Gottfried v. Miller

APPEAL from the Circuit Court of the United States for the Eastern District of Wisconsin.

The bill of complaint alleged that Frederick Miller, the defendant, was infrn ging letters-patent No. 42,580, bearing date May 3, 1864, and granted to the complainants, Matthew Gottfried and John F. T. Holbeck, for an improvement in a machine for pitching beer barrels. It prayed for an injunction to restrain his further infringement, and for damages and an account of profits.

The only defence relied on was that on Nov. 25, 1872, John H. Stromberg, the owner of an undivided one-third of the entire interest in the letters-patent sued on, sold and delivered to the defendant, for his use forever, a machine for pitching barrels, containing some of the improvements purporting to be secured by said letters-patent; that the defendant paid for it; and since that date used, and was still using it; and that except as aforesaid he never in any manner used or employed the method or improvements, or the process or machine, set forth in the letters-patent.

The controversy relates to Miller's right to use the machine. The evidence establishes the following state of facts, about which there seems to be no dispute:--

The letters-patent were, as above stated, granted to Gottfried and Holbeck. On Nov. 25, 1872, Stromberg sold to Miller a pitching machine containing, as the complainants asserted, the improvements covered by their letters-patent. Miller claimed the right to use it, and did use it from the time of his purchase up to the date of filing this bill. This is the infringement of which complaint is made. The controversy depends on several transfers and other transactions between the parties who at different times had or claimed to have an interest in the patent. They were as follows: On Dec. 19, 1870, Gottfried, one of the patentees, by written assignment, in consideration of five dollars paid, and a royalty to be paid of ten dollars on every machine to be manufactured by Holbeck, sold and transferred all his interest in the letters-patent and the invention to Holbeck, reserving, however, however, in the same instrument, the right to revoke it if the royalty should not be paid. On Jan. 3, 1871, Holbeck, being then the sole owner of them, sold and assigned to Charles F. Smith and Henry C. Comegys an undivided two-thirds of all his title and interest therein; on the 25th of that month, the title to them being at that time in Holbeck, Smith, and Comegys, they, by written assignment, transferred to the 'Barrel Pitching Machine Company' of Baltimore all their right, title, and interest in and to various letters-patent, including those to Gottfried and Holbeck. The assignment contained this provision: 'The same to be held and enjoyed by the said company as fully and entirely as they would have been held by us if this assignment and sale had not been made, with the exception that the said company shall not assign to any one but ourselves any or all the interest in and to the above-named patents in the proportion as they are now held by us, this assignment to hold good until the dissolution or liquidation of the said company, when the said company shall reassign to us in the same proportions as now assigned by us.' Afterwards, on June 1, 1871, Holbeck, Smith, and Comegys made a further assignment to the company of their interest in the letters-patent mentioned in the first assignment, which contained the following clause: 'And provided also that this assignment shall continue in full force until the dissolution of said company, in which event, or in the event of the liquidation of the affairs of said company, the several interests of each grantor in said patents shall, subject to the lawful rights of the creditors of said corporation, be reassigned to each grantor.'

On Dec. 9, 1875, the directors of the company resolved that all the right, title, and interest of the company acquired by the assignment from Smith, Comegys, and Holbeck, should be assigned and reconveyed to them for the sum of $500, and directed Charles F. Smith, the president of the company, to execute and deliver on its behalf an assignment to them.

On the 11th of that month, in pursuance of the resolution just mentioned, an instrument purporting to be an assignment, for the consideration of $500, was executed by the company to Smith, Comegys, and Holbeck, of all its right, title, and interest in and to the patent. The attestation clause and signature were as follows:--

'In testimony whereof, and in pursuance of a resolution passed by said company on the ninth day of December, 1875, a copy of which is appended hereto, the said Charles F. Smith had hereto set his hand, as the act of the said company, this eleventh day of December, 1875.

(Signed) 'CHARLES F. SMITH,

'President Barrel Pitching Machine Company.' On the same day, Smith, for the alleged consideration of $500, granted and assigned to Holbeck and Gottfried all his right and title to the patent; and afterwards, on June 7, 1876, Comegys transferred to Stromberg all his interest in the patent.

In next appears that on Oct. 9, 1876, Gottfried, Holbeck, and Stromberg, who are named as jointly interested in the patent, appointed, by a certain instrument in writing, J. H. B. Latrobe, of Baltimore, their attorney, with authority to prosecute suits against infringers of the patent, and to compromise or adjust the same. This instrument contained the following clause:--

'And it is understood that all expenses, costs, and charges, including counsel fees, attending the litigation, if any, shall be deducted from the collections aforesaid, and the balance paid over to the parties hereto in the proportion of their interest in the said patents, and particularly it is understood that the said John H. Stromberg shall be paid out of said collections, as fast as made, all moneys that he may have advanced in the prosecution of claims under said letters-patent.'

This instrument bears the signatures and seals of Holbeck, Gottfried, and Stromberg. During the years 1877 and 1878 bills in equity were filed by them against various defendants, in which they averred themselves to be joint owners of the letters-patent.

On Dec. 15, 1879, Stromberg, in consideration of the sum of $5,000, assigned to Gottfried all his interest in the patent, and in all claims of every kind or nature for past infringements, and all rights of action arising out of, or connected with, infringements. This instrument of assignment recited the fact that Stromberg had theretofore disposed of rights and licenses under the patent as a part owner under mesne assignments of the same, and had caused suits to be instituted against infringers, and that it was a part of the consideration of the assignment from him that he should be released from all claim which Gottfried or Holbeck, or their assignees, might or could have against him for or by reason of any collections theretofore made by him, or his attorneys, or against any person or persons to whom he had granted licenses to use the patented improvements; and it was then declared as follows:--

'Now, therefore, the said Matthew Gottfried and the said John F. T. Holbeck (the said Holbeck uniting herein for the purpose of carrying out the agreement aforesaid), for and in consideration of the premises, have released, and by these presents do hereby release, the said John H. Stromberg from all claim that they or either of them might or could have against the said Stromberg for or by reason of any collection he may have made from parties to whom he or his attorneys. . . may have granted licenses to use the said patented improvement, hereby ratifying and confirming all such licenses, and all the acts of the said Stromberg and his attorneys in the premises. And the said Matthew Gottfried doth hereby covenant and agree that he will save harmless the said Stromberg and his attorneys from all claims that may be made against them or either of them for or by reason of any interest which the said Gottfried and Holbeck or either of them may have given to any other party in the said letters-patent.'

It appears also that in September, 1873, Charles F. Smith brought a suit against Henry C. Comegys in the Superior Court of Baltimore City, upon an indebtedness from Comegys to him, in whicha n attachment was issued and a seizure made of the shares of capital stock held by Comegys in the Barrel Pitching Machine Company, which proceedings, on October 27, resulted in a judgment condemning the stock, according to the laws of the State of Maryland, for the satisfaction of Smith's claim.

On the day upon which Stromberg sold the machine to Miller, he had no interest in the letters-patent and no license under them, and it is admitted that he infringed them by making and selling the machine to Miller.

At the January Term, 1881, on motion of both complainants, the court below dismissed the bill as to Holbeck. Upon a final hearing, in June following, a decree was rendered dismissing the bill as to Gottfried, who thereupon appealed.

Mr. Thomas A. Banning and Mr. Ephraim Banning for the appellant.

Mr. E. H. Abbot for the appellee.

MR. JUSTICE WOODS, after stating the case, delivered the opinion on the court.