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way signals, held to present too many elements of doubt to warrant the granting of an injunction.
[Ed. Note.--For cases in point, see Cent. Dig. vol. 38, Patents, $ 409.
Grounds for denial of preliminary injunctions in patent infringement suits, see note to Johnson v. Foos Mfg. Co., 72 C. C. A. 123.)
Appeal from the Circuit Court of the United States for the Western District of New York.
On appeal from an order made by the Circuit Court for the Western District of New York granting a preliminary injunction restraining the infringement of five letters patent, granted to A. J. Wilson for improvements in electric railway signals. The bill alleges infringement of 53 claims of these patents, but the discussion on this appeal has been limited by stipulation of counsel to the consideration of 6 claims only. The operation of the injunction was suspended pending appeal.
Edmund Wetmore, Howard L. Osgood, J. William Ellis, and Macomber & Ellis, for appellants.
William Houston Kenyon and Henry D. Williams, for appellees. Before WALLACE, LACOMBE, and COXE, Circuit Judges.
COXE, Circuit Judge. It is a cardinal principle of equity jurisprudence that a preliminary injunction shall not issue in a doubtful case. Unless the court be convinced with reasonable certainty that the complainant must succeed at final hearing the writ should be denied. Union Switch & Signal Co. v. Philadelphia R. R. Co. (C. C.) 75 Fed. 1004.
A record, containing 868 printed pages, composed of ex parte affidavits, patents for complicated electrical machinery and a great mass of other matter, much of it, apparently, having remote relevancy to the present issues, has been presented. To reach a clear and satisfactory conclusion upon many of the vital questions involved would, upon such a record, be difficult if not impossible.
The entire aspect of the case may be changed at final hearing and for obvious reasons the discussion of the issues involved should be restricted to the narrowest limits possible.
We have reached the conclusion that a preliminary injunction should not be issued and will briefly state the considerations which have led to this result.
First. The five patents in suit relate to a difficult, complex and abstruse subject, namely, the transmission of signals on railways by electricity. Because of its complicated character and the innumerable details involved it is peculiarly a case where the court should have the benefit of the opinions of those skilled in the art tested and clarified by cross-examination.
Second. The patents have never been adjudicated or judicially construed.
Third. The defendants assert that the patents are invalid for lack of novelty and invention and that the claims of three of the patents are not infringed.
The answer sets up 21 American and eight prior English patents and alleges four instances of prior use. It is also contended that if the patents are sustained the prior art renders a broad construction of the claims impossible.
We do not intend to pass upon these defenses further than to say that we cannot consider them as wholly devoid of merit. On the contrary we have examined the prior art sufficiently to be convinced that it is quite possible that at final hearing the court may feel constrained to limit the claims to a much narrower construction than is now asserted by the complainants. It is enough to say that the patents may emerge from the supreme test of the trial with some of the claims invalidated and others so limited as to avoid infringement.
Fourth. We think the complainants have failed to prove a case of acquiescence which may be regarded as a substitute for an adjudica
There has been no general long continued public acquiescence. The railroads are the complainants' only custonters and for many vears The Hall Company's only competitor was the Union Switch & Signal Company. In a technical sense, therefore, there was no public, It is not the case of a patented device going into long continued general use in circumstances which compel the conviction that infringements would have occurred were it not for a settled conviction on the part of those who might profit by infringing that the patent is valid.
It is true that the general policy of the Union Company was not to infringe, but we are not at all convinced that this course was adopted through fear of the Wilson patents.
The Union Company and the Hall Company were active rivals in business, the former advocating' and installing the so-called normal safety system and the latter the normal danger system. Every consideration, not only of honesty in competition but of self-interest also, would induce the Union Company to exploit its own system, which it thoroughly understood and in the efficiency of which it had implicit confidence. To assert that its course, which was the natural one for honorable men to adopt, was due solely to the Wilson patents, is, we think, carrying the doctrine of acquiescence beyond the limits set by former adjudications.
Fifth. We are not convinced that the complainants will suffer irreparable damage if the cause be allowed to take the usual course. That the defendants are amply responsible is conceded and if the complainants' contention is sustained and the patents construed to cover broadly the “normal danger system” there should be no difficulty in recovering the full amount of profits and damages.
Sixth. The attitude of the court may be stated in a single sentence: We think the record presents too many elements of doubt to warrant the issuing of a preliminary injunction
The order is reversed.
In re WENHAM.
(District Court, 8. D. New York. May, 1906.) 1. BANKRUPTOY-EXEMPTION OF BANKBUPT FROM ARREST-CONSTRUCTION OJ
Under Bankr. Act July 1, 1898, c. 541, $ 9a, 30 Stat. 549 (U. S. Comp. St. 1901, p. 3425), which provides that a bankrupt shall be exempt from arrest upon civil process, except “(1) when issued from a court of bankruptcy for contempt or disobedience of its lawful orders; (2) when issued from a state court having jurisdiction and served within such state upon a debt or claim from which his discharge in bankruptcy would not be a release," a bankrupt is exempt from arrest or imprisonment upon civil process issued from a Circuit Court of the United States on a judgment of said court rendered prior to the bankruptcy proceedings. SAME-DEBTS RELEASED BY DISCHARGE-MISAPPROPRIATION BY AGENT.
A judgment obtained by a railroad company against a ticket agent for money collected by him for tickets sold and misappropriated to his own use is not one for a debt which is a liability for obtaining property by false pretenses or false representations, nor for a debt created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity within the meaning of Bankr. Act July 1, 1898, c. 541, 8 17a, 30 Stat. 550 (U. S. Comp. St. 1901, p. 3428), but is one from which the defendant would be released by a discharge in bank. ruptcy, and after his adjudication as a bankrupt he is exempt from arrest thereon.
Habeas Corpus to Test the Validity of Imprisonment of Bankrupt.
HOLT, District Judge. This is a writ of habeas corpus to test the validity of the bankrupt's imprisonment.
The bankrupt is imprisoned in Ludlow street jail under an order of arrest issued by the United States Circuit Court for the Southern District of New York on January 26, 1906, holding the bankrupt to bail in the sum of $10,000, and an execution against the person subsequently issued in said action. The action was brought against the bankrupt by the Canadian Pacific Railway Company. The complaint alleged that the bankrupt was a ticket agent of the Canadian Pacific Railway Company, and that, as such agent, he converted to his own use over $50,000, the proceeds of passenger tickets sold by him, and other moreys collected by him, which he should have accounted for to the railway company. Before the adjudication in bankruptcy judgment was entered against the bankrupt in said action for about $56,000, and since the bankruptcy an execution against the person has been issued upon the said judgment under which the marshal detains the bankrupt.
The question in this case is not whether the bankrupt has been guilty of reprehensible or fraudulent or criminal acts. The question is whether he is exempt from arrest under section 9a of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 549 (U. S. Comp. St. 1901, p. 3425]). That section provides as follows:
“A bankrupt shall be exempt from arrest upon civil process, except in the following cases : (1) When issued from a court of bankruptcy for contempt or disobedience of its lawful orders; (2) when issued from a State court bav. Ing jurisdiction and served within such State upon a debt or claim from which bis discharge in bankruptcy would not be a release.”
In the first place, in my opinion, the petitioner is exempt from arrest in this case, on the ground that he has not been arrested by a civil process from a court of bankruptcy, or from a state court. He is held under process issued from the United States Circuit Court.
In the next place, in my opinion, he is not held upon a debt or claim from which his discharge in bankruptcy would not be a release. Section 17a of the bankruptcy act (30 Stat. 550 [U. S. Comp. St. 1901, p. 3128]) provides that a discharge in bankruptcy shall release a bankrupt from all of his provable debts, with certain exceptions. The only exceptions which are relied upon in this case are debts "which are liabilities for obtaining property by false pretenses or false representations," or which "were created by his fraud, embezzlement, misappropriation or defalcation while acting as an officer or in any fiduciary capacity.” The evidence does not show that the bankrupt obtained any property by false pretenses or false representations. He made numerous false pretenses and false representations to the Canadian Pacific Railway Company by which he concealed the fact that he had converted money which was due to the company, but he obtained no money from the Canadian Pacific Railway Company by false pretenses or false representations. The money was all obtained from third parties. Nor were the debts created by fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity, in the sense in which that language is used in the seventeenth section of the bankruptcy act. The authorities establish that the phrase, “while acting as an officer or in any fiduciary capacity," qualify all the preceding words, "fraud, embezzlement, misappropriation or defalcation," and do not simply refer to the last word "defalcation," and that the "fiduciary capacity” referred to in this section relates to that of a trustee of an express trust. Crawford v. Burke, 195 U. S. 176, 25 Sup. Ct. 9, 49 L. Ed. 147, 12 Am. Bankr. Rep. 659; Chapman v. Forsyth, 2 How. 202, 11 L. Ed. 236; Hennequin v. Clews, 111 U. S. 676, 4 Sup. Ct. 576, 28 L. Ed. 565; In re Harper (D. C.) 13 Am. Bankr. Rep. 430, 133 Fed. 970.
There may be some doubt, under the decisions, whether the term "officer" in this section is confined in its meaning to a public officer, as provided in the previous bankrupt act, or whether it applies to any officer, including an officer of a corporation. But the bankrupt was not an officer of the Canadian Pacific Railway Company. He was a mere agent-a ticket agent.
My conclusion is that the prisoner should be discharged.
THE EVA D. ROSE et al.
(District Court, E. D. North Carolina. February 25, 1907.) SAIPPING-SUIT FOR NONDELIVERY OF CARGO—Costs.
Where a vessel stranded on a voyage near her port of delivery, and on being released some days later started back with the intention of delivering the cargo back to the consignors, in violation of the contract of carriage, the consignees were entitled to sue the vessel in admiralty to recover the cargo and damages for its nondelivery, and a delivery of the goods to libelants pending the suit and a receipt for the same, releasing the vessel and master from claims for damages, do not relieve the vessel from payment of the costs where the receipt expressly provided that the settlement should not have that effect. In Admiralty. On rehearing. For former opinion, see 151 Fed. 104. A. D. Ward, D. L. Ward, and Harry Skinner, for libelants. W. D. McIver and H. C. Whitehurst, for respondent.
PURNELL, District Judge. Both respondent and libelants having asked that this cause be reopened and a further hearing granted, on the 18th day of February an order was entered reopening the cause and setting the same down for further hearing on February 22d, at 10:30 in the forenoon, when the same was heard; both libelants and respondent being represented by proctors and respondent Warren being present in person.
Attention is called to the clause in the agreement referred to in the former opinion in which it is said, “This paper writing, whatever it is called, seems to be an abandonment of all claims except for cost and some goods, claimed to be short, which shortage the master denies," and the attention of the court is now called especially to the following claim in said paper writing:
*These goods are received at New Bern and all claims for freight and delay thereon from New Bern to the point of destination are waived except as hereinafter mentioned.”
And afterwards, in a subsequent clause of this paper, appears this stipulation :
“And C. H. Fowler & Co. hereby release and discharge the said E. C. Warren and his vessel from all further claim against them, except those claims which are already set out in the libel proceedlings now pending in the District Court of the United States for the Eastern District of North Carolina, all of which are to be unprejudiced by this delivery and acceptance, except that they make no further claim as to actual delivery of the goods herein specified, but does not prejudice their right to recover judgment for possession thereof and for cost, and such damages as are set out in their libel as though no delivery had been made."
This paper is signed by the master and the consignee. The effect of this paper on the pending libel is the question now presented. The court would hardly be asked or expected to give a judgment for the possession of goods already delivered, and this was the main purpose of the libel, to get the goods. It was not presented at the former hearing, but filed after the hearing, and there is some dispute among counsel as to the propriety of this paper being thus called to the attention