author: Callahan, J. Berdon, J.,

text:
    Robert A. Levine et al. v. James V. Massey III et al.
    (14989)
    Callahan, Borden, Berdon, Norcott and Palmer, Js.
    Argued November 3, 1994
    decision released February 21, 1995

      John M. Calimafde, pro hac vice, with whom, on the brief, were Lori Welch-Rubin and Roger Sullivan, for the appellants-appellees (plaintiffs).

      Thomas E. Minogue, Jr., with whom were Alexander W. Samor and Barry Kramer, for the appellee-appellant (named defendant).
   Callahan, J.

The plaintiffs, Robert A. Levine and Stephen C. Wardlaw, both medical doctors, and the named defendant, James Y. Massey III (defendant), the owner and operator of a medical laboratory, collaborated to invent a device utilizing a capillary tube and an interior float that, upon centrifugation, separated a blood sample placed in the tube into constituent parts in discernible measurable layers (capillary tube-float device). This unique device was of substantial value to the medical profession because it permitted quick blood analysis. In 1976, Levine, Wardlaw and Massey jointly applied for and subsequently obtained a United States patent on the device. Thereafter, three additional patents were issued jointly to the inventors, all relating to the separation of blood by centrifugation into constituent parts by use of a capillary tube and float.

Wardlaw, alone, also invented what the parties have described as a “manual reader,” an instrument used for viewing and measuring the thickness of each separated layer of blood constituents in the capillary tube-float device. A separate patent application for the manual reader was filed in 1977 and a patent was issued to Wardlaw in 1979, individually, as the inventor of that device. Wardlaw assigned equal shares in the manual reader patent to Levine and Massey. It is undisputed that Wardlaw had conceived of and worked on the manual reader prior to the time that the capillary tube-float device for separating blood into its constituent parts was patented or licensed.

On April 1, 1977, Levine, Wardlaw and Massey entered into a licensing agreement with the defendant Becton, Dickinson and Company (Becton, Dickinson), a manufacturer and distributor of medical equipment, which is not a party to this appeal. In exchange for royalties, this agreement gave Becton, Dickinson the exclusive right to manufacture, use and sell, worldwide, the capillary tube-float device and any related technology or improvements to that device invented by any of the licensors. The parties conceded, and it is obvious from the Becton, Dickinson agreement, that the manual reader, invented solely by Wardlaw but jointly owned by Wardlaw, Levine and Massey, was part of the technology related to the capillary tube-float device originally licensed to Becton, Dickinson.

As a method of payment of royalties, the agreement between Levine, Wardlaw and Massey and Becton, Dickinson provided: “A check for one third of the royalty or other payment due licensors shall be made payable to each licensor and sent to the addresses set out herein in the introductory paragraph. The licensors agree that this method of payment shall discharge licensee’s obligation to each of the licensor’s with respect to such payment.” In the years since the agreément was executed, Becton, Dickinson has paid substantial royalties to each of the three licensors in this fashion.

On April 1, 1977, the same day that Levine, Ward-law and Massey entered into the agreement with Becton, Dickinson, they executed a separate agreement defining their obligations to each other in relation to their invention and the licensing agreement with Becton, Dickinson. The purpose of the agreement, in part, was to distinguish between such future improvements on the basic invention or new inventions in which the parties would share equally, and those that would remain solely the property of the individual inventor.

At some time in 1982, the defendant ceased working with the plaintiffs. Thereafter, Wardlaw invented and subsequently obtained patents in 1985 and 1987 for an instrument called the “auto reader.” The auto reader was described in Wardlaw’s patent applications as relating to “an improved method and apparatus for measuring substantially accurate blood constituent counts in a centrifuged sample of anticoagulated whole blood.” Wardlaw assigned a joint interest in the auto reader invention to Levine, with whom he was still affiliated.

Pursuant to its April 1,1977 agreement with the parties, Becton, Dickinson acquired the rights to, and has manufactured, sold and distributed, the auto reader device. Pursuant to the terms of its April 1,1977 agreement with the parties, it also has paid one third of the royalties due on its sales of the auto reader, as well as royalties due on the capillary tube-float device and the manual reader, to Levine, Wardlaw and Massey each. A controversy arose, however, as to whether Massey was entitled to royalties from sales of the auto reader. The royalties paid by Becton, Dickinson to each party attributable to the auto reader are in excess of $500,000.

After unsuccessful attempts to resolve the issue of entitlement to the royalties from the auto reader, the plaintiffs commenced this action against the defendant. In their complaint, the plaintiffs alleged that royalties from the auto reader did not fall within the royalty sharing agreement among themselves and Massey, and that the auto reader’s claims were not dominated by any claims of the capillary tube-float device. They claimed, therefore, that Massey was not entitled to receive any royalties from the auto reader. In their prayer for relief, the plaintiffs claimed an accounting from Massey for any royalties received, damages, interest and costs, as well as an order determining the allocation of future royalty payments between the parties. The defendant denied the plaintiffs’ allegations.

The defendant argued in the trial court that because the manual reader was contemplated by Wardlaw prior to 1977, and had been invented by him at the time of the agreement with Becton, Dickinson in 1977, and was actually a part of the technology that was originally licensed to Becton, Dickinson, it was a part of the basic invention referred to in the April 1, 1977 agreement among the parties. The defendant argued, moreover, that the claims of the manual reader patent dominated those of the auto reader patent and that he, therefore, was entitled, pursuant to the agreement of the parties, to royalties from the auto reader.

The trial court found that the manual reader was part of the basic invention as contemplated by the agreement among the plaintiffs and the defendant. The court then determined that the auto reader was an improvement on the manual reader and that its patent claims were dominated by those of the manual reader. It concluded that, pursuant to the April 1, 1977 agreement among the parties, the defendant was entitled to one third of the royalties from sales of the auto reader for the life of the manual reader patent. Additionally, the trial court found that since there appeared to be no disagreement between the parties concerning the amount of royalties that had been paid, what they had been paid for, and to whom, there was no need for an accounting.

The plaintiffs appealed, and the defendant cross appealed, from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c). We reverse the judgment of the trial court.

We agree with the trial court that the principal issue raised by this appeal is one of contract law and not one of patent law. It is not necessary, therefore, for us to determine whether the patent claims of the manual reader dominate those of the auto reader. We conclude, rather, that the manual reader was not a part of the basic invention that was the subject of the April 1,1977 agreement among the parties. Therefore, improvements to the manual reader, in the form of the auto reader, were not “vested in the parties in equal undivided shares or interest” as provided by their agreement.

Although ordinarily the question of contract interpretation, being a question of the parties’ intent, is a question of fact; Gurliacci v. Mayer, 218 Conn. 531, 567, 590 A.2d 914 (1991); Finley v. Aetna Life & Casualty Co., 202 Conn. 190, 199, 520 A.2d 208 (1987); “[wjhere there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law. Thompson & Peck, Inc. v. Harbor Marine Contracting Corp., 203 Conn. 123, 131, 523 A.2d 1266 (1987).” (Internal quotation marks omitted.) Mulligan v. Rioux, 229 Conn. 716, 740, 643 A.2d 1226 (1994). We regard this case to present such definitive contract language.

It is the general rule that a contract is to be interpreted according to the intent expressed in its language and not by an intent the court may believe existed in the minds of the parties. Id.; Barnard v. Barnard, 214 Conn. 99, 110, 570 A.2d 690 (1990); Powel v. Burke, 178 Conn. 384, 387, 423 A.2d 97 (1979). When the intention conveyed by the terms of an agreement is “clear and unambiguous, there is no room for construction.” Gino’s Pizza of East Hartford, Inc. v. Kaplan, 193 Conn. 135, 138, 475 A.2d 305 (1984). “[A] court cannot import into [an] agreement a different provision nor can the construction of the agreement be changed to vary the express limitations of its terms.” Hatcho Corp. v. Della Pietra, 195 Conn. 18, 21, 485 A.2d 1285 (1985); see also Bank of Boston Connecticut v. Schlesinger, 220 Conn. 152, 159, 595 A.2d 872 (1991) (“ ‘[i]t is not within the power of courts to create new and different agreements’ ”); Jay Realty, Inc. v. Ahearn Development Corp., 189 Conn. 52, 55, 453 A.2d 771 (1983) (same); Cirrito v. Turner Construction Co., 189 Conn. 701, 706-707, 458 A.2d 678 (1983) (“[i]n interpreting a contract courts cannot add new or different terms”); Powel v. Burke, supra, 388.

“The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity. Downs v. National Casualty Co., 146 Conn. 490, 494, 152 A.2d 316 [1959]. The circumstances surrounding the making of the contract, the purposes which the parties sought to accomplish and their motives cannot prove an intent contrary to the plain meaning of the language used. Connecticut Co. v. Division 425, 147 Conn. 608, 616-17, 164 A.2d 413 [1960] .... It is axiomatic that a party is entitled to rely upon its written contract as the final integration of its rights and duties.” (Citations omitted.) Zullo v. Smith, 179 Conn. 596, 601, 427 A.2d 409 (1980); see Sturman v. Socha, 191 Conn. 1, 12, 463 A.2d 527 (1983). “Similarly, any ambiguity in a contract must emanate from the language used in the contract rather than from one party’s subjective perception of the terms.” Reese v. First Connecticut Small Business Investment Co., 182 Conn. 326, 327, 438 A.2d 99 (1980).

The plaintiffs make no claim that, under the licensing agreement with Becton, Dickinson, the defendant is not entitled to one third of the royalties due from Becton, Dickinson that are related to the capillary tube-float device or the manual reader. They do claim, however, that pursuant to the April 1, 1977 agreement among the parties, the defendant was not, and is not, entitled to any royalties attributable to the auto reader. We agree.

In their April 1, 1977 agreement, the plaintiffs and the defendant acknowledged that they “have jointly invented a method and apparatus for the measurement of blood counts and other similar tests for which they have made applications for United States Letters Patent, Serial No. 673,058, filed April 2, 1976, and indicated as being allowable on December 17, 1976, and desire to define their rights and interests in said invention and in any Letters Patent which they or any of them may obtain relating to the invention . . . .” (Emphasis added.)

The agreement also stated that: the parties shall endeavor, through their attorney, to obtain “Letters Patent of the United States for said invention”; costs “in connection with the development of the invention” be shared; any “payments derived by the parties from the invention or Letters Patent shall be divided equally among them”; “[njone of the parties shall sell, assign or mortgage his share or interest in the invention . . . or grant any license thereunder without the previous written consent of the others”; and if any party “shall make or acquire any improvement or apply for or obtain any patent for any improvement upon said invention, he shall forthwith disclose the same to the others . . . to the end that the same shall be vested in the parties in equal undivided shares or interest . . . .” (Emphasis added.)

It is clear, from the opening substantive paragraph of the April 1, 1977 agreement among the parties, as well as the entire text of the agreement, that the only “invention”—whether termed “the invention,” “said invention” or “the basic invention”—covered by this agreement was the capillary tube-float device, and not the manual reader. The only invention mentioned in the April 1, 1977 agreement among the parties is the invention described as having been “jointly invented,” which was identified by its patent application serial number of 673,058, and the application as having been filed on April 2, 1976. The only invention to which those particulars apply is the jointly invented capillary tube-float device. The manual reader upon which the defendant grounds his claim for auto reader royalties was not “jointly invented,” but, rather, was invented by Ward-law alone. Moreover, its patent application bears a different number and filing date than that filed for the capillary tube-float device.

The agreement further provided that “improvements made by and Letters Patent issuing therefrom which relate to the use of capillary tubes, but which are not dominated by any claims contained in any of the patent applications or Letters Patent of the basic invention, shall not be subject to equal shares among the parties. Any such improvements and Letters Patent not dominated by the claims of the basic invention shall remain the property of the inventor. In the event that such improvements of Letters Patent, because of the language of the aforesaid license agreement with Becton, Dickinson, become subject to its royalty provisions, then any such royalties paid by Becton, Dickinson to parties other than the inventor shall be paid over by such parties to the inventor. The calculations for such payment will be made to the end that the inventor shall be made whole as though he had licensed his improvement or Letters Patent individually to Becton, Dickinson and Company.” (Emphasis added.)

This paragraph of the April 1, 1977 agreement among the parties made their intentions clear: any future inventions that are related to the use of capillary tubes, but which are not dominated by the claims contained in the patents for the capillary tube-float device, remain the sole property of the inventor of that invention; and, the terms of the payment of royalties contained in the licensing agreement with Becton, Dickinson notwithstanding, the royalties for that invention—in this case, the auto reader—must be paid over to the inventor-in this case, Wardlaw, and, by virtue of their separate arrangement, Levine—just as though the inventor had licensed his invention individually to Becton, Dickinson.

In other words, as applied to the facts of this case, Wardlaw and Levine, and not Massey, would be entitled to the royalties on the auto reader unless the claims of the capillary tube-float device—not the claims of the manual reader, as suggested by the defendant— dominate the claims of the auto reader. Furthermore, as the plaintiffs correctly point out, the only evidence in this case in this regard was that the claims of the capillary tube-float device did not dominate the claims of the auto reader, and there was no contrary evidence. Therefore, under the clear language of the agreement as applied to the facts of this case, the royalties generated by the auto reader belong to the plaintiffs, and the defendant has no right to them.

Consequently, we conclude that the April 1, 1977 agreement among the parties was unambiguous. It describes with exactness the invention, the improvements to which the parties had a duty to disclose and which improvements would be jointly owned. That invention was the capillary tube-float device. The fact that there is a reference in the parties’ agreement to the “basic invention” without describing or referring to any invention other than the capillary tube-float device, while describing that device in detail, does not render the agreement ambiguous. “[W]ords do not become ambiguous simply because lawyers or laymen contend for different meanings.” (Internal quotation marks omitted.) Water & Way Properties v. Colt’s Mfg. Co., 230 Conn. 660, 668, 646 A.2d 143 (1994); Downs v. National Casualty Co., supra, 146 Conn. 494-95. The agreement does not even mention the manual reader, let alone describe it with any degree of particularity. If we were to interpret the agreement to include the manual reader so as to require joint ownership of improvements dominated by patent claims to that device, we would be rewriting the agreement of the parties. That we cannot do. Bank of Boston Connecticut v. Schlesinger, supra, 220 Conn. 159; Collins v. Sears, Roebuck & Co., 164 Conn. 369, 374, 321 A.2d 444 (1973).

Because the April 1, 1977 agreement of the parties specifically included only the jointly invented capillary tube-float device, the trial court improperly found that the manual reader was part of the basic invention encompassed by the agreement of the parties. Therefore, the trial court improperly concluded that the defendant was entitled to royalties from the auto reader.

The judgment is reversed, and the case is remanded with direction to render judgment for the plaintiffs on the first count of the complaint, and for appropriate orders on the plaintiffs’ specific prayers for relief.

In this opinion Borden, Norcott and Palmer, Js., concurred.

Berdon, J.,

dissenting. The majority holds that, on appeal, the dispositive issue is whether the plaintiffs, Robert A. Levine and Stephen C. Wardlaw, and the named defendant, James V. Massey III, intended that “the invention” referred to in their April 1, 1977 agreement (L/W/M agreement) pertained only to the capillary tube-float device. The trial court, however, concluded that it was the intention of the parties that “the invention” referred to the capillary tube-float device and the manual reader. The trial court wrote: “It appears to the court that when all is said and done it was the intention of the parties to share the profits on those inventions which were known to the parties at the time of entering the agreement on April 1, 1977, and to likewise share improvements which were dominated by the known inventions.”

Despite the fact that the parties do not dispute the factual findings of the trial court, and despite the fact that these findings clearly support the conclusion of the trial court, the majority nevertheless has decided to reverse the trial court on what it claims to be a matter of law. The majority justifies its action by concluding that the L/W/M agreement unambiguously does not include the manual reader as part of the invention and, therefore, that the actual intent of the parties is irrelevant. In other words, the majority has looked only to the “four corners” of the document, and has refused to consider extrinsic evidence bearing on the true intent of the parties.

The majority’s analysis, however, is flawed for two reasons. First, the “four corners” doctrine is not the law of this state today, nor should it be. The trial court, therefore, was justified in considering extrinsic evidence in determining the meaning of the contract between the parties. Second, even if the majority is correct in asserting that “a contract is to be interpreted according to the intent expressed in its language and not by an intent the court may believe existed in the minds of the parties,” this rule cannot apply when the contract itself is imbued with ambiguity. Because several portions of the L/W/M agreement are ambiguous, the court was required to utilize extrinsic evidence to elicit the true meaning of the agreement.

I

While it is true that under the “four corners” doctrine, a court may not consider any extrinsic evidence unless a contract is ambiguous, the more modern view, propounded by Professors Corbin and Farnsworth, recognizes that “the meaning of language may vary greatly according to the circumstances” and that “all language is infected with ambiguity and vagueness and that even language that seems on its face to have only one possible meaning may take on a different meaning when all the circumstances are disclosed . . . .” 2 E. Farnsworth, Contracts (1990) § 7.12, pp. 277-78. Under this theory, extrinsic evidence is always available to be used for interpreting the intent of the parties. Id., p. 272. After all, as Professor Corbin observed, “[n]o contract should ever be interpreted and enforced with a meaning that neither party gave it.” 3 A. Cor-bin, Contracts (Sup. 1994) § 572B, p. 443; see 2 Restatement (Second), Contracts § 212, comment (b), and § 209, comment (a) (1981); see also Uniform Commercial Code, General Statutes § 42a-2-202.

Indeed, in Sims v. Honda Motor Co., 225 Conn. 401, 623 A.2d 995 (1993), we rejected the “four corners” doctrine in interpreting a general release agreement, choosing instead to embrace the modern approach and to make it crystal clear that evidence is admissible to determine the actual intent of the parties. In Sims, the injured plaintiff had signed the contract with the intent of releasing only one defendant from liability, but the contract expressly discharged from liability “any and all” other parties from “any and all” claims arising from the incident. Id., 404. Chief Justice Peters, writing for the court, declined to enforce the plain meaning of the all encompassing release, and instead adopted a Corbin-like approach which “provides for consideration of extrinsic evidence of the parties' actual intent and does not confine interpretation of the release to its four corners.” Id., 413.

Indeed, it is well established that the meaning of the language itself can be ascertained and interpreted only in light of the situation of the parties and the circumstances surrounding them. Buckley v. Buckley, 144 Conn. 403, 409, 133 A.2d 604 (1957); United Aircraft Corp. v. O’Connor, 141 Conn. 530, 538, 107 A.2d 398 (1954). Therefore, evidence that sheds light on the intent of the parties is admissible to construe the contract itself.

The Restatement (Second) of Contracts, § 212, comment (b), explained this concept as follows: “It is sometimes said that extrinsic evidence cannot change the plain meaning of a writing, but meaning can almost never be plain except in a context. Accordingly, the rule [making extrinsic evidence of intent admissible] is not limited to cases where it is determined that the language used is ambiguous. Any determination of meaning or ambiguity should only be made in the light of the relevant evidence of the situation and relations of the parties, the subject matter of the transaction, preliminary negotiations and statements made therein, usages of trade, and the course of dealing between the parties. . . . But after the transaction has been shown in all its length and breadth, the words of an integrated agreement remain the most important evidence of intention.”

The undisputed evidence on the record pertaining to the circumstances surrounding the execution of the L/W/M agreement and the conduct of the parties clearly supports the trial court’s finding that “the invention” included the manual reader. Indeed, the record is abundant with evidence that the parties, both before and after executing the L/W/M agreement, clearly intended that the manual reader was part of the invention they were trying to market.

On February 26, 1977, a little more than one month before they entered into the L/W/M agreement, the parties met with a potential licensee to display their invention. They demonstrated the manual reader as part of the invention and led the licensee to believe that the invention was “a complete system,” including the capillary tube-float device and a manual reader. Just over one month later, the parties entered into the licensing agreement with Becton, Dickinson and Company. In this agreement, the parties again referred to an “invention.” The plaintiffs conceded in their brief to the trial court that this use of the word “invention” referred both to the capillary tube-float device and to the manual reader.

Even more indicative of the intent of the parties than the circumstances surrounding the execution of the L/W/M agreement, however, is their subsequent conduct. Since signing the agreement in 1977, all of the parties have conducted themselves in a manner indicating that they intended “the invention” to include both the capillary tube-float device and the manual reader.

On April 20, 1977, nineteen days after they executed the L/W/M agreement, the parties issued a check from their partnership account to pay their patent attorney for processing the patent application for the manual reader. Wardlaw, in whose name the patent for the manual reader was initially registered, voluntarily assigned one-third interests in the manual reader patent to Levine and Massey. Since 1977, the parties have shared equally in the royalties of the manual reader and there is no evidence that Levine or Wardlaw ever contested Massey’s share of the royalties that Massey received under their agreement with the eventual licensee, Becton, Dickinson and Company. Later, in a “proposal for the development” of the auto reader, Wardlaw admitted that Massey was “one of the participants in the development of the original [capillary tube-float device] and reader . . . .” (Emphasis added.)

Finally, the three inventors shared in the royalties on the auto reader for more than one year before the plaintiffs brought this action. During this time, Massey was paid approximately $500,000 in royalties on the auto reader by Becton, Dickinson and Company. Indeed, Wardlaw and Levine brought this action only after Massey refused Levine’s request to modify the L/W/M agreement in order to cut off Massey’s rights to the royalties in the auto reader commencing in 1996.

We have repeatedly held that “[i]n construing the intended meaning of terms in a contract, the conduct of the parties regarding their use is a proper consideration.” Lar-Rob Bus Corp. v. Fairfield, 170 Conn. 397, 407-408, 365 A.2d 1086 (1976). Indeed, their conduct “is given great weight in the interpretation of the agreement.” (Emphasis added.) 2 Restatement (Second), Contracts § 202 (4) (1981). This is so because “[t]he parties to an agreement know best what they meant, and their action under it is often the strongest evidence of their meaning.” Id., § 202, comment (g). In this case, the conduct of the parties strongly supports the trial court’s finding that the L/W/M agreement’s reference to “the invention” included both the capillary tube-float device and the manual reader.

Three years ago, in the case of Voll v. Lafayette Bank & Trust Co., 223 Conn. 419, 613 A.2d 266 (1992), this court succinctly summarized both the role of the trial court in interpreting contracts and the standard of review we employ in reviewing the trial court’s findings in this regard. Justice Callahan, writing for the court, wrote that “[a] contract is to be construed according to what may be assumed to have been the understanding and intention of the parties. Ginsberg v. Mascia, 149 Conn. 502, 505-506,182 A.2d 4 (1962). The intention of the parties is a question of fact to be determined from the language of the contract, the circumstances attending its negotiation, and the conduct of the parties in relation thereto. Kakalik v. Bernardo, 184 Conn. 386, 393, 439 A.2d 1016 (1981). The trial court’s finding of fact with respect to intent is reversible on appeal only if the court’s finding was clearly erroneous. A. Dubreuil & Sons, Inc. v. Lisbon, 215 Conn. 604, 609-10, 577 A.2d 709 (1990); Kakalik v. Bernardo, supra [393].” (Internal quotation marks omitted.) Voll v. Lafayette Bank & Trust Co., supra, 426. That, of course, is not the case here. The evidence conclusively supports the trial court’s factual determination that the parties intended that the term “the invention” in the L/W/M agreement include the manual reader. This court, therefore, should affirm the judgment of the trial court.

II

Even if the majority is correct that the meaning of the contract must be determined from the “four corners” of the agreement, however, no one claims that this rule has any application when the contract itself is ambiguous. See, e.g., TIE Communications, Inc. v. Kopp, 218 Conn. 281, 288-89, 589 A.2d 329 (1991); Cody v. Remington Electric Shavers, 179 Conn. 494, 500, 427 A.2d 810 (1980). Although the majority reads the L/W/M agreement as a model of clarity, I find it to be patently ambiguous as to the meaning of the word “invention,” thereby requiring the court to consider extrinsic evidence bearing on the intention of the parties.

The first contract recital provides, in part, that “whereas, the parties have jointly invented a method and apparatus for the measurement of blood counts and other similar tests for which they have made applications for United States Letters Patent, Serial No. 673, 058, filed April 2, 1976, and indicated as being allowable on December 17, 1976, and desire to define their rights and interests in said invention and in any Letters Patent which they or any of them may obtain relating to the invention . . . .” The majority uses the wording of this recital to conclude that “[t]he only invention to which those particulars apply is the jointly invented capillary tube-float device.”

If this reading of the contract is correct, however, then the first operative paragraph of the agreement is wholly without purpose. That paragraph provides that “[t]he parties shall apply through their patent attorney for and endeavor to obtain in their joint names Letters Patent of the United States for said invention, and any Letters Patent obtained therefrom shall be held by them in equal shares as tenants in common.” (Emphasis added.) At the time the parties entered into this agreement, however, they already had applied for and endeavored to obtain patents for the capillary tube-float device. In fact, they had filed the patent application, Serial No. 673,058, with the United States Patent Office on April 2, 1976, one full year earlier. The Patent Office had ruled on December 17, 1976, four months before the parties executed the contract, that the application for the patent was allowable. Yet this paragraph of the L/W/M agreement clearly contemplated a patent which the parties would apply for and seek in the future and which would be included in the contract term “invention.” Obviously, the “plain language” of the agreement is not so plain, and the term “invention” refers to more than simply the capillary tube-float device. The exact meaning of “invention,” therefore, can be ascertained only by reference to extrinsic evidence.

Furthermore, the recital to the contract quoted above is rife with other ambiguities. First, the reference to “the measurement of blood counts and other similar tests” (emphasis added) connotes equipment that includes the manual reader, the very purpose of which is to measure blood counts.

Second, the contract refers to “applications for United States Letters Patent,” but goes on to list only one serial number for these patent applications. (Emphasis added.) As indicated above, one week after signing this agreement, the parties paid their attorney for processing a patent application for the manual reader, and the patent was awarded shortly thereafter. Indeed, as the defendant explained in his posttrial brief to the trial court, “[t]he only reason that the [manual] reader instrument was not listed by serial number in the [L/W/M agreement] . . . was because the patent application for the reader had not been assigned a serial number by that date.” The reference to “applications,” therefore, can be construed as meaning the patent for the manual reader. (Emphasis added.)

Third, the parties refer specifically to future patents, which also can be construed as relating to the patent application for the manual reader.

Finally, the contract as a whole, including the description of the measurement of blood counts, clearly contemplates the application for additional patents and the making of additional improvements, all of which make ambiguous the meaning of the term “invention.” Even if the “four corners” rule applies, therefore, these ambiguities should prevent this court from attempting to discern the meaning of the contract without referring to extrinsic evidence to ascertain the intent of the parties.

Accordingly, it is clear that, pursuant to the L/W/M agreement, the named defendant is entitled to a one-third share of the royalties on the auto reader. Therefore, I respectfully dissent.

       “Domination” refers to “that phenomenon, which grows out of the fact that patents have claims, whereunder one patent has a broad or ‘generic’ claim which ‘reads on’ an invention defined by a narrower or more specific claim in another patent, the former ‘dominating’ the latter because the more narrowly claimed invention cannot be practiced without infringing the broader claim. ... In possibly simpler terms, one patent dominates another if a claim of the first patent reads on a device built or process practiced according to the second patent disclosure.” In re Kaplan, 789 F.2d 1574, 1577 (Fed. Cir. 1986).

       The plaintiffs’ complaint also contained an interpleader count requesting that Becton, Dickinson be required to make any royalty payments to the court. The trial court denied the interpleader, and the plaintiffs have not appealed from that denial.

       The defendant also filed three special defenses and a three count counterclaim in answer to the plaintiffs’ complaint. The counterclaim was subsequently withdrawn. The special defenses were found to be without merit by the trial court.

       Responding to the defendant’s motion, the trial court rendered an articulation of its original judgment. The articulation, however, is self-contradictory. Therefore, we assume that the court’s original memorandum of decision expresses the reasoning for the trial court’s judgment. In addition, the articulation is not directly relevant to our determination of the plaintiffs’ claims.

       On his cross appeal, the defendant raised the issue of whether the trial court properly found that the defendant was entitled to royalties from sales of the auto reader only for the life of the manual reader patent. Because we reverse the judgment of the trial court, we need not address this issue.

       See footnote 1.

       The dissent cites Sims v. Honda Motor Co., 225 Conn. 401, 623 A.2d 995 (1993), for the proposition that this court has rejected the “four comers” doctrine of contract interpretation. Sims, however, was a narrow exception to the general rule of contract construction. “We recognize that our conclusion is a departure from the general rule of contract construction that unambiguous contract provisions are to be given their plain meaning without reference to evidence outside the four corners of the agreement. . . . Rigid application of that general rule would, however, frustrate the purposes of [General Statutes] § 52-572e, which counsels against uncritical enforcement of boilerplate general release language and, therefore, justifies treating such language differently from how we treat other contractual provisions. Accordingly, we hold that, in light of the purposes of § 52-572e, general releases like that executed by Sims are not subject to that traditional rule of contract construction.” (Citations omitted.) Id., 415. Because the present case does not frustrate the purpose of a remedial statute, we see no justification for treating it differently than other contractual provisions with definitive language.

       “WHEREAS, the parties have jointly invented a method and apparatus for the measurement of blood counts and other similar tests for which they have made applications for United States Letters Patent, Serial No. 673,058, filed April 2, 1976, and indicated as being allowable on December 17, 1976, and desire to define their rights and interests in said invention and in any Letters Patent which they or any of them may obtain relating to the invention . . . .”

       In purporting to determine the intent of the parties in light of the surrounding circumstances, the dissent ignores the very language employed by the parties to express their intent—the words of the contract. Not only would the dissent’s interpretation alter the meaning of some of the contract phrases (e.g., “jointly invented” apparently would mean “invented by Wardlaw and then assigned to Levine and Massey”), but the very purpose for entering into the agreement would be abrogated. The purpose of the agreement obviously was to ensure that if one of the parties invented a device “which relate[s] to the use of capillary tubes” (emphasis added), he would not be obligated to share the proceeds reaped from that device unless the claims contained in its patent were dominated by the claims contained in the patent of the capillary tube-float device. The auto reader patent was not dominated by the claims contained in the capillary tube-float device. In an attempt to ascertain the intent of the parties, the dissent concludes that the parties’ intent was to enter into a meaningless agreement.

       The contract also referred intermittently to “the invention” as “the basic invention.” Neither party contends that “the basic invention” means something different than “the invention.”

       The L/W/M agreement read as follows:
      “AGREEMENT
      “This agreement entered into this 1st day of April, 1977, by and between Stephen C. Wardlaw, residing at 16 Pine Orchard Road, Branford, Conn., Robert A. Levine, residing at 31 Pilgrim Lane, Guilford, Conn., and James V. Massey III, residing at 80 Driftwood Lane, Trumbull, Conn.
      “whereas, the parties have jointly invented a method and apparatus for the measurement of blood counts and other similar tests for which they have made applications for United States Letters Patent, Serial No. 673,058, filed April 2,1976, and indicated as being allowable on December 17,1976, and desire to define their rights and interests in said invention and in any Letters Patent which they or any of them may obtain relating to the invention; and
      “whereas, the parties have entered into a license agreement with Becton, Dickinson and Company, dated effective as of April 1, 1977.
      “now, therefore, the parties agree as follows:
      “1. Application and Joint Ownership. The parties shall apply through their patent attorney for and endeavor to obtain in their joint names Letters Patent of the United States for said invention, and any Letters Patent obtained therefrom shall be held by them in equal shares as tenants in common.
      “2. Costs and Profits to be Shared. All fees, charges and expenses incurred in connection with the development of the invention and obtaining, maintaining, and protecting the said Letters Patent shall be borne and paid by the parties in equal shares; and all profits, royalties or other payments derived by the parties from the invention or Letters Patent shall be divided equally among them.
      “3. Restrictions on Transfer. None of the parties shall sell, assign, or mortgage his share or interest in the invention or said Letters Patent or grant any license thereunder without the previous written consent of the others.

        “4. Improvements. If any of the parties at any time shall make or acquire any improvement or apply for or obtain any patent for any improvement upon said invention, he shall forthwith disclose the same to the others, and shall execute and do all applications, documents, instruments, and other things necessary for obtaining Letters Patent for and assigning the same, as the case may require, to the end that the same shall be vested in the parties in equal undivided shares or interest, and the same shall be held by the parties upon the same terms and conditions as the Letters Patent to be applied for under Paragraph 1 hereof.
      “However, improvements made by and Letters Patent issuing therefrom which relate to the use of capillary tubes, but which are not dominated by any claims contained in any of the patent applications or Letters Patent of the basic invention, shall not be subject to equal shares among the parties. Any such improvements and Letters Patent not dominated by the claims of the basic invention shall remain the property of the inventor. In the event that such improvements of Letters Patent, because of the language of the aforesaid license agreement with Becton, Dickinson, become subject to its royalty provisions, then any such royalties paid by Becton, Dickinson to parties other than the inventor shall be paid over by such parties to the inventor. The calculations for such payment will be made to the end that the inventor shall be made whole as though he had licensed his improvement or Letters Patent individually to Becton, Dickinson and Company.
      “in witness whereof, we caused our signatures and seals to be affixed hereto.
      [Signatures of Stephen C. Wardlaw, Robert A. Levine and James V. Massey III]”

       The trial court noted that “[i]t is conceded that the defendant Massey has a one-third interest in the Manual Reader patent.” After reciting detailed testimony, the trial court concluded: “In short the combination of Dr. Ward-law’s diary of the invention process and Dr. Levine’s testimony appears to make it clear that sometime in 1976, clearly prior to the parties’ agreement in 1977, the Manual Reader in the form that was introduced at trial was well along in the invention process. Because the Manual Reader appears to have existed as a clear concept, it is the holding of the court that it is within the contemplation of the parties when they talk about ‘the invention’ in the agreement between the parties to share profits.”

       Moreover, “the determination of what the parties intended to encompass in their contractual commitments is a question of the intention of the parties, and an inference of fact. As an inference of fact, it is not reversible unless the trial court could not reasonably have arrived at the conclusion that it reached. Otto Contracting Co. v. S. Schinella & Sons, Inc., 179 Conn. 704, 709, 427 A.2d 856 (1980); Hydro-Hercules Corporation v. Gary Excavating, Inc., 166 Conn. 647, 653, 353 A.2d 714 (1974); Bianco v. Darien, 157 Conn. 548, 557, 254 A.2d 898 (1969); Finlay v. Swirsky, 98 Conn. 666, 671, 120 A. 561 (1923).” Bead Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266, 274-75, 439 A.2d 314 (1981).

       The majority contends that, according to this interpretation of the L/W/M agreement, “the very purpose for entering into the agreement would be abrogated” and the document would become a “meaningless agreement.” See footnote 9 of the majority opinion. These are incorrect statements. The contract sets forth the rights of the parties with respect to the capillary tube-float device and the manual reader, and it governs the rights of the parties in the event that one of them invents an improvement on those devices “which relatefs] to the use of capillary tubes.” In such a case, if none of the patent claims of the capillary tube-float device and none of the patent claims of the manual reader dominate any of the patent claims of the improvement, then the inventor of that improvement need not share credit with the other parties. For all other improvements, however, the contract provides that the inventor must share credit with the other parties. The contract, therefore, performs a valid function.

       The trial court found that the manual reader patents, in the parlance of patent law, “dominated” those of the auto reader. “By domination we refer, in accordance with established patent law terminology, to that phenomenon, which grows out of the fact that patents have claims, where-under one patent has a broad or ‘generic’ claim which ‘reads on’ an invention defined by a narrower or more specific claim in another patent, the former ‘dominating’ the latter because the more narrowly claimed invention cannot be practiced without infringing the broader claim. To use the words of which the board seemed to be enamored, the broader claim ‘embraces’ or ‘encompasses’ the subject matter defined by the narrower claim. In possibly simpler terms, one patent dominates another if a claim of the first patent reads on a device built or process practiced according to the second patent disclosure.” In re Kwplan, 789 F.2d 1574, 1577 (Fed. Cir. 1986). The agreement clearly provided that if either Levine, Wardlaw or Massey made or acquired any improvement on the invention, and that improvement was dominated by the invention, then the remaining inventors would share equally in those royalties for the improvement.


source: Caselaw Access Project

author: Palmer, J.

license: Public Domain

text:
    Naugatuck Savings Bank v. Anthony T. Fiorenzi et al.
    (15083)
    Callahan, Norcott, Katz, Palmer and M. Hennessey, Js.

      Argued November 30, 1994
    decision released February 21, 1995

      Raymond J. Antonacci, for the appellant (plaintiff).

      Frederick W. Krug, for the appellee (defendant Cynthia A. Sodlosky).
   Palmer, J.

The dispositive issue in this appeal is whether a mortgagee is entitled to foreclose an open-end mortgage purporting to secure the obligation of a mortgagor who is secondarily liable for an open-end loan when the mortgage deed fails to comply with the provisions of General Statutes § 49-4b. The plaintiff, Naugatuck Savings Bank, initiated proceedings in the Superior Court to foreclose its mortgage on certain property that the defendant, Cynthia A. Sodlosky, had mortgaged to the plaintiff in 1989. After a trial, the court concluded that the plaintiff was not entitled to a judgment of foreclosure and, accordingly, rendered judgment for the defendant. The plaintiff appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c). We affirm.

The following facts are not in dispute. Beginning in January, 1987, Anthony T. Fiorenzi and Edward J. Sodlosky III (developers) sought to develop a thirteen acre parcel of land located in the borough of Naugatuck into a twenty lot subdivision. The Naugatuck planning and zoning commission approved the developers’ subdivision application, subject to the developers’ satisfaction of a road bond requirement in the amount of $361,080. The developers, in order to satisfy the bond requirement, applied for a loan from the plaintiff, who agreed to issue a letter of credit to Naugatuck in the amount of the required bond. Accordingly, on March 18, 1988, the developers signed a promissory note payable to the plaintiff for “$361,080.00 or so much thereof as may from time to time be advanced” under the note. On the same date, the plaintiff issued a letter of credit to Naugatuck in the amount of $361,080 in satisfaction of the borough’s bond requirement. The expiration date of the letter of credit was March 18, 1990.

As work proceeded on the subdivision, the developers encountered unanticipated problems that increased the projected cost of the development. In response to the developers’ request for additional funds, the plaintiff agreed to an extensive refinancing package for the project on August 10, 1989. As a condition of the refinancing, however, the plaintiff required that the defendant guaranty the developers’ $361,080 obligation to the plaintiff and, in addition, that the defendant convey to the plaintiff, as security for her guaranty, a mortgage on certain property that she owned in Middlebury. The defendant agreed to do so, and executed a mortgage on her Middlebury property to the plaintiff. The mortgage contained the following relevant terms: “Whereas Edward J. Sodlosky, III is . . . justly indebted to [the Naugatuck Savings Bank] in the sum of Three Hundred Sixty-One Thousand Eighty & 00/100 Dollars with interest thereon, payable on demand together with reasonable attorney’s fees and all costs of collection which [Cynthia A. Sodlosky] has agreed to pledge the herein property as security therefore. Now therefore if said note shall be well and truly paid according to its tenor, then this deed shall be void, otherwise to remain in full force and effect.”

The developers and the plaintiff also signed an agreement on August 10,1989, specifying that the mortgage on the defendant’s Middlebury property would be released when and if Naugatuck reduced the bond requirement by $125,000 or more. On February 5, 1990, Naugatuck reduced the bond requirement from $361,080 to $253,000, a reduction insufficient to release the defendant’s mortgage. The letter of credit subsequently lapsed according to its terms on March 18, 1990. Up to that point, Naugatuck had not made any claim against the plaintiff for payment pursuant to the letter of credit.

Following discussions thereafter between the developers and the plaintiff to “reissue” the letter of credit, the plaintiff issued a second letter of credit to Naugatuck on June 13, 1990, in the amount of $253,000. Upon its receipt of the second letter of credit, Naugatuck released the first letter of credit and returned it to the plaintiff. By its terms, the second letter of credit was to expire on March 18,1991, unless the plaintiff agreed to extend the credit beyond that date.

In the summer of 1990, negotiations took place between the developers and the plaintiff concerning the continuation of the line of credit. The plaintiff informed the developers and Naugatuck in December, 1990, however, that it would not renew the second letter of credit. Thereafter, Naugatuck demanded payment in the amount of $253,000 from the plaintiff under the terms of the letter of credit. The plaintiff honored Naugatuck’s demand and made payment in full. The plaintiff, in turn, sent the developers a written notice in March, 1991, that Naugatuck’s draft had “activated the line of credit which was to fund the letter should a call be made on it,” and demanded payment of $253,000 from the developers in accordance with the terms of the promissory note. When the developers failed to pay the plaintiff pursuant to the note, the plaintiff initiated this action to foreclose on the defendant’s mortgage.

The trial court’s decision rejecting the plaintiff’s claim for foreclosure rests on three alternative bases. First, the trial court concluded that an open-end mortgage securing the guaranty of a party secondarily liable for an open-end loan is enforceable only if the mortgage satisfies the requirements of § 49-4b. Because the mortgage signed by the defendant did not meet those requirements, the trial court concluded that the plaintiff was not entitled to a judgment of foreclosure. Second, the trial court found that the mortgage deed’s reference to the term “note” was ambiguous, and, further, that the defendant understood the reference to limit the duration of her obligation under the mortgage to the duration of the first letter of credit. In accordance with these findings, the trial court concluded that the defendant’s guaranty did not extend beyond March 18,1990, the expiration date of the first letter of credit and prior to the developers’ default on the promissory note. Finally, the trial court ruled that the mortgage deed failed to comply with the statute of frauds, General Statutes § 52-550, and, therefore, that the plaintiff could not enforce the mortgage against the defendant.

The plaintiff challenges each of these conclusions on appeal. First, the plaintiff maintains that the mortgage is enforceable notwithstanding its noncompliance with § 49-4b. Specifically, the plaintiff contends that strict adherence to the statutory requirements is not necessary when, as here, the original mortgagee seeks to enforce the mortgage against the original mortgagor. In such circumstances, the plaintiff argues, § 49-4b does not supplant equitable principles recognized in the common law of mortgages that would permit enforcement of the mortgage in this case. Second, the plaintiff claims that the term “note” in the mortgage deed unambiguously refers to the promissory note signed by the developers, and, accordingly, that the defendant remained liable for the developers’ obligation to the plaintiff as of the date of the developers’ default on the promissory note. Finally, the plaintiff argues that the statute of frauds does not apply to the type of guaranty at issue here and that, in any event, there has been no showing of fraud in this case.

We agree with the trial court that the requirements of § 49-4b are mandatory. Accordingly, because the mortgage deed did not substantially comply with the terms of § 49-4b, the trial court properly denied the plaintiff’s claim for a judgment of foreclosure against the defendant.

I

Before turning to an analysis of the plaintiffs claim under § 49-4b, we briefly review the law governing letters of credit. Although our disposition of the plaintiff’s claim under § 49-4b renders it unnecessary for us to resolve the other issues raised by this appeal, a discussion of the law pertaining to letters of credit will serve both to clarify the confusion caused by the language of the mortgage deed, and to illustrate why that confusion could have been avoided had the deed complied with the requirements of § 49-4b.

“The law that governs letters of credit in this state is contained in article 5 of the Uniform Commercial Code, General Statutes §§ 42a-5-101 through 42a-5-117. A letter of credit, under the code, is an engagement by a bank or other person, made at the request of a customer, that the issuer will honor drafts or other demands for payment upon compliance by the beneficiary with the conditions specified in the credit. General Statutes § 42a-5-103 (1) (a); New York Life Ins. Co. v. Hartford National Bank & Trust Co., 173 Conn. 492, 498, 378 A.2d 562 (1977); B. Clark, The Law of Bank Deposits, Collections and Credit Cards (Rev. Ed. 1981) § 8.2; J. White & R. Summers, Uniform Commercial Code (2d Ed. 1980) c. 18.” Armac Industries, Ltd. v. Citytrust, 203 Conn. 394, 397-98, 525 A.2d 77 (1987).

“Letter of credit transactions have a tripartite nature because they involve three separate commitments. The first is the underlying contract between the customer and the beneficiary, here the [road bond agreement between the developers and Naugatuck]. The second is the contract between the customer and the issuer, here the contract between [the developers and the plaintiff] concerning the issuance of the credit in exchange for the customer’s promise to reimburse the issuer for payments made in conformance with the terms of the credit. The third is the letter of credit itself, obligating the issuer to honor proper drafts or other demands for payment by the beneficiary, if accompanied by the documentation required by the credit.” Id., 398; see also 2 J. White & R. Summers, supra, (3d Ed. 1988) § 19-2, pp. 7-11.

In the law of letters of credit, “the single most important legal principle is the independence of these three commitments . . . .” Armac Industries, Ltd. v. Citytrust, supra, 203 Conn. 398. Although the underlying contract, the letter of credit and the reimbursement agreement together define the parties’ relationship, each of these agreements creates a separate and distinct obligation. Thus, no obligation in the three party arrangement is contingent on the performance of any of the other obligations. 2 J. White & R. Summers, supra, (3d Ed. 1988) § 19-2, p. 8. For example, the issuer’s obligation to honor a proper payment demand by the beneficiary is not contingent on the beneficiary’s performance of the underlying contract with the customer. General Statutes § 42a-5-114 (1); New York Life Ins. Co. v. Hartford National Bank & Trust Co., supra, 173 Conn. 497-99. Similarly, the issuer’s obligation to honor payment demands by the beneficiary is independent of any obligation of the customer to the issuer. 2 J. White & R. Summers, supra, (3d Ed. 1988) § 19-2, p. 9.

In seeking to apply these general principles to the transactions at issue in this case, the trial court found that “[t]he term ‘note’ in the mortgage deed is ambiguous because it could refer either to the promissory note dated March 18, 1988, or [to the first] letter of credit . . . both of which evidence a debt owed by Edward Sodlosky III in favor of [the plaintiff] in the amount of $361,080.00.” The trial court further found that “Cynthia Sodlosky understood that the mortgage secured her husband’s debt obligation in the amount of $361,080.00 pursuant to [the first] letter of credit . . . which expired on March 18, 1990.” Consistent with these findings, the court concluded that the mortgage secured the developers’ obligation to the plaintiff only until the expiration of the first letter of credit on March 18,1990, and, accordingly, that the defendant was no longer liable as a guarantor of that obligation at the time of the developers’ default on the promissory note.

As the trial court determined, the defendant’s apparent confusion as to the nature of her obligation under the mortgage deed stemmed from the failure of the deed adequately to describe the obligation. We disagree with the trial court, however, that the term “note” in the mortgage deed could have referred to the first letter of credit. As we have discussed, the obligation created by the letter of credit rested solely and exclusively with the plaintiff, not with the developers. As a matter of law, therefore, the letter of credit, contrary to the conclusion of the trial court, did not “evidence a debt owed by Edward Sodlosky III.” Moreover, although one who provides a secondary guaranty for the obligation of another may limit that guaranty to a period shorter than the duration of the underlying obligation; see General Statutes § 49-4b (d) (2); there is nothing in any of the documents relating to the transactions, including the promissory note, the letters of credit and the mortgage deed, to support the conclusion that the defendant’s guaranty was so circumscribed. In view of the paucity of information contained in the mortgage deed concerning the nature of the defendant’s guaranty, however, the defendant’s apparent misunderstanding as to the duration of her obligation under the deed is not surprising. Any such confusion could have been avoided had the mortgage deed complied with the requirements of § 49-4b, to which we now turn.

II

The question of whether the mortgage deed’s conceded noncompliance with § 49-4b renders the mortgage unenforceable is one of first impression for this court. On the basis of the language of the statute and the applicable legislative history, we are persuaded that the legislature intended the provisions of § 49-4b to be mandatory.

Our starting point is the language of the statute itself. We have recently identified several linguistic factors significant to a determination of whether the provisions of a mortgage statute are mandatory: the use of the term “required” in the title of the statute, the use of mandatory language in the body of the statute, and the use of words of specific instruction in describing the standards established by the statute. Dart & Bogue Co. v. Slosberg, 202 Conn. 566, 573-75, 522 A.2d 763 (1987). Each of these considerations supports the conclusion that § 49-4b is mandatory.

To begin with, the title of § 49-4b refers to “Mortgage deed requirements.” (Emphasis added.) Similarly, General Statutes § 49-5b, which we have construed to set forth minimum requirements necessary to satisfy the statute of frauds, is entitled “Required information in a mortgage contingency clause.” (Emphasis added.) See Maturo v. Scranton, 177 Conn. 569, 571 n.1, 418 A.2d 928 (1979). By contrast, the title to General Statutes § 49-3 1b, which speaks in terms that we have held not to be mandatory, contains no language “to indicate that the information described in the statute is ‘required.’ ” Dart & Bogue Co. v. Slosberg, supra, 202 Conn. 573.

The language contained in the body of § 49-4b also supports the conclusion that its provisions are mandatory. Section 49-4b (a) states, without qualification, that a mortgage in compliance with its terms “shall secure” the guaranty of secondary liability. This unqualified language, similar to the mandatory provisions of § 49-5b; see Dart & Bogue Co. v. Slosberg, supra, 202 Conn. 574 (“[s]ection 49-5b . . . contains no qualifying language, providing directly that a mortgage contingency clause ‘shall satisfy’ the statute of frauds if it contains the specified provisions”); see also Maturo v. Scranton, supra, 177 Conn. 571 n.l; stands in contrast to the nonmandatory provisions of General Statutes § 49-3 (mortgages are valid to secure future advances when they contain stipulated clauses that the statute describes as “sufficiently definite and certain” [emphasis added]); see Dart & Bogue Co. v. Slosberg, supra, 574; see also Sadd v. Heim, 143 Conn. 582, 589, 124 A.2d 522 (1956); and § 49-31b (mortgage deed “shall be deemed to give sufficient notice” if it provides the information enumerated therein [emphasis added]). As we have previously indicated, the use of unqualified language like that contained in § 49-4b evinces a legislative intent that the statutory provisions are to be construed as mandatory. Dart & Bogue Co. v. Slosberg, supra, 574-76.

Finally, § 49-4b describes its standards in terms of specific, rather than general, instruction. Section 49-4b provides that the following information shall be included in an open-end mortgage deed securing the obligation of a guarantor who is secondarily liable for an open-end loan: (1) the title “Open-End Mortgage”; (2) a description of the loan constituting the underlying obligation for which the mortgagor is secondarily liable, including the name and address of the person primarily responsible for the underlying obligation, a statement that the obligation permits advancement and, if applicable, that such advancements are made pursuant to a revolving loan agreement, the full amount of the loan, and the terms for repayment of the loan; and (3) a comprehensive description of the mortgagor’s secondary liability, including the amount of the obligation undertaken if different from the underlying obligation, the duration of the secondary liability, any conditions by which the mortgagor might become responsible for paying the underlying obligation, and any conditions that might relieve the mortgaged property from the mortgage obligation. General Statutes § 49-4b (b) through (d). The comprehensive and detailed nature of the instructions contained in § 49-4b evidences an intent by the legislature that the requirements are to be construed as mandatory. See Dart & Bogue Co. v. Slosberg, supra, 202 Conn. 574-75.

Moreover, the inclusive language of § 49-4b is to be compared with the “open-ended phraseology” of § 49-3 lb (a); Dart & Bogue Co. v. Slosberg, supra, 202 Conn. 574; the requirements of which are satisfied if the mortgage deed “ ‘furnishes information from which can be determined’ the date, principal amount and maximum term of the underlying obligation.” Id. Thus, while § 49-31b (a) describes only a general duty to “[furnish] information,” § 49-4b specifically enumerates, in detailed mandatory and comprehensive terms, the information that is necessary to satisfy the requirements for an open-end mortgage securing a third person’s guaranty of an open-end loan.

The applicable legislative history also reflects an intention by the legislature that a mortgage subject to § 49-4b shall be enforceable only if the deed satisfies the statute’s requirements. Proponents of House Bill 6077, subsequently enacted and codified as § 49-4b; see footnote 14; explained that the proposed legislation established a new type of mortgage security. For example, Senator Myron Bailen, in expressing his support for the bill, stated that “[t]his bill would permit open-end mortgages on real property to be used as security for commercial revolving loans . . . [and] would also permit a person who guarantees an open-end loan, including a commercial revolving loan agreement, to secure his guarantee with a mortgage.” 22 S. Proc., Pt. 10, 1979 Sess., p. 3261; see also 22 H.R. Proc., Pt. 17, 1979 Sess., p. 5860, remarks of Representative John Sponheimer (“this Bill . . . concerns itself with open end mortgages and revolving credit. What this Bill does is allow revolving credit to be secured for real estate mortgage[s]. Under existing Connecticut law, it is not possible to secure revolving credit through a mortgage, and this would allow commercial entities to be able to now secure their transactions through revolving credit situations”). These remarks indicate that the legislature, by enacting § 49-4b, understood that it was authorizing a type of secured guaranty not enforceable under the common law of this state.

The plaintiff claims that the mortgage executed by the defendant is enforceable under common law standards, citing as support the principle that a mortgage deed’s failure to describe the debt with exactitude does not necessarily render the mortgage unenforceable in a foreclosure action by the mortgagee against the mortgagor. See, e.g., Burt’s Spirit Shop, Inc. v. Ridgway, 215 Conn. 355, 576 A.2d 1267 (1990); State National Bank v. Dick, 164 Conn. 523, 325 A.2d 235 (1973). The plaintiff has cited no case, however, in which this principle has been applied to an action to foreclose on an open-end mortgage securing the obligation of a mortgagor who is secondarily liable for an open-end loan. Moreover, even if state common law, contrary to the assumption of the legislature, does permit the use of an open-end mortgage as security for the obligation of a person secondarily liable for an open-end loan, we nonetheless conclude that the provisions of § 49-4b are mandatory. The legislative history of § 49-4b reflects the legislature’s understanding that it was establishing the exclusive means by which a mortgagee could enforce a mortgage that secured a guaranty of secóndary liability for an open-end loan. When, as here, the intent of the legislature is clearly expressed in the language and history of the statute, that intent must be given effect, even if the antecedent assumption of the legislature is mistaken. See Frillici v. Westport, 231 Conn. 418, 432, 650 A.2d 557 (1994) (“[t]hat the legislative branch enacts legislation based upon what may be a reasonable but mistaken factual or legal assumption is not a sufficient justification for the judicial branch, in interpreting and applying that legislation to a particular set of facts, to fail to give proper effect to the legislation”); see also Fleming v. Garnett, 231 Conn. 77, 91-92, 646 A.2d 1308 (1994) (“ ‘[o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature’ ”); In re Valerie D., 223 Conn. 492, 512, 613 A.2d 748 (1992) (“[i]t is axiomatic that the process of statutory interpretation involves a reasoned search for the intention of the legislature”).

Accordingly, we conclude that § 49-4b establishes mandatory requirements for an open-end mortgage securing the obligation of a person secondarily liable for an open-end loan. Because the mortgage deed conveyed by the defendant to the plaintiff did not comply with the terms of § 49-4b, the trial court properly determined that the plaintiff was not entitled to a judgment of foreclosure against the defendant.

The judgment is affirmed.

In this opinion the other justices concurred.

       General Statutes § 49-4b provides: “open-end mortgage as security FOR GUARANTY OF AN OPEN-END LOAN! MORTGAGE DEED REQUIREMENTS. description of loan and secondary liability, (a) If an open-end mortgage meets the requirements of this section, such mortgage shall secure the obligation of any person who is secondarily liable for an open-end loan, including (1) a commercial revolving loan, as defined in subsection (c) of section 49-2, without regard to whether the authorized amount of indebtedness of such revolving loan constituting the underlying obligation shall at that time or at any time have been fully advanced, (2) future advances under such open-end loan, to the extent that such mortgagor is secondarily liable for such future advances, and (3) a letter of credit. Such mortgagor’s secondary liability for such future advances shall be secured by such open-end mortgage equally with the obligation secured by such mortgage at the time of recording such mortgage deed and shall have the same priority over the rights of others who may acquire any rights in, or liens upon, the mortgaged real estate subsequent to the recording of such mortgage deed.
      “(b) The heading of such mortgage deed shall be clearly entitled ‘Open-End Mortgage'.
      “(c) The loan constituting the underlying obligation for which the mortgagor is secondarily liable, which secondary liability is secured by such open-end mortgage, shall be described in such open-end mortgage deed. A description of such loan meets the requirements of this subsection if such open-end mortgage deed states: (1) The name and address of the person who is primarily liable for such loan; (2) that such underlying obligation specifically permits such advancements and, if applicable, that such advancements are made pursuant to a revolving loan agreement; (3) the full amount of the loan authorized; and (4) the terms of repayment of such loan.
      “(d) The secondary liability of the mortgagor shall be described in such open-end mortgage deed. A description of such secondary liability meets the requirements of this subsection if such open-end mortgage deed states: (1) The full amount of the obligation of the mortgagor if such amount is different from the full amount of the loan authorized for the underlying obligation; (2) the date, if any, on which the secondary liability of the mortgagor will terminate; (3) the conditions, if any, which will cause the mortgagor to pay all or part of the loan constituting the underlying obligation; and (4) the conditions, if any, which will relieve the mortgagor of liability for all or any part of the loan constituting the underlying obligation or which will release all or part of the mortgaged premises from the lien of such open-end mortgage.
      “(e) As used in this section, ‘mortgagee’ includes any assignee of the mortgagee, and ‘mortgagor’ includes any assignee of the mortgagor, and ‘any person who is secondarily liable’ means any person who is secondarily liable for or who is also liable for, or who has guaranteed or endorsed an open-end loan.”

       The plaintiffs action also contained claims against other defendants arising out of the transactions that are the subject of this appeal. Those claims, however, are not relevant to this appeal.

       The trial court rendered judgment, in part, for the plaintiff on the defendant’s counterclaim, which alleged, inter alia, violations of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. The defendant has not appealed from that judgment.

       The defendant is the wife of Edward J. Sodlosky III.

       At the time the promissory note was signed, it was secured by two mortgages. Those mortgages are not at issue in this appeal.

       The developers’ loan application of June 6, 1990, states as the reason for the request: “Reissue bond for $253,000—to 3-18-91 replacing Letter of Credit [#1] ($361,080) backed by credit line secured by Anthony Fiorenzi and Edward Sodlosky III.”

       The trial court found that “[t]he mortgage signed by [the defendant] in favor of [the plaintiff] does not meet the requirements of General Statutes § 49-4b. The mortgage is not entitled ‘open-end mortgage.’ The mortgage does not identify the address of Edward Sodlosky, it does not describe the primary debt as open-ended, and it does not set forth the repayment terms of the primary debt. In addition, the mortgage does not state whether the secondary liability is extinguished on the repayment of the letter of credit or on some other repayment or condition.” The plaintiff does not dispute these conclusions.

       General Statutes § 52-550 provides: “statute of frauds; written agreement or memorandum, (a) No civil action may be maintained in the following cases unless the agreement, or a memorandum of the agreement, is made in writing and signed by the party, or the agent of the party, to be charged: (1) Upon any agreement to charge any executor or administrator, upon a special promise to answer damages out of his own property; (2) against any person upon any special promise to answer for the debt, default or miscarriage of another; (3) upon any agreement made upon consideration of marriage; (4) upon any agreement for the sale of real property or any interest in or concerning real property; (5) upon any agreement that is not to be performed within one year from the making thereof; or (6) upon any agreement for a loan in an amount which exceeds fifty thousand dollars.
      “(b) This section shall not apply to parol agreements for hiring or leasing real property, or any interest therein, for one year or less, in pursuance of which the leased premises have been or are actually occupied by the lessee, or any person claiming under him, during any part of the term.”

       The mortgage deed contains only one reference to the term “note,” which is not otherwise described or identified in the deed.

       We do not understand the trial court to suggest that the mortgage deed reasonably may be construed as a guaranty for the letter of credit. Such a construction would serve to place the defendant in the implausible position of having secured the plaintiffs obligation to Naugatuck, a bizarre result that neither party claims was intended.

       Because we resolve the defendant’s claim under § 49-4b in her favor; see part II of this opinion; we do not reach the issue of the defendant’s apparent good faith belief as to the limited duration of her obligation under the mortgage. We also do not consider the plaintiff’s claim that the statute of frauds, General Statutes § 52-550, is inapplicable to the mortgage deed in this case.

       Although we contrasted the language of § 49-4b to that of General Statutes § 49-31b (a) in Dart & Bogue Co. v. Slosberg, 202 Conn. 566, 573-75, 522 A.2d 763 (1987), wherein we concluded that § 49-31b (a) does not impose mandatory minimum requirements for mortgage deeds but, rather, creates a “safe harbor” for real property mortgages that comply with its terms, our holding in that case concerned only the proper construction of § 49-31b (a).

       As we have recently noted, it is helpful, in searching for an expression of legislative intent, to compare the statutory language at issue with other statutes governing the validity of mortgages that are contained in chapter 846 of the General Statutes. Dart & Bogue Co. v. Slosberg, supra, 202 Conn. 573.

       We note that House Bill 6077, subsequently enacted as Public Acts 1979, No. 79-359, and codified at § 49-4b, originally provided that an open-end mortgage “may secure” the obligation of any person who is secondarily liable for an open-end loan. 22 H.R. Proc., Pt. 17,1979 Sess., p. 5862. By amendment, however, the word “may” was changed to “shall,” and the bill was passed as amended. Id.

       Similarly, subsection (b) of § 49-4b states that the deed “shall be clearly entitled” in a prescribed manner; subsection (c) states that the underlying obligation “shall be described” in the mortgage deed; and subsection (d) states that the secondary liability also “shall be described” in the deed.

       As we have already indicated, mortgage deeds that include the information enumerated in § 49-4b will not be susceptible to misinterpretation of the kind that forms the core of the parties’ dispute in this case, a consideration that the legislature undoubtedly took into account in setting minimum standards for an open-end mortgage securing a guaranty of an open-end loan.

       We note that the legislature would have been empowered to supplant common law standards had it intended to do so. See, e.g., Lynn v. Hay-buster Mfg., Inc., 226 Conn. 282, 290, 627 A.2d 1288 (1993); Dart & Bogue Co. v. Slosberg, supra, 202 Conn. 572.

       We do not suggest that the proponents of § 49-4b necessarily were incorrect in assuming that mortgages of the type described in § 49-4b are unenforceable at common law. We need not resolve that issue because we conclude that the language and legislative history of § 49-4b indicate that the legislature intended to establish mandatory minimum standards for the enforceability of an open-end mortgage securing the obligation of a person who is secondarily liable for an open-end loan.