache Co.

On January 15, 1919, plaintiffs and respondents, Fageol and Tate entered into a written agreement with C. S. Baird and John M. Bailhache whereby Fageol and Tate granted a license to Baird and Bailhache to manufacture and sell heating devices under patents belonging to the licensors. Subsequently the licensees organized a corporation, Baird-Bailhache Company, which succeeded to their rights and obligations under the license agreement and is the defendant and appellant here. The agreement provided for the payment of royalties upon the articles manufactured and sold according to a certain schedule and for the payment of certain minimum annual royalties in any event. The amount of these minimum royalties and the manner of their payment were subsequently modified from time to time by the agreement of the parties, the final modification providing, in so far as is material here:

The original contract contained the following provision which was never subsequently modified: “In case of a breach of any of the terms and conditions of this agreement by the parties of the second part (licensees), and the failure of said parties of the second part to comply therewith within thirty (30) days…