author: TRIMBLE, District Judge.

text:
    SCROGGINS FARMS CO. v. COMMODITY CREDIT CORPORATION.
    Civ. No. 714.
    District Court, E. D. Arkansas, W. D.
    April 20, 1945.
    Coleman, Mana, McCulloch & Goodwin and R. B. McCulloch, all of Little Rock, Ark., for plaintiff.
    Sam Rorex, U. S. Atty., and Warren E. Wood, Asst. U. S. Atty., both of Little Rock, Ark. (Dan P. Chisholm, Regional Counsel, Department of Agriculture, of Little Rock, Ark., of counsel), for defendant.
   TRIMBLE, District Judge.

This action was commenced in the Pulaski County Chancery Court, by Scrog-gins Farms Company, an Arkansas corporation, and is here by removal. The defendant corporation was organized in Delaware pursuant to certain acts of Congress, for the purpose of stabilizing prices on farm products, including cotton.

Pursuant to the provisions of the acts of Congress, and rules and regulations promulgated by authority thereof, certain producers of cotton stored in authorized warehouses cotton produced during the 1938 crop season. Using the warehouse receipts as collateral, they borrowed from various banks throughout the State of Arkansas, the full amount of the loan value on this cotton, which loan value had been fixed by the Agricultural Adjustment Administration. In due course of the business for which it was created, the Commodity Credit Corporation became the owner of said notes and all the rights thereunder, including the collateral security of the warehouse receipts, but without recourse upon either the producers or intermediate assignors for any deficiency.

The notes were executed upon forms provided by the Commodity Credit Corporation, called a “Cotton Producer’s Note,” and were in ordinary form, so far as the face of the note is concerned. These notes recited that it was secured by the pledge of warehouse receipts representing so many bales of cotton and showing the aggregate weight. On the same paper, and a part of the same document, there was a “Loan Agreement”, which, among other things, provided: “5. * * * The undersigned producer shall be and remain liable to the holder for any deficiency only in the event that the loan was obtained through fraudulent representations by the producer.” This is also the provision of the statute. 7 U-S.C.A. § 1302(h).

The plaintiff, acting through Mr. O. O. Scroggins, purchased from the producers of cotton involved here, whatever right, title or interest they had in the cotton evidenced by the warehouse receipts, “subject to the lien of a cotton producer’s note.” Most of these purchases were evidenced by assignment on forms other than official, and were, so far as is pertinent here, substantially as follows: “For value received, I hereby sell, transfer, and assign to you all of my right, title and interest in and to - bales of cotton now owned by me, subject only to the lien of a cotton producer’s note, executed by me on the - day of-, 1938, in the amount of - dollars, it being understood that you are expressly not assuming any obligations for the payment of such note or the performance of any of its terms and conditions.”

Mr. O. O. Scroggins, who was the agent for the plaintiff and the only witness in its behalf, testified that plaintiff paid an average of twenty-five to fifty cents a bale for these assignments; that the most it paid was $3.50 a bale, and that to tenants on plaintiff’s own farms, “because I thought it would be of benefit to the farms.”

On April 3, 1940, the defendant Commodity gave what it terms a press release, or information for the press, to the newspapers, announcing the extension of the loans on 1938 cotton producers’ notes, to July 31, 1941. This press release also contained the following language: “It was also announced by the Commodity Credit Corporation that after July 31, 1940, no request for the release of loan cotton to any person other than the producer will be accepted unless the request is submitted to the Corporation or its agent, on a standard form to be printed and provided by the Corporation, within fifteen days after it has been executed by the producer.”

This was in accordance with a so-called directive of the Commodity, and the standard form required, when later furnished, was known as “Form R.”

Mr. Scroggins, who was at all times acting either for himself and/or as agent for the plaintiff, admitted that he had seen and read this press release, had notice of it immediately after its publication, and was familiar' with the requirement with respect to assignments. Thereafter he secured some of the standard forms, secured their execution by some of the producers, but many of the assignments were not on these official forms.

On or about May 15, 1941, Mr. Scrog-gins, acting for the plaintiff, according to his testimony presented all these assignments to the Commodity through its fiscal agent at the Federal Reserve Bank, at Little Rock, Arkansas, made a tender of all sums of money and charges due thereon, and demanded the delivery to him of the warehouse receipts pledged to secure the payment of the notes. While the presentation on this date was denied by the officials of the Federal Reserve Bank, a subsequent check shows that some of them were presented on that date, and bore the stamp showing receipt. Such as were tendered at that time were refused for reasons hereinafter stated. On July 25-26, 1941, Mr. Scroggins again presented to the Commodity, through the same fiscal agent, the assignments involved herein, they were there stamped as having been received, the tender refused and the assigments with the accompanying papers were returned to the plaintiff.

Included in the assignments presented were many for cotton which had theretofore been released to the producers themselves, or to other assignees, without notice of any claim by plaintiff. Also included were assignments invalid for reasons other than those assigned by defendant for refusing the tender, and plaintiff has by agreement or stipulation eliminated those from this action. By agreement of counsel there is now involved 286 bales of cotton, 136 bales on nonofficial forms and 150 on official forms, the latter hereinafter referred to as being on Form R.

The grounds for refusal of the tender, alleged by the defendant, are:

1. The cotton involved in this case was pledged to the defendant as security for mandatory, non-recourse loans, as ■ prescribed by Section 302 of the Agricultural Adjustment Act of 1938, 7 U.S.C.A. § 1302. The act provided for loans on cotton to the producers thereof only. Under the act and loan documents, the defendant was not required to recognize any assignment by the producer of his interest in the cotton pledged to the defendant.

2. On April 3, 1940, at the time the loan maturity date was extended to July 31', 1941,. it was announced by the defendant to all interested parties, and they were notified, including the plaintiff here, that beginning August 1, 1940, the defendant would recognize only such assignments by borrowing producers as were made in accordance with an official form of assignment to be prescribed by the defendant, and which was to be presented within fifteen days after the execution thereof; that none of the assignments presented by plaintiff were on this official form, and, the plaintiff, did not attempt to redeem the cotton prior to August 1, 1940.

Upon the trial of this cause it developed that some of the assignments tendered were on official forms, and the defendant now contends that these not having been presented within fifteen days after their execution, defendant was not required to recognize them.

The relief prayed in the original complaint was that the defendant be enjoined from disposing of the warehouse receipts for cotton covered by plaintiff’s assignments; for delivery of the cotton, “upon payment by the plaintiff of the loan on said cotton, together with all interest and charges thereon,” and for judgment- for the value of plaintiff’s cotton sold, assigned or delivered by defendant to parties other than plaintiff after demand was made by plaintiff for delivery thereof. After removal of the cause to this court, plaintiff filed an amendment, in which it prayed; “Upon final determination, of this cause, defendant be required to deliver to the plaintiff,” the cotton listed, together with warehouse receipts therefor, upon payment by the plaintiff of the, loan on the cotton, together with all interest and charges accrued thereon, and for judgment for the value of plaintiff’s cotton which was disposed of otherwise than by delivery to the plaintiff after tender and demand.

In the case of Harris v. Commodity Credit Corporation, decided by this court on November 30, 1942, and reported in, D.C., 47 F.Supp. 681, this court held that Commodity Credit Corporation could not unilaterally change the terms of its loan agreements, and thereby prejudice the rights of the plaintiff in that action, and that the plaintiff there was entitled to judgment for delivery of the cotton upon payment of the charges against it. This case, being upon all fours with that upon that issue, will be controlled by the decision in that case, and the court now holds that upon tender by the plaintiff of the amount of the loan and carrying charges against the cotton, the plaintiff here was entitled to the delivery of the warehouse receipts for the 286 bales of cotton described above.

What then is the measure of plaintiff’s recovery ?

Plaintiff in its brief succinctly states its position as follows:

“Plaintiff contends that it is entitled to recover the value of the cotton at the time of the conversion without any deduction of the amount of the loan, interest and carrying charges which were due Commodity.” And, in common parlance, the defendant can whistle for its money.

In support of this contention it relies on the case of Mitchell v. Roberts, 8 Cir., 17 F. 776, decided by the late Judge Caldwell, while Circuit Judge of the Eastern District of Arkansas. That case held (quoting from the syllabus) : “A tender of the debt after its maturity extinguishes the lien on personal property pledged to secure its payment, and the pledgor may recover the pledge or its value in any proper form of action, without keeping the tender good or bringing the money into court, and the pledgee may have his action for the debt.”

The case of Mitchell v. Roberts, supra, is not in point in the case at bar. There the thing pledged was not treated as primarily liable for the payment of the debt, while in the instant case the thing pledged was not only primarily but solely liable for such debt. There can be no recourse for the debt against the producer, for both the statute and the loan agreement provide that there shall be no liability on his part, and he, in effect, negotiated this loan without recourse on him, except upon a condition that does not arise here. Nor can the pledgee, if it lose the lien against the thing pledged, proceed against the plaintiff for the debt, for under the terms of the assignments it took without recourse. Hence if the Commodity cannot enforce its lien against the thing pledged, it not only loses its lien but also its debt, for there is no one against whom it can proceed for collection.

Giving to the language of the assignments its greatest probative effect in favor of the plaintiff, and taking into consideration all of the evidence before the court, what the plaintiff here purchased from the producers, and all it purchased was all the producers had, the equity of redemption, the -right to pay the charges and receive from the defendant the warehouse receipts for the cotton.

In the case of Knudson v. Fenimore, 69 Okl. 3, 169 P. 478, 480, L.R.A.1918C, 181, 183, the Supreme Court of Oklahoma said: “There is no reason or equity in the contention that the defendants brought themselves, * * * within the harsh rule that a refusal by a creditor of a tender of the amount due on a debt secured by a mortgage or other lien operates to relinquish and discharge the lien, when made by the proper person * * *.”

It would, indeed, be a harsh rule if enforced in this case. The fact is the plaintiff speculated upon the possibility that the market value of the cotton at some future date would exceed the loan and charges against it and that from this equity of redemption which he was purchasing, he might realize a profit over and above the small sums which he paid for this equity of redemption. To permit him now, through the happening of a fortuitous event, the refusal of the tender by an agent of the defendant upon a misunderstanding of the law, to increase the interest which he had in this collateral, from a mere equity of redemption, which he purchased, to an outright ownership of the thing pledged, for which he paid nothing, free and clear of the lien of the pledge, would not only be enforcing a harsh rule, but one against reason and equity, and one which the court would be most unwilling to enforce, “unless the clearest principles of law require it.”

However, we think the plaintiff mistakes the principles of law upon which this controversy turns, and which control, as to the amount it is entitled to recover.

In the case of Knudson v. Fenimore, supra, the court had before it the effect of a tender upon the lien of a mortgage, and as to who has the right to make a tender, such as would discharge the property from the lien of the mortgage. In the opinion, the court quotes extensively from the case of Harris v. Jex, 66 Barb. 232, 237, where the Supreme Court of New York, which had theretofore decided the case of Kortright v. Cady, 21 N.Y. 343, 78 Am.Dec. 145, said:

“In the case of Kortright v. Cady [supra], it was held that a tender of the money due on a mortgage discharged the lien, although the tender was not subsequently kept good. It is plain that this is a somewhat harsh principle; and it should not be pressed beyond its strict limits. It rests upon the familiar doctrine that the bond is the principal, and the mortgage is the collateral. Now while this is the legal principle, yet in modern times and in the common understanding of men, a contrary view prevails. It is the security on the land, and not the responsibility of the debtor, to which men look in taking mortgages. The facility of transferring real estate and mortgages results, frequently, in ignoring the original mortgagor, and treating the lien on the land as the only thing of real value. To hold, then, that a mere tender, without actual payment, is a discharge of the lien, may sometimes operate very unjustly. It is important, then, to inquire who has the right to make a tender which shall have this very serious effect. To ascertain this, it may be well to examine the authorities cited in Kortright v. Cady. * * *

“Now certainly it would not be claimed that a mere stranger to the contract could make a tender of the debt to the creditor which would have any validity. And such a tender, that is, a tender made by a mere stranger, if refused, could not have the effect of ‘payment as to all things which are incidental and accessorial to the debt/ It is important to keep this in view; that is, that a tender cannot be made by a mere stranger to the contract, so as to oblige the creditor to accept it.

“What right then has the owner of the equity of -redemption who has not assumed the debt personally? He has just what the name which designates him implies: the equity of redemption. That is, he has the right to redeem the land from the lien. But how is the land to be redeemed from the lien of the mortgage? Not, I suppose, by a mere tender which is not kept good, but by actual payment, or by bringing the money into court for the purpose of payment. The mere owner of the equity of redemption owes no debt. It cannot be said, in respect to him as it is said in Kortright v. Cady [supra], ‘The creditor by refusing to accept does not forfeit his right to the very thing tendered, but he does lose all collateral benefits and securities/ For the creditor, if he refuses to take the money from the owner of the equity of redemption, cannot recover it from him. It is the redemption of a lien, not the payment of a debt, which his tender is to accomplish. There is no debt, at least from him, and therefore, as it seems to me, his mere tender does not discharge the mortgage lien. He has the right to redeem; but he must redeem by actual payment.

“But there is a further consideration. The equity of redemption was in this case conveyed subject to the payment of the mortgages. The land was thereby made the primary fund for payment. The •original debter has become a quasi surety, having a right to insist on the enforcement of the debt out of the land. The holder of the equity of redemption cannot even dispute the validity of the mortgage. (Freeman v. Auld, 44 N.Y. 50.) The land or so much as is necessary, is (as it were) appropriated to the payment of the mortgages. If therefore under such circumstances, the owner of the equity of redemption were permitted to discharge the lien by a mere tender without payment, great injury would be done. For instance, in the present case, Jex took the land subject to the mortgages. It is reasonable to suppose that in so doing he deducted their amount from the value of the land agreed upon. The land then is primarily liable for the debt. That is, Poillon has a right to insist upon the collection of the debt first out of the land. Now if by a mere tender Jex has discharged the lien, then all rights of the mortgagee seem to have gone. He cannot sue Jex, for Jex never assumed the debt. He cannot enforce the lien, for that, by the supposition, is discharged. He cannot sue Poillon; for by the discharge of the primary fund Poillon, who had become a quasi surety, must be released. The result is, that Jex retains the whole of the mortgage for which he has paid nothing, and the mortgagee loses his debt. Unless the clearest principles of law require it we ought not to work out such injustice.” See also 93 A.L.R. 60, 61.

Was the plaintiff here, who was a stranger to the pledge contract, a mere speculative purchaser of the equity of redemption, who had paid nothing for the lien on the cotton, one who could make such a tender as would discharge the lien of the pledge, and take from the pledgor, the Commodity, not only its lien upon the thing pledged, but its debt as well? We think not. In the .case of Knudson v. Fenimore, supra, the court quoted with approval from Hunt on Tender, Sec. 373, as follows: “A tender by a mere stranger will not discharge the lien of a mortgage. Where mortgaged premises are conveyed to a purchaser subject to a mortgage, but without any assumption of the debt by him, a tender by such owner of the equity of redemption will not discharge the lien. As between the mortgagor and the purchaser of the legal estate, the mortgage debt is part of the consideration, and the land is the primary fund for the payment of the mortgage debt. s Hence a purchaser cannot be permitted to discharge the lien of the mortgage by a mere tender without payment. If he desires to pay the mortgage debt so as to free his land, and the mortgagee refuses the money, he has his remedy in equity to compel a discharge of the mortgage, and, by keeping the tender good and bringing the money into court for the purpose of the payment, he stops the running of the interest, and subjects the mortgagee to the costs of the suit. Or in a suit to foreclose he may plead the tender as a defense and bring the money into court with like effect.”

In the instant case the plaintiff purchased the right to redeem, but did not purchase the whole corpus, including lien and debt. While there is language in some of the cases which might lead to the conclusion that some courts have held to a different theory, and that the plaintiff here would not be a stranger, •but is one that could make the tender such as it claims, a consideration of those, cases shows a different state of facts from that in the case before the court. Aside from that, where there is a conflict in the authorities, from courts whose decisions are merely persuasive and not controlling, the court should and must select that holding which comports with equity, good conscience and sound judgment. The parties have not brought to the attention of the court, nor has the court in its independent research found any case decided by the Arkansas Supreme Court, bearing directly, on this question, and so far as has come to the notice of the court the statutes of Arkansas are silent upon this issue.

It is the theory of the defendant, that, if it is liable in this case at all, it is liable as for conversion of the plaintiff’s equity of redemption in the cotton, and the amount to which plaintiff would be entitled to judgment would be the market value of the cotton on the date of the conversion, the date of tender, less the amount of the loan and carrying charges due to the Commodity.

In the case of Franklin v. Spratt, 174 Ark. 268, 295 S.W. 26, the Supreme Court of Arkansas said (quoting from the syllabus): “The rule of damages applicable to an unlawful conversion of personal property is that, if the defendant has equitable interest in the property, recovery against him is limited to the actual net amount of the plaintiff’s interest, although the possession is wrongfully assumed or retained.” This is the well settled rule in the State of Arkansas. Meyer Bros. Drug Co. v. Matthews, 69 Ark. 483, 64 S.W. 264; Hamburg Bank v. George, 92 Ark. 472, 123 S.W. 654; Schutt v. Arkansas Rice Growers Agricultural Credit Corporation, 183 Ark. 972, 39 S.W.2d 517; Barham v. Standridge, 201 Ark. 1143, 148 S.W.2d 648; Patton v. Alexander, 202 Ark. 883, 154 S.W.2d 1.

The plaintiff is entitled to judgment for the value of its equity of redemption, that is, for the market value of the cotton on the date of tender, less the loan, interest and carrying charges due the Commodity on that date.

Doubtless the parties can stipulate as to the market price of cotton, amounts of loans and carrying charges, and net amount due plaintiff. Counsel, will, therefore, prepare findings of fact, conclusions of law and praecipe for judgment in accordance with this memorandum.


source: Caselaw Access Project

author: DUNCAN, District Judge.

license: Public Domain

text:
    COOK ELECTRIC CO. v. PERSONS et al.
    Civil Action No. 2468.
    District Court, E. D. Missouri, E. D.
    Jan. 17, 1945.

      Bertram W. Coliman (of Thiess, Olson & Mecklenburger), of Chicago, 111., and Delos Haynes, of St. Louis, Mo., for plaintiff.
    Bruninga & Sutherland, of St. Louis, Mo., for defendants.
   DUNCAN, District Judge.

The bill of complaint alleges joint infringement by the defendants of Patent No. 1,726,584 for improvement in bellows construction granted September 3, 1929, to the plaintiff as assignee of the defendant Lawrence M. Persons, inventor, and of Patent No. 1,816,610 for methods and means for forming bellows, granted July 28, 1931, to the plaintiff as assignee of the defendant Lawrence M. Persons, as inventor,' and plaintiff seeks to restrain the defendants from further infringement of both patents in suit, and for an accounting.

The plaintiff is a corporation organized and existing under the laws of the State of Illinois, with its principal place of business in the City of Chicago; the defendant L. M. Persons Corporation is a corporation organized and existing under the laws of the State of Missouri, with its principal place of business at St. Louis; the defendant Lawrence M. Persons is a resident of the City of St. Louis, Missouri.

In November 1922 the defendant Lawrence M. Persons entered the employ of the Cook Electric Company as engineer in charge of its experimental and development department. Under the terms of his employment, any new devices or methods developed or patents granted to him were to become the property of the plaintiff.

Plaintiff was engaged in the manufacture of mechanical devices, among which were water pumps and other devices requiring the use of diaphragms and bellows. Much difficulty had been experienced by the plaintiff in the use of the type bellows which was then available for use in the pumps manufactured and sold by it. During his efforts to eliminate this mechanical difficulty, defendant Persons discovered what he contended to be a new and improved method of forming a bellows which he contended was greatly superior to any other bellows known. The new method lay in the form of the elements constituting the device and the method of joining such elements by means of solder which greatly lengthened the life of the device.

Application for a patent 1,726,584, the “device” patent, was filed in the name of defendant Lawrence M. Persons and sworn to by him on May 10, 1924. The first paragraph of the application stated:

“My invention relates broadly to bellows construction which has particular application to elastic piston pumps which effect the intake and discharge by the contraction and expansion of the piston. Although I shall refer throughout the present case to this particular adaptation of my invention, it is to be understood that my invention has broader application and may be used wherever bellows are needed for any purpose.

“One aim of my invention is to provide an improved form of bellows construction having a life greatly in excess of bellows heretofore known.”

The application contained twelve claims, each of which referred to “a plurality of sectional parts.” Over the five year period between the filing of the application and the issuance of the patent, many amendments were made to the application — claims were amended, some were withdrawn and others were added. In Patent No. 1,726,584 the language in Claims No. 1 and 3 is typical of all the claims.

“1. A bellows construction of the type described having its side wall divided into a plurality of sectional parts, each of which is fastened to the sections above and below by a circumferential edge engagement, said engagement comprising a gutter in one of the engaging sections and a cooperating flange on the other engaging section.”

“3. A bellows construction of the type described having its side wall divided into a plurality of sectional parts, each of which is fastened to the sections above and below, and is provided with a solder filled gutter for the reception of a flange on one of the adjacent sections.”

On May 14, 1927, Persons filed an amendment to the application, adding Claims 16, 17, 18, 19, 20, 21, 22, 23 and 24, and refers to “sectional parts” as distinguished from “a plurality of sectional parts” for the first time. On September 3, 1929, the patent was granted allowing twenty-four claims.

In June 1941 Persons and others organized the L. M. Persons Corporation of St. Louis, and shortly thereafter it began manufacturing the accused device for use in an electric switch for installation in airplanes manufactured for war purposes. But it is not contended that the contract with the Governmental agency designated a particular make of diaphragm or bellows.

The accused device, Plaintiff’s Exhibit 13B, is approximately 9 inches in circumference and Vi inch in diameter. It is constructed of a solid metal base approximately Vi6 inch in thickness, near the outer periphery of which is a V-shaped gutter or trough, the outer wall of which extends perpendicularly approximately Vi inch above the surface of the base. The upper part of the accused device is flexible, about Vis inch in thickness, the outer periphery of which is turned down to form a perpendicular flange designed to fit into the V-shaped gutter or trough in the outer periphery of the rigid element. Molten solder is flowed into the V-shaped gutter or trough in the solid base and the flange of the flexible element is inserted into the solder filled groove in the rigid element, thus forming a solid joint. The solder rises on the inside and the outside of the wall of the flange, thus filling the gutter or trough. The flexible element contains several circumferential corrugations. In the center of the rigid base there is attached a nut or threaded nipple for the attachment of a hose or feed line to convey into the chamber created by joining the elements, the activating substance, causing the diaphragm to expand and collapse. A perpendicular pin is attached to the flexible element in the center thereof, which is designed to come into contact with the mechanism to be controlled by the diaphragm.

The accused device is distinguished from a device manufactured by the plaintiff under its patent and offered in evidence as Plaintiff’s Exhibits 44 and 47 in that both the top and bottom elements of plaintiff’s device are flexible instead of a flexible element attached to a rigid base. In Plaintiff’s device both elements are the same thickness. They contain circumferential corrugations and are joined in the same manner. That is, by melting solder into the outer peripheral gutter or trough of one element and inserting therein the perpendicular flange of the upper or opposite element, thus causing the solder to rise on the inside and the outside of the flange in the same manner, and forming identically the same kind of joint or union as that in the accused device, except that the outer wall of the trough of the accused device rises higher than on the plaintiff’s device.

A bellows constructed of a plurality of sectional parts differs from a bellows or diaphragm constructed of a single section or unit only in the number of such units. In constructing a bellows with a plurality of sectional parts, an aperture of desired size is placed in the center of each element or disk, and around the periphery of this aperture is formed a V-shaped trough, just as there is' on the outer periphery, and around the inner periphery of the matching element there is formed a flange corresponding to the flange on the outer periphery. This process may be continued indefinitely to attain the desired expansive capacity for the purpose to which the device is to be put.

Defendants deny infringement. In their answer defendants allege:

“ * * * that after defendant Lawrence M. Persons had signed the application which matured into patents aforesaid he had no control over the prosecution of the same and that thereafter the claims of said applications were subjected to such change at the instance of plaintiff that the claims, as allowed, included more than defendant Lawrence M. Persons intended to claim and were inconsistent with the beliefs of defendant Lawrence M. Persons as to the novelty embraced in said applications.

“IX. That the patents in suit and each of them are wholly invalid and void because the alleged inventions, improvements or discoveries purported to be claimed therein are substantially different from any indicated, suggested or described in the original applications therefor.”

The defendants further contend that the patents in suit, and each of them, are wholly invalid and void “ * * * because the plaintiff has long known that said patents in suit purported to cover subject matter of which defendant Lawrence M. Persons was not the original or first inventor or discoverer, * * * ” and for other reasons which were known at the time to the defendant Persons. The answer further stated:

“* * * the subject matter described and claimed in the patents in suit and each of them is wholly devoid of patentable invention or novelty in view of the state of the art as it existed prior to the date of the alleged inventions therein and more than two years prior to the filing of the applications for the patents in suit; that in view of such prior state of the art the subject matter of the patents in suit constitutes nothing but unpatentable and trivial variations thereof, unpatentable aggregations of features of construction long known in the art, and the adaptation of expedients involving no more than ordinary mechanical skill and judgment.”

With respect to all of these contentions, an examination of the record reveals that the defendant Persons was at all times familiar with the progress of the application, that it was signed and acknowledged by him. The affidavit signed by Persons stated:

“ * * * that he verily believes himself to be the original, first and .sole inventor of the improvement in BELLOWS CONSTRUCTION described and claimed in the annexed specification; that he does not know and does not believe that the same was ever known or used before his invention or discovery thereof * * * ”.

Thereafter he signed numerous communications to the Commissioner of Patents making changes and amendments, withdrawing claims and adding additional claims with respect to Patent No. 1,726,584. On September 17, 1926, in a communication to the Commissioner of Patents, the defendant Persons used this language:

“The idea of forming a solder union in a manner preventing formation or retention of air bubbles was a new inventive thought wholly beyond the ken of these patents.” Page 30, P’s Ex. 9.

And on the same day he further stated:

“Also, invention is involved to employ in a device embodying this novel form of union, a plurality of sections nested one within the other, the sections being provided with inner and outer upstanding flanges, so that the flanges of each section may join the flanges of the adjacent sections disposed above and below. All this was a new invention though not suggested in any of the references, and though it is old to join a plurality of sections together, it is distinctly a new idea, and one involving invention, to join a plurality of sections, in nested relation, and in a manner as just described.” Page 31, P’s Ex. 9.

The record and the evidence do not bear out defendant Persons’ contention as to his views and his ideas respecting the patentability of his discovery, as now alleged in his answer.

I have discussed these questions of fact concerning the defendant’s belief and knowledge of the condition of the prior art, not for the purpose of questioning the validity of the patent, but for such weight as it might have in construing or narrowing the claims of the patent in regard to their relation to the accused device. Westinghouse Electric & Manufacturing Co. v. Formica Insulation Co., 266 U.S. 342, 45 S.Ct. 117, 69 L.Ed. 316.

The assignor is estopped to attack the utility, novelty or validity of the patented invention in an action between assignee and assignor. As to the rest of the world, the patent might be void or unpatentable. It is not necessary to pass on that question in this case because the assignor cannot be heard to question the right of assignee to exclude him (them in this case) from its use. Westinghouse Elec. Co. v. Forsica Insulation Co., 266 U.S. 342 loc. cit. 349, 45 S.Ct. 117, 69 L.Ed. 316; Freeman v. Altvater, 8 Cir., 66 F.2d 506; Sbicca-Del Mac Inc. v. Milius Shoe Co., 8 Cir., 145 F.2d 389.

It must therefore follow that the defendants cannot attack the validity of the patents, and for the purpose of this suit it must be held valid with respect to that which is included within its claims, and in an action of this nature, between the assignor and the assignee, a liberal construction must be placed on the patent in determining what was intended to be included within its claims. Freeman et al. v. Altvater, 8 Cir., 66 F.2d 506.

At the trial the defendants contended that the single element diaphragm or bellows represented by Plaintiff’s Exhibits 13-B and, 44 were included within the claims. In the original application there is described a bellows comprising “a plurality of sectional parts” attached at their peripheral edges in the manner described therein, and no change was made in that respect until the filing of the application on May 14, 1927 when nine additional claims, 16 to 24 inclusive, were filed. It is in this amendment that we first find descriptive reference to the single element device and I quote:

“21. An expansible and collapsible element comprising sectional parts jointed together at their peripheries by a soldered joint, said joint comprising a gutter in one section, solder in said gutter, and the edge of the other section extending into said gutter and imbedded in the solder.”

“22. An expansible and collapsible element comprising sectional parts joined together at their peripheries by a soldered joint, said joint comprising an open top gutter in one section, solder in said gutter, and the peripheral edge of the other section extending into said gutter and imbedded in the solder.”

In other words, we find in these claims the phrase “sectional parts” as distinguished from “a plurality of sections.”

Some time prior to the filing of the application in which these additional claims were made, a conference was held in the office of the attorneys for the applicant, at which this very question was discussed. Stenographic notes were taken of this conference, a transcript was made and introduced at the trial of this case. In this conference it was clearly indicated that Lawrence M. Persons anticipated the inclusion in his patent of a single diaphragm. This question was asked and answered:

“Mr. Ames: In that connection is that shown here in this application?

“Mr. Persons: It is a single diaphragm like this (indicating). .The distinction between a diaphragm and a bellows or a number of diaphragms is pretty hard to say.”

After the discovery by Persons of the method of assembling the units and soldering them at their peripheries, the plaintiff manufactured single element expansible and collapsible diaphragms, and such devices bore the number of the patent. In view of the record, I think there can be no question that this type device was intended to be included within the patent.

We next come to the contention of the defendants that even though the single element expansible and collapsible diaphragm is included in the patent, the accused device constructed as it is, is not included within the patent and therefore, not an infringement. Again we look at the record. Claim No. 20 signed by defendant Persons and filed with the Commissioner of Patents provides:

“20. An expansible and collapsible element comprising a flexible sectional part secured to an adjacent sectional part, said flexible section having a peripheral flange secured in a gutter in said adjacent section.”

The meaning seems to be clear that this claim covers the description of the accused device as to the question of a rigid base and flexible top, but if there is any doubt, we may again rely upon the patentee’s own words. At the time of the filing of the application adding the last nine claims, in a note attached to the amendment, he stated:

"Claim 20 covers a structure where one of the cooperating parts is not necessarily flexible.” (Emphasis supplied.)

Therefore, by his own language the inventor brings a device formed of a rigid base and a flexible member within the claims of his patent.

We come now to the final contention of the defendants with respect to the device patent 1,726,584 that the method of forming diaphragms by joining the elements at their peripheries by means of solder-in-gutter-flange-in-solder was old in the art and was not included within the claims of the patent.

To answer this question it must be determined whether or not the method of applying the solder in securing the joint was a part of the new and novel idea of the patentee, and whether or not the patentee intended that the method of uniting the elements in the solder as well as the shape of the elements themselves, was a part of his new and patentable idea. Defendants contend that it is not, and that in view of the prior art and the method of constructing bellows prior to the formation of this new device, it could not have been intended to be included as a claim of the patentee at the time of the filing of his application and the granting of his patent.

To support their contention, the defendants introduced in evidence numerous patents for the forming of bellows and other devices in which a diaphragm was generally described as forming a part of the device patented. They also introduced in evidence several devices which had been constructed and in which the use of a diaphragm was required. In the patents of these latter devices, a diaphragm with soldered joints was described.

.However, experience had taught that bellows formed by this method of joining the parts of such devices at the peripheries had not been successful and that the joints formed in that manner were not secure and were inclined to separate or permit leaks. It was because of this difficulty that Persons engaged in his experiments that finally resulted in the discovery of the method of soldering the joints which resulted in the issuance of the patent.

At the expense of repetition, it might he well to again describe the method of joining the parts of the accused device. Into the V-shaped trough or gutter in the rigid base there is flowed molten solder and it is puddled in such a manner as to produce uniform consistency and depth. Into this solder is pressed or inserted the peripheral flange of the upper or flexible part, and the solder rises on the inner and outer walls of the flange, thus forming an hermetically sealed joint; the flange on the flexible part being perpendicular.

In the prior art there will be found numerous ways of joining the elements or parts forming bellows or diaphragms long prior to the Persons discovery, some of which may be described as “sweated,” “crimped,” “brased,” “welded” and “soldered” joints.

Defendant Persons, in filing the application for the patent and the various statements made with respect to the patentability of his idea, contends that none of these methods were successful and that his method of soldering the parts at the peripheries in the particular manner in which his method of soldering was taught, eliminated the problems encountered with the other and older types of joints.

In determining whether or not the forming of the union at the joint by flowing the molten solder in the trough and inserting the perpendicular flange into the hot solder in such way as to permit air bubbles to escape and causing the solder to rise on the inner and outer walls of the flange in such manner as to lend strength to the joint as well as to hermetically seal it was a part of the patent in suit, let us again refer to the words of the patentor, the defendant Persons. At page 5 of Plaintiff’s Exhibit 9 this language was used by the defendant Persons in his application.

“In Fig. 6 I have illustrated the method of assembling the sections 6 and 7. The upper section 7 is first inverted and solder is poured in the circumferential gutter 26, the lower section 6 is also then inverted and superimposed upon section 7 so that flange 17 will enter the solder and seat within gutter 26. Solder is then poured in gutter 22 of section 6 and the next lower section 7 is inverted so that its outer circumferential flange 24 will enter the solder and also seat in gutter 22. As soon as solder 30 is seated the various sections 6 and 7 are rigidly united.”

In a communication to the Patent Office dated June 26, 1925 applicant stated (page 11, P’s Ex. 9):

“ * * * said gutters receiving molten solder into which said flanges are inserted during the assembly, said molten solder rising on the walls of said flanges when inserted, forming a substantial hermetic union between the disks when- the solder hardens, sáid gutters and said flanges being arranged or formed on said disks so as to practically eliminate deflection and prevent crystallization of the metal at or near the union of said disks.”

In a communication addressed to the Commissioner of Patents on December 3, 1925, the applicant stated (Page 24, P’s Ex. 9):

“It will be observed that applicant has provided a bellows construction having a novel type of union between its sections. Applicant’s gutter method of soldering forms a tight joint, as any bubbles of air which might otherwise form a pocket are allowed to freely escape. This forms a strong joint because the solder holds a larger area of the diaphragm compared to the references cited. * * * ”

Again on September 17, 1926, in a communication to the Commissioner, the applicant stated in reference to the Deegan and Zierden patents which have been offered in evidence here (Page 29, P’s Ex. 9):

“Both Deegan and Zierden talk of their edges as being turned over flanges, and in their description of the assembly of the sections, the very character of these edges are revealed as flanges and only flanges, because in neither case, are these edges first formed in trough or gutter formation to receive the cooperating flange in a puddle of solder. On the other hand, these edges are turned over into their interconnecting relation after the adjoining edges are placed together. Solder may be placed about the edges after placed together in Zierden’s device, but his arrangement is obviously not one of solder filled gutters. The apparent advantage of. applicanfs gutters is that air bubbles do not remain in the solder, but liberate themselves before the solder hardens. A surface application of solder to form a hermetic seal invariably results in trapping considerable air which cannot free itself in time — that is, before the solder hardens.” (Emphasis supplied.)

Applicant further stated in the same communication to the Commissioner (page 31):

“The applicant submits that invention is involved in a device in which the sections are hermetically sealed by a solder connection comprising a solder filled gutter and cooperating flange, the air bubbles liberating themselves before the solder hardens. Also, .invention is involved to employ in a device embodying this novel form of union, a plurality of sections nested one within the other, the sections being provided with inner and outer upstanding flanges, so that the flanges of each section may join the flanges of the adjacent sections disposed above and below.”

Again on January 26, 1929, in a communication to the Commissioner applicant stated (page 54) :

“Mount relies on holding his sections together by the rings 4 and not by solder, as in applicant’s case.”

And further on the same page:

“Mount does not subject his solder joint to stresses of any kind. Mount relies on the flanges 4 for strength at the union, while in applicant’s case, the solder-filled gutter is the strongest part of his entire bellows.”

Again on same page:

“Clearly, Mount does not teach the use of applicant’s union in Deegan’s device, nor does he even teach Deegan to use a solder joint. Mount does not form the edges of his sections into gutters. His rings 4 form the union and allow solder merely to form a hermetical seal.”

As further evidence of the intention of the patentor to include the method of flowing the solder and of inserting the parts into the solder within the claims of his patent, he invented and was granted Patent No. 1,816,610, one of the patents in suit here, for the purpose of joining the elements or parts by means of solder, and at page 20 of Plaintiff’s Exhibit 12 in a note attached to application under date of February 29, 1929, this language was used:

“He found that it was vital to apply the solder in a manner which would permit of easy flow in and about all the surfaces to be united, so as to cause any air bubbles which may form to rise through the puddled solder and escape. The invention herein resides in a method of soldering the bellows joint which eliminates any possibility of air bubbles trapping in the solder. Applicant accomplished this advance in the art by applying heat circumferentially to the gutter and rotating the heating element before the solder is applied to the heating element. This assures that no air bubbles will be trapped in the solder so as to weaken the joint at this point.”

I have investigated the claims of the patents offered in evidence with respect to the description of the bellows formation and the method of joining the edges or peripheries by means of solder, and I fail to fiñd in any of them a description of any method of flowing the solder or of any particular method of inserting the elements into the solder with the view to forming a particular type of union, nor do I find any statement in any of the patents or the claims, claiming any superiority of the soldered joint over that of any other joint because of the particular method of securing the joint by means of the solder. They are merely described as soldered joints and not a particular type of soldered joint as is described in and taught by the patent in suit.

Defendants offered in evidence Exhibits 7, 15 and 116 showing the use of a diaphragm- and explaining its formation in a “Gasograph” which was a device designed for the measuring of gasoline in automobile gasoline tanks. These exhibits were manufactured in accordance with “Mapel” Patents Nos. 1,798,692; 1,510,691; 1,633,-672 and mentioned repeatedly in the evidence. A physical examination of these patents clearly indicates that the soldered joints are not comparable, nor are they formed in the same manner as the soldered joints described in the patent in suit and as used in forming the accused device. The diaphragm in Defendants’ Exhibits 7 and 15 are constructed of a rigid base and a flexible top or disk containing circumferential corrugations. At or near the outer periphery of the rigid base is a trough or gutter with an inner perpendicular shoulder and flat bottom surface and a perpendicular outer wall. The outer periphery of the flexible member is turned down into a perpendicular flange, and the periphery of this flange is turned out to form an horizontal flange. When these flanges are fitted into the trough in the rigid member the wall of the perpendicular flange fits flush against the inner wall of the gutter and the horizontal flange lies flat in the bottom of the trough and is slightly narrower than the bottom of the trough. Apparently solder is flowed in on the top of the flange, and on the outer edge of the horizontal flange and the outer edge of the perpendicular wall of the trough, and in the description of the diaphragm there is no method suggested for forming the union.

The other Exhibit, No. 116, is constructed exactly like those described above, except that the inner wall of the trough in the outer periphery of the rigid member is on a slight angle instead of being perpendicular, and is comparable as to the inside of the trough of the device described in the patent in suit and of the accused device, the flexible member is constructed in identically the same manner, i. e., with a perpendicular flange and an horizontal flange to lie in the trough of the gutter and receive the solder.

I find nothing in these patents or in these exhibits which sustain the contention of the defendants that the method of soldering the joint was not intended to be included in the claims of the Persons patent. The accused device in all respects is within the claims of Patent No. 1,726,584 and the finding is against the defendants as to that contention. The accused device, Plaintiff’s Exhibit 13b infringes Claims 20, 21, 22, 23 and 24.

Plaintiff also contends that the defendants are threatening to infringe Patent No. 1,726,584 through the manufacture and sale of a device represented by Plaintiff’s Exhibit No. 42B. This device is formed of a plurality of sectional parts instead of the single diaphragm construction, and clearly comes within the claims of Patent No. 1,-726,584.

The defendants make the same claim with respect to the validity of the patent respecting this device as with respect to Plaintiff’s Exhibit 13b.

The defendant corporation prepared certain advertising describing a device which in all respects was comparable to bellows manufactured by the plaintiff, and showed a cut of the same which it apparently was distributing to prospective customers. However, it was contended by defendants; and not denied by the plaintiff, that this particular device was purchased from the plaintiff by the defendant corporation.

Defendant Lawrence M. Persons and the sales manager of the defendant L. M. Persons Corporation, discussed with certain die manufacturers in Chicago, the question of producing dies to form disks or parts for the manufacture of bellows. These discussions took place in 1943.

I suspect that the defendants had in mind reproducing a bellows constructed in accordance with Patent No. 1,726,584, but there was no convincing evidence that the dies which the defendants sought were to be used in the manufacture of a device which would infringe the patent in suit. Such dies were never obtained, and the matter never progressed beyond the discussion stage. The evidence is not sufficient to justify a finding that defendants intend to produce a bellows formed of a plurality of sectional parts which will infringe Patent No. 1,726,584 and the finding must be against plaintiff on that issue.

Plaintiff contends that the mechanical device used by defendant corporation to form its diaphragm, Plaintiff’s Exhibit 13b, is an infringement of its Patent No. 1,816,610. Application for this patent was filed by the defendant Lawrence M. Persons as patentor on May 10, 1924, and was granted by the Commissioner of Patents on July 28, 1931, to the Cook Electric Company, assignee of the said Lawrence M. Persons.

This patent was the result of the efforts of Persons to find a means of more effectively joining the plurality of sections forming the expansible and collapsible bellows patented by him under Patent No. 1,726,584 heretofore referred to. In his application, the patentor stated:

“Certain advantages may be obtained by the use of the same or similar apparatus shown herein when practicing the method of forming collapsible and expansible vessels as disclosed herein. The soldering irons may be supported on extensible frames which permit each iron to extend forwardly over the work table when it is desired to use the same. Provision is made to immediately withdraw the iron from over the work table to a position where the operator is less apt to accidentally touch the same. Counterbalancing weights are provided to raise the irons from the surface of the work table and springs are used to automatically swing the supporting frames backwardly. Both of these irons are so positioned relative to the work table that they may be easily operated without loss of time when reaching for one or the other. I obtained an increased production as the result of the use of this apparatus and find it has materially reduced the cost of the manufacture of the collapsible and expansible vessels.

“On the other hand, it permits the use of soldering irons which are rotatably mounted and which are provided with annular heating tips whereby the heat and solder may be applied substantially at the same time to all points about the gutter and cooperating flange, thereby producing a remarkably uniform joint. Slight rotation of these irons at the time of heating and applying solder tends to work the solder uniformly about the gutter and obtain a maximum hold or engagement over a larger area.”

The patented device which is described in the patent as “Improvement in Methods of and Means for Forming Bellows” was new and apparently an improvement in the method of applying solder to joints such as described in the application. It was especially designed to form the particular type of bellows or diaphragm designed by Persons. The solder irons were attached to a rotary device so as to fit into the trough or gutter and together with heat applied in such a manner as to form solder in such gutter in an even quantity, heat having been supplied by electrically charged soldering irons.

The art of soldering was old long before the discovery by Persons of his new method and was in use for many purposes, but an entirely different method was used than that discovered by Persons. That is, through the use of an assembly of soldering irons brought in contact as in his patent, with the parts to be soldered.

The defendants make the same allegations as to the validity of this patent that they do to the validity of the first patent in suit, but that issue must be ruled against the defendants, as they are estopped to deny the validity of the patent. Westinghouse Electric, etc., Co. v. Formica Insulation Co., supra.

The method adopted by the defendants in forming the accused device, Plaintiff’s Exhibit 13b, was entirely different from that described in the patent. In accordance with the findings of the court as to the infringement of Patent No. 1,726,584 the defendants could not use any method for the forming of a device which infringes that patent, but the use of a device for soldering a diaphragm or bellows which was not an infringement of that patent, would not be denied defendants.

The method used by the defendant corporation in forming the accused device is constituted of the head of a drill press which comes down and clamps the two parts of the diaphragm together and turns the parts of the diaphragm around. The whole assembly and the mounted supporting structure all turn together. Numerous gas jets arranged around the device are used' to heat -the element, and while the device is being turned,, heated solder is fed into the groove. This is an entirely different method than that used by the plaintiff in its patented device where the soldering irons are rotated so that they fit into the groove of the bellows and rotate around such groove. There is no open flame.

As I read the claims, there is no infringement by the accused device. Construing the plaintiff’s patent broadly and indulging in every presumption of its validity, it does not seem reasonable that it was intended by the patentor to include within his claims the open flame or the old method in a process which he contended was superior to that old method, and which greatly expedited the forming of the bellows and greatly reduced the expense of its manufacture. The finding is against the plaintiff as to the infringement on all claims as to its Patent No. 1,816,610.

Conclusions of Law.

I. The first patent in suit, namely, the Persons Patent No. 1,726,584, is valid as between the parties hereto as to each and all of its claims.

II. The corporate defendant L. M. Persons Corporation by its manufacture, use and sale of its bellows and diaphragms typified in Plaintiff’s Exhibit 13b has infringed Claims 20, 21, 22, 23 and 24.

III. The second patent, namely, the Persons Patent No. 1,816,610, is valid as to each and all of its claims.

IV. The device used by the defendant corporation in forming the accused device and infringing Exhibit 13b does not infringe Persons Patent No. 1,816,610.

V. The individual Lawrence M. Persons is liable jointly with the corporate defendant.

VI. Plaintiff is entitled to a decree for an injunction and accounting and to its costs as prayed for in the amended complaint. Plaintiff has waived an accounting against the individual defendant Lawrence M. Persons.

Judgment is ordered in accordance with the above.


author: RUSSELL, District Judge.

text:
    INTERSTATE COMMERCE COMMISSION v. TANK CAR OIL CORPORATION.
    No. 2721.
    District Court, N. D. Georgia, Atlanta Division.
    Jan. 31, 1945.
    S. Parker New, I. C. G, of Washington, D. G, and J. Ellis Mundy, Asst. U. S. Atty., of Atlanta, Ga., for plaintiff.

      Hamilton Douglas and F. Lee Evans (of Douglas, Evans & Cole), both of Atlanta, Ga., for .defendant.
   RUSSELL, District Judge.

This is a suit by the Interstate Commerce Commission, as plaintiff, proceeding under the authority of the provisions of part 2 of the Interstate Commerce Act and section 222(b) thereof, 49 U.S.C.A. § 322(b), seeking to enjoin the defendant from operation as a distributor of gasoline without having obtained a certificate authorizing such operations as a- motor carrier. A hearing has been had at which testimony was adduced, and the parties have argued the case by brief. The facts are found as follows:

Findings of Fact.

The defendant is a corporation organized and .existing under the laws of the State of Georgia, with its principal office and place of business in Atlanta, Georgia. Defendant owns and operates twelve retail gasoline filling stations in and near Atlanta, Georgia, and controls four such retail stations in which it furnishes pumps, tanks and other equipment under an agreement whereby these stations agree to purchase their gasoline from the defendant. The defendant operates several tank trucks and tractor-tank transports, by means of which it purchases both within and without the State of Georgia and transports such gasoline as is necessary to keep its stations supplied with stock sufficient for its retail sales. This gasoline is purchased largely in Birmingham, Alabama, St. Marks and St. Joe, Florida, and at Chattahoochee, a distributing terminal of the Southeastern Pipe Line Company near Atlanta, Georgia. When and if defendant is able to purchase more gasoline than is required for the operation of the retail stations, he makes sales of tank truck lots at wholesale to other dealers in the State of Georgia. In the period between June 12, 1943, and the time when the complaint was filed, December 20, 1943, this being when it is alleged the defendant illegally transported in interstate commerce gasoline for compensation, the defendant bought 343 truck loads of gasoline. It used 168 truck loads in its own retail stations, and sold 165 truck loads at wholesale to its controlled stations and other customers.

The complaint alleges eleven claimed illegal acts of transportation, and which are contended by the defendant were actual wholesale sales of gasoline. Proof was introduced of a statement by the managing officer of the defendant made to a representative of the plaintiff, and of testimony of two of the purchasers of the gasoline included within the eleven specified transactions.

During the period under investigation, an acute shortage of gasoline existed because of war conditions and the inference is clear that no dealer had on hand at all times sufficient stock to supply all demands.

The price at which the defendant made his sales to customers varied in proportion to the distance of delivery, but the defendant’s testimony that the sales were made to meet competitive conditions is not contradicted. The difference between the price paid by the defendant at the terminal at Birmingham, and the price received from his wholesale purchasers, is slightly in excess of the contract hauler’s freight rate for a haul from Birmingham to the place of ultimate delivery. However, the evidence discloses that the defendant took delivery of a considerable portion of his aggregate purchases from the terminal at Chattahoochee, Georgia, and plaintiff made no attempt to prove that there was any difference in the delivered price of this gasoline to customers close at hand and that secured on the delivery of gasoline purchased at Birmingham which involved a considerable haul.

The court finds that in essence the transactions complained of, and the general business of the defendant was, that the defendant was engaged primarily in transporting gasoline to supply the needs of its retail stations, and that when in the course of business it was able to and could secure gasoline in excess 'of the amount required for such purpose, it would dispose of such excess by completing a sale theretofore made. At times such excess would be on the yard at the time of sale, but in the majority of cases gasoline would have to be purchased by the defendant in order to fulfill the prior order.

Sometimes defendant would take the order and agree to deliver at the time in the future desired by the purchaser; at others, and the more frequently, it would require from two to fifteen days for delivery. At some times the defendant would merely state to the prospective purchaser that it did not have any gasoline, but would get it as soon as possible. Defendant had no storage tanks. The truck would be sent to the terminal, either at Birmingham, St. Marks or Chattahoochee, with a check filled out but with the amount blank, and the terminal operator or seller would fill in the amount of the purchase price of the gasoline and invoice the same to the defendant, the load would be taken to the defendant’s office in Atlanta and invoiced by the defendant at the sales price to the wholesale customer, and the truck then dispatched to such customer who would at that time deliver to the driver of the truck, or within a few days thereafter mail, a check to the defendant for the invoice price at which the gasoline had been sold to such customer. The gasoline was purchased by the defendant at the terminal at a price per gallon, plus State and Federal taxes, and was invoiced by the defendant to his customer at a price of so many cents per gallon, and in some instances at a price per gallon, plus taxes. The purchasers from the defendant bought the gasoline f. o. b. their station at an agreed price per gallon which included freight and Federal and State taxes, and to use the words of a witness, “did not know and did not care” where the gasoline came from. From the invoices introduced in evidence, it appears that as to the transactions with the two purchasers chiefly relied upon, the gasoline was transported from Birmingham, Alabama, and as to these, while the price received by the defendant from its purchasers was as to each sale the same, the corresponding purchases at the terminal upon occasion varied by as much as .37 of a cent per gallon.

The defendant was concerned in the transportation to the extent that it enabled it to keep its trucks in full operation, and such wholesale sales of gasoline not needed in the conduct of- its retail business earned for defendant additional profits, in the earning of which it was necessary that the defendant buy and transport the gasoline. Under present conditions, all gasoline was readily salable, and even if the same had not been secured in fulfillment of prior orders, could have been disposed of in the defendant’s trade area without storage in bulk.

The plaintiff fails to show by a preponderance of the evidence that as to any transaction there was other than a bona fide sale of gasoline f. o. b. the purchaser’s station, in which the purchaser was buying gasoline and was not concerned in the price or cost of transportation. The plaintiff does not show by a preponderance of the evidence that in case of the majority of the sales by the defendant at wholesale, the gasoline was purchased by the defendant after a sale of the approximate or equivalent gallonage to his customer.

In an application in February, 1943, before the alleged illegal transportations beginning June 12, 1943, to the office of Defense Transportation for authority to purchase additional equipment, defendant stated the need of such new equipment to be because it was “unable to buy or lease any transport equipment. The equipment we now have is busy continuously and we are unable to keep up with orders on hand * * * our operation is the transportation of gasoline from the Southeastern Pipe Line Terminal to jobbers and gasoline agents in Georgia and South Carolina. It is our understanding that the Southeastern Pipe Line is approximately 200 orders behind. With the addition of this new piece of equipment we will be in a position to serve quite a number of additional agents.” Following the denial of this application, in a letter seeking reconsideration, defendant stated: “As specified * * * we have been requested by the Republic Oil Company, the Southeastern Pipe Line Company, the South-port Gasoline Company, the National Oil Company, the Shell Oil Company, the Sinclair Oil Company and the Cities Service Company for equipment to transport gasoline in this area. All of these requests we were forced to refuse.”

The defendant has failed to keep a driver’s log in duplicate as required by the regulations of the Interstate Commerce Commission, and has likewise failed to secure or have in its files a certificate of physical examination signed by a qualified Doctor of Medicine for every new driver entering its employment as required by such regulations.

Defendant has not secured a certificate of public convenience and necessity from the Interstate Commerce Commission, nor has it filed policies of insurance or other security as required by the statute, nor has it filed with the Interstate Commerce Commission any rate or charge applicable to the transportation of property, or any minimum charge for such transportation of property.

Discussion.

Complainant contends that the decision in this case is upon the facts controlled by the rule in the case of A. W. Stickle & Co. v. Interstate Commerce Commission, 10 Cir., 128 F.2d 155. In addition, complainant urges the accepted rule that the Interstate Commerce Act is entitled to a liberal construction to effectuate the policy of the act, and further, the established rule that the courts will look beyond the actual form of the transaction in determining whether questioned operations are those of a common or contract carrier, or private carrier. A. W. Stickle Co. case, supra, and Georgia Truck System, Inc., v. Interstate Commerce Commission, 5 Cir., 123 F.2d 210. It also urges the accepted principle that interpretation of the statute by the Interstate Commerce Commission, the agent charged with its enforcement and operation, is entitled to great weight.

Upon consideration of the “matter it appears that the real question for determination by this court is the actual nature of the transaction involved rather than a determination of the law, for if the operations of the defendant are those of a common or contract carrier, the complainant is entitled to the relief of injunction as sought. The Stickle case does not afford much help in determining the .proper result in the present case. There the trial court found the circumstances of the transactions involved were transportations for compensation and that the Stickle Company was a common carrier. The Court of Appeals determined that there was sufficient evidence to sustain the finding under the facts in the case and thereupon held that the operations of the defendant were those of a contract carrier. The difference in the classification of the operations of the defendant by the trial court as those of a common carrier, and that of the Circuit Court of Appeals as those of a contract carrier, as well as the failure of the complainant in the present case to contend for any definite classification except that the defendant is not a private carrier, well illustrates that the difficulty inhering in the determination of any such a case is properly ascertaining the facts as to the actual circumstances of the operations, rather than a determination of the law. In the Stickle case the courts determined, under the facts there present, that the defendant was in fact engaged in the transportation of property for hire as a carrier. With this fact established, as a matter of law, the defendant became subject to all of the regulatory provisions of the statute including the proper subjection to an injunction by the court to prevent any violations thereof. The same court in Interstate Commerce Commission v. Clayton, 10 Cir., 127 F.2d 967, on the day prior to the decision in the Stickle case, held upon the facts there presented that the operations of the defendant were those of a private carrier. Thus each case 'must be determined by its own facts.

In this case, no extended discussion of the law involved is deemed necessary. Full findings of fact have been made. As to the law, before the complainant is entitled to the injunctive relief sought, it is necessary for it to convince this court that the operations of the defendant was “transportation for compensation as a common or a contract carrier,” as held by the Interstate Commerce Commission in T. J. McBroom Contract Carrier Application 29370, 1 M. C. C. 425. This appears to be an excellent statement of the test. Thus, not that the transportation might result in compensation as a matter of profits to the seller or transporter, but that the effect of the transaction is compensation as a common or contract carrier. In the Stickle case the court found transportation for such compensation. In the present case, while the court finds that the transportation resulted in profit to the defendant, that is, that it was necessary to transport in order to earn the profit, nevertheless I am unable to find, under the evidence, that there was involved in the transportation any idea of freight or carrier charges. Under the undisputed and uncontradicted evidence, it made no difference where the shipment originated, the cost to the purchaser was the same. I do not believe that the fact that profit, or compensation, may accrue as a result of transportation is a sufficient test, for if that be so, one who lost money as a result of deliveries for fixed freight charges would not be a carrier. The real question in any case to be determined is, looking beyond the form of the transaction and to its circumstances, whether the transportation is for compensation as a common or contract carrier, or whether such transportation is incidental to the operation of a commercial enterprise. In this connection, I find nothing in the statute which prohibits the conduct of a bona fide wholesale business, even if transportation is usually and even exclusively employed as a means of its conduct, provided the operation does not in fact place the operator within the classification of a common or contract carrier. Thus the fact that the defendant used no storage tanks, in itself does not subject it to the provisions of the statute.

It is true that ownership of the goods transported is not the sole test whether one is a private carrier or otherwise: However, where bona fide ownership is shown, that fact is, under the definition of private carrier contained in the statute, entitled to considerable weight. And where bona fide ownership is shown, together with a failure to prove transportation for compensation as a common or a contract carrier, no proper basis exists for classification as a common or contract carrier. Indeed, this does not appear to be seriously questioned by the complainant, its contention is that the profit on the f. o. b. sales of the gasoline is the substantial equivalent of transportation charges between the points involved in the eleven transactions proved in detail, and that this, together with the evidence that the defendant always had an order before he purchased to fill it, shows that in essence the transaction was a subterfuge to evade the requirements of the statute. In view of the testimony from the complainant’s witnesses that they purchased gasoline f. o. b. their stations, and neither knew nor cared from whence it came, and the testimony in behalf of the defendant that the prices charged were based upon competitive conditions in the respective localities, the inference sought to be drawn by the complainant is not entitled to the weight claimed for it. This is not a case where the business relates solely to transportation and wholesale sales. It is shown by the evidence that more than half of the gasoline transported by the defendant was delivered to its retail stations and there sold. As to this portion of the business it is conceded by the complainant that the operations were those of a private carrier. Under the facts here I can find no substantial difference between such transportation for sale at retail and the transportation for sale at wholesale, and accordingly conclude that the complainant has failed to show that in its wholesale operations the defendant is either a common or a contract carrier.

Complainant relies heavily upon a statement made by the general manager of the defendant in which he admits that “we transport a spasmodic load now and then for somebody who calls in.” Considering, this statement in its context, and in con-nection with the evidence adduced upon the trial, I am unable to predicate thereupon a finding that the defendant’s operations were the transportation of gasoline for compensation. The statement in its application to the Office of Defense Transportation that it had been requested to transport for various companies, is likewise not proof that it had been transporting, for it did not secure the additional equipment simultaneously stated to be necessary to carry on such operations.

In none of the decisions of the Interstate Commerce Commission cited and relied upon in the argument here were the facts similar to those here involved, and in them the element of transportation for compensation as a common or contract carrier clearly appeared.

There lurks in the , background of this case circumstances which give rise to" a suspicion that some operations of the defendant may be different than those disclosed by the evidence presented. However this suspicion is not sufficient to override the positive testimony in the record. Nor, being in opposition thereto, does it aid in establishing complainant’s case by a preponderance of the evidence.

From the statements made, it is apparent that there are other cases of a similar nature pending, and as the case will doubtless be appealed for final adjudication, no further discussion is necessary.

With reference to the matter of keeping of driver’s logs and record of medical inspection, it is clear from the evidence that the defendant has failed to comply with the terms of the statute and regulations thereunder which are applicable to private carriers, and as to these matters, the complainant is entitled to an injunction to secure compliance with such statute and regulations. An order providing therefor may be presented.

Conclusions of Law.

This court has jurisdiction of the parties and the subject matter.

The operations of the defendant are not subject to the provisions of the Motor Carrier Act so as to require it to obtain a Certificate of Convenience and Necessity, to file a tariff or statement of its minimum charges, or to file with the Commission the insurance or the filing and approval of surety bonds, qualifications as a self-insurer, or other securities or agreements by motor carriers subject to said act, duly prescribed by said Commission pursuant to the provisions of Section 215 of said Act, 49 U.S.C.A. § 315.

The complainant is entitled to an injunction to restrain the defendant from violating the Motor Carrier Act by failing to keep and preserve driver’s logs and certificates of medical doctors certifying to the good health of the drivers employed.

Defendant should be taxed one-half of the costs of this proceeding.

Let a decree be presented by the plaintiff upon notice effectuating these conclusions of law.


author: BYERS, District Judge.

text:
    HORAN v. PENNSYLVANIA R. CO. THE JOHN J. HORAN. THE DETROIT.
    No. A-17166.
    District Court, E. D. New York.
    April 27, 1945.
    Mahar & Mason, of New York City (Frank C. Mason, of New York City, of counsel), for libelant.
    Burlingham, Veeder, Clark & Hupper, of New York City (William S. Stuhr, Jr., of New York City, of counsel), for Pennsylvania R. Co. and the tug Detroit.
    Edward R. Brumley, of New York City (Edmund J. Moore, of New York City, of counsel), for Trustees of New York, New Haven & Hartford R. Co.
   BYERS, District Judge.

The question for decision is whether the libelant’s scow John J. Horan was struck by the Pennsylvania Railroad’s Diesel tug Detroit or by a carfloat being towed by the New Haven steamtug Transfer No. 17 on May 29, 1944, when the scow was lying on the north side of the open pier at Greenville, New Jersey.

The fact of damage to the scow on her starboard side was established.

She had been chartered to the Pennsylvania at the time in question, and her delivery in good condition and her return on June 2, 1944, in damaged condition are not now in question.

The Pennsylvania alleged that while the scow was so under charter to it and on the afternoon of May 29, 1944, it was struck on the starboard side by a carfloat in tow of Transfer No. 17 wherefore it filed an impleading petition against the Trustees of the New York, New Haven and Hartford Railroad Company, to be called the New Haven.

The latter by cross petition denied that its carfloat so struck the scow, and alleged that the damage was actually caused by the Pennsylvania’s Diesel tug Detroit, which was proceeding inshore, close to the northerly side of said open pier, between the tow composed of the Transfer No. 17 and her two car-floats which were headed out of the slip, and the scow, so close to the latter as to strike it.

The narrow question of fact which survives the trial is: Which tug did the damage? The testimony yields the following:

Findings

(1) Ownership of the scow John J. Horan and the incorporation of the other parties and ownership of the respective tugs, and the appointment of the Trustees of the New York, New Haven and Hartford Railroad Company, all as alleged in the pleadings, are found as pleaded.

(2) The John J. Horan is a wooden scow, 113 feet by 33 feet, having an inside depth of 8.9 feet.

(3) On May 29, 1944, at about 2.30 p. m., the said scow was being loaded at the northerly side of the open pier at Greenville, New Jersey, bow in, about 400 feet from the bulkhead and about two or more lengths outshore from the five float bridges at the inshore end of the slip.

There was about 875 feet of water between the said open pier and the mooring rack opposite.

(4) The said scow was then under charter to the Pennsylvania Railroad Company, and its movements were directed and controlled by that Company; the scow-master on board was Matthew Campbell, an employee of the libelant.

(5) 'At about 2:30 p. m. the New Haven steamtug Transfer No. 17 (the dimensions of which are 112 feet by 26.2 feet with an inside depth of 14 feet, and 1,000 horsepower) proceeded to the float bridges 13 and 14 immediately adjacent to the north side of the said open pier, and took in tow two steel carfloats, Number 68 o'n the tug’s starboard and the other on its port hand.

(6) Both carfloats carried railroad cars; there being twenty on Number 68. The dimensions of that float are 360 feet, 2% inches, by 40 feet, 2% inches, with a depth of 11% feet.

(7) The tug then backed to its starboard hand in about a 90 degree turn, close to the said mooring rack, and then went ahead under a hard left rudder so as to turn the tow sufficiently to port to proceed out of the slip.

(8) The effort was so performed that the tow tended to head toward the mooring rack, in a diagonal direction, and it was necessary for the tug then to make an abrupt change of helm to the starboard to arrest the turn to port.

(9) That starboard turn was not made sufficiently in time to enable the carfloat Number 68 to avoid contact with the scow John J.. Horan, and such contact actually took place and caused the damage for which the libel was filed.

(10) At about the time that the Transfer No. 17 was backing out with the two carfloats as stated, the Pennsylvania tug Detroit rounded the open pier and slowly proceeded into the slip for the purpose of enabling the Pennsylvania employee Timothy Hayden, on board the tug, to make a pier check; that is, a listing of the vessels lying on the northerly side of the said open pier, for the purpose of record.

(11) The Detroit was barely moving while the said checking was taking place, and at the time that the said carfloat struck the libelant’s scow, the Detroit was not less than 300 feet away from the said scow.

(12) The Detroit did not strike the libelant’s scow.

(13) Visibility was good at all times herein involved, and neither tide nor wind affected the vessels in question or the maneuvers of Transfer No. 17.

(14) No whistle signals were blown by either tug to the other.

Conclusions

I. The libelant is entitled to a decree with costs against the Pennsylvania Railroad Company, the respondent, because of its failure to return the scow John J. Horan to its owner in as good condition, etc., under the charter as stated.

II. The Pennsylvania Railroad Company is entitled to a decree against the impleaded Trustees of the New York, New Haven and Hartford Railroad Company, with costs, for the damage caused to the libelant’s scow as above stated.

III. The Pennsylvania Railroad Company is entitled to a decree dismissing without costs the cross petition filed by the Trustees of the New York, New Haven and Hartford Railroad Company against the impleaded Pennsylvania Railroad’s tug Detroit.

Comments

The reasons for resolving the testimony in accordance with the Findings may be summarized as follows:

(a) No lookout was posted on carfloat Number 68 as the New Haven tow proceeded out of the slip; the deckhands testified that they were handling the lines during this maneuver and could not function as lookouts. That statement is accepted, but it does not alter the fact that no one was in a position on carfloat Number 68 to warn the Transfer No. 17 of its proximity to the libelant’s scow John J. Horan while the described maneuver was being conducted.

(b) The navigator of the Transfer No. 17 could not see the libelant’s scow, by reason of the presence of cars on the float, which shut off his view toward the open pier as the rounding maneuver was under way.

(c) The actual contact was seen by John Fluke, the captain of the Detroit. While he was not a neutral witness, nothing was observed concerning his demeanor or recital, or of Hayden, the Pennsylvania floatman who was making the dock check, to impair the testimony of either.

(d) Campbell, the scowmaster, observed the stern of the starboard carfloat rubbing his boat after the contact, and says that the Detroit was not less than 300 feet away at the time.

(e) Curtain, the captain of the New Haven tug, was told on May 30, 1944, to prepare a report on damage claimed to have been sustained by the scow Horan, which means that the assertion was promptly made for the Horan that the damage was caused by the New Haven tug and not by the Detroit; thus consistency of narrative from the time of the happening to the trial must be attributed to the libelant.

Settle interlocutory decree in accordance with the foregoing.


text:
    SEIBERLING LATEX PRODUCTS CO. v. COE, Commissioner of Patents.
    No. 25031.
    District Court of the United States for the District of Columbia.
    April 27, 1945.
    Edmund H. Parry, Jr., of Washington, D. C. (Gordon C. Mack, of Akron, Ohio, of counsel), for plaintiff.
    W. W. Cochran, Sol., United States Patent Office, of Washington, D. C., for defendant.
   DUNCAN, District Judge.

This suit was instituted by plaintiff as assignee, in the United States District Court for the District of Columbia, to authorize the defendant, the Commissioner of Patents, to issue to the plaintiff, a patent based upon Application No. D-99,104.

Plaintiff is a corporation organized and existing under the laws of the State of Ohio, and seeks relief under Section 4915 of the Revised Statutes, 35 U.S.C.A. § 63.

The subject of the application is described as a “new, original and ornamental design for playing ball” and referred to by applicant in his testimony as “An Educational Play Ball”. It will be referred to herein as the “Glass” patent.

The ball is inflated, made of latex and is manufactured in sizes five and six inches in diameter. Before the ball is lettered or decorated, it is white. Around the equatorial center of the ball (exhibit 4) is painted a red stripe about five-eighths inch wide. On each side of the red stripe in what may be termed the “temperate zones”, are blue letters three-fourths inch in height, some of which are broken, i. e., the lines forming some of the letters are broken or divided at irregular places, thus permitting the white of the ball to show through the open or broken line, and so spaced as to extend entirely around this section of the ball.

Around the “polar region” there are arranged numerals from 1 to 0 three-fourths inch in height and exactly and evenly spaced so as to extend completely around that surface of the ball. The lines forming some of those numbers are divided or broken the same as those forming the letters.

The same design is carried out in the other half of the ball. The letters and the numbers are accurately and evenly balanced in both halves of the ball and occupy exactly relative positions. As one views the ball lying in a fixed position, the numbers and letters in one-half of the ball appear in an upright position, and the letters and numbers in the opposite portion of the ball appear in an upside down position.

To place the letters upon the surface of the ball it is held in what is termed a “mask” — a metallic “gadget” just the shape and size of the ball. It is divided into halves and secured at the top by means of a hinge. It is placed over the ball and held at the bottom by handles provided for that purpose. On the surface of the “mask”, at the proper places, there is formed the shapes of the letters and numbers to appear on the surface of the ball, and through the opening forming the letters the paint of whatever color desired is sprayed by means of a mechanical sprayer. More simply described, the “mask” is a stencil clamped around the ball and the paint is sprayed through the opening forming the letters and numbers. The solid line around the equatorial center is placed on the ball after the “mask” is removed. The exhibit offered in evidence is a combination of red, white and blue, the surface of the ball being white, the equatorial line red, the letters blue, and the numerals red.

It is contended by the plaintiff that the combination or arrangement of the letters and numerals and the color combination is new in design, attractive to the eye, and not heretofore discovered, and therefore patentable as to design.

The Commissioner rejected the application “because unpatentable for lack of design invention over the reference and for the reasons of record: That, more particularly, the basis of the final rejection was the following U. S. patents: Farley 280,807, Reimert 2,017,473, Eddy D-51722, and Griffiths D-61805; and Items 48T3123 and 48T3148 of pages 34 and 35 of the Montgomery Ward Christmas catalog for 1937, in view of which art the Primary Examiner held that there was no invention in providing conventional letters and numerals in the manner claimed:”.

The Farley patent 280,807 applies to “Croquet balls (wood) mallets, wickets and stakes and/or either but particularly to balls made luminous by the application of a luminous substance 'to enable the balls to be more easily seen “in the cool of the evening” ’ ”. The balls and mallets have opaque lines “as a distinguishing mark”. Other than the opaque lines around the balls and mallets for distinguishing purposes, I can find no similarity whatsoever between that patent and the “Glass” application in question here. In fact, at the trial, the defendant did not contend that there was any similarity.

The same is true with respect to the Reimert patent 2,017,473. This patent refers to a rather complicated game device composed of a “ball-supporting block”. Numerous balls were used, each ball having painted upon its surface several large letters. The box or ball-supporting block was so designed that when the balls were placed therein, words might be formed or games of chance played. Like the Farley patent, I can find no similarity to the “Glass” Play Ball.

The Griffiths patent has two lines oi ribs around the equatorial center, one on each side of a seam or rib exactly dividing the ball, and in the upper space are' arranged letters “A” to “Z”, but these letters are not spaced in such manner as to extend entirely around the ball; they extend only part way around, there is left considerable space between the “A” and “Z”.

In the space below are numerals from 1 to 0. These numerals are so balanced that the numeral “1” is matched with and beneath the letter “B”, and “0” is beneath the letter “K”. In the “temperate zone” both above and below the center are numerous animals, horses, camels, goats, bears, birds, etc. In the “polar region” is Noah’s Ark. Around this region and the Ark are two circles or ribs. The animals, the Ark, the letters and the numbers are molded into the fabric, and it is contended, and I think with justification, that the animals and other designs in the rubber ball, which, as above stated, are molded into and are a part of the fabric, and therefore, not attractive and distinguishable as such beyond a short distance from the eye.

The Eddy patent likewise is a rubber ball. Around the equatorial center is found all of the letters of the alphabet, spaced almost exactly as are the letters in the “Glass” application. In the ball covered by the Eddy patent, the letters are molded into the fabric. The entire surface of the ball above and below the equatorial line is solidly covered by small stars of equal size and obviously of the same color as the fabric of the ball. They likewise are molded into the fabric.

The Montgomery-Ward ball, design 48T3148 which is not patented, is approximately the same size as the “Glass” ball and the balls described in the Griffiths and Eddy patents, and is shown in Defendant’s Exhibit 1 and Plaintiff’s Exhibit 2, as a white ball with a black line around the equatorial center with four narrower zigzag lines of the same color extending around the ball in both temperate zones. The polar region is surrounded by diamond-shaped blocks of the same color. There are no letters or numbers on the design.

The Montgomery-Ward design 48T3123 shown in Defendant’s Exhibit 1, is an inflated ball. The description in Montgomery-Ward’s catalog says “It is a rubber ball with bright clown decoration in two colors, red and white.” The cut in the catalog indicates that the surface of the ball is red with a white stripe around the equatorial surface, and in the zones opposite the white stripe is to be found pictures of clowns in white upon the red background. This design like the other Montgomery-Ward design, is not patented, and no letters or numerals appear upon the surface of the ball.

Defendant contends that plaintiff’s arrangement of the letters and numerals on the “Glass” design is simply a rearranging and grouping of the letters and numerals shown in the Eddy and Griffiths patents, is not new and ■ novel in design, and therefore, not patentable.

Certainly there is nothing new and nothing novel about the design of either of the Montgomery-Ward balls. One is composed simply of zigzag lines on either side of a solid black line and the connected diamond-shaped blocks around the “polar region”. It is not novel and cannot be said to represent any inventive genius.

With respect to the other Montgomery-Ward design, i. e., a red ball with a white equatorial line and clowns, I think it is not materially different from many other types of balls which are shown in the catalogs introduced in evidence. It follows pretty generally a pattern to be found in many other types of play balls, particularly those shown in the Miller catalog.

A design patent must involve exercise of inventive genius — and more than mere skill in the draftsman. Whether or not the design is attractive is not the way in which it appears to the expert, but to the ordinary observer, and certainly the eyes through which the writer of this opinion views the exhibits and the “Glass” design, are those of an ordinary observer and in no respect, expert.

There certainly is no indication of inventive genius or anything unusual in the attractiveness of the arrangement of the letters on either the Griffiths or the Eddy patent. They are simple A B Cs and 1-2-3-4s appearing on the Griffiths patent, without any attempt at balancing or spacing to add attractiveness, and on the Eddy patent, while the letters are evenly spaced around the equatorial center, they are molded into the fabric and must reasonably be expected to follow the color of the band around this surface. So far as the letters and numerals are concerned, there is greater distinction between the “Glass” design and either the Griffiths or the Eddy patent, than there is difference between the Eddy and Griffiths patents.

The design of the letters and numerals, the balancing of each with the other upon the surface of the “Glass” design and the manner in which the letters and numerals are formed, is distinctive and immediately attracts the eye at most any distance at which the letters and the numerals, each of which is approximately three-fourths inch in height, may be seen.

From my own observation of the “Glass” design-and the other exhibits, the “Glass” design has much greater eye-appeal.

Considerable testimony was introduced to show that the demand by the trade for the “Glass” design was very much greater than any other of the designs shown in evidence. This of course, of itself, is not sufficient to justify the granting of a patent, but certainly it is persuasive in determining whether or not the design is new and novel and appealing to the eye. The evidence shows that the 10^ stores and other stores handling novelties were the greatest purchasers of this type ball, and certainly the persons who purchase such commodities for a large number of stores are judges of what is likely to be attractive to consumers.

The mere regrouping of numerals and letters as shown upon the Eddy and Griffith patents would not justify the granting of a patent but Glass has done more than that, it seems to me, and has shown inventive faculties in the method and the manner or the forming of his letters and numerals and the grouping upomthe ball.

I am convinced that the “Glass” design is new, original and ornamental and that the plaintiff is entitled to a patent.

Decree accordingly.