1846-1848 Co-Partnership with G. & E.M. Smith **
Bagley Controlled Factory - Not Factory Employees
Albert G. Bagley informal partnership - Albert G. Bagley, Gerrit Smith and Edgar M. Smith from May, 1846-November 30, 1846
Albert G. Bagley & Co., then Albert G. Bagley, Gerrit Smith and Edgar M. Smith from December 1, 1846-August 10, 1848.
In 1856, Bagley faced a lawsuit. A district attorney witness named W. Hawley purchased a pen from Bagley's store as evidence, and it was discovered that the pens were not stamped with the correct patent date as required by the patent law of August 29th, 1842. Bagley's pens were stamped with "A. G. Bagley Pat 1850" instead of "Jan 1, 1850," which could have resulted in a fine of $100 per item sold. Since Bagley was selling hundreds of these pens, he could have been ruined if he lost the case. However, Bagley argued that he was following the "spirit of the law" even though he failed to comply with some of the details. In the end, Judge Betts agreed with Bagley's argument and found him not guilty.
The Smiths informally announced dissolution of the co-partnership during Bagley's temporary absence from New York City on August 10th, 1848.
The Smith brothers took advantage of Bagley's patent marking legal case brought by the Manhattan District Attorney and used it as an opportunity to take his assets and start a new company called "E. and G. Smith Pen Co (Formerly AG Bagley)". Bagley was unhappy with this and took legal action against them, accusing them of breaching their partnership agreement and damaging his business through their advertisements. The judge ruled in Bagley's favor and awarded him a large sum of money for 1856, $7,500. The judgement prompted the Smith brothers to liquidate their jewelry business and they never advertised gold pen nib sales beyond 1856.