Case Facts
Two letters patent (Nos. 10,512 and 10,513), granted on 28 July 1887 to J. Stewart and T. Charlton, related to inventions for storing volatile or inflammable liquids. Stewart and Charlton subsequently entered into arrangements with Casey to introduce their patents to the mercantile world, and Casey spent considerable time and money pushing, developing, and improving the inventions in his capacity as practical manager.
On 29 January 1889, Stewart and Charlton signed a letter addressed to Casey stating: "in consideration of your services as the practical manager in working both our patents … we hereby agree to give you one third share of the patents above-mentioned, the same to take effect from this date." In June 1889, Stewart and Charlton handed the physical letters patent to Casey to assist him in negotiations for a sale; the sale was not effected. J. Stewart died in September 1889, and the plaintiffs in the action were Isabella Stewart and Ernest Stewart, his executors, together with T. Charlton. Casey registered the letter of 29 January 1889 on the Register of Patents in December 1889 and claimed to retain possession of the physical letters patent as co-owner of a one-third share.
The plaintiffs brought an action seeking delivery up of the letters patent and damages for their detention. They also brought a motion to rectify the Register of Patents by expunging the entry of the letter of 29 January 1889, arguing that the promise to assign a one-third share was unenforceable for want of consideration, since all of Casey's services had been rendered before the letter was written, and that the letter could not properly be entered on the register. The case was heard at first instance by Romer J on 8 June 1891 and the appeal was heard by the Court of Appeal on 18–19 November 1891.
Held
Romer J at first instance held that the document of 29 January 1889 was intended to confer on Casey a one-third share in the patents from its date, that there was clearly sufficient consideration, and that the interest granted was not conditional. He concluded that the document constituted an assignment of an interest in the patents and was properly entered on the Register of Patents.
The Court of Appeal affirmed Romer J's decision in its entirety. It held that the letter of 29 January 1889 operated as an immediate equitable assignment of a one-third interest in the patents, taking effect from the date of the document. The promise was not void for want of consideration. The document was properly entered on the Register of Patents under the Patents, Designs, and Trade Marks Act 1883, and Casey was entitled to retain possession of the physical letters patent as a co-owner.
Ratio Decidendi
The ratio of the case rests on two distinct legal propositions.
First: past consideration may be good consideration. The general rule is that past consideration — that is, an act performed before a promise is made — cannot constitute valid consideration for that promise. However, the Court of Appeal affirmed that past consideration is not void where: (1) the prior act was done at the express request of the promisor; and (2) there was an implied or express understanding at the time the act was performed that remuneration of some kind would follow. Where those conditions are satisfied, the subsequent promise does not create new consideration but merely fixes the amount or form of the remuneration that was always contemplated. On the facts, Casey had performed his services as practical manager at the express request of Stewart and Charlton, and both parties understood from the outset that his efforts would be rewarded. The promise in the letter of 29 January 1889 was therefore supported by good consideration.
Second: an equitable assignment of a share in a patent may be entered on the Register of Patents. s 85 of the Patents, Designs, and Trade Marks Act 1883 provides that no notice of any trust shall be entered on the register. The plaintiffs argued that Casey's interest was merely a trust interest and therefore incapable of registration. The Court rejected this. An equitable assignment of a proprietary share or interest in a patent is not a notice of a trust within the meaning of s 85 of the Act. s 23 of the same Act provides for the Register of Patents to record notifications of assignments and transmissions of patents and documents affecting the proprietorship of letters patent. The letter of 29 January 1889, as an immediate equitable assignment, fell squarely within that provision and was properly registered.
The letter operated as an equitable assignment taking immediate effect from its date, rather than a conditional or future promise. Casey accordingly had the right as a co-owner to retain the physical letters patent.
Obiter Dicta
Not applicable.