author: OTIS, District Judge.

text:
    UNIVERSAL OIL PRODUCTS CO. v. STANDARD OIL CO. OF INDIANA (GERMAN, Intervener).
    No. 121.
    District Court, W. D. Missouri, W. D.
    Feb. 27, 1934.

      See, -also (D. C.) 1 F. Supp. 612.
    R. R. Brewster, of Kansas City, Mo., and Charles H. Mayer, of St. Joseph, Mo., for plaintiff.
    Cyrus Crane (of Lathrop, Crane, Reynods, Sawyer & Mersereau), of Kansas City, Mo., for defendants.
   OTIS, District Judge.

The Universal Oil Products Company filed in this court August 7, 1916, its bill in equity alleging that the defendant, Standard Oil Company of Indiana, had infringed a patent belonging to the plaintiff and praying injunctive relief and damages. An answer having been filed, -a master was appointed to take testimony. For a period of years the ease pended before the master. Finally, before any hearing by the court and, of course, before any decree, a settlement out of court was effected between the parties. Thereupon the plaintiff sought to dismiss its bill here.

Mr. Charles W. German was one of the attorneys for the plaintiff. Before any order of dismissal was made, and none has been made, he filed in the case what was styled an “intervening petition,” the general purpose of which was to obtain an order or decree of court requiring the plaintiff, before final order of dismissal, to compensate the intervener for his legal services. It was attacked by a motion to dismiss. That motion was overruled by the judge of this court, Honorable Albert L. Reeves, before whom the case was then pending. The plaintiff was required to and did answer. The issues made by the intervening petition and the answer were set for trial. Before the trial date Judge Reeves disqualified and the writer of this opinion was designated by the Senior Circuit Judge to take over the ease and to proceed with it. The trial date was reset. Shortly before that date was reached Mr. German filed a second amended intervening bill which the plaintiff has moved to strike.

The motion to strike has been treated by the parties as a motion to dismiss and it will be so considered here. The prime question raised by this motion is whether the claim of an attorney for compensation rendered a client in a given ease, where the client is the plaintiff, who has settled with the defendant out of court and before judgment, may be enforced in the manner here attempted, that is, by an intervening bill in the case itself? Counsel for Mr. German contend that it may be so enforced and that it might be enforced upon a mere motion in the ease. It is contended, on the other hand, by counsel for the plaintiff, that such a claim can be enforced only by an independent suit at law or in equity.

I consider then in what manner under the law an attorney may enforce as against his client a claim for compensation for legal services rendered in a ease begun in the courts, partially prosecuted, and settled between the parties before final judgment or decree? That he may enforce it by an independent suit for breach of express or implied contract of course is certain. That he may enforce it by an independent suit in equity to foreclose an attorney’s lien if he has such a lien also is certain. That the law gives him these good and generally sufficient remedies none questions. Does he have also a remedy in the very ease in which services have been rendered and, if so, of what character is it and under what circumstances may it be secured?

The Attorney’s Lien Statute.

1. In support of the contention that there is such an alternative remedy, counsel first relies on the Missouri attorney’s lien statute. I proceed therefore to a consideration of that statute. It is section 11716, R. S. Mo. 1929 (Mo. St. Ann. § 11716), and reads: “The compensation of an attorney or counselor for his services is governed by agreement, express or implied, which is not restrained by law. Drom the commencement of an aetion or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his client’s cause of aetion or counterclaim, which attaches to a verdiet, report, decision or judgment in his client’s favor, and the proceeds thereof in whosesoever hands they may eome; and cannot be affected by any settlement between the parties before or after judgment.”

It is to be observed at once that this statute, although creating an attorney’s lien, makes no provision whatever for its enforcement, nor does any other Missouri statute fill up this omission. If then there is a remedy for the enforcement of the attorney’s lien, that remedy must be found in the general law or in established principles of equity.

Laying aside for the time those judicial opinions which interpret this and similar attorney’s lien statutes, and looking now only at the language used in the statute, we perceive that it gives an attorney a lien only upon one thing; that is, the “client’s cause of aetion.” It provides indeed that the lien so given shall attach to a verdiet, report, decision, or judgment in the client’s favor, but it is still a lien only upon the cause of action. It was quite logical, although perhaps unnecessary, to provide that the lien should attach to a verdict, report, decision, or judgment, for each of these is the immediate progeny of the cause of action, or, more accurately, each of these is the cause of aetion in a metamorphosed and perfected state. That is true too of the proceeds of a verdiet, report, decision, or judgment to which also the lien attaches. The lien does not attach to any other thing than those specified, for expressio unius ex-clusio alterius est. The lien is only upon the cause of aetion and it attaches only to the objects expressly named.

There is only one reference in the statute to a settlement between the parties. Although the context shows that the possibility of a settlement before or after judgment and the effect thereof upon the security intended, to be given the attorney were present in the minds of the lawmakers and to some extent provided for in the same sentence as that creating the lien and declaring the objects to which it shall attach, still neither an agreement of settlement nor the proceeds thereof are included among the objects to which the lien will attach.

The one reference to a settlement is this: “(The lien upon the client’s cause of aetion) cannot be affeeted by any settlement between the parties before or after judgment.” If it is not affeeted, then it is neither enlarged nor lessened. It is still upon the client’s cause of action and that only. It still attaches to a verdiet, report, decision, judgment, and their proceeds and to them only.

Something, however, was intended to be accomplished by the provision last quoted. It was assumed by the lawmakers that except for that provision the attorney’s lien would be affected by, for example, a settlement before judgment. The assumption was justified by the doctrine that a settlement extinguishes a cause of action, although, perhaps more accurately it should be said, when there has been a settlement of a cause of action the cause of aetion merges in the agreement of settlement. What the lawmakers intended to make clear was that the lien given upon the cause of action would continue although the cause of aetion was merged in an agreement of settlement.

A cause of aetion is a right which the law gives and which the law will enforce, a right to recover something from another. There are two ways in which he who has such a right may obtain satisfaction from him obligated. One of these is through the courts. The other is by private negotiation with the party from whom satisfaction is demanded. He who has the right may seek satisfaction in either of these ways or in both at the same time. If he has called to his aid an attorney and that attorney institutes a lawsuit to enforce the client’s right, then from the commencement of the action the attorney has a lien upon the cause of action. The lien is upon the cause of action; that is, the right of the client under the law to recover something from his adversary. The lien is not restricted to the cause of action in so far only as it may be enforced in the courts, but is upon the cause of action without any such limitation; that is to say, it is upon the cause of action, whether prosecuted in the courts or by private negotiation out of court. However, there is this distinction to be drawn: So far as the cause of action is asserted in the courts it is subject to the jurisdiction of the courts. Any interest in the cause of action to the extent that the cause of action is in the courts (and a lien upon a cause of action is an interest in it) possibly also is subject to the jurisdiction of the courts and possibly is determinable and may be enforced by the courts in the same ease in which the cause of action is prosecuted. But if the cause of action is prosecuted by private negotiation out of court, then the court has no jurisdiction whatever over such prosecution, the incidents thereof, the interest of the plaintiff or any other therein. No court can compel, prevent, or condition such a prosecution. Since the court can have no jurisdiction over the prosecution of a cause of action by private negotiation, it cannot have any jurisdiction to enforce an attorney’s lien upon a cause of action so prosecuted.

The situation just described is quite comparable with this: B has given his promissory note in the amount of $1,000 to A. It is due and unpaid. A has a cause of. action against B. He employs C as his attorney and agrees to pay him as compensation for his services 25 per cent, of whatever is recovered. Thereupon C brings suits for A against B in two courts at the same time, in the circuit court of X county and in the circuit court of Y county. Two prosecutions are thus instituted, although there is only one cause of action, and upon that cause of action C has an attorney’s lien. If A obtains a judgment in the circuit court of X county to which C’s lien would immediately attach, no one would urge that the circuit court of Y county has any jurisdiction whatever to enforce that lien. If there is jurisdiction in any court summarily to enforce the lien, it is in the circuit court of X county and not in the circuit court of Y county. The situation would not be different because the cause of action has been prosecuted, not in the circuit court of X county, but by private negotiation or before a nonofficial arbitrator selected by the parties. In either ease, the prosecution which has resulted in a disposition of the controversy has never been conducted and neither it nor its incidents ever have been within the jurisdiction of the circuit court of Y county.

We may suppose another case which equally makes clear the conclusion that a court does not have the power summarily to enforce an attorney’s lien where a settlement has been made outside of court and before judgment.

Assume there is no statutory attorney’s lien. An attorney is employed by a client who has a cause of action against-another for specific performance of a contract to sell land. The client agrees to pay his attorney'for his services the sum of $1,000 and gives him a demand note for that amount, secured by a contract lien on his cause of action and whatever is recovered through its prosecution. A decree for specific performance is obtained. The defendant, complying with the decree, executes the deed to the land in question. Now the attorney has a lien on the land to secure the note and he demands payment of the note. He has a cause of action now against his client on the note and to foreclose his lien. Can he proceed against his client by intervention or by motion or in any other way? If not, why not? The simple answer is: Because the attorney’s cause of action is wholly distinct from the client’s cause of action. One who goes into court to sue another subjects himself to being sued by that other in a lawful counterclaim, b,ut he certainly does not subject himself to suits against himself without lawful service of process upon him by all who may have causes of action against him. What difference does it make that this attorney has a contract lien instead of a statutory lien? The remedies available for the enforcement of a lien, whether arising out of contract or out of statute, if the liens are otherwise identical, cannot be different unless in the ease of the statutory lien some special statutory remedy has been provided.

I cannot find then in the language of the Missouri attorney’s lien statute nor in the character of the lien therein created any support whatever for the contention that it provides a lien enforceable summarily by an attorney for a plaintiff in a ease in which the plaintiff outside of court has entered into an agreement of settlement with the defendant and has received the proceeds of that settlement.

The Missouri Cases.

2. I turn now to the decisions of the Missouri courts which interpret the attorney’s lien statute of this state and which discuss what remedies are available for the enforcement of the attorney’s lien. It may be said at once that there is not one of them in which it is ruled or asserted even by way of dictum that an attorney for a plaintiff may have summary enforcement of his lien against the plaintiff in the plaintiff’s case against the defendant where the parties have entered into an agreement of settlement out of court. But counsel point to the case of State ex rel. Anderson v. Roehrig, 320 Mo. 870, 8 S. W. (2d) 998, 1000, and urge that the opinion and decision in that case support in principle such a theory. It seems to me to give it no support whatever.

All that was held in State ex rel. Anderson v. Roehrig was that in a ease where a plaintiff has obtained a judgment against a defendant, and where the amount of that judgment has been paid into court by the defendant, the plaintiff’s attorney may, by motion in the ease, assert and have determined his lien and have the lien enforced against the amount paid into court. That a court of general jurisdiction has authority, “in such circumstances, to fix an attorney’s fee and. make the necessary orders to enforce its payment, is incident,” it is said in the opinion in that ease, “to the control it has over its own judgment and records.” There is no further discussion in the opinion of the source of the asserted jurisdiction.

It is impossible to see in this decision and in the reasons given for it any support for the contention that a court of general jurisdiction may enforce an attorney’s lien in a ease in which there has been no judgment and in which nothing has been paid into court on account of any judgment. A jurisdiction which depends upon the fact that there has been a judgment certainly cannot exist where there has been none.

It is true that the doctrine in the Anderson opinion is not limited to a ease in which the amount of the judgment has been paid into court. The whole amount may have been paid by the defendant to the plaintiff and the plaintiff may have satisfied the judgment. In that situation the plaintiff’s attorney may move the court to set aside the satisfaction pro tanto and to award execution to the extent of his lien. That was ruled in Young v. Renshaw, 102 Mo. App. 173, 76 S. W. 701, cited and quoted with approval in State ex rel. Anderson v. Roehrig, 320 Mo. loc. cit. 876, 8 S.W.(2d) 998. This jurisdiction of the court also arises from the control it has over its judgment. It has authority to see to it that the judgment is paid to those who- axe entitled to be paid, including the attorney who has an interest by virtue of his lien in the judgment. Obviously, however, a jurisdiction which is bottomed on the control which a court has over its judgments does not extend to ncr by analogy support a jurisdiction over an agreement of settlement between the parties made outside of court and before any judgment is rendered. Moreover, even if a settlement were made after judgment and a remedy was available to the attorney through the court’s control of its judgment, po remedy would be available against the attorney’s client by that method. The control of the court over its judgment against a defendant never could extend to a rendition of judgment against the plaintiff.

I do not overlook the point that an order of dismissal in a case in a sense is a judgment in the ease. Such a judgment, like any other, is subject to the control of the court; but an attorney’s lien certainly does not attach to such a judgment, for it is not a judgment in favor of the plaintiff nor one which has any pecuniary value to the plaintiff. It is a judgment in favor of the defendant.

The Anderson Case was not one in which settlement was made between the parties before judgment. Gillham v. Railway, 282 Mo. 118, 221 S. W. 1, the one other Missouri case to which I make reference, was such a case. There the attorney for the plaintiff sought to enforce his lien, not against the plaintiff, hut against the defendant, and he undertook to do that by moving to set aside an entry of dismissal which had been made, for the reinstatement of the ease and for judgment in the case against the defendants for the attorney’s fee claimed. The Supreme Court, in its decision in the case, said in effect that where a settlement was made before judgment, the attorney could not recover even against the defendant by summary procedure in the principal ease, hut that his remedy was either by an independent action at law for the value of the lien of which he was deforced or by an independent suit in equity to foreclose his lien. The Anderson Case is to be read with this ease. The opinion in each was written by the same judge. The two together declare the law of Missouri to be that an attorney for a plaintiff may by motion in the plaintiff’s ease have determined and have judgment for the amount of his fee, and have it enforced against a fund paid into court by the defendant, or if the judgment has been paid to the plaintiff, then he may have that judgment set aside and execution pro tanto awarded to him against the defendant; but if the controversy between the parties has been settled before judgment, then the attorney can have no relief in the ease, even against the defendant. He must resort to an independent action.

Cases from Other Jurisdictions.

3. Not only do the Missouri eases lend no support to the contention made here, but also it must be said that there is no case in any jurisdiction which lends any support to it. The cases in other jurisdictions most relied on are Fischer-Hansen v. Brooklyn Heights R. R. Co., 173 N. Y. 492, 66 N. E. 395, 398; Byram v. Miner (C. C. A. 8) 47 F.(2d) 112; Middlestadt v. City of Minneapolis, Minnesota, 147 Minn. 186, 179 N. W. 890, 892; Davis v. Great Northern R. R. Co., 128 Minn. 354, 151 N. W. 128, 129. None of them supports the contention made.

In Eischer-Hansen v. R. R. the attorney for plaintiff sought to enforce his lien, not against the plaintiff, but against the defendant. He sought to enforce it, not by intervention or motion in the original case, but by an independent proceeding. The ease came to the Court of Appeals of New York from a judgment on demurrer. The argument for the demurrer was that an independent proceeding was not the proper remedy for enforcement of an attorney’s lien. The only question decided was whether an independent proceeding was proper. It was held proper. There is dictum in the opinion that a summary proceeding under the New York attorney’s hen statute also would have been proper, but that dictum is based upon the express language of the New York statute to the effect that “the court upon the petition of the client or attorney may determine and enforce the Hen.” Laws 1899, c. 61, p. 80, § 1. The Missouri statute, which otherwise is identical with the New York statute, omits the express provision which alone supports the dictum in the New York case.

Byram v. Miner is no more in point than is Eischer-Hansen v. R. R. In the first place, the question of the oropriety of a summary procedure in behalf of an attorney in his Ghent’s case is not discussed in the opinion and was in no way involved in the decision. In the second place (certainly this is the reason the question was not discussed and was not involved), the Minnesota attorney’s hen statute (General Statutes of Minnesota 1923, § 5695) expressly provides that the hen there created “may be established, and the amount thereof determined, by the court, summarily, in the action or proceeding, on the application of the Hen claimant. * * * ”

The eases of Davis v. Great Northern Ry. Co. and Middlestadt v. City of Minneapolis, Minnesota, may be considered together. The latter adds nothing to the former and need not specifically be reviewed. The attorney’s hen statute which was in force when Byram v. Miner was decided had not yet been enacted when these eases were decided. The attorney’s lien statute then in force in Minnesota (section 4955, General Statutes Minn. 1913) did not provide for a summary proceeding in the client’s case to enforce the attorney’s hen. That statute, like the Missouri statute, made no special provision for the enforcement of the hen created by it. It merely gave to the attorney a lien “upon the cause of action from the time of the service of the summons therein.”

The Davis Case was this: One Haynes had brought a suit for damages for personal injuries against the Great Northern Railroad Company. Davis was his attorney. Outside of court the parties settled the controversy and a certain sum was paid to Haynes. Davis then brought an independent action against .the railroad company to recover for the value of his services to Haynes. He recovered judgment. The assignment of error upon whieh the ease went to the Supreme Court- of Minnesota was that the attorney could not maintain an independent action to recover his compensation or to enforce a hen, but was confined to a proceeding in the original action. All that was decided by the court was that an independent action against the defendant in the original case was a proper procedure. The court said: “The statute creating the lien under which plaintiffs claim does not prescribe a remedy for its enforcement, and we thirds:, and so hold, that the attorney in such ease may elect whether to proceed by independent action, or in the original suit.” But it is quite clear that the dictum that the attorney might proceed “in the original suit” means only that he might proceed by prosecution of his client’s cause of action to a judgment where the settlement by the parties was made for the purpose of cheating and defrauding the attorney. It does not mean that he might have a summary determination and enforcement of his hen in the original proceeding.

The Officer of the Court Theory.

4. A second contention which is made by counsel for Mr. German is that wholly without regard to the statutory attorney’s lien and what remedies may be used to enforce that lien, there is jurisdiction in any court to protect the interests of an attorney as an officer of the court and, therefore, to make such orders in any ease in which he is employed as will secure for him from his client payment of compensation owing to him. If it is meant by this contention that a court has power to forbid a party to a lawsuit settling his controversy with his adversary out of court unless he pays his attorney what is owing to him, or if it is meant that a court has power to say to a party bringing a suit in court, “You cannot dismiss this case unless you pay your attorney what you owe him,” then the contention has no support either in precedent or principle. No precedent has been cited supporting any such contention and I have found none. The attorney is indeed an officer of the court and entitled to the court’s protection, but that he is entitled to a different procedure for the enforcement of his contracts than that to which other citizens must resort is a doctrine which does not appear ever before to have been asserted.

Intervention in an Equity Suit.

5. I 'think it is unnecessary to discuss more than very briefly whether counsel for a plaintiff in a patent suit or for that matter in any suit in equity may intervene in that suit to enforce against the plaintiff his claim for compensation for legal services under Equity Rule 37 (28 USCA § 723). The right of intervention given by that rule (and there is no other right of intervention in the technical sense in a federal equity case) is restricted to him who has “an interest in the litigation.” This phrase, “an interest in the litigation,” is to be read in connection with the preceding language of the rule: “All persons having an interest in the subject of the action and in obtaining the relief demanded may join as plaintiffs, and any person may be made a defendant who has or claims an interest adverse to the plaintiff.” The “interest in the litigation” which will support intervention must be some legal or equitable interest in the subject of the action which a decree might or would affect. While an attorney has in Missouri a lien upon his client’s cause of action and therefore in a sense an interest in the cause of action, he does not have either a legal or equitable interest in the subject of the action and his interest in the cause of action cannot be affected by any decree rendered. However, in this opinion I have chosen to consider, not whether the claimant could assert his cause of action by intervention in the technical sense, but whether by any method he could have it determined and enforced summarily in the principal ease.

The Law of the Case.

6. Finally it has been contended by counsel for Mr. German that even if it should be my conclusion that the present motion to dismiss the second amended intervening bill should be sustained, I am precluded from so ruling by the law of the case already established by an order of Judge Reeves overruling a motion to dismiss the original intervening bill. Such decisions, among others, as Plattner Implement Co. v. International Harvester Co. (C. C. A. 8) 133 F. 376, 378; Commercial Union v. American Bank (C. C. A. 2) 10 F.(2d) 937; and Hardy v. North Butte Mining Co. (C. C. A. 9) 22 F.(2d) 62, are cited.

From the first of the cited eases, a decision of the Circuit Court of Appeals for the Eighth Circuit, the opinion in which was written by Judge Walter H. Sanborn and which (for both reasons) is especially authoritative and persuasive I quote language setting out the rule relied on: “That rule is 'that the various judges who sit in the same court should not attempt to overrule the decisions of each other * * * except for the most cogent reasons.’ * * * The rule * * is a rule of comity and of necessity. * *' * By its terms it permits the 'most cogent reasons,’ such as a certainty that a previous ruling was erroneous ° c to present exceptions to it. But the rule itself, and a careful observance of it, are essential to the prevention of unseemly conflicts, to the speedy conclusion of litigation, and to the respectable administration of the law, especially in the national courts, where many judges are qualified to sit at the trials, and are frequently called upon to act in the same eases.”

Before this rule can govern a decision made by a judge who succeeds another in the same ease, it must appear that that decision is of the same matter decided by his predecessor and that cogent reasons are not present justifying a different decision than that made by the predecessor judge. One possible such cogent reason, said Judge San-born, is a certainty that the earlier ruling was erroneous. Another possible cogent reason, which undoubtedly would be sufficient to justify a departure from the rule, is a conclusion reached by the succeeding judge that the court has no jurisdiction either of the parties or the subject-matter. Unless the rule is reasonably interpreted, unless it is subject to the “cogent reasons” qualification stated by Judge Sanborn, it would reduce the succeeding-judge to the character of mere automaton; it might compel him, for example, to go through the faree of the long trial of a case upon a petition which he knows states no cause of action or of which he knows the court has no jurisdiction whatever.

While this ease was yet pending before Judge Reeves and before he disqualified, a motion to dismiss the original intervening bill filed by Mr. German was argued, submitted to him, and overruled. After he disqualified and the case was assigned to me, I was asked orally to consider again the same matters which had been presented to Judge Reeves. I did not do that. Then a second amended intervening bill was filed, in which, in my judgment, an entirely different cause of action is stated. It is this amended bill which is attacked by the present motion.

Whéther the court has jurisdiction of the cause of action now stated never was decided by Judge Reeves. He decided an attack made on a different bill. It may be that in support of that attack the same arguments were made as have been made in support of the present attack, and that the same arguments were made contra; it may be that the same authorities were cited for and against that motion. As he understood the law Judge Reeves applied it to that motion. So far as the law of the ease was thereby established, it was to the extent only that the original bill was good as against the motion attacking it. Finality was given only to that particular decision. The arguments and reasoning and the application of precedents which led to that decision were not given sanctity and such a character of eonelusiveness 'as that when a motion to dismiss a different bill is before a succeeding judge he is bound by them. He who would take advantage of the law of the case must not abandon that to which the law of the case attached.

Not only does the rule have no application here for the reason that a wholly different matter than that decided by Judge Reeves is now for decision, but even if it were the same matter the law of the case rule does not restrict a succeeding judge in passing on a question of jurisdiction. Whether a court has jurisdiction is always an open question. And the question here is one of jurisdiction, not merely one of procedure, nor merely one such as some ordinary demurrer or motion might raise. It is a question of jurisdiction. Whether an attorney’s cause of action against his client for compensation for services rendered may be ingrafted on the client’s cause of action against another for patent infringement obviously is a question of jurisdiction. The two causes of action axe wholly distinct from and independent of one another. So far as subject-matter is concerned, the jurisdiction of the court in the original ease is limited by the pleadings of the original parties and by interventions proper under Equity- Rule 37 (28 USCA § 723). Any other subject-matter cannot be thrust into the ease except in some way the court’s jurisdiction of the new subjeehmatter be established. The essence of this motion is that jurisdiction of this new subject-matter does not exist.

Conclusion.

My conclusion is that an attorney for a plaintiff in a patent infringement suit who out of court has settled his controversy with the defendant in that suit and has asked an order of dismissal cannot, over the objection of his client, summarily proceed against him in the patent suit to collect compensation for legal services rendered in that suit, and that the court in which the patent suit is pending has no jurisdiction in that suit on intervention, petition, or motion of the attorney to determine what compensation the attorney has earned and to give judgment therefor against the plaintiff. The remedy of the attorney against his client is by an independent action at law upon contract or at,equity to foreclose his attorney’s lien.

Order.

The motion of plaintiff, Universal Oil Products Company, to dismiss the second amended intervening bill of Charles W. German, having been duly considered by the court, and the court being fully advised in the premises, is by the court sustained and the bill dismissed. An exception is allowed. It is so ordered.


source: Caselaw Access Project

author: BYERS, District Judge.

license: Public Domain

text:
    THE ONWARD. THE SYBIL.
    No. 13671.
    District Court, E. D. New York.
    Dec. 26, 1933.
    Single, Atkins & Tyler, of New York City (George B. Warburton, of New York City, of counsel), for libelant.
    Park, Lynch & Hagen, of New York City, for claimant of steam tug Sybil.
    Arthur J. W. Hilly, Corp. Counsel, of New York City (Charles J. Carroll, of Brooklyn, N. Y., and William J. Leonard, of New York City, of counsel), for City of New York.
    Joseph B. Miller, of New York City (Irving Miller, of New York City, of counsel), for respondent P. T. Cox Contracting Co., Ine.
   BYERS, District Judge.

This cause involves damages occasioned by the sinking of the coal barge Onward on September 20, 1932, about 2:30 p. m., soon after she had passed down Newtown creek, at about low water, under the Greenpoint Avenue Bridge. The barge was in tow of the tug Sybil, which had her bow ahead alongside, to starboard of the tug; approaching the bridge it became apparent that the tow must hold well to the Queens shore, as a diver was working on the bottom under the bridge, on the port side; in obedience to a signal from a bridge tender, the tow, after stopping, entered the space between the piers, so close to its starboard hand that the barge scraped along the abutment on that side.

The harge was carrying about 500 tons of coal, which brought her freeboard to about 1% feet midships. She was 100 feet long, had a moulded bow, was 25 feet in beam, and had 13 feet sides. Her draft therefore was approximately 11% feet.

Approaching the northerly end of the abutment, the bargee heard a crash of wood and reported to the tug’s captain that the barge had hit something; his next words were: “Captain of the towboat, your Honor. It was' the side of the bridge only.” Later he said she did not strike the abutment, she grazed along only.

He then noticed that "the barge was rapidly filling, started his pump, and jumped on the tug. Sinking followed in about ten minutes from the striking.

The libellant asserts that the barge struck either or both of two 3 or 4 inch pipes, which were imbedded in the hard bottom of the channel and held in a vertical position under water, and that the city of New York, or the contractor who built the bridge, or both, are liable for the damage.

That the sinking did take place at about 1,500 feet from the bridge, admits of no discussion. As to all other matters, except the previous good condition of the barge, the testimony presents several issues of fact.

Over eighteen months after the sinking, the barge was pumped out, raised, and towed to Mariners Harbor, Staten Island — without incident — and there the interior of the hull was inspected and revealed a 12-inch hole in the bow, just at the turn of the bilge, “a little to the starboard.”

That condition is the basis of libellant’s claim, upon the theory that the hole was caused by the barge’s striking one or both of the said pipes.

It is deemed that the evidence establishes that there were two such pipes 4 feet or less off the easterly abutment of the bridge, and about 18 feet south of the northerly line thereof, and that they were imbedded in the hard bottom of the creek, and not in the concrete base of the abutment, or in any concrete which had ever been used in the construction of that pier of the bridge. At low water in the afternoon of September 29, 1932, the taller pipe was 4 feet from the abutment and its top was not less than 11.5 feet from the surface of the water; the shorter pipe was bent down stream, and it was inside the taller one, and its top was not less than 13.5 feet from the surface of the water.

These facts were established to the knowledge of libellant (except as to what held the pipes) through the written report of diving operations conducted for it on October 7, 1932. The original libel was filed in February, 1933, against the Sybil alone, alleging fault in proceeding through the draw of the bridge so as to bring the barge into collision with a stationary object and known obstruction; grazing the abutment; striking the submerged pipes; and navigating as stated, at unusually low water. The tug was claimed by the Waterfront Ash Removal Company, which answered, denying negligence, and asserting that the sinking was due to striking an uncharted obstruction.

This answer was filed after the claimant had become insolvent.

An amended libel was filed on April 28, 1933, in which the city of New York was named as respondent, asserting that the latter “laid a concrete base upon the creek bottom extending out into the channel in which were imbedded two pipes over 8 feet long standing upright,” and that the eity failed to dismantle and remove the said pipes extending up from the creek bottom but left them in an upright position whereby they became a menace to navigation; and that the barge Onward rode upon them upon the occasion in question and a hole was punched in her bow, causing her to fill and sink.

The City answered on June 3, 1933, and in effect denied the presence in the creek of the concrete base with two pipes imbedded therein and projecting up 8 feet therefrom; and denying any fault or neglect.

On August 19, 1933, the libellant, pursuant to leave, filed a second amended libel, bringing in as a respondent the P. T. Cox Contracting Co., Inc., the contractor which built the bridge, and alleged that it laid the said concrete base upon the creek bottom in which were imbedded the said pipes, and failed to remove and dismantle them upon the completion of the contract.

That respondent answered, denying that, in the construction of the concrete base of the bridge, any pipes were used, and hence there were none to remove when that part of the construction was completed.

The issues as eventually made went to trial.

The libellant has therefore finally elected to prove that the pipes projected upward from the concrete base, and were left in that position by the contractor and were permitted so to remain by the City.

The proof fails as to both.

The evidence of the diver and his employer clearly shows that the pipes were not imbedded in any concrete, but in the so-called hard bottom of the creek.

Whether they fell vertically, at some undisclosed time, from a passing craft, and took up the positions described, is purely a matter of conjecture, but the testimony for the contractor is quite convincing that no such pipes were employed in building the concrete abutment, and consequently none were left when the abutment was completed in condition to receive the bridge structure.

This necessarily establishes that, when the city took over the bridge in December of 1929, the pipes in question were not imbedded in the base or abutment, and consequently that the eity did not permit them so to remain.

The contract under which the bridge was built in 1929 provided that the channel bottom should be maintained at an elevation “not higher than existing at the beginning of the work. Soundings will be made at the site by the Department (of- The City of New York) immediately before the starting of this contract and again at its completion, and material, if any, fund (found?) above the original bottom level shall be removed by the contractor.”

The proof satisfactorily shows that soundings were made by the city at the completion of the contract, and no material was encountered, nor was the channel bottom higher than at the commencement of the work.

Testimony on these matters was offered by the respondents, and was not controverted.

It must be understood that the libellant’s theory of the ease is that the failure of the contractor to remove these pipes from the concrete forming the base of the pier or abutment, and the city’s failure to discover and remedy that oversight, gave rise to the libellant’s cause; not that any duty existed on the part of the eity to dredge the channel and remove obstructions not caused by the erection of the pier in question. It is deemed that the libellant’s proof is opposed to its own theory of recovery, and that the respondents have shown that the libellant’s theory is contrary to the facts. None of the eases relied upon by the libellant involves facts at all like those here involved.

This conclusion renders it unnecessary to discuss whether the libellant has demonstrated that the sinking was "the result of striking these pipes at all. It may be noted in passing that the location of the hole in the Onward, according to the photograph (Segrave Ex. 4) taken with the testimony of Van Frank who raised the barge, shows that the hole was closer to the center of the barge (which was 12% feet from the starboard side) than would be consistent with striking a pipe that was 4 feet or less from the abutment, unless the barge was angling into the latter so as to be nearly head on; but there is-no testimony that the tow went through the draw in that shape. If it did, the original libel may have been sound, on the theory that the contact called grazing was so severe as to open the seams below the line, and cause the barge to fill; if that is what took place, a hole might have been stove in at the turn of the bilge, at the time and place of actual sinking.

Again, the pipes were at such a depth below the surface of the water, even at 2/10 of a foot below mean low, as to render the actual striking and riding as argued by libellant quite argumentative.

The diver’s theories were doubtless honestly held, but are not accepted because he was coneededly wrong as to the location of one pipe, by a matter of 18 feet; visibility at his working depth in Newtown creek, unaided by artificial light, would leave much to be desired if anything approaching precision were to be predicated of his observations.

Libel dismissed with costs as to both respondents. Settle decree.

If findings are desired, they may be settled at the same time, and are to embody appropriate recitals as to ownership and incorporation.


author: NIELDS, District Judge.

text:
    MILLER v. NATIONAL BROADCASTING CO., Inc. SAME v. RCA COMMUNICATIONS, Inc.
    Nos. 851, 852.
    District Court, D. Delaware.
    Feb. 13, 1934.
    Hugh M. Morris, of Wilmington, Del., and Clifton V. Edwards and Henry T. Kilbum, both of New York City, for plaintiff.
    William G. Mahaffy, of Wilmington, Del., Thomas G. Haight, of Jersey City, N. J., and Abel E. Blaekmar, Jr. (of Sheffield & Betts), of New York City, for defendants.
   NIELDS, District Judge.

These two suits charge infringement of United States patent No. 1,758,000 for a piezo-electric oscillation generator, granted to John M. Miller April 22, 1930. Broadly, the patent relates to two specific radio signaling circuits and more particularly to circuits utilizing a piezo-electric crystal to control the frequency of oscillations generated with the aid of a vacuum tube with associated circuits including a tuned plate circuit. All claims are in suit except 3, 9, and 10. The alleged infringement consists of the use of crystal controlled oscillators employing tuned plate circuits in certain of the radio transmitting stations of the defendants.

The defenses are (1) invalidity and (2) nonmfringement. The defense of invalidity is based upon the state of the prior art, particularly the work of Prof. Cady of Wesleyan University and Prof. Pierce of Harvard College.

“Piezo-Electric” (from mé^eai to press) is a quality possessed by certain crystalline substances such as quartz. A piezo-electric crystal when compressed develops an electric charge on certain of its surfaces, and conversely, when charged by an electric current, the crystal is compressed and expanded.

Plaintiff specifies as objects of his invention (1) “to facilitate the generation of oscillations of constant frequency”; (2) “to select, at will, any possible mode of oscillation of the piezo-electric substance”; (3) “to permit adjustments to be made for the generation of such oscillations of maximum amplitude”; and (4) “to furnish a convenient means for connecting the oscillator to other tubes for amplification or other uses.” The merit and significance of the patent is sufficiently indicated by the first of the above objects.

The claims in issue may be classified in three groups: (1) Those calling for a tuning of the plate circuit; (2) those calling for tuning of the plate circuit at a frequency approximately that of the natural frequency of the crystal; and (3) those calling for a tuning of the plate circuit at a frequency higher than the natural frequency of the crystal where the crystal is connected between the grid and the filament.

A glance at the broadcasting art may ’ throw light upon a proper understanding of the patent. Radio communication is carried on by means of carrier waves transmitted from a radio transmitter through the ether to a receiver. In the transmitter alternating current of 10,000 cycles per second up to several million is fed into an antenna consisting of one or more wires suspended in the air above the ground. This current alternately flowing into and out of the antenna causes waves in the ether which spread in all directions, much as ripples caused by a stone thrown into a still body of water. Successive waves follow one another as long as successive impulses of electric current flow into and out of the antenna. The waves follow exactly both the timing and intensity of alternations of the electric current. The early stations produced these alternations by means of a spark gap. Then followed the use of eleetric ares and mechanical generators.

In 1912 De Forest discovered that the vacuum tube could be utilized to generate alternations of electric current at radio frequencies. Thereafter the vacuum tube with its associated electric circuits was used as an oscillator to generate oscillations or high frequency alternating current for antenna, and became known as the “vacuum tube transmitter.” Each radio transmitting station is assigned a definite transmitting frequency. To avoid interference, it is essential to maintain that frequency constant. When we turn the dial of a radio receiver, we make it more responsive to waves of one frequency than to those of any other frequency. This is tuning the receiver. It can be made to discriminate between many transmitting stations sending out waves of different frequencies. To enable the receiver to select between transmitting stations, it is essential that the stations transmit at different frequencies or rather at the particular frequency assigned to them. The tube and circuits of the oscillator are so constructed and interrelated that they generate alternating current at the assigned radio frequency. While the vacuum tube transmitter materially improved the stability of frequency as compared with the early forms of transmitting apparatus, the increasing use of wireless and the multiplication of transmitting stations required stability of frequency in order that sending stations would not interfere with each other. This demand for stable oscillations finally led to the adoption of piezo-electric crystals to control the frequency of the oscillations of the vacuum tube transmitter.

Long before the fall of 1923, when plaintiff entered the field, it was a fundamental axiom of radio that “wherever there are high frequency oscillations tune the circuit.” For many years before 1923 the use of variable tuning in the plate circuit was fundamental. It had been common practice to employ for tuning a coil and in parallel thereto a variable condenser. In such oscillators the proper plate circuit reactance was obtained by tuning the plate circuit to a frequency either-higher or lower than the operating frequency. Long before 1923, tuning by varying the inductance of a circuit was used as the equivalent of tuning by means of varying the capacity of a circuit. It was well known that no result is secured by one method which cannot also be secured by the other method. Before the present litigation, the plaintiff in another case testified that a coil in the plate circuit of a vacuum tube oscillator corresponds exactly to a coil having a condenser in parallel thereto.

Before 1923 the operation of vacuum tube oscillators controlled by electrically tuned circuits was thoroughly understood. It was understood that, where the grid-plate circuit is eapacitative, the plate circuit must be tuned to a higher frequency than the operating frequency; i. e., have an inductive reactance at that frequency. Where the grid^filament circuit is eapacitative, the plate circuit must be tuned to a lower frequency than the operating frequency; i. e., have a eapacitative reactance at that frequency.

The method of operation of circuit controlled oscillators has been indicated above in general terms and is particularly disclosed in the work of Armstrong and Heising. The method and theory of operation of crystal controlled oscillators and of circuit controlled oscillators are the same. There is no fundamental difference between the crystal controlled oscillator in Fig. 1 of the patent in suit and tuned circuit controlled oscillators in the prior art including Fig. 3 of the Armstrong patent. The difference' in detail is the substitution of the sharply mechanically tuned crystal for the less sharply tuned electrical circuits. Hogan, a recognized authority, testified: “Fig. 1 of the patent in suit and Mg. 3 of the Armstrong patent are both regenerative circuits, having the oscillation frequency controlled by a tuned element. The tuned element in Mg. 1 is the crystal shown at M in the patent in suit. The tuned element in the Armstrong Fig. 3 is the tuned circuit similarly connected between grid and filament and having its frequency determined by its effective electrical capacity and inductance. Fundamentally the two circuits are the same except for the substitution of a crystal having a definite natural frequency for an electric circuit having a definite natural frequency.”

Walter G. Cady, professor of physics at Wesleyan University, began experiments with piezo-electric crystals as early as 1917, and is recognized as the pioneer in their use in this country. He was working with them actively in 1920 and 1921. In April, 1922, he published a paper in the proceedings of the Institute of Radio Engineers entitled “The Piezo-Electric Resonator.” In his paper he disclosed to the art that a crystal was suitable to control the frequency of a vacuum tube oscillator; that a crystal was a sharply tuned element; that a crystal, like an electrically tuned circuit, had both eapacitative and inductive reactance. He treated the crystal as though it were an electric circuit having resistance, capacity, and inductance.

Crystal oscillators employing a tunable plate circuit were used by Cady and his assistant, Yan Dyke. The use of a tunable plate circuit to increase the power tube of such oscillators was described by C’ady in the Physical Review for April, 1922, in an article entitled “A Piezo-Electric Method for Generating Electric Oscillations of Constant Frequency.” In Figs. 2 and 3 of his patent No. 1,472,583, granted October 30, 1923, applied for May 28,1921, Cady described two crystal controlled oscillators in which the crystal was connected between grid and filament and was an essential element in the generation of oscillations. In both Cady circuits the frequency of oscillation was controlled by a natural frequency of the crystal. In Fig. 3 the plate circuit is tunable indirectly, and in operation is tuned to a higher frequency than the natural frequency of the crystal.

Prof. George W. Pierce, Rumford professor of physics and director of the Cruft Laboratory for high-tension electrical research at Harvard College, became interested in the use of crystals through the work of Prof. Cady. In calibrating wavemeters in the spring of 1923, Prof. Pierce fabricated and utilized a crystal controlled oscillator in which the crystal was connected between grid and plate and the plate circuit contained a variable inductance coil. In May, 1923, he constructed his “piezo-electric oscillator No. 1,” which he used in his experiments until the summer of 1923.

The results of the work of the first half of 1923 Prof. Pierce embodied in a paper drafted in July and published in the “Proceedings of the American Academy of Arts and Sciences” in October, 1923. The paper described a crystal controlled oscillator in which the crystal was connected between the grid and the plate of the vacuum tube and in which an inductance coil was connected in the plate circuit. Mgs. 3, 5, and 6 of the article described the use of an inductance coil in the plate circuit. The article specifically states that an inductance of any value, if large enough, may be used in the plate circuit, and a coil of specific size is suggested for use with a crystal of a certain specified frequency. It was well known in the art that every inductance coil inherently has capacity, and therefore possesses a natural frequency, and that the coil has a capacity reactance. The description in the article was at the time sufficient to enable a radio engineer to secure crystal controlled oscillations. The article, in suggesting the trying of various coils in the plate circuit, described a practical method of tuning that circuit, and a radio engineer who followed the instructions of the article would tune the plate circuit. Furthermore, when a large enough coil to secure crystal controlled oscillations was employed, the natural frequency of the coil (by virtue of the inherent distributed capacity) was necessarily lower than that of the crystal, and therefore had a capacity reactance at the frequency of oscillation. Thus the plate circuit of the oscillator was necessarily tuned to a lower frequency than the natural frequency of the crystal. In this paper Prof. Pierce discloses the use of elements in the plate circuit for tuning.

In the fall of 1923, Prof. Pierce conceived of, disclosed to others and reduced to practice, the grid-filament connection of the crystal. At this season Prof. Pierce and Prof. Cady had a conference at Cambridge about their inventions in the use of piezo-electric crystals and about patenting and manufacturing their respective devices. When Prof. Cady was asked whether anything was said at this meeting about crystal connections in the circuit, he said: “I remember very clearly that Professor Pierce told me that when he first planned to make a circuit oscillate by means o-f the crystal, he expected to connect the crystal either between filament and grid, or between grid and plate,- expecting that if the circuit did not oscillate one way, it would the other.” In a footnote to a letter of October 23, 1923, after the conference, Prof. Cady wrote: “You noticed, perhaps, that my claims cover the case where the resonator is between filament & grid, but not when it is between plate & grid.” Regarding this, Prof. Cady testified: “As near as I can remember we had compared notes in order to determine what was originated by one of us and what by the other, and I was making clear to him there that I laid no claim to the connection of a crystal between grid and plate.” East-ham, president of General Radio Company and manufacturer of electrical devices, was also present at the conference. Regarding the instructions for manufacture, he said: “I know that at the time that we arranged to go ahead with it, we planned for a circuit having the two possibilities available, that is the grid-plate connection, and the grid-filament connection,” and that this was planned “within a few days of that meeting.’.’ As to his instructions to Eastham to enable him to construct a commercial apparatus, Prof. Pierce said: “I had explained to Mr. Eastham that the crystal might be shifted from its connection between plate and grid to its connection between grid and filament, leaving the rest of the circuit constant and 'bringing out thereby two different frequencies of oscillations, one being the high frequency mode of operation of the crystal and the other the low frequency mode of operation of the crystal.’!

November 15, 1923, Prof. Pierce and his assistants completed the construction of his “piezo-electric oscillator No. 2,” which was provided with a variable tuning coil permanently connected in the plate circuit. Prof. Pierce and his collaborators also tuned the plate circuit of his crystal controlled oscillators in other ways, such as by means of a closely coupled tunable circuit and by means of two coils used as a variometer, both of which were recognized electrical equivalents of the arrangement shown in the plate circuit of the figures of the patent in suit. In using variable coils in the plate circuit of the crystal controlled oscillators, Prof. Pierce provided the means for and utilized “rough” timing of that circuit, i. e., a step-by-step tuning. The only difference between his plate circuit so used and the circuit of Fig. 2 of the patent in suit is that the method of tuning employed by Prof. Pierce was “rough,” whereas the method indicated in the patent in suit is “fine.” “Rough” tuning and “fine” tuning merely express differences in the method of arriving at the desired tuned condition of the plate circuit. This condition is the same whether secured by “rough” tuning or “fine” tuning. The difference between these two circuits is, at most, merely one of degree and not in any sense one of substance.

In November, 1923, Prof. Pierce, believing he had made an important invention, called in his patent counsel. Prof. Pierce prepared a memorandum of the principles of his invention, and delivered it to his attorney November 27, 1923, with explanations to guide him in preparing a patent application. After further conferences, an application for patent was filed by Prof. Pierce February 25, 1924. This application contained claims specifically directed to a crystal controlled oscillator in which the crystal was connected between grid and filament and which had a tunable plate-circuit.

Early in 1924, crystal controlled oscillators were manufactured and sold by the General Radio Company of Cambridge, Mass., on behalf of Prof. Pierce. These oscillators were so constructed that the crystal might be connected either between grid and plate or between grid and filament. The plate circuit of these oscillators contained a coil which, in the process of manufacture, had been so adjusted or tuned with respect to the natural frequency of the crystal that the necessary reactance relations were secured and crystal controlled oscillations obtained.

It should be borne in mind in considering plaintiff’s work that his application for the patent in suit was filed September 10, 1925. The application of Prof. Pierce covering the same subject-matter was filed February 25, 1924. Since the bringing of this suit, an interference has been declared by the Patent Office between the patent in suit and the pending Pierce application. The necessary legal consequence of this situation is that the law imposes upon plaintiff the burden of proving by a fair preponderance of the evidence that he was the first and original inventor. Evans v. Associated Automatic Sprinkler Co. (C. C. A. 3) 241 F. 252; Willard v. Union Tool Co. (C. C. A. 9) 253 F. 48.

From 1907 to 1919 plaintiff was a physicist in the Bureau of Standards. In 1919 he was transferred to the Navy Department. About 1923 he was transferred to the United States Naval Research- Laboratory at Washington where he was in charge of the section having to do with receiving sets, vacuum tubes, and frequency measurements.

In 1921 plaintiff obtained from tbe Burean of Standards a crystal resonator loaned by Prof. Cady, and experimented with it in two circuits shown in a patent of Prof. Cady, but his experiments were failures. In July, 1923, the Bureau of Engineering of the Navy forwarded to him an Italian article about frequency standardization. Plaintiff reported against the Italian suggestion, but recommended the use of crystal resonators for the purpose of cheeking frequency meters, saying : “These resonators are quartz crystal rods which have natural frequencies of vibration in this range and can be made to oscillate by the application of an electric field, exhibiting characteristics similar to a tuned circuit. They are described in a paper by Prof. W. G. Cady of Wesleyan University. * * * This laboratory has investigated these resonators to some extent, utilizing a borrowed crystal, and is convinced that they world be of very great value as frequency standards. Further they can be utilized to control and keep constant the frequency of the output of a vacuum tube oscillator and in this respect might be very valuable in the design of constant frequency transmitters.”'

Early in November, 1923, after the publication of his article on crystal resonators and oscillators, Prof. Pierce distributed many hundred copies of the article to scientists, radio engineers, and friends, including Dr. Miller. In acknowledging receipt of his copy on November S, 1923, plaintiff said:

“Have had a number of reports with respect to the interesting experiments you have been conducting with crystal oscillators and am greatly indebted to you for sending me a reprint of your paper on this subject.
“We are planning to use these crystals in cheeking our wavemeters throughout the service and your paper will doubtless be very valuable assistance to us in this work.”

Not only is there no suggestion in this letter that plaintiff had worked with piezo-electric crystals as controllers of the frequency of oscillations generated by vacuum tubes, but plaintiff testified that up to that time he had done no such work.

In view of the above evidence, it is difficult to credit plaintiff’s statement in the bill of particulars that he made his invention, reduced it to practice and disclosed it to others on November 6, 1923, the same day he received the Pierce article. If full credit be given this statement, it follows that it was only necessary for a person skilled in the art to read Prof. Pierce’s paper to immediately conceive of what plaintiff afterwards claimed to have discovered. Upon receipt of the Pierce article, plaintiff set up a circuit similar to that shown in Fig. 1 of the article. He did not succeed in getting the crystal to os eillate.

Plaintiff testified the result of his first work on crystal oscillators was entered on a loose sheet dated “Nov. 30 and Dee. 1st 1923” (Plaintiff’s Ex. No. 29), that he set up and operated a crystal controlled oscillator using a “Paragon” tuned plate circuit, and that he obtained oscillations with four different crystals. He further testified that he entered on another loose sheet dated “Dee. 4th 1923” (Plaintiff’s Ex. No. 31), the result of further work employing an ultraudion tuned plate circuit. On this sheet appears a circuit sketch showing the crystal connected between grid and plate with an inductance coil and a variable condenser in parallel in the plate circuit. The evidential value of these sheets is very doubtful. There was no occasion to employ loose sheets. At that time plaintiff had two notebooks and the Navy Department furnished regular log sheets on which such entries appropriately would be tnade. Moreover, there is no proof where these loose sheets had been during the eight years between 1923 and the time they were introduced in evidence. Certainly they were wholly unofficial, as they were not included among the certified copies of documents which the Navy Department furnished at the request of the court. Further, the two witnesses called by plaintiff out of the eight named in the bill of particulars, as persons to whom plaintiff disclosed his invention in November, 1923, did not corroborate plaintiff’s testimony. Neither of them was able to say the experiments on the loose sheets had been made before December 21, 1923, which was four days after a personal visit by plaintiff to Prof. Pierce. There is no suggestion on either of these sheets of the grid-filament connection. They are only tied up to that connection by the oral testimony of the plaintiff. That testimony stands uncorroborated.

By letter of November 30, 1923, Prof. Pierce wrote plaintiff:

“I am much obliged to you for your letter of November 6 regarding the crystal oscillators.
“The General Radio Company, has, I believe, made arrangements to manufacture the crystal resonators for cheeking wavemeters. The crystal oscillator will probably be also supplied by the General Radio Company at some later date.
“I shall be very happy to see you at any time that you are in this neighborhood. With best wishes.”

December 6, 1923, plaintiff wrote to Prof. Pierce: “Since I have received your paper on crystal oscillators, I have been experimenting with them to some extent and have had both success and failure. I would like to take advantage of the invitation in your letter of the 30th of November * * * to see you for a few days, in order to obtain some pointers on the subject. I can come at any time which suits your convenience. I will suggest Monday December 17th but would be pleased to have you set a date this month or next which would be more convenient.”

' Plaintiff arranged .with the Navy Department for the expense of a visit to Cambridge on December 17, 1923. He spent the day in the Cruft laboratory, and was shown by Prof. Pierce his notebook and his piezo-electric oscillator. It is significant that plaintiff states the purpose of his visit was “in order to obtain some pointers on the subject” from Prof. Pierce. Regarding the visit, Prof. Pierce testified : “I have in mind that we discussed the reason for the oscillation‘in the circuit disclosed in my published paper. That is what I have in mind. Whether we discussed other circuits or other theories, I do not recall.” Prof. Pierce also testified that he told plaintiff that he had found spectacle lenses good oscillators and advised him to try them. At variance with Prof. Pierce’s recollection, plaintiff testified: “On this trip to Prof. Pierce, I explained the operation of the circuits which I had developed prior to my visit. Also Dr'. Pierce told mo that he did not understand the operation of the circuit which he published in his paper, and I explained the operation of that circuit to Prof. Pierce.” This testimony calls for no comment. Counsel for plaintiff lays much stress on plaintiff’s further testimony:

“Q92. What did you tell Dr. Pierce about your use of the tuned plate circuit? A. I explained the operation of the tuned plate circuit practically in the manner that it is explained in my patent.
“Q93. Would you mind very briefly going over that? A. That is, that in the case of the crystal connected between the grid and filament, it is necessary to have an inductive reactance in the plate circuit in order to generate oscillations; that this inductive reactance might be obtained by using a tunable circuit, but tuned to a frequency higher than the frequency generated by the crystal; that in the case of the grid to plate connection where a capacitive reactance is required, that the capacity reactance could be obtained by using a tunable circuit in the plate of the tube, and by adjusting this circuit to a frequency lower than corresponded with the frequency of the crystal.”

That he made such a full disclosure of his patent on this occasion is wholly inconsistent with the statement in his letter that the purpose of Ms visit was “in order to obtain some pointers on the subject” from Prof. Pierce It is also inconsistent with the entries on the first page of the notebook that he opened upon his return to WasMngton. Those entries are, however, a'full corroboration of the information that Prof. Pierce testified he imparted to plaintiff. To the question, “Do I understand that the net result of your visit to Cambridge in the Pall of 1923, was that you ' gave, and did not receive, information ?" plaintiff answered, “Yes, excepting in the respect that Professor Pierce advised me to try spectacle lenses.”

Upon Ms return to Washington, plaintiff started a notebook of his own. Hollowing Prof. Pierce’s advice, he borrowed some quartz optical lenses, and the first entry in his notebook reflects the use of this special type of crystal to secure high frequency oscillations. At that time plaintiff was using the grid-plate connection shown in the Pierce article. About three weeks later the first entry relating to the grid-filament connection appears in plaintiff’s notebook in the words, “crystal connected between grid and filament.” The entry contains no reference to a tuned plate circuit and no sketch or circuit diagram is shown. In fact, the first drawing or circuit diagram of plaintiff showing the grid-filament connection appears in his notebook on March 24, 1924. This entry is the first disclosure of what is substantially Pig. 1 of the patent in suit. It is significant to note that on March 6, 1924, about three weeks before this entry, plaintiff had paid a second visit to Prof. Pierce at Cambridge.

There is no occasion to further discuss Miller’s work. Why did he defer his application for a patent a year and a half after the entry of March 24, 1924? The answer is obvious. He never considered himself the inventor of the grid-filament connection of the crystal with a tunable plate circuit. In view of his familiarity with the work of Prof. Cady and Prof. Pierce and the literature of the art, he did not consider that the grid-filament connection with the tunable plate circuit involved invention. •

In the earlier part of this opinion the development of oscillators utilizing vacuum tubes was briefly outlined. Before tbe piezoelectric crystal was added, the literature of the art had explained that the plate circuit must he tuned above or below tbe operating frequency of the tube circuit. ’Plaintiff merely followed this teaching in tuning tbe plate circuit above the crystal frequency with the grid-filament connection. If, for the sake of argument, plaintiff should be credited with this teaching, what does it amount to?

The infirmity of plaintiffs ease is that he is seeking to rest it, not on practical accomplishment, but on the statement of a theory of operation; namely, that with one crystal connection the plate circuit must be tuned to a higher frequency, and with another crystal connection it must be tuned to a lower frequency. Certain claims of tbe patent call for a crystal connected between grid and filament and a plate circuit which is tuned to a higher frequency than that of the crystal. The explanation with respect to the plate circuit, however, contributes nothing, for the reason that the circuit will not generate oscillations unless the plate circuit is tuned to a higher frequency. A pupil of the entire work of Prof. Pierce concerning this oscillator, like I)r. Miller, would be bound to secure oscillations, and in so doing would be bound to tune the plate circuit to a higher frequency with the grid-filament connection. Whether the circuit is tuned to a frequency above or below tbe crystal frequency is a matter of only a small fraction of a turn on the scale of the variable condenser. In practice, the operator sets the variable element of the plate circuit to approximately the desired frequency, and then varies the element back and forth until the oscillations are secured. Tbe operator does not necessarily know, and does not care, whether the plate circuit is tuned to a lower or a higher frequency than that of the crystal. Oscillations will be secured when tbe frequency relation, whatever it may be, is correct.

All the elements of tbe Miller circuit were disclosed by Prof. Pierce. Prof. Pierce secured oscillations by use of his crystal controlled oscillator employing a tuned plate circuit. He was bound to tune tbe plate circuit above or below the natural crystal frequency in order to secure the desired oscillations. What could plaintiff contribute except a statement of the theory of operation? Assuming plaintiff did explain the theory underlying the operation of the crystal controlled oscillator employing a tuned plate circuit, that is a scientific achievement of a kind that cannot be the basis of a patent. Whether Prof. Pierce knew the scientific explanation of his crystal controlled oscillator is not important. He did know and use the device and employ the methods which produced the desired results, and which are the device and methods of the patent. De Forest Radio Co. v. General Electric Co., 283 U. S. 664, 686, 51 S. Ct. 563, 75 L. Ed. 1339.

Having in mind the state of the prior art, I find that plaintiff was not the first and original inventor of the subject-matter disclosed and claimed in the patent in suit.

This opinion contains a statement of the essential facts and of the law applicable thereto in conformity with Equity Rule 70½ (28 USCA § 723).

The bills of complaint must be dismissed.


text:
    GERMAN v. UNIVERSAL OIL PRODUCTS CO. (SKELLY OIL CO., Garnishee). REED v. SAME.
    Nos. 1714, 1715.
    District Court, W. D. Missouri, W. D.
    Jan. 24, 1934.

      Cyrus Crane (of Lathrop, Crane, Reynolds, Sawyer & Mersereau), of Kansas City, Mo., for plaintiffs.
    R. R. Brewster, of Kansas City, Mo., and Charles H. Mayer, of St. Joseph, Mo., for defendant.
   OTIS, District Judge.

Each of these cases was filed in the circuit court of Jackson county, Mo., May 20, 1931. In neither of them was personal service had upon defendant. Writs of attachment were issued under which the Skelly Oil Company was summoned as garnishee. Thereafter the cases were removed to this court where the defendant has moved to quash the garnishments and to dismiss the eases. These motions are the subject-matter of this memorandum. Since the questions raised by the motions are essentially identical in the two cases, only the first, No. 1714, specifically will be discussed. What is said with reference to it equally is applicable to ease No. 1715.

1. I consider first whether the state court had jurisdiction to issue the writ of attachment upon which the summons in garnishment was based. Whether it did have such jurisdiction depends upon the Missouri statutes governing attachments and garnishments as construed by the Missouri courts. That those courts have so construed the statutes as to restrict the jurisdiction of courts to issue writs of attachment and garnishment to actions at law only is settled by the decisions [Lafkowitz v. Jackson (8 C. C. A.) 13 F.(2d) 370; State ex rel. v. Blair, 238 Mo. 132, 142 S. W. 326; Lackland v. Garesche, 56 Mo. 267; Beyer v. Trust Co. et al., 63 Mo. App. 521; Brumback v. Weinstein et al., 37 Mo. App. 520; Bachman v. Lewis et al., 27 Mo. App. 81; Atwood v. Hale et al., 17 Mo. App. 81] and .admitted by plaintiff’s learned counsel who, in his brief, thus states the rule: “The statutory process of garnishment, particularly where based upon a writ of attachment, being a purely legal process, cannot issue in aid of a suit which is fundamentally a suit in equity.” The question then is, Does plaintiff’s petition state a cause or causes of action at law or in equity ?

The petition is in two counts. That the first of these states a" cause of action in equity and not at law seems plain to me. Very obviously the pleader intended it to be an equitable proceeding. He affixed to it all the usual labels of a ease in equity. He prays for an accounting as between joint adventurers of whom-he is one, for a decree adjudging to the plaintiff such an amount from the fruits of the joint adventure “as will be equitable and right in the premises,” and he asks “that a subpmna in chancery issue” commanding the defendant to appear and answer.

But more must be examined than the labels affixed to a package if the true nature of its contents is to be ascertained. So we must look into count 1 to discover what really it is. That will more easily be done if its essential allegations are concentrated, omitting-mere details and elaboration, but retaining, so far as possible, the very language of the petition. We have:

“Plaintiff * * * 'states that * * *' defendant represented to plaintiff that defendant was the owner (of a certain valuable patent). * •* That if the validity and priority of said patent could be established * * * (it) would be eontrolljig and basic (in the gasoline producing industry). * * * That * * “ the Standard Oil Company * * * ^as ~ * * infringing the said patent. * * * That the value of the said patent and the rights of the defendant could only be established and proof of their infringement be obtained by the exercise of great skill and the expedition of much time, labor and care. (That the accomplishment of such ends would bring to the defendant from the Standard Oil Company and others millions of dollars). * *
* * That J. Ogden Armour, C. P. Dubbs, Frank L. Belknap, A. F. Reiehmann, H. J. Halle and R. J. Dunham had associated themselves together in a joint adventure * * i for the purpose of protecting the said patent rights and developing the processes covered thereby and to seeure the value of (those) rights. *' * That it had been determined and agreed upon between (the joint adventurers) and the defendant (that the joint adventure) should be carried out through defendant. * * * (That each of the joint adventurers was qualified to and was to contribute in a specified way to the carrying out of the adventure) * * That the difficulties to be encountered * * would be of an unusual, laborious and difficult character. * * That it was understood and agreed that the success of said adventure depended upon (the exertions of the several adventurers) and that (the several adventurers) were to accept, in the nature of advancements on account of services rendered, payments which would not be compensatory; but that if the adventure were successful all of the benefits and advantages gained were to be equitably divided between all persons aforesaid, including plaintiff.
“That defendant proposed to plaintiff that he associate himself with the parties aforesaid and with defendant in said joint adventure (to do certain legal work required in carrying out the adventure) and that plaintiff should, along with the other parties to said joint adventure, equitably participate in all benefits derived. That plaintiff consented to the terms aforesaid and agreed to perform the services specified and did perform the same. * * * It was, however, especially agreed that defendant would pay as advancements on account (certain stipulated amounts to plaintiff) and that he was to participate as aforesaid in any advantages gained in said adventure. * * * That said contract and agreement remain and still remains in full force and effect.
“That at various times * * * the said agreement and understanding * * * was ratified and confirmed * ® * (That various specified things were done, participated in by plaintiff in furtherance of the joint adventure). That all of this was pursuant to the agreement and understanding with plaintiff, * * * (That the objects sought in the joint adventure were accomplished largely through a settlement made with the Standard Oil Company and defendant realized large sums thereby) but that, instead of paying the money thereby received in such settlement into the treasury of (the) court to be there equitably apportioned among all of the joint adventurers, and paying the plaintiff herein such compensation for his contribution and services as should be just and proper (it was arranged by certain of the joint adventurers) that the avails of said settlement should be paid to the defendant * * * and that defendant * * * is proposing to divide the same among said joint adventurers except this plaintiff and * all in violation of the understanding and agreement * * and in derogation of (plaintiff’s) rights under his agreement and understanding with the defendant. * * (That the plaintiff rendered, pursuant to the agreement and understanding, various and difficult services which are specifically described and enumerated, rendering such services over a long period in many places and at great sacrifice to his other professional engagements). That he performed such services upon the agreement and understanding heretofore set out and performed all of the work devolving upon him under the agreement and arrangement herein set out and that he is entitled to an accounting of all profits and benefits derived by reason of said joint adventure, directly or indirectly by said defendant herein or by any of the parties hereto and to a decree of this court awarding to him his full share thereof.”

Concerning the cause of action thus stated by plaintiff in count 1 of his petition, plaintiff’s learned counsel says that it is “essentially legal,” that its fundamentals are “employment (of the plaintiff) as one of several counsel to represent a litigant, the performance of services, the failure of the client to pay and the prayer for recovery.”

I cannot reconcile this construction of count 1 with the language used in it. That it is an impossible construction must appear, it seems to me, from any consideration of the foregoing summary of the petition. Over and over again and so clearly as to be wholly free from ambiguity what was the agreement with' the plaintiff is set out. It was not an agreement whereby he was to render legal services for their reasonable value, but an agreement whereby he became one with others in a joint adventure and whereby he was to share with them the profits to be realized in the event of success. The cause of action stated in this count is one in equity. „

Does the second count of plaintiff’s petition state a cause of action in equity or at law?

In hasc verba count 2 is as follows:

“For a second and further cause of action against defendant, plaintiff states that he refers to the first count of this petition as to the matters and faets therein pleaded, with the same force and effect as though they were repeated here and now in this the second count of this petition.
“Plaintiff further shows to the court that the reasonable value of his services in connection with the matters set forth in the first count of this petition is One Million ($1,000,-000) Dollars, and that defendant is indebted to him in that sum.
“Wherefore plaintiff prays judgment against defendant in the sum of One Million ($1,000,000) Dollars, with interest thereon at six per cent per annum, and for costs.”

Here, in contrast with count 1, the pleader has made use of certain of the usual labels of a law action. He alleges the reasonable value of his services as would be done in the ordinary quantum meruit case. The prayer is that to be expected in a suit at law. It must be supposed that the pleader designed stating some cause of action other than that stated in count 1. The labels used by him indicate an intention to state a cause of action at law, but once again mere labels cannot alone determine the true nature of the cause of action stated, if any has been stated.

The only fact alleged in count 2 that is not alleged in count 1 is that the reasonable value of plaintiff’s services is $1,000,000. But what relation has that fact to any others that are alleged? It would be most pertinent if an agreement to pay the reasonable value of plaintiff’s services had been alleged or if from the faets alleged such an agreement could be implied. No such an agreement is alleged, and no faets are alleged from which it can be implied. An express agreement is alleged — that for his participation in it the plaintiff shall share in the profits of a joint adventure. To plead such an express agreement but to ask no recovery because of it, then, to plead a fact which has no sigifieance without a wholly different agreement, which is not pleaded, to support it, results, it seems to me, in nothing. So that count 2 states a cause of action neither at law nor in equity. Conceding that the purpose was to state a legal cause of action and conceding also that, if that purpose had been so far accomplished as that a defective, but amendable, result was produced, it would have been sufficient to support a writ of attachment, it must be ruled, I think, that count 2 does not satisfy even that minimum requirement.

The state court then did not have jurisdiction to issue the writ of attachment upon which the summons in garnishment was based, because (1) the cause of action stated in count 1 is in equity, and (2) because no cause of action is stated in count 2.

2. A second ground relied on for quashing the writ of garnishment is that the Skelly Oil Company, the garnishee, owed no debt to the defendant subject to garnishment. The facts, either shown by plaintiff’s pleading to the answer of the garnishee or admitted on the oral argument of this motion and in the brief, are these: The defendant was the owner of a patent. It made the claim that the Skelly Company, not an inhabitant of Missouri, had infringed that patent (but not in Missouri) and thereby had damaged the defendant. A suit in equity was instituted in a federal court in Delaware for injunction against infringement and for damages. Defendant prevailed in that suit to the extent that the issue of infringement was resolved in its favor and an injunction granted. The claim for damages was referred to a master and has not been adjudicated. The obligation of the Skelly Company to the defendant for damages by reason of its infringement of defendant’s patent is the debt garnished in this ease. Is such an obligation subject to garnishment?

Two rules of law here must be set out and then applied. The first is: “The liability of a garnishee to a defendant debtor must originate in and be dependent upon contract in order to authorize the proceeding; a claim for unliquidated damages or a right of action for a tort is not the subject of garnishment.” Peycke Bros. Com. Co. v. Co-Operative Co., 195 Mo. App. 417-420, 191 S. W. 1088, 1089. See, also, Eddy v. Heath’s Garnishees, 31 Mo. 141, and Ransom v. Hays, Garnishee, 39 Mo. 445. The second is: If the defendant could not have sued the garnishee for the liability involved in the jurisdiction in which the garnishment is brought, then the garnishment cannot be maintained in that jurisdiction. Harris v. Balk, 198 U. S. 215, 25 S. Ct. 625, 49 L. Ed. 1023, 3 Ann. Cas. 1084.

Applying the first of these rules, it would seem that the obligation of the Skelly Company to the defendant is not subject to garnishment, both because the claim of the defendant is based on tort, for infringement of a patent is in the nature of a tort, and because it is á claim for unliquidated damages, for the amount of damages, if any, due the defendant has not been determined.

I conceive that the reason for the rule is that garnishment attaches, so far as concerns us here, only to a debt. Liability on an undetermined tort claim is not a debt. The liability may never be established, and it cannot be established until both the wrongful act and that damage resulted therefrom have been proved.

Take, for example, a case of damages alleged to have been caused by the negligence of another. It cannot be assumed that the plaintiff in such a ease certainly has been damaged in some amount merely because it has been proved or is admitted that the defendant was negligent. What was merely a claim of damages for tort up to that point is not something nearer to a debt after that point is passed and before damages have been proved and judicially ascertained. Similar, and equally within the reason for the rule, is a ease in which damages for patent infringement are claimed. Liability based only on such a claim certainly is not a debt. In such a ease, just as in one based on negligence, liability for damages does not arise upon mere proof of the alleged wrongful act. Damages remain to be and never may be proved. Neither the establishment of the negligence in the one ease nor of the infringement in the other converts that which was only an undetermined and unliquidated claim into a debt subject to garnishment.

Nor is this conclusion in any way affected by those eases which hold that an unliquidated claim based on a contract, as a contract of insurance, may be the subject of garnishment, if the amount of the obligation may be ascertained by reference to some definite standard. In such cases the liability arises out of contract, not tort; liability in some amount is certain, not merely possible. The standard for determining the amount is _set up in the contract', it is no such elastic measuring rod as must be used in determining the damages resulting from infringement of a patent.

Does not the application of the second of the rules stated compel the same result? It does if the defendant could not have sued the Skelly Company in the Jackson county, Mo., circuit court for damages for infringement of its patent.

It is certain that the defendant could not have sued the Skelly Company in Missouri to enjoin patent infringement and for damages. It could and did sue it in Delaware for both. It could there have sued it for the injunctive relief only. Disregarding for the moment the fact that it also sued for damages and that that branch of the case still is in trial and as yet undetermined and supposing that it had sued only to enjoin patent infringement and had prevailed, could it then sue the Skelly Company for damages wherever it could obtain service? That question is answered by the plaintiff in the affirmative, in the negative by the defendant.

Por the right answer we first must look to the applicable statutes. Doing that we find that the courts of the United States are given exclusive jurisdiction “of all eases arising under the patent-right * * * laws of the United States.” Title 28, U. S. C. § 371 (28 USCA § 371). And that “In suits brought for the infringement of letters patent the district courts of the United States shall have jurisdiction, in law or in equity, in the district of which the defendant is an inhabitant, or in any district in which the defendant * * * shall have committed acts of infringement and have a regular and established place of business.” Title 28, U. S. C. § 109 (28 USCA § 109).

Now if a suit for damages because of patent infringement is a suit “arising under the patent right laws of the United States” and is “a suit brought for the infringement of letters patent,” then it is included within the meaning of both the cited statutes. That it is a suit brought for the infringement of letters patent is scarcely debatable. If otherwise there were doubt about that, it is removed by the express language of section 109. The jurisdiction there referred to is of suits “in law or in equity.” The only conceivable suit in law involving patent infringement is a suit for damages because of infringement.

I find no decision of any court, and none has been cited, which holds that a suit “for the recovery of damages and profits by reason of infringement (may be prosecuted) anywhere service can be obtained,” as plaintiff’s counsel contends in his brief. Moore v. Marsh, 7 Wall. 515, 520, 19 L. Ed. 37, cited by counsel, does not so rule. The language there is only that damages for patent infringement “may he recovered by-action on the case in any Circuit Court (i. e. federal circuit court) of competent jurisdiction,” but that is not the equivalent of saying that any eourt is a eourt of competent jurisdiction. Sandusky, etc., v. De Levaud (D. C.) 251 F. 631, cited by counsel, does not support plaintiff’s contention; it rules only that he who is sued on account of patent infringement may waive the privilege accorded him by section 109.

The error in the reasoning of plaintiff’s counsel is in assuming that the matter of infringement and the matter of damages are separable. The two reliefs the injured patent owner may have, one injunction, the other damages, are separable, but each depends on infringement; neither relief is separable from that.

If the theory of counsel is correct, then the defendant, having obtained a decree of injunction by reason of infringement in a Delaware federal eourt, can sue the Skelly Company for damages in a Missouri state court, if it obtains service on that company, for, if it is not still a suit for patent infringement, then the federal eourt does not have exclusive jurisdiction. What would the defendant be required to allege and prove in such a suit? Is not the very basis of its suit infringement? Must it not allege and prove that? If conceivably infringement might be proved by proving the decree of the Delaware eourt, still it must be proved. There can be no recovery of damages until it has been proved. The kind of evidence required certainly does not alter the nature of the suit. It is a suit for and on account of patent infringemenkstill.

My conclusion is that upon the admitted facts the obligation, if any, of the Skelly Company to the defendant was not subject to garnishment issued out of the Jackson county, Mo., circuit court.

It follows from the conclusions herein reached that the motions to quash the writs of garnishment should be sustained. Incidentally the defendant has moved for a dismissal of the cases, not as an independent matter, but as an incident which would follow the quashing of the writs of garnishment. But the theory that dismissal necessarily would result from the quashing of the writs of garnishment, as an incident thereof, seems to me to be erroneous in view of the provisions of section 83, title 28, U. S. C. (28 USCA § 83), under which an alias summons might issue out of this court in each of these eases. See Maichok v. Bertha-Consumers Co. (6 C. C. A.) 25 F.(2d) 257, 258. Because of that statute, the prayer for dismissal in the motions should be denied.

Order.

The motions of defendant to quash the writs of garnishment issued to the Skelly Oil Company, having been duly considered by the court and the eourt being fully advised in the premises, are sustained, and the writs are quashed. It is so ordered. The plaintiff in each of the eases is allowed an exception to this order.