become familiar with the Essen process of detinning, and William Foerster, who had been employed in the same factory from 1892, and worked in the cooking-room, the place where the brine was prepared and regenerated, to leave their employment in Essen and enter the service of the Holland company. Both of these employes had agreed with the Goldschmidt firm that they would refrain from communicating the processes in use which were claimed to be secrets. The processes used by Laernoes and his confederates in the Holland factory were, for all practical purposes, the same as those used by the Goldschmidts in their Essen factory, and it was the intention, deliberately formed, and boldly carried out by Laernoes and his partners, to obtain, by stealth and fraud, the secret processes and methods in use in the Goldschmidt factory, and this theft was accomplished by debauching and corrupting the trusted servants of the Goldschmidts.

The possibility of erecting a detinning plant in this country attracted the attention of Mr. Adolph Kern, the senior member of the firm of A. Kern & Co. In December, 1897 seven men, of whom the defendant Assmann was one, met with Kern in New York City to consider founding a detinning factory in the United States. Subscriptions toward the organization of a company had been secured, and it was decided to send Kern to Europe to obtain one of the secret processes in use there. Kern went to Essen, where he saw the Messrs. Goldschmidt, and tried to induce them to join the enterprise, but they refused, giving as a reason that, in their opinion, the cost of wages and materials in the United States would prevent the successful application of the process in that country.

In the course of previous correspondence with the Goldschmidts, Kern had been told that the process was used at Vlissingen by the Tinfabriek, that Laernoes had obtained his secret processes through Zeyen, one of the Essen employes, and that Zeyen had been punished in a German court for taking a sample from the Essen factory for the purpose of transmission to Laernoes. Kern had been sent newspaper clippings describing the offense and its relation to the Vlissingen business. It does not appear that Kern ever communicated this piece of information to anyone except to Laernoes himself.1

Kern had visited the Vlissingen factory before going to Essen, and returned to Holland, where he entered into negotiations with Laernoes, who acted for the Electro-Tinfabriek. Kern secured an optional contract, by which, in return for one-third of the stock of a detinning company to be organized in the United States, the Dutch company was to furnish the processes used by it, and send over two men to give instructions and superintend the erection of

1 This sentence is condensed from the statement of Garrison, J., 72 N. J. Eq. 390

a factory. On Kern's return to this country, his associates directed the acceptance of the option. Laernoes came over with Zeyen. The formal contract was executed between the Electro-Tinfabriek and A. Kern & Co.

Thereupon the Vulcan Metal Refining Co. was formed, to which A. Kern & Co. assigned the contract. The method of construction and operation as carried on in Holland was then written out by Laernoes and delivered to the company. Upon Assmann's suggestion four copies were made of the original formula, one being handed to each of four trustees appointed by the directors, to hold in trust for the company, Assmann's reason being, "that as we have a valuable secret process, it ought to be preserved so as to guard against the loss of it by the death of any one of the parties conversant with it." The copy held by Assmann as trustee was delivered to Kern when Assmann left the company. The original and the other copies have for some undisclosed reason been destroyed. This company and another, organized later by the same parties, were subsequently merged into the complainant company.

In 1901 Mr. Assmann, having then become a director and officer of the American Can Company, resigned his position with the Vulcan company, and sold his stock to Mr. Kern, giving as a reason for dissolving his connection with the Vulcan company that as the American Can Company was a large seller of tin scrap to the Vulcan company, of the selling of which he had charge, he could not consistently continue to occupy the position of buyer and seller. Shortly after, the American Can Company began the erection of two detinning plants, and employed three of the defendants, who were then or recently had been in the employ of the complainant in positions of trust, such as necessarily required the imparting to them of the alleged secret processes. The testimony conflicted. as to the existence of an express contract of secrecy, but the vicechancellor found that even in its absence the confidential relation and the effort made to preserve secrecy, to the defendants' knowledge, were sufficient to raise an implied agreement not to divulge any such secret. Assmann subsequently became president of the American Can Co. The processes used by the defendants, the complainant, the Electro-Tinfabriek, and the Goldschmidts, are for all practical purposes identical.

The bill of complaint prays that the American Can Co., and the defendants Assmann and the three former employes of the complainant, may be enjoined from operating the two detinning plants or any other factories in imitation of those of the complainant, or for the purpose of utilizing or operating under said secret process, or any improvements thereon, and that the three defendants last named be enjoined from performing any further services in the detinning plants of the can company, and that the employes of Assmann and the can company be enjoined from

using or communicating any knowledge they may have of the secret process, or of the construction or operation of complainant's plant, and that they be required to surrender and destroy all copies of such secret process and of all drawings and designs that might aid any other in the construction of similar plants. The opinion in the Court of Chancery follows. 70 N. J. Eq. 588.

BERGEN, V. C. . . . The defendants, among other things, seek to justify their action upon the ground that the process was not a secret one.1 . . . If this case was devoid of what the complainant insists is a trust relation between the parties, I should have no hesitation in declaring that the process is no longer such a secret as to justify the interference of this court in preserving it to the complainant. What the complainant insists upon is that Mr. Assmann, as one of the original associates, occupies a relation of trust and confidence towards those who, in conjunction with him, purchased this secret, and who, relying upon his agreement to preserve the secret, became stockholders of the complainant company, and invested their money, and he ought now to be estopped from declaring that the process is no longer a secret, without regard to whether or not Laernoes and his partners had a title which they could properly convey. This contention, they claim, is supported by the following expression to be found in the opinion of ViceChancellor Reed overruling a demurrer interposed to the bill of complaint in this cause: Now, the title to this trade secret, held by the Vulcan company, was, I think, good against every one but Goldschmidt and his assignee. A person who became bound to the Vulcan company, by contract or by confidence, cannot, as against that company, when suing for a breach of such contract or confidence, set up that the Vulcan company had no right to such trade secret, because it had been obtained honestly from owners who had dishonestly obtained the knowledge from the discoverer." 67 N. J. Eq. 243.

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While the proposition thus stated by Vice-Chancellor Reed appeals with great force to a court of equity, and is one which I would be bound to follow if the conditions which he states were present, viz., that "it had been obtained honestly," it has no application here, because, in my judgment, the secret was not honestly obtained by Mr. Kern for his associates, because he had sufficient knowledge of the dishonest manner in which the Holland people obtained the secret from the rightful owner to charge him with notice of all such facts as a proper inquiry would have dis

1 Bergen, V. C., found that the Goldschmidts had discovered a process which was not known to their competitors, and which for the first time made the detinning business successful; that it was not divulged by them; that it was not known to the world at the time Kern dealt with Laernoes; but between 1900-1902 was described in scientific journals.

closed, and that knowledge will be imputed to his associates and the officers of the company for whom he was acting, in the business to which it related.

A corporation is liable for the fraud of its agents acting within their authority and in due course of its business, and cannot shield itself from responsibility by showing that the agent also failed in his duty to the corporation. First National Bank of Hightstown v. Christopher, 40 N. J. L., 435, 439. "The fact that the information had not been acquired by him in the course of his agency does not militate against the application of the rule in question, when the agent personally participates in the later transaction in behalf of the corporation. Where information is casually obtained by an agent for a corporation the corporation is not charged with notice from the mere fact of its agent's knowledge; but if the corporation act through such agent in a matter where the information possessed by him is pertinent, the knowledge of the agent will be imputed to the principal. To bring about this result two things must concur, viz., the possession by the agent of pertinent information and his personal participation in respect thereto on behalf of his corporation." Willard v. Denise, 50 N. J. Eq. 482.1 . . .

When stripped of all refinements, the situation presented is this: Dr. Goldschmidt discovers a secret process for detinning; Laernoes entices Zeyen, a trusted employe, to betray his master, whereby he became possessed of a secret process belonging to another; that secret the complainant purchases, under conditions which charge it with knowledge of the wrong committed against Dr. Goldschmidt, thereby helping Laernoes and Zeyen to market their stolen property. It is not to be conceived that a court of equity will stain its hands by contact with such a disreputable proceeding.

It was most strenuously insisted on the argument by the complainant that its association with Laernoes in procuring this secret was a matter entirely distinct from the present controversy, and that the rule requiring a complainant to come into a court of equity with clean hands does not require that all his acts be pure, and that the uncleanliness for which the rule may be invoked must have some relation to the other party. My conclusion is that the rule applies in this case. The foundation of the complainant's right rests upon the assignment to it by Laernoes of the right to use this secret, and if in ascertaining its title, for without title it would have no property to protect, it is made to appear that the title was acquired knowingly from one who could never equitably invoke the court's protection, good conscience requires that the court should abstain from interfering. It is not

1 The omitted passages set forth the evidence of Kern's knowledge of Laernoes's misappropriation of the process.

alone fraud or illegality which will prevent a suitor from entering a court of equity. Any really unconscientious conduct connected with the controversy to which he is a party will repel him from the forum whose very foundation is good conscience. Pom. Eq. Jur. § 404.1

In cases of this class the jurisdiction of the court is rested upon its duty to protect property from wanton destruction, and it interferes by injunction because that is the only efficient method by which property of this character can be preserved to the owner. This complainant claims to be the true owner of a secret process, a recognized species of property, but when the owner asks the aid of the court to restrain the defendant from injuring his property, it is essential that he should not be guilty of any wrong-doing in connection with the property he seeks to protect. He cannot represent to the court that he came honestly by the property when the contrary is the truth, and then successfully invoke the help of a court of equity, for he is guilty of a false representation regarding the very right which he desires protected. The complainant in this cause pirated a secret process belonging to the Goldschmidts. The defendants are, if we accept the complainant's contention, guilty of the same offence, one step removed, and as each is using the same secret process, the property of another, from whom, to the knowledge of each, it was dishonestly obtained, they are both in pari delicto. Leather Cloth Co. v. American Leather Cloth Co., 4 De G. J. & S. 137; Manhattan Medicine Co. v. Wood, 108 U. S. 218.

The proposition advanced by the complainant, viz., that the defendants having agreed with the complainant, either as joint purchasers or employes, to keep secret this process, they cannot now be heard to question the title of the complainant because of a trust relation, either express or constructive, thereby raised, would appeal with great force to a court of equity if in the purchase of the secret process the complainant had acted honestly and was justified in the belief that the vendor's title was without fault. But the mainstay of this proposition is absent in the case at bar. The purchasers knew, or were bound to know, that in treating with Laernoes and his partners they were obtaining for use the property of another, dishonestly procured, and for which they had unsuccessfully negotiated with the true owner. That they afterward disagreed as to which of them should appropriate what they had thus improperly secured does not make it the duty of a court of equity to interfere and by injunction protect some of the wrong-doers against the assaults of their confederates. The want of honor among thieves is not a ground of equitable jurisdiction.

1 Quotations from Thompson v. American Law Book Co., 122 Fed. 922. and Krauss v. Peebles, 58 Fed. 585, are omitted.