THE ATLANTIC REPORTER VOLUME 122 BALCH v. EDWARD G. BUDD MFG. CO. (Supreme Court of Pennsylvania. May 23, 1923.) 1. Master and servant 405 (4) - Finding compensation claimant was totally disabled by disease caused by accident sustained. cal efficiency, he was above the average. On August 10, 1921, while engaged with others in lifting the center of a die, he sustained a rupture in his right groin. He [contends] the malady which now afflicts him developed as the The referee found result of this injury. * * * [against the claim on the ground that Balch's On In a workmen's compensation proceeding, evidence held sufficient to sustain a finding that claimant was totally disabled by a disease of the hip joint, in consequence of a hernia caused [I] "The board found 'that on August 10, by spraining himself while lifting a heavy 1921, while lifting a heavy weight * * in weight, and not in consequence of typhoid fever. the course of his employment, claimant sprained 2. Master and servant 405(1)-Probability himself; he suffered acute pain, and at the sufficient evidence in compensation case. time was rendered incapable of further work, While the law requires that the relation of and, in consequence thereof, a hernia develcause and effect involved in a compensation case oped.' This is amply supported by the testibe established beyond mere possibility, its ex-mony of the claimant himself and of his physiistence need not be demonstrated with mathe-cian, Dr. John Groff. * * The finding 'that matical precision, and probability is sufficient. Appeal from Court of Common Pleas, Philadelphia County; Charles Y. Audenried, Judge. claimant's condition was not complicated by typhoid fever and [therefore] that ailment does not enter into this case,' might well rest on the testimony of Dr. Groff, who declared that, in his opinion, 'there was not any more typhoid in the case than a man in the moon.' The blood culture taken at the Presbyterian Hospi- Proceedings for compensation under the Workmen's Compensation Act (Pa. St. 1920, 21916 et seq.) by William H. Balch, employee, opposed by Edward G. Budd Manufactur-The finding that the claimant has been toing Company, employer. From a judgment tally disabled since August 10, 1921, and is still sustaining an award of compensation by the totally disabled in consequence of said accident Workmen's Compensation Board, the employ- as described,' is not lacking of support in the er appeals. Affirmed. evidence. The claimant's disability since the accident cannot be doubted in the face of his own and his mother's testimony, which is not contradicted. That this disability probably resulted from the accident was stated by Dr. Argued before MOSCHZISKER, C. J., and FRAZER, WALLING, SIMPSON, KEP. HART, and SCHAFFER, JJ. C. D. Swartz (of Swartz & Campbell), of Carnett, whose testimony went beyond [asPhiladelphia, for appellant. Edward C. Dougherty and Thomas Boylan, ble. both of Philadelphia, for appellee. * serting] that this connection was merely possiThe board found, 'the medical witnesses produced by the defendant, who admitted a hernia in consequence of the injury, PER CURIAM. We adopt the following but suggested that the total incapacity was excerpts from the opinion of the court below: the latter.' It is to be observed that the medicaused by typhoid fever, [were] mistaken as to "William H. Balch, now about 21 years of cal witness of the defendant, Dr. Sturgis, was age, claims he is wholly incapacitated for work not positive with respect to the cause of the by a disease of his right hip joint, known as plaintiff's high temperature while at the hos'ilium ostearthritis.' * On July 18, 1921, pital. He said everything present in this case he entered the employ of * * defendant was of a typhoid origin, but admitted he had as a press helper; an examination not had the benefit of knowing the results of made at that time by a physician in the serv- the Widal test, and that the claimant's temice of defendant showed [Balch] was then in a perature chart while at the hospital was not normal condition, and that, in point of physi- typical of typhoid fever. He suggested the case For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 122 A.-1 was one of para-typhoid, but stated, 'I found it to do in furtherance of the common plan, and impossible to make a diagnosis in this case.' providing that a corporation should be organizDr. Groft * * was positive Balch did not ed to manufacture and sell such machinery, suffer from typhoid fever, and that this dis-held not to bind any of the parties to aid perease played no part as a cause of his present sonally in the organization of the proposed condition of health. Defendant con- corporation. * In a proceeding to enforce, in a court of equity, a forfeiture under a contract, the court will not resort to any inferences that are not compelled by the clear, direct, and unambiguous language of the contract, especially when the contract was drawn by the party who relies upon the inference to aid and extend the language of the contract. 30(1)-Agreement held 3. Corporations not to require party to furnish money to exploit assets of proposed corporation. tends the testimony of Dr. Carnett does not warrant the conclusions reached by the board 2. Contracts 175(1)—No inferences in aid as to the cause of the claimant's present total of forfeitures. incapacity, because it is asserted this witness dealt with mere possibilities. So to construe what was said by Dr. Carnett, however, is unfair to him. It is true he was careful to state that the causal relation of Balch's accident to the ostearthritis which has developed in his right hip joint is by no means certain, but it is clear he considered such a relation to be not merely possible, but probable, and he gave his reasons for this conclusion. In his opinion, the disease that affects the head of the claimant's thigh bone is due to infection caused by the entry of a micro-organism into the joint. An agreement between three persons for From what focus this was derived is uncer- the making, marketing and exploiting of certain. Such infection 'may arise in the absence tain machinery used in the manufacture of of any injury. On the other hand, we know canned goods, while providing that one of the that those who have been injured are more sus- parties should defray all preliminary expenses. ceptible and likely to develop such trouble than in perfecting and demonstrating a practical those not injured.' * To the question, machine which could be profitably manufactur'Would it be a fair statement to say the in-ed and sold, and that such party should supply jury in this case probably so weakened the resistance of that joint as to enable the disease to take hold? the witness replied, 'Probably, yes.' * * * In view of the evidence of Dr. Carnett, it cannot be successfully maintain-incorporated. ed there is no basis for the finding 'that the claimant is, at the present time, totally disabled 4. Contracts 317-"Willful" as applied to and has been since the date of the accident, as a direct result of the said accident.' [2] "While the law requires the relation of cause and effect to be established beyond mere possibility, it does not require its existence to be demonstrated with mathematical precision. Probability is sufficient. It cannot be said there was no proof that the causal connection of Balch's injury with the malady from which he now suffers is a probable one." To the above-quoted matter from the satisfactory opinion of the court below, we need add only that the evidence in this case falls fairly within the requirements stated in Fink v. Sheldon A. & S. Co., 270 Pa. 476, 479, 113 Atl. 666. The judgment of the court below, and the award of the Workmen's Compensation Board, are affirmed. the money needed to exploit the assets of the proposed company, did not require him to secure money to exploit the assets of the proposed company before or after it was actually contracts defined. The word "willful" implies a deliberate intention for which no reasonable excuse can be given to do or refrain from doing some act which good faith in the performance of some duty required the promissor to do or not to do, as the case may be (citing Words and Phrases, First and Second Series, "Willful"). 5. Corporations 30(1)-Refusal to sell stock in proposed corporation for uncertainty as to company securing patent held not to work forfeiture of promoter's interest. Where a contract between three persons for the promotion of a corporation to manufacture and sell certain canning machines provided that one of the parties should diligently and in good faith undertake and exercise every reasonable effort to secure the money necessary to exploit the company's assets by the sale of preferred stock, and provided that the "willful failure" of any party thereto to comply with the terms should effect a forfeiture of his interest, held, that the party thus named to raise money was entitled to exercise a discretion as to whether he could properly sell such stock to investors, and that he should not be subjected to a forfeiture because he refused Jan. 19, to sell such stock by reason of the uncertainty as to whether the company could secure patent protection for its machines. COVER v. TALIAFERRO et al. (Court of Appeals of Maryland. 1923.) 1. Corporations 30(1)—Agreement held not to bind parties to aid personally in organization of corporation. 6. Equity 24-Equity will not enforce forfeiture except with extreme reluctance. An agreement between three persons for the making, marketing, and exploiting certain machinery used in the manufacture of canned food specifically naming what each party was A court of equity will not lend its aid to divest an interest or an estate by enforcing a forfeiture except with extreme reluctance and only in the most extreme cases. (122 A.) Appeal from Circuit Court of Baltimore [1] The first question depends altogether City; Carroll T. Bond, Judge. upon the construction of the contract, for all the rights, duties, and liabilities of the parties in relation to its subject-matter are fixed by its terms. The apparent purpose and ob Suit by Ralph Cover against John C. Taliaferro and others. From a decree dismissing the bill, plaintiff appeals. Affirmed. Argued before BOYD, C. J., and BRISCOE, THOMAS, PATTISON, URNER, ADKINS, and OFFUTT, JJ. ject of the parties to the contract was to machinery used in the manufacture of canned agree to make, market, and exploit certain food, and more particularly a cooker and cooler called the "Submarine," which was believed to embody improvements over any machine then sold for the complete sterilization Richard S. Culbreth, of Baltimore (Charles C. Wallace, of Baltimore, on the brief), for appellant. William C. Coleman, of Baltimore, for ap of canned food. All the provisions of the conpellees. tract are subsidiary and incidental to the accomplishment of that purpose. And to that OFFUTT, J. On August 29, 1919, Ralph end it states clearly and precisely what each Cover, of Westminster, Carroll county, and party to the agreement is to do, and what J. C. Taliaferro and John Coyle, both of Balti-part each is to have in the common plan. more City, entered into an agreement for the Ralph Cover was to be the patent expert, faexploitation and development of improved miliar with the law and practice of securing machinery to be used in the manufacture of and protecting patents, as well as with the canned goods in processing, sterilizing, and technical and mechanical features, elements, preserving the contents of containers of details, and functions of machinery used in fruits, vegetables, and other food products, sterilizing and canning food, and his duty for some of which improvements letters pat- was to investigate the novelty of inventions ent had been applied for. That agreement covered by the agreement, and the possibility provided that, upon a satisfactory demon- of infringing existing patents by the manustration of the utility and practicability of a facture, sale, or use of machines embodying machine embodying the inventions referred such inventions, to secure data as to the liketo in those patent applications, a corporation ly profits and hazards of the business, and should be organized for the exploitation, the conditions under which the machines manufacture, and sale of such machines. It further provided that the willful failure of any party to the contract to perform the obligations imposed by it should effect a forfeiture of all his right, title, and interest therein to the other parties thereto. On July 30, 1920, Cover filed the bill of complaint in this case, in which he asked that the right, title, and interest of each of the appellees in said contract be forfeited to him on the ground that they had willfully failed to perform the part of the agreement which they had agreed in it to perform. An answer was filed, testimony was taken, and after a hearing a decree was passed by the circuit court of Baltimore City, dismissing the bill, and from that decree this appeal was taken. The appeal presents but one question, which is: Whether the conduct of the defendants amounted to such a breach of the obligations imposed upon them by the agreement as to warrant a court of equity in decreeing under its terms a forfeiture of their interests and rights therein to the complainant. In dealing with that question we will inquire: (1) What obligations were imposed by the agreement upon the parties to it? (2) What penalty did the agreement exact from the parties for a failure to perform the obligations imposed by it? (3) Did the defendants willfully fail to perform such obligations? And (4), if they did. should the court decree a forfeiture of their rights and interests in the contract in consequence thereof? could be manufactured most successfully, to keep records of all transactions connected with the work, and, in short, to do such prac tical work as might be required to perfect the machine and make the manufacture and sale of it a commercial success, so far as he could by the exercise of reasonable diligence do that. His training and experience had fitted him for such work. He was a member of the bar; he had been engaged seven years in the development of machinery, principally canning machinery, and had made a special study of patent law and was widely experienced in patent matters. John C. Taliaferro was "to defray all expenses incurred up to the date of the commencement of the first full-sized machine in the exploiting and development of the machines herein referred to," and he was to "pay all expenses incurred from the date of the commencement of the first full-sized machine to the date of the formation of said corporation," He was the capitalist who was to supply the funds needed for the perfection and completion of a practicable machine, which could be profitably manufactured and sold to manufacturers of canned food for the sterilization of their product. He had been widely engaged in the development and exploitation of patented inventions and had been a director in the Continental Can Company, and one of its founders, and had also been general manager of the American Can Company, and a director in the National Bank of Baltimore, and the Calvert Bank. John Coyle was to act as a supervising ex-spective duties of the several parties, the pert and critic, and was to "act in an advi- agreement, for the protection of innocent sory capacity in the development, designing, parties against the willful default of either construction, and testing of any machines or both of the other parties, contained this embraced by this agreement." He was the provision: assistant general manager of the Baltimore plant of the Continental Can Company, and familiar with the operation of machinery of the character covered by the agreement. In addition to this specific designation of the duties of the several parties to it, the agreement provides that they "shall use and employ their ideas and inventive skill and ability in the arts embraced by this agreement and in the betterment thereof, and each by sketches and, where necessary, by written description, will promptly disclose to the others any new invention therein." After thus stating the duties of its several parties in relation to the exploitation and development of the machines referred to in it, the agreement provides: of any party hereto to comply with the terms "It is further agreed that the willful failure hereof shall effect a forfeiture of his title, rights, and interests herein to the other parties hereto, in proportion to their respective interests, and this contract still shall be effective against such defaulting party with respect to his obligations hereunder. It is further agreed that if such default shall be due to circution of this agreement, or to circumstances cumstances unforeseen at the time of the exebeyond his reasonable control, then, by mutual agreement, or by submission of the question to arbitration, the rights of the parties shall be adjusted according to the justice and equities of the parties, under the circumstances." This agreement therefore provided in spe it were required to do, and (2) for the penalty to be imposed upon any one of them who willfully failed to carry out its terms. The next question then is: Did the defendants willfully fail to perform any duty imposed upon them by the contract? "That, forthwith upon the satisfactory dem-cific terms: (1) What the several parties to onstration under service conditions of the utility and practicability of the machine embodying the inventions specifically referred to by patent application serial numbers in the preamble hereto, a corporation shall be organized, under the laws of the state of Maryland, bearing the name 'United Corporation' for the purpose of exploiting, manufacturing, securing the manufacture of, selling, etc., of the machines embraced by this agreement." And after providing for the issue of 2,000 shares of common stock, and for the form of the charter, it further provides: "That, forthwith upon the formation of said corporation, the parties hereto shall assign all their rights accruing under this agreement to said United Corporation, and they shall receive common stock of said United Corporation in the following proportions immediately after the execution of such assignment: J. C. Taliaferro shall receive 800 shares; John Coyle shall receive 300 shares; and Ralph Cover shall receive 900 shares." In dealing with that question, we will revert to the pleadings and look at the bill to learn the particular breach of which the appellant complains, and which is the basis of his suit. The crux of his complaint as stated in his bill is this: "That, thus, the demonstration under service conditions of the utility and practicability of said machine was satisfactory to the said Taliaferro, one of the defendants, and it was equally satisfactory to the said John Coyle, the other defendant, who, as acting assistant general manager of the Baltimore branch of said Continental Can Company, was under the said Taliaferro, and was one of the mechanical engineers whom the plaintiff consulted in the performance of his (the plaintiff's) part of said agreement; that, accordingly, the next step under said agreement was to organize under the "The said J. C. Taliaferro, upon the forma- laws of the state of Maryland a corporation tion of said corporation, will diligently and in bearing the name 'United Corporation,' for the good faith undertake and exercise every rea- purpose of exploiting, manufacturing, securing sonable effort to secure such sum of money as the manufacture of, selling, etc., of the mashall be decided by the parties hereto at that chines embraced by said agreement, as providtime to be necessary to successfully exploited by paragraph 5 thereof; and to assign to the company's assets, and for which the parties advancing same shall receive preferred stock in the corporation of a par value in an amount equal to the amount actually secured for and received by the corporation." And that * * said corporation all the rights of said parties under said agreement, and to issue to said parties the common stock as provided in paragraph 6; that in pursuance of said provisions, the plaintiff proposed * that a formal meeting be held for said purposes; that And, until the formation of the corporation then, for the first time, was there exhibited by and the making of such assignments, it pro- said parties a spirit other than one of hearty vides that the rights of the parties "in all co-operation; that, to the great surprise and machines, inventions, patents, moneys and disappointment of the plaintiff, who had devotother subject-matter of this agreement, shall clusion of other matters, the defendants refused his entire time to the enterprise, to the exbe in the same proportion as that provided"ed to attend such a meeting, the said Taliaferin the paragraph dealing with the distribu- ro stating in so many words that he would not tion of the common stock. co-operate to organize said corporation; that |