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W. M. RITTER LUMBER CO. v. LESTERSHIRE LUMBER & BOX CO. (Circuit Court of Appeals, Second Circuit. April 8, 1907.)

No. 177.

1. SALES CONSTRUCTION OF CONTRACT-ACTION FOR BREACH.

An order for lumber given in January, 1902, stating that "you may enter our order for 4,000,000 feet of shipping cull poplar of same grading as that furnished us by you during the year 1901 and in accordance with our contract dated February 18, 1901," did not render the contract made by its acceptance a continuation of the prior contract, which is referred to merely in connection with the grade, and especially where the price nanied was different, and a breach of the first contract by the purchaser afforded no ground for the refusal of the seller to perform the second. 2. APPEAL AND ERROR-REVIEW-FINDINGS OF FACT BY REFEREE.

Where the testimony taken before a referee is not in the record as sent to an appellate court, his findings of fact, or upon mixed questions of law and fact, cannot be reviewed.

In Error to the Circuit Court of the United States for the Northern District of New York.

For opinion below, see 144 Fed. 568.

On writ of error to review a judgment for $24,397.33 damages, interest and osts, entered April 17, 1906, in favor of the plaintiff for damages occasioned by the failure of the defendant to deliver lumber to the plaintiff pursuant to an order for 4,000,000 feet of lumber, dated January 2, 1902, which order was duly accepted by the defendant. The case comes here upon the pleadings, report and memorandum of the referee and also upon the opinion of the judge of the Circuit Court, delivered upon plaintiff's motion for judgment and defendant's motion for a new trial.

John D. Kernan and Kernan & Kernan, for plaintiff in error.
I. T. Deyo and Carver, Deyo & Hitchcock, for defendant in error.
Before WALLACE, LACOMBE, and COXE, Circuit Judges.

PER CURIAM. The order out of which this controversy arises is as follows:

"W. M. Ritter Lumber Co., Columbus, Ohio:

"Lestershire, N. Y., Jan. 2, 1902.

"You may enter our order for 4,000,000 feet of shipping cull poplar of same grading as that furnished us by you during the year 1901 and in accordance with our contract dated February 18, 1901. It is understood that this stock will be dry and in condition to work on arrival. Shipments are to be made during the year 1902 as we direct, and all the 4,000,000 feet is to be taken on or before January 7, 1903. It is also understood that you will deliver this stock by way of the Erie Railway at Endicott or Lestershire as we may direct nd that the price will be $17 per thousand feet, delivered at either of the points named.

"Yours very truly,

Lestershire Lumber & Box Co."

The defendant refused to execute the order for the reason that the plaintiff had neglected to pay for lumber sent pursuant to prior orders, which neglect resulted in a suit and a recovery against the Lestershire Company, the writ of error to review the judgment (153 Fed. 573) being argued cotemporaneously with the writ in the present action. The sole question of importance now to be determined is, was the order of January 2, 1902, a continuation of the previous agreement of Feb

ruary 18, 1901, or was it a separate and independent agreement? If the latter, a breach of the 1901 agreement constituted no defense.

The question turns practically upon the construction to be given the words "and in accordance with our contract dated February 18, 1901.” With these words omitted it cannot be seriously contended that there is any substantial ground for the contention that the 1902 contract was merely a continuation of the earlier one. Both the referee and the judge find that these words were inserted merely as a convenient method of determining the grade. The referee says of the 1902 order and acceptance:

"It is a contract complete in itself and having a different price for the lumber. The fact that the lumber is to be of the same grade as that furnished in 1901 in accordance with the contract of February, 1901, does not make the order of January, 1902, a continuance of the former one, or supplemental to it. It simply states a method of determining the grade to be furnished. The contract is a new one at a different price."

The judge says:

"The only reference in the order of January 2d to the order of February 18. 1901, is in the following language: 'You may enter our order for 4,000,000 feet of shipping cull poplar of same grading as that furnished us by you during the year nineteen hundred and one and in accordance with our contract dated February 18, 1901.' It cannot be reasonably contended that the words and in accordance with our contract dated February 18, 1901,' refer to anything more than the grade of the lumber to be furnished under the order. These words have no reference to any contract made February 18, 1901, to deliver a further quantity of lumber."

It is argued by both parties that it was proper in construing the agreement, which is not free from ambiguity, to take into consideration the circumstances surrounding the transaction. U. S. v. Peck, 102 U. S. 64, 26 L. Ed. 46; Empire State Type Co. v. Grant, 114 N. Y. 40, 21 N. E. 49. This is true and the referee who saw and heard the witnesses decided the issue in favor of plaintiff. Under the rule as laid down in this circuit (Chicago Co. v. Clark, 92 Fed. 968, 35 C. C. A. 120), the testimony has not been returned and we have no means of determining what the surrounding circumstances were except as they may be inferred from the report. It is manifest that we cannot reverse the finding of the referee upon questions of fact, or upon mixed questions of law and fact. St. Louis v. Rutz, 138 U. S. 226, 241, 11 Sup. Ct. 337, 34 L. Ed. 941.

We see no reason to disturb the conclusion that the 1902 agreement was independent of all the previous dealings between the parties. There can be no question as to the breach of this contract. We think the referee correctly assessed the damages.

The judgment is affirmed with interest and costs.

CONTINUOUS GLASS PRESS CO. v. SCHMERTZ WIRE GLASS CO. et al. (Circuit Court of Appeals, Third Circuit. April 22, 1907.)

No. 8.

INJUNCTION-PRELIMINARY INJUNCTION-DISCRETION OF COUrt.

While a preliminary injunction is to be cautiously used by a court of equity, it should not be withheld if, in the exercise of a sound judgment, it is deemed necessary to prevent injustice; and an order granting such an injunction will not be reversed by an appellate court except for an abuse of discretion.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 27, Injunction, §§ 302306.1

Appeal from the Circuit Court of the United States for the Western District of Pennsylvania.

A. B. Stoughton, for appellant.

Thomas W. Bakewell and Wm. L. Pierce, for appellees.

Before GRAY, Circuit Judge, and HOLLAND and LANNING, District Judges.

LANNING, District Judge. On November 2, 1905, the Schmertz Wire Glass Company and the Mississippi Wire Glass Company filed their bill of complaint in the Circuit Court of the United States for the Western District of Pennsylvania, praying that the Continuous Glass Press Company be restrained from an alleged infringement of patent No. 791,217, for a process and apparatus for manufacturing wire glass. On March 28, 1906, an application for a preliminary junction was denied. On April 6, 1906, an order was made proying that if the complainants, within four days from the date of the order, should file a schedule of the net prices and terms of sale of the styles of glass they alleged the defendant was manufacturing in infringement of the complainants' patent, agreeing to maintain those prices and terms during the pendency of the suit, the defendant should within one week thereafter have leave to sigfy its willingness to abide by such prices while the suit was pending, and that, on the defendant's failure so to do, the complainants might renew their application for a preliminary injunction. The complainants filed their schedule on the day of the date of the order, and on April 11th the defendant filed a statement signifying its willingness abide by those prices and terms. On the same day, April 11th, the defendant issued to the trade a circular letter, the opening pararaph of which was as follows:

"By an order of court and agreements in pursuance thereof, copies of which are hereto attached, the Mississippi Wire Glass Company is after this date, Abril 11, 1906, debarred from selling its polished wire glass, rough wire glass, and ribbed wire glass at less than the following prices."

The complainants thereafter renewed their application for a preiminary injunction, on the ground that the circular letter was misleading in its character, and because, as it was proved, the defendant had represented at least to one party in Chicago that the order of the court was in effect a restraining order against the Mississippi

153 F.-37

Wire Glass Company forbidding their selling wire glass at any other prices than those stated in the circular letter, and that it did not apply to the product of the defendant company. The argument on this second application was had on April 24th. The result was that the court vacated the order of March 28th and allowed a preliminary injunction. This action was based on the court's conclusion that:

"In view of the further and clearer light thrown on the fact of alleged infringement by the depositions and affidavits laid before the court subsequent to its order of March 28, 1906, refusing a preliminary injunction, and in view, also, of the action of the respondents in connection with the schedule of price lists suggested by the court, we have reconsidered our former order of March 28, 1906, refusing an injunction, and after due consideration are of opinion that our former order should be vacated and a preliminary injunction should issue."

On April 24th a second bill of complaint was filed by the same complainants against the same defendant asking for an injunction to restrain the defendant from infringing reissued patent No. 12,443, which was also for an apparatus and process for manufacturing wire glass. The above-mentioned order for a preliminary injunction was made applicable to both suits.

In this appeal complaint is made of that injunction order. The record of the case shows that the Circuit Court proceeded in the case with much deliberation and great care. While a preliminary injunction is to be cautiously used by a court of equity, it should not be withheld where, in the exercise of a sound judgment, it is necessary to prevent injustice. In the present case we are satisfied that the grant of the injunction was not in any sense an abuse of the discretionary power vested in the circuit court.

Without at present expressing any opinion on the merits of the two cases, we think the decree brought before us by this appeal should be affirmed; and it is so ordered.

MINARD V. DELAWARE, L. & W. R. CO.

(Circuit Court of Appeals, Third Circuit. April 19, 1907.)

No. 3.

COVENANTS-CONSTRUCTION-COVENANT OR CONDITION.

A provision in a deed conveying right of way to a railroad company re quiring the grantee to erect a station house thereon and to stop all passen ger trains there which stopped at other stations within three miles held, i view of other provisions, to constitute a covenant and not a condition subsequent.

In Error to the Circuit Court of the United States for the Distric of New Jersey.

Wm. J. Kearns, for plaintiff in error.

Conover English, for defendant in error.

Before GRAY and BUFFINGTON, Circuit Judges, and LAN NING, District Judge.

PER CURIAM. The specifications of error in this case presen for decision the question whether a certain clause in a deed of convey

ance referred to in the pleadings and offered in evidence on the trial should be construed as a covenant or a condition subsequent. In the Circuit Court Judge Cross (Minard v. Delaware, L. & W. R. Co. [C. C] 139 Fed. 60) construed the clause as a covenant. We think the principles of law applicable to the case are correctly stated by him and we are content to rest our decision on his opinion.

The judgment of the Circuit Court is affirmed, with costs.

MARSHALL v. PETTINGELL-ANDREWS CO.

(Circuit Court, D. Massachusetts. May 7, 1907.)

No. 201.

PATENTS INVENTION-INSULATING LININGS.

The Marshall patent, No. 784,695, for an insulating lining consisting of a paper tube held in the metallic shell by its resiliency and yet easily removable, claims 5 and 9 are void in view of the prior art, as involving merely the substitution of paper as an insulating material for vulcanized fiber previously used, with no change except the minor advantage of removability which results from the fact that paper is slightly more compressible, an advantage not involving invention, and also because both claims are devoid of patentable novelty in view of the Hart “Diamond H” switcheap which preceded the alleged invention of the Marshall patent, and had a paper lining similar in use. purpose, and function.

In Equity.

Edward P. Payson, for complainant.

Howson & Howson and Hubert Howson, for defendant.

BROWN, District Judge. The bill charges infringement of letters patent No. 784,695, issued March 14, 1905, to Norman Marshall, tor an insulating lining. The claims in suit are:

An insulating-lining consisting of a paper tube having its diameter reduced for a portion of its length, substantially as described."

The combination with a metallic shell, of an insulating-sleeve consisting of an elastic, compressible paper tube held in frictional engagement with the shell by its own resiliency."

Each claim uses the term "paper tube," upon which are based the principal distinctions from the prior art.

The patent to Painter, No. 718,378, dated January 13, 1903, shows an insulating lining of the same form. It is contended by the complainant that this insulator was constructed of material such as fiber, hard rubber, etc., which does not possess the peculiar properties of paper insulator in respect to frictional engagement with the shell. It is established that, as an insulator, paper was a well-known equivalent for fiber.

The defendant contends that the patent in suit shows merely the substitution of paper for vulcanized fiber. The complainant does not deny that, considered merely as an insulating material, this is true. et insists that the insulating lining of the patent in suit is differntiated from the prior art by a—

ew function, depending upon a previously unused capability of paper, absent in vulcanized fibre, to exercise under atmospheric changes a slight but contin

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