Opinion of the Court.

"That the government of the United States, when it grants letters-patent for a new invention or discovery in the arts, confers upon the patentee an exclusive property in the patented invention which cannot be appropriated or used by the government itself, without just compensation, any more than it can appropriate or use without compensation land which has been patented to a private purchaser, we have no doubt. The Constitution gives to Congress power to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries,' which could not be effected if the government had a reserved right to publish such writings or to use such inventions without the consent of the owner. Many inventions relate to subjects which can only be properly used by the government, such as explosive shells, rams and submarine batteries to be attached to armed vessels. If it could use such inventions without compensation, the inventors could get no return at all for their discoveries and experiments. It has been the general practice, when inventions have been made which are desirable for government use either for the government to purchase them from the inventors, and use them as secrets of the proper department; or, if a patent is granted, to pay the patentee a fair compensation for their use. The United States has no such prerogative as that which is claimed by the sovereigns of England, by which it can reserve to itself, either expressly or by implication, a superior dominion and use in that which it grants by letters-patent to those who entitle themselves to such grants. The government of the United States, as well as the citizen, is subject to the Constitution; and when it grants a patent the grantee is entitled to it as a matter of right, and does not receive it, as was originally supposed to be the case in England, as a matter of grace and favor.

"But the mode of obtaining compensation from the United States for the use of an invention, where such use has not been by the consent of the patentee, has never been specifically provided for by any statute. The most proper forum for such a claim is the Court of Claims, if that court has the

Opinion of the Court.

requisite jurisdiction. As its jurisdiction does not extend to torts, there might be some difficulty, as the law now stands, in prosecuting in that court a claim for the unauthorized use of a patented invention; although where the tort is waived and the claim is placed upon the footing of an implied contract, we understand that the court has in several recent instances entertained the jurisdiction. It is true it overruled such a claim on the original patent in this case, presented in 1867; but according to more recent holdings, it would probably now take cognizance of the case. The question of its jurisdiction has never been presented for the consideration of this court, and it would be premature for us to determine it now. If the jurisdiction of the Court of Claims should not be finally sustained, the only remedy against the United States, until Congress enlarges the jurisdiction of that court, would be to apply to Congress itself." pp. 357-360.

We have quoted these observations because, so far as they express an opinion on the subject, either of the right or the remedy, they are in general accord with our present views. And we add now, that in our judgment, the Court of Claims has jurisdiction to entertain claims and demands of the character presented in the present suit. Whether a patentee may waive an infringement of his patent by the government, and sue upon an implied contract, is a question on which we do not express an opinion.

As to the questions relating to the character and amount of use which the government had of the claimant's invention, and of the proper compensation due therefor, we do not see anything in the findings of the court below, or in its conclusions deduced therefrom, to call for serious observation. What evidence the court may have had on these points is not disclosed by the record, and should not be, and the facts found are sufficient to sustain the judgment.

Judgment affirmed.

Statement of the Case.

MEANS v. DOWD.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE WESTERN DISTRICT OF NORTH CAROLINA.

No. 47. Argued October 30, 1888. - Decided November 19, 1898.

An insolvent debtor, making an assignment for the benefit of his creditors, cannot reserve to himself a beneficial interest in the property assigned, or interpose any delay, or make provisions which would hinder and delay creditors from their lawful modes of prosecuting their claims. In this case the deed of assignment, which forms the subject of controversy, has the obvious purpose of enabling the insolvent debtors who made it to continue in their business unmolested by judicial process, and to withdraw everything they had from the effect of a judgment against them. Though this bill is not sustainable under the provisions of the bankrupt act against a preference of creditors in fraud of the act, because the proceedings were not commenced within the time prescribed by that act as necessary to avoid a preference, yet a right is shown to relief on the ground that the instrument was made to hinder and delay creditors.

THIS was an appeal from a decree of the Circuit Court of the United States for the Western District of North Carolina, dismissing a bill brought by Paul B. Means, assignee in bankruptcy of Charles G. Montgomery and Charles D. Dowd, partners, composing the firm of Montgomery & Dowd, against Clement Dowd, A. B. Davidson, Charles G. Montgomery and Charles D. Dowd.

On and prior to the 24th day of April, 1876, the firm of Montgomery & Dowd carried on a mercantile business in the town of Concord, North Carolina. About that time they became embarrassed, and on that date made a conveyance in writing of all their goods and personal property to A. B. Davidson and Clement Dowd of Charlotte, in the same State, which instrument is variously called a "deed of trust," an "assignment," or a "mortgage." Although the grantors asserted that they did not consider themselves as being insol vent at the time, it is very evident now, in the light of subsequent circumstances, that they were entirely so. They had a very considerable stock of goods, which does not seem to have

VOL. CXXVIII-18

Statement of the Case.

been inventoried in reference to this transfer, and a large amount relatively to their business was outstanding debts due them growing out of that business. The stock of goods was old and needed replenishing; the notes and accounts due them were in many cases worthless and never have been paid. They were also indebted in a large amount (quite as much probably as they were worth) to certain banks in Charlotte upon promissory notes, indorsed by A. B. Davidson and Clement Dowd, sometimes jointly and in other cases separately.

Davidson was the father-in-law of Charles G. Montgomery and the vice-president of the Merchants' and Farmers' National Bank, one of the creditors secured by this conveyance. Clement Dowd, the other grantee, was a brother of Charles D. Dowd, one of the grantors, and also president of the Commercial National Bank, a preferred creditor. W. J. Montgomery was a brother of Charles G. Montgomery, and he and Davidson and Clement Dowd appear as indorsers upon some of the notes set forth in the instrument referred to.

This conveyance, although made in April, was not placed on record until the 12th day of July, 1876, thereafter, and the grantors, Montgomery & Dowd, remained in possession and had absolute control of the property until shortly after that period. The instrument itself was filed as "Exhibit A," and was as follows:

"Exhibit A.

"This indenture, made this 24th day of April, 1876, by Chas. G. Montgomery and Chas. D. Dowd, partners, trading under the firm and style of Montgomery & Dowd, of Concord, North Carolina, parties of the first part, and A. B. Davidson and C. Dowd, of Charlotte, in the State aforesaid, parties of the second part, witnesseth: That whereas the parties of the first part are indebted as follows: By a certain promissory note, of even date with these presents, given to the Commercial National Bank of Charlotte, N. C., for three thousand dollars, and endorsed by the said A. B. Davidson and C. Dowd; also by a certain other note to the said bank for one thousand dollars, dated the day of, 1876, due

Statement of the Case.

at sixty days, and endorsed by W. J. Montgomery; also by another note of five hundred dollars to the said bank of even date herewith, endorsed by C. Dowd, and due at sixty days; also by another note to said bank of thirty-four hundred dollars, secured by customer's notes in the hands of Montgomery & Everitt, att'ys, bearing date theday of and due at sixty days; also by two other notes of one thousand dollars each to the First National Bank of Charlotte, endorsed by A. B. Davidson, dated, respectively, on the 25th March and 5th April, 1876, and running to maturity at sixty days; also by a note to the Merchants' & Farmers' National Bank of Charlotte for one thousand dollars, dated the day of 1876, at sixty days, and endorsed by A. B. Davidson; also by another note to the last-named bank for five hundred dollars, endorsed by W. H. Lilly; also by another note to said M. F. National Bank for one thousand dollars, endorsed by J. R. Neisler, and by another note to said bank for five hundred dollars, endorsed by R. S. Harris; also by a note to Martin Boyer, Jr., dollars, and note to D. P. Boger for; also by a note to J. A. Lilly for four hundred dollars:

"Now, in order to provide for the payment of the said debts, and to indemnify and save harmless the said endorsers, the parties of the first part do hereby bargain, sell, convey, and transfer unto the said A. B. Davidson and C. Dowd the following property, to wit: The entire stock of goods, wares, and merchandise of every kind and description now in the possession of the parties of the first part and in and about their store in Concord, together with all the fixtures and personal property used in connection with the said store and business; also such goods, wares, and merchandise as the parties of the first part may purchase to renew or replenish the said stock; also all the notes, accounts, mortgages, judg ments, and other evidences of debt due and belonging to the parties of the first part, from whomsoever and howsoever the same may be due.

"To have and to hold the said property and the said choses in action and evidences of debt to the said A. B. Davidson and C. Dowd, their executors and assigns, in special trust as follows: