N.J. Constitutional Convention: Vol. 4, Page 387

Wednesday, July 9, 1947 (Afternoon session)

case that I cited is a case that was decided not more than two years ago and long after the new set of rules were adopted. I don't recall the name of the case, but I recall the decision of the case. Under some of the wartime powers it was provided that where the licensee under a patent was making goods covered by the patent, the federal agency had the power to determine the reasonableness of the royalty and to direct the licensee to pay the stipulated royalty, in excess of what was determined to be reasonable, into the federal Treasury. In this particular case, a very valuable patent, producing large royalties, was involved. The Government fixed $50,000 a year as the royalty, and directed the licensee to pay all the rest of it into the federal Treasury. An action was brought to restrain the licensee from making that payment into the federal Treasury. The bill was dismissed on the ground, according to the Supreme Court decision - I haven't read the decision in the District Court; it was brought in the District of New Jersey - the bill was dismissed on the ground that the remedy was mistaken; that all that the licensor could do would be to sue the licensee for the full royalty. The payment into the Treasury would be no defense if the licensee was not lawfully required to pay the excess into the Treasury. An appeal was taken to the Supreme Court and the Supreme Court sustained that view, and sustained the dismissal of the bill. I'm not arguing in favor of the soundness of that decision, but I am stating what happened.

There may be cases, and there could be cases without the abolition of the Court of Chancery, where if a case was commenced wrongly in the Court of Chancery, it could be transferred to a law court - I think we have a statute of that kind now. And if it were wrongly commenced in the law court, it could be transferred to the Court of Chancery. That could be done without a constitutional amendment. It could be included in a constitutional amendment. But, so far as administering a legal remedy under pleadings applying solely for equitable relief and equitable remedies is concerned, I think that could scarcely be done. Of course, the pleadings might be changed and the case proceed although -

MR. WINNE: The argument, of course, is this. If the one judge has both equitable and legal powers to apply the rules of both branches of the civil procedure, he can retain the case, mold the pleadings and proceed, without having it go to another court and have a new suit started. That definitely was the argument of Judge Smith -

MR. STRYKER: That is the argument. That is not what was done in the case that I cited. That could be done; there would be no objection to transferring the case from one court to another. That could be done and still retain the Court of Chancery.

VICE-CHAIRMAN: Any further questions of Mr. Stryker?

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