Johnson Steel Street Rail Company v. William Wharton, Jr. & Company

This was an action by William Wharton, Jr., & Co., Limited, to the use of William Wharton, Jr., & Co., incorporated, against the Johnson Steel Street Rail Company, to recover royalties for patented guard rails sold by the latter. An affidavit of defense filed by defendant was held insufficient, and judgment entered for plaintiff. Defendant then sued out this writ of error.

By written agreement executed November 24, 1885, between William Wharton, Jr., & Co., a limited partnership association, and the Johnson Steel Street Rail Company, a corporation,-to be hereafter referred to as the Wharton and Johnson Companies,-the latter acquired the right to make and sell, upon certain conditions, guard rails constructed according to the specifications attached to letters patent granted to William Wharton, Jr., for an improved guard rail.

The present action was brought upon this agreement of license, to recover the stipulated royalties or fees for guard rails sold and delivered by the Johnson Company between January 10, 1888, and June 4, 1889.

In its statement of demand the Wharton Company averred that the Johnson Company commenced and continued the sale of guard rails, and voluntarily rendered statements and paid the stipulated fees, down to January 1, 1887, but refused to pay those due between January 1, 1887, and January 10, 1888, on the ground that the rails made and sold by it were not covered by the Wharton patent; that, in a suit brought by the present plaintiff against the Johnson Company in the circuit court of the United States for the eastern district of Pennsylvania, it was adjudged that the rails sold by the defendant were covered by the Wharton patent, and judgment was entered for the amount of royalties to January 10, 1888; that from and after the latter date down to the expiration of the patent, June 4, 1889, the defendant continued to sell, under the agreement, rails of the same character as those that had been adjudged to be covered by the above patent.

The Johnson Company, admitting the manufacture and sale by it between January 10, 1888, and June 4, 1889, of certain girder guard rails of steel, averred that those manufactured by it were not such rails as were covered by the Wharton patent. It also admitted that the suit mentioned in the plaintiff's statement was brought and decided as set forth, but insisted that the decision was not binding in the present case, 'because the amount involved in the former suit was so small as not to entitle the defendant to a writ of error on the said judgment to the supreme court of the United States, whereas the amount involved in this suit is sufficient to so entitle the defendant,' and 'that the right of the defendant to have the issues involved in this case adjudicated by the supreme court of the United States, if a decision adverse to it is rendered by this [the circuit] court, cannot be taken away from it by reason of a former trial and judgment between the same parties, where the amount involved did not entitle the defendant to a review of the same.'

The court below held the affidavit of defense to be insufficient, and, the damages sustained by the defendant having been assessed at the sum of $6,306, judgment was rendered for that sum.

George Harding and Wayne MacVeagh, for plaintiff in error.

[Argument of Counsel from pages 254-256 intentionally omitted]

Frank P. Prichard and John G. Johnson, for defendants in error.

Mr. Justice HARLAN, after stating the facts, delivered the opinion of the court.