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REGINA MUSIC BOX CO. v. NEWELL et al.
(Circuit Court, S. D. New York. July 11, 1904.)
1. PATENTS-INFRINGEMENT-ESTOPPEL TO DENY VALIDITY.
Mortgage trustees of a corporation licensed under a patent, who have taken possession of the property on default, and through their agents have continued the business and to manufacture and sell the patented article, placing the patent stamp thereon, are estopped to deny the validity of the patent when sued for the infringement.
In Equity. Suit for infringement of patent. On demurrer to bill. Briessen & Knauth, for complainant.
Clifford E. Dunn, Esq., for defendants.
PLATT, District Judge. The second ground of demurrer is the only one pressed by the defendants, viz.: That the letters patent in suit are absolutely void for want of invention, by reason of matters patent upon their face, or of which the court will take judicial notice. By filing the demurrer the defendants admit the truth of certain salient facts alleged in the bill, which I will recount as clearly and briefly as time and capacity will permit. Complainant, having title to letters patent for music box, No. 500,371, did, on December 4, 1897, sue for infringement one Alfred E. Paillard, who sold in New York the infringing product of the factory of a corporation, F. G. Otto & Sons, of New Jersey. Said corporation paid for the defense of said suit and furnished Paillard with counsel. On June 28, 1898, after proofs had been taken, it was agreed between complainant and said corporation that a decree for a perpetual injunction should be entered against Paillard, and that said corporation should have a license, which was not assignable, transferable, or divisible, for the full term of the patent. This was done, and the corporation did business in New Jersey under the license. On April 1, 1900, the corporation became financially embarrassed, and made a mortgage to Trumbull and Lewis as trustees. On May 18, 1903, said corporation defaulted in the payments of interest, and said trustees took possession. Said trustees placed Madison, Otto, and Schaub, who had been managers of the corporation, in charge of its business as their agents, and as such agents the trio conducted the business. After obtaining the license, the corporation naturally placed the patent stamp on the music boxes which it made and sold, and since the three officers and managers have been in charge as agents for the trustees they have continued to make and sell music boxes with the patent stamp upon them. The five parties are jointly sued for infringe
Are the trustees in a position where they can avail themselves of the defense indicated by the demurrer? They insist that they can, because the license expired under its own terms by the transfer of possession. But they have permitted the former managers of the corporation to continue the manufacture of music boxes as their agents, and to place the patent stamp upon them, thereby leading the purchaser to believe
1. See Patents, vol. 38, Cent. Dig. § 184.
that the license still continues; and it would seem that in equity they are estopped from now attacking the validity of the patent, under which they were made by the corporation, and which it is now alleged the agents are assisting the trustees to infringe. It is not incumbent upon the court at this time to seek out the shoulders upon which the blame for the present situation should be placed, but certainly its aid cannot, in all fairness, be invoked in an enterprise which was not attempted by the corporation at a time when the path was plainly open, when it was furnishing the sinews of war to Paillard in the early litigation. Let the demurrer be overruled.
WESTINGHOUSE et al. v. NEW YORK AIR BRAKE CO. et al.
(Circuit Court, S. D. New York. July 14, 1904.)
1. PATENTS-INFRINGEMENT DAMAGES RECOVERABLE.
On an accounting for infringement of a patent, complainant is entitled to recover the amount of the profits he would have realized, if he had made the sales which were made by defendant, where he was prepared to supply the demand, although it may exceed the profits made by defendant. 2. SAME-AIR BRAKES.
Profits and damages for infringement of the Westinghouse patent, No. 376,837, for an improvement in air brakes, must be based on the sales by defendant of the entire triple valve structure, of which the emergency valve of the patent is the dominating feature, without which the entire structure would be without marketability.
In Equity. Suit for infringement of letters patent No. 376,837, for an improvement in air brakes, granted to George Westinghouse, Jr. On exceptions to master's report.
See 115 Fed. 645.
Betts, Betts, Sheffield & Betts, for complainants.
PLATT, District Judge. This wearisome contention ought to end at the earliest practicable date. I have tried to give it such attention as so large a matter deserves, and being well aware that my action is merely a necessary stepping-stone to the final outcome, I present my conclusions in all brevity, trusting that I may be credited with having performed my duties with scrupulous care, and insisting that silence upon many points before me in no wise indicates a lack of appreciative interest.
For obvious reasons, the law of the case must be accepted as laid down at the last hearing on the circuit. Any inclination toward an independent judgment upon the main question will, therefore, be sternly repressed, although it will not excite profound surprise if further proceedings shall carry the doctrine of Wales v. Waterbury a
¶ 1. Accounting by infringer of patent for profits, see note to Brickell v. Mayor, etc., of City of New York, 50 C. C. A. 8.
See Patents, vol. 38, Cent. Dig. §§ 567, 571.
step beyond the point at which necessity compelled the master to pause in his supplemental report. I am satisfied that the master's action therein is based upon a correct interpretation of the decretal order, whether examined from the view-point of its letter or of its spirit. The opinion of the Court of Appeals (63 Fed. 962, 11 C. C. A. 528), coupled with the facts found by the master in his original report, and the position taken by defendants upon those facts-in short, the entire situation which confronted Judge Wheeler at the hearing-makes it impossible to suspect that he was influenced toward so narrow and astute a construction of the injunctive order as that which the defendants insist that he adopted.
The emergency valve could not be separated from the triple valve structure, the entire structure was an integral device, it was unitary, it had a catalogue price, and no way of dividing the cost existed; and then, again, the emergency valve feature was not only a part of the triple valve structure, but dominated it, so that without that valve the entire structure had no marketability, and, whatever may be said of the other equipments, it is beyond dispute that no buyer would take at any price during the period of the accounting the triple valve structure, unless the emergency valve were made a part of it. Such a structure the complainants were amply prepared to supply to any and every would-be purchaser. Structures containing the infringing combination were supplied by the defendants. The rule is clear that the profits which the complainant might have gained by supplying such demand are recoverable as damages which it suffered thereby. It is also clear that, if such sum exceeds the profits which the defendants gained, such profits can be enlarged until they equal the complainants' losses, but that the two amounts cannot be added together and charged up to the defendants. In this situation, the problem becomes an exceedingly simple one. The amount of profits which complainants would have made, if they had obtained the market supplied by defendants with infringing quick-action valve structures, would have been $128,397.40.
The master's report is accepted, and the above sum is found to be due to the complainants from the defendants, with costs.
BLUMBERG v. A. B. & E. L. SHAW CO.
(Circuit Court, S. D. New York. July 19, 1904.)
1. REMOVAL OF CAUSES-EFFECT ON ATTACHMENT.
An attachment granted by a state court in a suit in which service was made by publication cannot be vacated by the federal court on removal, because the action is one in which such service is not provided for by the federal practice, but under section 4 of the removal statute (Act March 3. 1875, c. 137, 18 Stat. 471 [U. S. Comp. St. 1901, p. 511]) it must stand as it would in the state court, whatever effect the failure to obtain personal service may have on its efficacy.
On Motion to Remand to State Court, and Motion by Defendant to Vacate Attachment.
Wales F. Severance, for plaintiff.
LACOMBE, Circuit Judge.
to the state court is denied.
1. The motion to remand this cause
2. The motion to vacate the attachment granted by the state court is denied on the sole ground that the removal act (Act March 3, 1875, c. 137, § 4, 18 Stat. 471 [U. S. Comp. St. 1901, p. 511]) provides that it shall not be disturbed, and without expressing any opinion as to whether the attachment can ever become fruitful in the event that no personal service be effected nor appearance entered, service by publication not being provided for by federal practice in actions such as this.
KANE v. LUCKMAN.
(Circuit Court, N. D. Iowa, Cedar Rapids Division. July 29, 1904.)
1. SPECIFIC PERFORMANCE-CONTRACT ENFORCEABLE-DEFINITENESS OF TERMS. Plaintiff in a suit for specific performance testified to the making of an oral contract with defendant for the purchase of 510 cows, in exchange for which he was to convey to defendant a farm situated in Missouri at a stated price, paying the difference in cash, and that he gave defendant a check for $100 to apply thereon. He was to some extent corroborated by another witness. Defendant testified that the agreement was conditional; that he was to go to see the land, and, if found to be as represented by plaintiff, on his return a written contract was to be made, and the check cashed and applied thereon. It was shown, without dispute, that he started the next day to see the land, taking another with him, and that on his return he stated to plaintiff that the land was not at all as represented, and refused to complete the trade, and tore up the check. It was also admitted by plaintiff that there was a mortgage on the land, and that it was not agreed whether he should pay it, or it should be assumed by defendant. which matter was to be determined later. Held, that such evidence did not entitle plaintiff to a decree for specific performance, under the settled rule that it must be clearly shown that the contract was completed, and that its terms were fair, and so definite and certain that they could not be reasonably misunderstood.
An offer by plaintiff to pay the mortgage did not relieve the contract from the objection of incompleteness, since neither plaintiff nor the court had power to complete it to bind defendant.
3. SAME-MUTUALITY OF CONTRACT.
Such contract, even if admitted, could not be specifically enforced by plaintiff, for want of mutuality in obligation, since, under the statute of frauds, both of Iowa, where it was made, and of Missouri, where the land was situated, it did not bind him to convey the land. 4. SAME
ADEQUATE REMEDY AT LAW-CONTRACT FOR PURCHASE OF CHATTELS. Under Rev. St. § 723 [U. S. Comp. St. 1901, p. 583], which provides that suits in equity shall not be sustained in either of the courts of the United States in any case where a plain, adequate, and complete remedy may be had at law, such a court is without jurisdiction to decree the specific performance of a contract for the sale to plaintiff of a number of cows at a 131 F.-39
stated price per head, where there is no evidence to show that the cows have any distinctive or peculiar value, which cannot be determined in an action at law for damages, or that defendant is insolvent.
5. FEDERAL COURTS-EQUITY JURISDICTION-OBJECTION ON GROUND OF ADEQUATE REMEDY AT LAW.
In a suit in equity in a federal court, the objection that plaintiff has an adequate remedy at law is jurisdictional, and may be made at any stage of the case.
ALLOWANCE IN EQUITY-EXAMINING UNNECESSARY NUMBER OF WIT
Where the successful party in a suit in equity has taken the testimony of a largely unnecessary number of witnesses on an issue, he will be allowed as costs the fees and cost of examination of only such number as the court deems reasonable.
In Equity. Suit for specific performance of contract.
Suit in equity to enforce specific performance of an alleged oral contract for the purchase by plaintiff from defendant of 510 cows. It was commenced in the district court of Iowa in and for Johnson county, and removed to this court by the defendant upon the ground of diverse citizenship of the parties. The petition was filed January 20, 1903, and therein it is alleged, in substance: "That on January 8, 1903, the plaintiff bought of the defendant five hundred and ten cows then in the hands of farmers in Johnson and other counties in Iowa, under contracts with defendant therefor, at the agreed price of twentyfive dollars a head, to be paid in a reasonable time. That such agreement was as follows: That plaintiff, having been the owner of three hundred and fiftyseven acres of land in Ralls county, Missouri [describing it], should pay by check the sum of one hundred dollars down upon the cows aforesaid, and execute a good and sufficient deed and furnish an abstract of title to said land to the defendant (said land to be figured at thirty dollars an acre); and, if defendant had exactly five hundred and ten cows, the plaintiff, in addition to the one hundred dollars paid by check, was to pay defendant the remainder of the difference in value between the land at thirty dollars an acre and the cost of the cows, but, if the number of cows was greater or less than five hundred and ten, then the cows were to be valued at twenty-five dollars a head; and said parties mutually and orally agreed to the terms of such sale. That the complainant at the time of such agreement executed and delivered to defendant a check of one hundred dollars as part payment on the purchase price of said cows, and defendant so accepted and received said check, which would have been paid on presentation to the bank upon which it was drawn. That defendant unlawfully and unjustly refuses to stand by or further execute the oral contract herein alleged. That the contracts between defendant and the farmers in whose possession said cows were, are advantageous to the owner of said cows. That by the terms of such contracts the farmers agreed to pay defendant, as rent per annum for said cows, six dollars each for some, and seven dollars each for others, which contracts enhance the value of said cows, and provide employment and use for the same; and the cows so under contract have a peculiar and distinctive value, that they would not have but for such contracts, and complainant cannot be fully compensated by a money judgment in lieu of the specific performance of said oral contract. That the plaintiff has a clear legal title to said land before described, free from incumbrance, except a mortgage of about six thousand dollars. That, in regard to said mortgage, the defendant agreed to inform plaintiff whether defendant would take the land subject to said mortgage, and assume payment of the same, or require plaintiff to pay the same. That plaintiff brings into court for defendant's use, and tenders herewith, an abstract of title of said land, and a warranty deed thereof, and asks defendant to inform plaintiff whether he desires to assume the said mortgage,
5. See Equity, vol. 19, Cent. Dig. §§ 173-176.
6. Right to costs in equity, see note to Tug River Coal & Salt Co. v. Birgel, 17 C. C. A. 368.