Railroad Company v. Trimble

ERROR to the Circuit Court for Maryland, the case being thus:The Patent Act of 1836 thus enacts:

'Section 11. That every patent shall be assignable in law, either as to the whole interest or any undivided part thereof, by any instrument in writing; which assignment, and also every grant and conveyance of the exclusive right under any patent to make and use, and to grant to others to make and use the thing patented within and throughout any specified part or portion of the United States, shall be recorded, &c.

'Section 14. Damages may be recovered by action on the case, in any court of competent jurisdiction, to be brought in the name of the person or persons interested, whether as patentees, assignees, or grantees of the exclusive right within and throughout a specified part of the United States.'

Section 18 of the act authorizes, under certain circumstances, an extension of the patent beyond the term of its limitation, and thus continues:

'And thereupon the said patent shall have the same effect in law as though it had been originally granted for a term of twenty-one years. And the benefit of such renewal shall extend to assignees and grantees of the right to use the thing patented to the extent of their respective interest therein.'

These statutory provisions being in force, a certain Howe obtained, on the 3d of August, 1840, a patent for an improvement in the manner of constructing the truss frame of bridges. He had previously, on the 10th of July, of the same year, obtained a patent on the same account, which was merged practically in that of August 3d. On the 9th of July, 1844, he assigned to one Isaac R. Trimble all his right in these two patents for certain States, including Maryland. This assignment (duly recorded) conveyed Howe's rights in these words:

'All the right, title, and interest which I have in said invention, as secured to me by said letters patent; and also all right, title, and interest which may be secured to me for alterations and improvements in the same from time to time;. . . the same to be held and enjoyed by the said I. R. Trimble, &c., to the full end of the term for which said letters patent are or may be granted, as fully and entirely as the same would have been held and enjoyed by me had this assignment and sale not have been made.'

Afterwards, on the 28th August, 1846, another patent was granted to Howe, for an improvement in the manner of constructing these truss frames; and on the 18th of September, 1854, Howe having died meanwhile, his adminis trator, one Joseph Stone, in order to 'secure to I. R. Trimble more perfectly his legal rights, and tend to a more speedy adjustment of any disputed claim,' assigned to Trimble the same interest in the patent of 1846 which he held in the others. The assignment recited that the alterations and improvements secured by the patent of 1846 already belong to Trimble, 'who has used and paid for the same since the year 1846, as understood at the time.'

On the application of the same administrator, Stone, the patent of 1846 was extended for seven years from the 28th of August, 1860.

On the 30th of May, 1861, Trimble executed a deed, duly recorded, of 'all his property and estate, whatsoever and wheresoever, of every kind and description,' to Anne Trimble (his wife) and Georgiana Presstman, in trust, &c.

The Philadelphia, Wilmington, and Baltimore Railroad Company during the years 1864, 1865, and 1866, that is to say, during the term of the extension, having built certain bridges in Maryland, adopting Howe's improvement, Trimble, his wife, and Presstman brought suit for damages. Plea not guilty, &c. There was no question as to the validity of the patent, the only point being whether the assignment of July 9th, 1844, from Howe to Trimble passed Howe's interest in the extension of 1846.

The plaintiffs having put the case, as already stated, before the jury, the defendant gave in evidence an assignment dated April 1st, 1861, from Howe's administrator, Joseph Stone, to a certain Daniel Stone, of Philadelphia, of all the administrator's interest in the patent of 1846, and its extension, for the State above mentioned. This was followed by proof of an agreement between Trimble and Daniel Stone, dated 30th September, 1846. This agreement, which was not recorded until July 27th, 1864, and after Stone's death, which event took place in December, 1863, recited the agreement between Trimble and Howe and the payments thereby stipulated to be made by Trimble. Stone covenanted to pay one-half of the instalments still unpaid as they should mature.

This clause follows:

'And the said Isaac R. Trimble, in consideration of the said payments, promises, and agreements on the part of the said Daniel Stone as aforesaid, for and on the part of himself, the said Isaac R. Trimble, and his heirs, executors, and administrators, covenants and agrees, and by these presents doth covenant and agree, to sell and transfer, and doth hereby sell and transfer unto the said Daniel Stone, his heirs, executors, and administrators, the one equal moiety or half-part of all the right, title, claim, and interest of him, the said Isaac R. Trimble, of, in, and to the patent-right aforesaid, which he purchased as aforesaid of the said William Howe.'

A copartnership between the parties in the business of building bridges under Howe's patents was then made by the agreement, and it was stipulated that if either party should at any time desire a dissolution, Trimble should name a sum which he would be willing to give or take for a moiety of the rights which he acquired from Howe, including the payments to Howe, and that Stone should thereupon decide whether he would buy or sell; and, further, that the contract might be dissolved at the expiration of six months after notice from either party.

The defendants then gave in evidence a transcript of the record in an equity proceeding in the Supreme Court of Pennsylvania, instituted March 10th, 1864, by this same Joseph Stone, administrator of Daniel Stone, against Trimble, as 'formerly of said city of Philadelphia.' It alleged a partnership between Daniel Stone and Trimble, and that the same was carried on in Philadelphia, and it produced what it charged was a copy of the articles of partnership of September 30th, 1846. It then charged that Trimble, 'on or about the 29th day of April, 1861, absconded to parts unknown, abandoning the said copartnership business, and took up arms against the government of the United States, became a major-general in the so-called Confederate States army, was afterwards captured, and is now held at Johnston's Island, on Lake Erie, as a prisoner of war by the United States.' It further charged that since April 29th, 1861, Trimble had taken no part in the management of the partnership business; that Daniel Stone died on November 26th, 1863, and that the complainant had administered on his estate; that no settlement of the business had ever been had; that a large amount was due from Trimble to Daniel Stone's estate; that the assets of the firm consisted in part of an interest in Howe's patents, which had been extended for seven years from August 28th, 1860; that great loss would result from lapse of time and non user, &c., unless the rights of the copartnership should be disposed of, &c. The bill then required the defendant to answer as to whether 'the property of the partnership does not principally consist of a partial right under letters patent originally granted to Howe, on the 28th of August, 1846, and afterwards extended for seven years from the 28th of August, 1860;' and it prayed an account, injunction, receiver, &c., and a subpoena against Trimble. It was sworn to by Joseph Stone. No subpoena was ever issued, but on the production of two affidavits, sustaining the allegations of the bill as to Trimble's having gone into the Confederate army, and being then in prison at Johnson's Island, the court, March 26th, 1864, sixteen days after the filing of the bill, appointed one John E. Shaw, receiver, and ordered him to sell the partnership property. He filed an inventory, in which the Howe patent, as extended, was set down as the only assets of the partnership, and a sale of it for $300, to one Burton, was reported. He then filed a petition for the confirmation of the sale of the patent and extension to Burton, and on June 11th, 1864, the sale was absolutely confirmed, and the receiver directed to execute the assignment to Burton of the Howe patent 'to the full end of the time for which said letters patent have been extended.'

[The articles of copartnership between Trimble and Stone, filed by the complainant, in the equity suit in Pennsylvania, as an exhibit with his bill, though in all other respects identical with the instrument filed in the Patent Office, and produced by the defendants on the trial, did not contain the words of actual sale, which were contained in the latter instrument, to wit: the words, 'and doth hereby sell and transfer,' but confined themselves to an agreement to sell.]

Next followed an assignment dated June 11th, 1864, from this Shaw, receiver, to Burton, of all the interest of Daniel Stone and Trimble, as partners in the Howe patents.

Next was produced an assignment from Joseph Stone, administrator of Daniel Stone, to the same Burton, dated March 6th, 1865, in which he transfers to the assignee all the interest of the deceased in the Howe patents and extension.

The plaintiffs, by way of rebutting evidence, then proved by Trimble that Daniel Stone never made any of the payments stipulated to be paid by him in the agreement offered in evidence by the defendant; that by common consent, the agreement never went into operation in any way, because Stone was unable to comply with any of his engagements made in said agreement, and left their witness to pay, and the witness was compelled to pay, the instalments still due on the original purchase, which the witness himself did; that Stone never claimed any right or interest whatever during his life under that agreement, nor did he ever pretend to act under it; but, on the contrary, always recognized the witness's exclusive right to the interest referred to in said agreement, and acted as the witness's agent under a power of attorney, in constructing bridges thereunder, paying the witness a part of the profits as a compensation for the privileges. The witness further proved that he never was a resident or citizen, nor were any of the plaintiffs, at any time, residents or citizens of Pennsylvania.

The evidence being closed, the plaintiff's presented their prayer for instructions, as follows:

'That if the jury believe, that the agreement offered in evidence by the defendant, executed by and between Trimble and Daniel Stone, and bearing date the 30th September, 1846, never went into effect and operation between the parties thereto, because of the inability and failure of the said Stone to comply with the terms thereof on his part, and that the partnership therein contemplated was, for the same reason, abandoned by the common consent of the said parties; and the said agreement was held and treated by and between them, in all particulars, as inoperative and of no effect; and further believe that the said Trimble, by reason of the failure of said Stone to pay the moneys due on the purchase of the original patent, as in said agreement stipulated, was compelled to pay, and did pay, the same altogether himself; and that said Stone always, after the execution of the said agreement, and notwithstanding the same, recognized the said Trimble as the sole owner of the patent right therein referred to, and acted only as his agent and attorney in regard thereto, and in recognition of his sole right therein, and not otherwise, and never caused or procured or intended the said agreement to be recorded, but died in 1862 or 1863, before the recording of the same, and without setting up the same or pretending to have acquired any rights thereunder, then the said agreement is not to be regarded by the jury as passing any right or title to the said Stone, which the defendant is entitled to set up in connection with any other evidence in the cause, as a bar to the right of the plaintiffs to recover; provided the jury find the execution and delivery to the plaintiffs, Ann Trimble and Georgiana Presstman, of the deed of the 13th of May, 1861, produced by the plaintiffs, and that the same was recorded, &c.'

This instruction the court gave.

The defendant presented eight prayers, of which the court granted the first and seventh, and refused the rest.

The second was to the effect, that Trimble did not acquire by Howe's assignment, or that of his administrator, a legal title to the extension of the patent, and that the deed of trust executed by Trimble passed no legal title to the grantees.

The third maintained that the articles of copartnership between Trimble and Stone passed Trimble's title to a moiety of his interest in the patents, and that in the absence of any proof of a reconveyance in writing Trimble had no exclusive legal right in the extended term of the patent.

The fourth affirmed the validity of the receiver's deed to Durton, and that the proceedings in Pennsylvania, and that deed divested Trimble's entire interest.

The fifth was a corollary to the fourth, and assumed that as the deed of trust was not recorded in the Patent Office when the proceedings in Pennsylvania took place, it cannot operate to Burton's prejudice if neither he, the complainant, nor the receiver had any knowledge of it.

The sixth asserted that the assignment by Howe's administrator to Daniel Stone, passed the legal right under the extension to said Stone.

The seventh, touching limitations, was granted.

The eighth asked an instruction that there was no evidence in the case from which the jury could find that the plaintiffs had an exclusive legal title to the use of the Howe improvement at the time of the infringement.

Under these instructions, excepted to by the defendant, the jury found a verdict of $12,500 for the plaintiff, and after judgment the case was brought here on error.

Messrs. W. Schley and T. Donaldson, for the plaintiff in error:

1. The alleged infringements occurred during the extended term of the patent, but the plaintiffs below did not adduce any evidence of title in that term. There is nothing in the agreement, nor in the assignment, relied on by them, which would justify the conclusion, that the parties had in contemplation the possible extension of the patents, or any of them. Wilson v. Rousseau, seems in point. There a covenant by the patentee, prior to the Patent Act of 1836, whose 18th section authorized extensions, that the covenantee should have the benefit of any improvement in the machinery or alteration or renewal of the patent, did not include an extension by an administrator under that act; and other cases favor that view. The defendant's second and eighth prayers ought to have been granted.

2. Even if there had been, in the agreement or assignment, or in both, a covenant, providing for an interest in any extension, it would, as respects third parties, have vested but an equitable right. By estoppel, the subsequently accruing right feeding the estoppel-it might, in a suit inter partes, even at law, have clothed the covenantee with a legal right. But, however this might be in such case, it could not create a legal right, to be enforced by the covenantee, or his assigns, in an action at law, against a stranger to the covenant.

3. But even if Trimble had an inchoate right, in the possible extension of the patent of 1846, his agreement with Daniel Stone passed to Daniel Stone one-half of such right; and, of course, the plaintiffs (assuming the agreement to be operative), would not have such exclusive title, as would enable them to maintain this suit.

4. The evidence of Trimble, as a witness, is not competent legal evidence to destroy the agreement; or to revest in him the moiety, which he had transferred to Stone. An assignment of a legal interest in a patent, or of an interest therein, can, under the 11th section of the Patent Act of 1836, only be made by writing. Even if the facts, stated by the witness, would avail in equity, as a ground for a decree setting aside the deed, still, in a suit at law, they cannot annul the agreement.

5. Without entering into any discussion of the merits of the suit in the Supreme Court of Pennsylvania, it was shown that it was still pending; and that the court, by a receiver, had taken possession of the interest of Trimble in the patent right, long before the commencement of this suit. Coming into question, collaterally, in this suit, comity requires that the action of that court should not be declared a nullity in law. It was a proceeding in a court of equity; and partnership matters are properly cognizable in equity. It was a case in a matter within its jurisdiction. The appointment of a receiver is an ordinary exercise of power, for the purpose of preserving property, pending litigation; and it is the province of every court, having possession of a cause, to decide for itself, whether, upon the state of case before it, it is expected to exercise the power. The averments of the bill presented a strong case for prompt interference.

Messrs. B. C. Presttman and S. T. Wallis, contra.

Mr. Justice SWAYNE delivered the opinion of the court.