text:
Moran v. Prather

ERROR to the Circuit Court for the District of Louisiana; in which court J. G. Prather filed a petition against Moran & Noble, setting forth in substance a case thus:

That he, the said Prather, with one Thoregan and two others, were joint-builders, in 1864, and jointly engaged in 1868 in navigating the steamboat Bartable; that the boat was a very valuable one, worth more than $50,000; but was liable to debts for a large amount incurred by the said owners in building and in repairing or in vavigating her; that on the 25th of September, 1868, Thoregan sold his interest in the steamboat to the petitioner; the petitioner then binding himself to hold Thoregan free and harmless from all debts of the boat and owners, existing at the date of the sale, and to reimburse him for any payment that he might be compelled to make of debts then existing; that the petitioner having thus and otherwise become owner of the largest interest, that is to say, 17/32 of the boat, he did in about one year afterward, that is to say, on the 21st of September, 1869, sell such interest to one Mrs. Mary Barker, for the sum, as mentioned in the bill of sale, of $6000, but that in consideration of a sale at a price so much below the value of his interest in the boat, the said Mrs. Barker was to assume and pay all the debts existing against the same at that time, and was to protect the petitioner against them; that not relying, however, absolutely on her ability to do this, and in order to be sure of protection against all the debts existing against the steamboat at that time the petitioner demanded an agreement of indemnity from a comercial firm in New Orleans named Moran & Noble; that certain persons whose names appear to it, had, by the instrument first given below, released the petitioner from liability; the said instrument being thus:

'NEW ORLEANS, September 20th, 1869.

'We, the undersigned creditors of the steamboat Bartable, do hereby agree to release J. G. Prather, of St. Louis, from all indebtedness due us by the said steamboat, so far as the said Prather is concerned.

'MORAN & NOBLE.

'McCLOSKY & MASON.

'T. R. MEDLEY.

BRADY & PALMER.

J. S. SIMONDS.

D. C. McCAN.'

That the said persons having previously released the petitioner, the said Moran & Noble, on the day previous to the sale, and as a consideration for the petitioner making sale of so very valuable as boat for the small sum of $6000, executed in this form the instrument of indemnity which he required:

'NEW ORLEANS, September 20th, 1869.

'We, the undersigned, of the city and State aforesaid, do hereby bind ourselves and our heirs, in solido, to defend and save the said J. G. Prather, of St. Louis, State of Missouri, 17/32 owner of the steamboat Bartable, free and harmless of any and all claims and demands that may arise or be brought against said steamboat, excepting those above signed.

'MORAN & NOBLE.'

The petitioner further set forth that Mrs. Barker did not pay the debts according to her contract; that on the contrary, a judgment for $1139 was rendered in the courts of Louisiana at the suit of one Stevenson, and another for $1127 at the suit of one Edwards against him, the petitioner, Thoregan and the other former owners; that execution issued on these judgments, and that he, the petitioner, was compelled to pay and did pay them; that the debts on which these judgments and executions issued were claims and demands that arose and were brought against the steamer, and were existing prior to the 20th day of September, 1869, and were embraced under the said agreement of indemnity given by Moran & Noble; that the petitioner having been thus obliged to pay the same, the said Moran & Noble under said agreement were bound to defend and save him free and harmless from said debts; but that they refused to do so, to the petitioner's damage, &c.

To the allegations of this petition there was a general denial.

The evidence showed that Mrs. Barker did not pay the debts, and that Stevenson and Edwards, not being among the creditors who released, sued Thoregan on the 22d June, 1872, and got judgment against him, which he had to pay, and that Prather repaid him what he was thus out of pocket.

The points of law and of fact, which, on the trial, seemed to be involved, were these:

I. Whether the agreement of indemnity, which had been executed by one partner for the firm, bound the firm, unless he had authority in writing from the other partner to execute it.

II. The true meaning of the agreement of the defendants, Moran & Noble.

The petitioner asserted that it meant that they indemnified him against any claims then existing on account of the boat whether a lien on the boat or not-and moreover that it referred to to debts to accrue after the 20th of September, 1869 (the date of the agreement of indemnity), but to debts which, then existing, might be thereafter presented; all claims and demands, in short, which had been contracted on account of the boat, and for which he, Prather, was liable as owner.

The defendants, on the other hand, contended that the terms 'all claims and demands that may arise or be brought,' referred only to claims and demands that should arise in futuro, i. e., should arise after the 20th of September, 1869; and that those terms could not cover debts due by the owners of the boat years before the execution of the instrument. They contended also that the terms 'that may arise or be brought against said steamboat,' did not include debts of the owner which could not be brought against the boat itself; in other words, debts incapable of being enforced in rem.

In the course of the trial, the plaintiffs, with a view of showing the truth of the allegation of the petition, that Mrs. Barker had contrac ed to pay the then existing debts, and that the agreement of Moran & Noble referred to them, offered a witness (one Bell) to prove that on the 21st of September, 1869, when the vessel was sold by Prather to Mrs. Barker, he was the agent of Prather to make the sale, and that he did as such agent make it; that the boat was then a very valuable vessel; that the interest of Prather in her was worth much more than the amount for which she was sold and set forth in the bill of sale from Prather to Mrs. Barker, and that it was understood at the time of said sale that Mrs. Barker should assume and protect the plaintiff from all existing debts of the boat and give a bond to that effect.

This testimony the court allowed to be given, and the defendants excepted.

The defendants on their part offered witnesses familiar with the custom among steamboatmen and merchants in this city and others, dealing with steamboats in New Orleans, to show that the word 'steamboat debts' is a well-known term among them, and that the meaning of that word is debts that are a lien on the boat for necessary supplies, materials, repairs, and wages; and in the year 1869, and for some years before and after that date, was confined to and existed according to the laws of the State but six months against a domestic vessel, like the Bartable, from the date when the debt accrued. And that when a debt could not be enforced against the boat by any of the conservatory processes allowed by the laws of the State of Louisiana, it ceased to be a debt of the boat, though it might remain a debt of the owners.

The purpose of this offer apparently was to show that the defendants had only engaged to protect Prather from debts that could be brought in rem, and against the steamboat, and to escape liability on the ground which they might purpose to show, that the debts which he had paid were not such debts.

The court refused to receive the testimony, and the defendants excepted.

In charging the court said:

'1st. The law is that one member of a commercial firm has no authority to bind the firm by signing the frim name to a bond executed for the benefit of third persons unless he has been especially authorized by his copartner to do so, or that his act in doing so has been ratified since it was done by his copartner, and in that event the parties would only be liable each for his share, that is, one-half each where there are two, as solidarity in obligations is never presumed, and commercial partners, though liable in solido, are so only in transactions connected with their commercial business. The party alleging this authority or ratification of this act must show it clearly and positively to your complete and entire satisfaction by competent evidence. It cannot be inferred and ought to be shown.

'2d. That defendants in this cause are sureties, and sought to be made liable as such. The law is that there are no presumptions against sureties; they can only be held to the precise terms of their obligation; their contract is to be construed strictly, and cannot be extended by implication beyond its express terms.

'3d. Legal agreements having the effect of law upon the parties, none but the parties can abrogate or modify them. The words of a contract are to be understood like those of a law, in their common and usual signification. Terms of art or technical phrases are to be interpreted according to their received meaning with those who profess the art or profession to which they belong.

'Now, all debts of the owners of a steamboat are not debts of the boat. In order to ascertain what are debts of a boat, you must examine the evidence, and ascertain from it what is understood by the words 'debts of the steamboat,' as contained in the contract, for if the debts claimed in this suit were not such debts as could be enforced against the steamboat, then they are covered by the bond [sic]. A claim against a steamboat is stale when the creditor has an opportunity to enforce it and neglected to do so for a reasonabl time.'

The court, having charged as first above mentioned, refused—

1st. To charge that the party alleging an authority or ratification from one partner to another to bind the firm by signing the firm name, must show such authority or ratification in writing.

2d. To charge that the petitioner could not recover unless he proved that the debt arose and was brought against the steamer since the date of the bond, to wit, September 20th, 1869.

3d. To charge that if the debts for payment of which indemnity was claimed in this suit were not such debts as could be enforced against the steamboat, they would not come within the terms of the agreement of indemnity; even though they should have arisen or been brought since the date of the bond, 20th September, 1869.

Verdict and judgment having been given in favor of the petitioner for the full amount of both the debts which his petition alleged that he had paid, the defendants brought the case here on exceptions to the admission of the evidence admitted and to the rejection of the evidence rejected, as also to the charge given, and the charge refused.

Mr. Bentinck Egan, for the plaintiff in error:

1. The evidence admitted was inadmissible. The bill of sale was the only evidence of the price. Mere circumstances could not contradict it by showing a different price.

2. The evidence rejected ought to have been admitted. 'Steamboat debts' is plainly not a legal phrase, but a technical phrase.

3. The charges refused were all, we submit, plainly fit to be given; especially the one which would not allow a partner to bind by bond his copartner, not being authorized by any instrument of equal dignity so to bind him.

Mr. Montgomery Blair, contra.

Mr. Justice CLIFFORD delivered the opinion of the court.

title: Moran v. Prather


text: Talk:Moran v. Prather

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/

title: Talk:Moran v. Prather


text:
Moran v. Prather/Opinion of the Court

The errors assigned are: (1.) That the Circuit Court erred in excluding the evidence offered by the defendants that the words 'steamboat debts' mean such debts as constitute a lien or privilege on the steamboat for necessary supplies, materials, repairs, and wages; that they do not include debts which cannot be enforced against the steamboat by any of the conservatory laws of the State. (2.) That the court erred in admitting the testimony offered by the plaintiff that the steamboat, at the time of the sale, was a very valuable vessel, that the interest of the plaintiff was worth much more than the amount for which it was sold, and that it was understood at the time of the sale that the purchaser should assume and protect the plaintiff from all existing debts of the steamboat, and that the purchaser should give a bond to that effect. (3.) That the instructions given to the jury were erroneous. (4.) That the court erred in refusing to instruct the jury as requested by the defendants.

1. Cases arise undoubtedly in which the testimony of expert witnesses is admissible to explain terms of art and technical words or phrases, and it may be admitted that a written instrument may be so interspersed with such technical terms that it would be error in the court to exclude the testimony of persons skilled in such matters, if duly offered by the proper party in the litigation.

Terms of art, in the absence of parol testimony, must be understood in their primary sense, unless the context evidently shows that they were used in the particular case in some other and peculiar sense, in which case the testimony of persons skilled in the art or science may be admitted to aid the court in ascertaining the true intent and meaning of that part of the instrument, but the words of the instrument which have reference to the usual transactions of life must be interpreted according to their plain, ordinary, and popular meaning; and the rule is that parol evidence is not admissible to contradict or vary such an instrument.

Difficulty will sometimes arise in determining whether the particular term or phrase in question is used in a technical or in a popular sense, but the court is of the opinion that no such difficulty is presented in this investigation. Instead of that it is quite clear that neither the words of the guarantee given by the plaintiff to his vendor when he made his second purchase nor the words used in the guarantee given by the defendants to the plaintiff are either doubtful or ambiguous, nor are the words of either of those contracts of a character to afford the slightest support to the proposition that parol testimony of any kind would be admissible to contradict, vary, or to unfold or expound their ordinary signification and meaning.

By the allegation of the petition it appears that the plaintiff when he made his second purchase bound and obligated himself to hold his vendor free and harmless of all debts of the steamboat and owners, existing against the steamboat at the date of the sale, and to reimburse him for any and all debts then existing that he should be compelled to pay on account of his having been an owner of the same. Language equally clear, comprehensive, and decisive is employed in the guarantee given by the defendants to the plaintiff when he transferred his entire interest to the person in whose behalf the defendants executed the guarantee which is the foundation of the present suit. Subject to the exception before stated they bound themselves and their heirs in solido to defend the plaintiff, and save him free and harmless of any and all claims and demands that may arise or be brought against the steamboat, which language is neither technical nor ambiguous, and it certainly falls within that class of expressions which by all the authorities must be interpreted according to their plain, ordinary, and popular meaning.

Where the words of any written instrument are free from ambiguity in themselves, and where the external circumstances do not create any doubt or difficulty as to the proper application of the words to the claimants under the instrument, or the subject-matter to which the instrument relates, such an instrument, said Tindal, C.J., is always to be construed according to the strict, plain, common meaning of the words themselves, and that in such cases evidence dehors the instrument for the purpose of explaining it, according to the surmised or alleged invention of the parties to the instrument, is utterly inadmissible.

All the facts and circumstances may be taken into consideration, if the language be doubtful, to enable the court to arrive at the real intention of the parties, and to make a correct application of the words of the contract to the subject-matter and the objects professed to be described, for the law concedes to the court the same light and information that the parties enjoyed, so far as the same can be collected from the language employed, the subject-matter, and the surrounding facts and circumstances.

Ambiguous words or phrases may be reasonably construed to effect the intention of the parties, but the province of construction, except when technical terms are employed, can never extend beyond the language employed, the subject-matter, and the surrounding circumstances.

Apply that rule to the case and it is clear that the evidence offered by the defendants was properly excluded, and that the exception under consideration must be overruled.

2. Evidence was introduced by the plaintiff at the trial that his interest in the steamboat was worth much more than the amount for which the same was sold, and that it was understood at the time of the sale that the purchaser should assume and protect the plaintiff from all existing debts of the vessel and give a bond to that effect. Exception was taken by the defendants to the ruling of the court in admitting that testimony, which ruling is the foundation of the next assignment of errors.

Parol evidence is certainly not admissible to contradict, vary, or control a written contract, but the evidence in question in this case is not subject to any such objection, whether applied to the guarantee given by the plaintiff to his vendor or to the bill of sale given to the plaintiff by the purchaser of his interest in the steamboat. Much less was paid for that interest than its market value, the evidence of which was properly admissible as showing the surrounding circumstances at the time the bill of sale was executed, and also to show the circumstances which induced the purchaser to give the guarantee executed by the defendants.

3. Specifications of error under the third assignment involve the same question, or some phase of the same question, as that contained in one or the other of the two preceding assignments.

The defendants insisted in the court below, and still insist, that the phrase 'steamboat debts' is a technical phrase, and that it did not include any debts except such as constitute a lien on the steamboat. Attempt is made to set up that theory by exceptions to the charge, as well as by exceptions to the rulings of the court, but several answers may be given to the theory, either of which is sufficient to show that the exceptions are not well founded: (1.) That the language of the guarantee is not correctly reproduced. (2.) That the phrase referred to is not a technical phrase within the meaning of the rules of evidence applicable in such cases. (3.) That by the true construction of the guarantee it includes all existing debts contracted for repairs, supplies, and running expenses for and on account of the steamboat, for which the plaintiff, as owner, was liable at the time of the sale and purchase.

Evidently the object of the agreement of guarantee was to secure the plaintiff against all liability arising from his partownership of the steamboat. It was his liability and not that of the steamboat which was to be protected from 'all claims and demands that may arise or be brought against the steamboat.'

4. Certain requests for instruction were also presented by the defendants which were refused by the presiding justice, and the court here is of the opinion that all of them were properly refused.

Partnership may be proved by parol as well as by written evidence, which is sufficient to show that the ruling of the circuit judge in refusing the first request is correct, and enough has already been remarked in response to the first exception to show that the other requests for instruction were properly refused, for the plain reason that every one of them sets up an erroneous theory of the guarantee which is the foundation of the suit.

Evidence of usage was offered by the defendants to limit the legitimate scope and operation of the instrument of guarantee, but it was excluded by the court for reasons so manifestly proper that no argument is necessary to vindicate the action of the court.

Usage cannot be incorporated into a contract which is inconsistent with the terms of the contract; or, in other words, where the terms of a contract are plain usage cannot be permitted to affect materially the construction to be placed upon it, but when the terms are ambiguous usage may influence the judgment of the court in ascertaining what the parties meant when they employed those terms.

Apply those rules to the case and it is clear that the theory of the controversy assumed by the circuit judge in all his rulings and in the instructions which he gave to the jury is correct. Conclusive proof of that proposition is found in the language of the guarantee, by which the defendants covenanted to save the plaintiff free and harmless of any and all claims and demands that may arise or be brought against the steamboat, except such as were relinquished by the instrument in writing executed on the same day.

JUDGMENT AFFIRMED.

title: Moran v. Prather/Opinion of the Court


text: Talk:Moran v. Prather/Opinion of the Court


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Ex parte Medway

ON petition for mandamus.

The case was thus: Medway had filed a petition in the Court of Claims for the recovery, under the Abandoned and Captured Property Acts, of the proceeds of ninety-four bales of cotton, of which he alleged himself to have been the owner, and which he alleged had been seized and sold by the United States, who now had the net proceeds, $17,386.20, in their treasury. A trial was had, and the court found as facts that the claimant was the owner of the number of bales stated, that they had been captured by the United States military forces at Wilmington, North Carolina, in February, 1865; that they had been turned over to the Treasury agent at Wilmington, and sold in New York, in August, 1865; and that the net proceeds thereof were in the treasury.

But it refused to find as another fact that which the plaintiff requested it to find, namely, 'that the whole amount of net proceeds of the said bales was $17,386.20.'

Judgment was rendered against the plaintiff, who thereupon appealed to the Supreme Court.

The Supreme Court reversed the judgment and remanded the cause for further proceedings, 'in conformity with law and justice.' The record in the Supreme Court contained the foregoing findings, and showed the failure of the Court of Claims to make the computation and state the amount of proceeds.

The plaintiff then filed the mandate in the Court of Claims, and moved that court to proceed with the case from the point reached by the reversal, which proceeding he alleged would be 'in conformity with law and justice.' The court, however, refused to so proceed, and on the contrary, on the 5th of April, 1875, ordered that all the findings of fact originally made and filed, and upon which the case had been heard in the Supreme Court, should be set aside and held for naught, and that a trial be had de novo.

Mr. Thomas Wilson, for the plaintiff, now filed a petition in this court, setting forth these facts and praying that the judges of the Court of Claims show cause why a mandamus should not be issued to the said court, to compel it to vacate its said order of April 5th, 1875, and it proceed in obedience to the mandate of this court, and in conformity to law and justice in the case.

The judges of the Court of Claims showed for cause—

1st. That the mandate of the Supreme Court left the Court of Claims to decide what further proceeding in the case would be in conformity to law and justice; and

2d. That it was in conformity to law and justice to set aside the findings of fact which had been made on the first trial, and try the case de novo; and thereupon the said order of April 5th, 1875, was made.

The question now was upon the sufficiency of the return.

Mr. Thomas Wilson, for the petitioner:

The court below having once tried the case, and having decided every question of fact arising in it, except making the computation and statement of the amount in dollars and cents, and having filed its findings in the nature of a special verdict, and an appeal having been had to the Supreme Court, which reversed the judgment and remanded the cause for further proceeding, the court below should be now required to proceed from the point reached by the reversal, and cannot go back over and retry those questions of fact which were settled and determined on the former trial, and which, being certified to the Supreme Court on appeal, formed the basis of its reversal.

The finding of facts set forth in the record remained on file in the Court of Claims; it continued to be part of its record. The judgment alone was reversed. The finding of fact remained unreversed and in full forc, the same as would a case stated, the report of an auditor, or a special verdict. But for this finding as to ownership, seizure, sale, and proceeds in the treasury, the judgment would not have been reversed. It was upon these findings that the reversal was made; yet the Court of Claims, upon regaining jurisdiction of the case, so far ignore the action of the Supreme Court as to strike out and set aside the finding of those facts upon which that court based its reversal.

If the proposition which we contend for is incorrect, then no decision of the Court of Claims is final upon the facts, and the different issues in a case may be determined seriatim, with an appeal to the Supreme Court intervening between each decision. If upon each reversal and remanding there be allowed a trial de novo, there may be injected another and a new defence, which may result in another decision upon another issue, and the granting of another appeal, and so on, until the last issue is disposed of by the second, third, or perhaps fourth appeal, the number of appeals being limited only by the number of issues in the case.

This is the inevitable result of the position taken by the Court of Claims. That it is erroneous is obvious.

Mr. John Goforth, Assistant Attorney-General, contra.

The CHIEF JUSTICE delivered the opinion of the court.

title: Ex parte Medway


text: Talk:Ex parte Medway

title: Talk:Ex parte Medway


text:
Ex parte Medway/Opinion of the Court

Our mandate required the Court of Claims to proceed in the cause remanded in conformity to law and justice. We did not undertake to direct what law and justice did require, any further than to say that upon the finding of facts appearing in the record sent to us upon the appeal, the judgment was erroneous. In everything else the Court of Claims was left free to proceed with the cause in its own way and according to its own judicial discretion. That discretion we cannot control in this form of proceeding.

PETITION DISMISSED.

title: Ex parte Medway/Opinion of the Court


text: Talk:Ex parte Medway/Opinion of the Court


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Chicago and Alton Railroad Company v. Wiswall

ON motion to dismiss a writ of error to the Circuit Court for the Southern District of Illinois. The case was this:

Wiswall, a citizen of Illinois, sued, in one of the inferior State courts of the State just named, the Chicago and Alton Railroad Company. The company conceiving that the case was properly cognizable in the Circuit Court of the United States for that district-the Southern District of Illinois-got an order from that court, the court below, commanding the State court to send the record to it. This the State court did. However, upon looking further into the matter, the Circuit Court was satisfied that it had no jurisdiction, and on motion of the plaintiff remanded the case to the State court. To that remand the railroad company took a writ of error from this court, and this writ it was which Wiswall now moved to dismiss; the ground of the motion being that the remand was not a 'final' judgment or decree, and that the proper proceeding of the company was a motion for mandamus on the court below to act, and not by writ of error to review what was done.

Mr. E. C. Brearly, in support of the motion; Mr. P. Phillips, contra.

The CHIEF JUSTICE delivered the opinion of the court.


text: Talk:Chicago and Alton Railroad Company v. Wiswall


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Chicago and Alton Railroad Company v. Wiswall/Opinion of the Court

The writ of error is dismissed upon the authority of Insurance Company v. Comstock. #fn-s-s The order of the Circuit Court remanding the cause to the State court is not a 'final judgment' in the action, but a refusal to hear and decide. The remedy in such a case is by mandamus to compel action, and not by writ of error to review what has been done. #fn-s-s-s


text: Talk:Chicago and Alton Railroad Company v. Wiswall/Opinion of the Court


text: Category:United States Department of the Interior


text:
United States v. Shrewsbury

APPEAL from the Court of Claims.

The case § found by the Court of Claims was thus:

On the 27th of March, 1865, W. S. Shrewsbury entered into a contract with the United States to transport army stores from Fort Leavenworth, Kansas, and other forts there and in Missouri, to Fort Lyon and other forts in the Territories of Colorado and New Mexico.

The contract contained a clause thus:

'In all cases where stores have been transported by the said Shrewsbury, under this agreement, a board of survey shall be called without delay, upon their arrival at the point of destination or delivery, to examine the quantity and condition of the stores transported, and in cases of loss, deficiency, or damage, to investigate the facts and report the apparent causes, assess the amount of loss or injury, and state whether it was attributable to neglect or the want of care on the part of the contractor, or to causes beyond his control; and these proceedings, a copy of which shall be furnished to the contractor, shall be attached to the bill of lading, and shall conclude the payments to be made on it.

'For loss of weight due to shrinkage. . . the contractor shall not be liable, if the packages are delivered in good order and condition, and the board of curvey shall be satisfied that such shrinkage did not arise from neglect or want of care on the part of the contractor or his agents.

'For deficiencies or damages, the contractor shall pay the costs at the point he receives the articles, and freight shall be deducted in the latter case in proportion to the amount of damage assessed. Should no board of survey be called, through failure on the part of the quartermaster's department or other military authority to convene one, it shall be considered that the contractor has delivered all the stores, as specified in the bill of lading, in good order and condition, and he shall be paid accordingly.'

On the 2d of June, 1865, one of Shrewsbury's transportation trains-train No. 124-received, at Fort Leavenworth, 858 sacks of corn, weighing in the aggregate 101,860 pounds, averaging 118 3/4 pounds per sack. The train arrived at Fort Lyon, Colorado, in the latter part of July, and delivered the corn in good order, except that 9 sacks, amounting to 1069 pounds, were lost. But, by reason of the difference or imperfection of the scales used in the determination of the weight of the remainder and the shrinkage in weight upon the road, the remaining 849 sacks were reported to weight only 97,620 pounds instead of 100,791 pounds, their weight when they left Fort Leavenworth, and Shrewsbury was charged with the loss of 3171 pounds. A board of survey was ordered on the 31st July, 1865, which met on the 1st August, 1865, and examined the supplies delivered.

The following were the proceedings of the board, as reported to the commanding officer, and as attached to the bill of lading:

'Proceeding of a board of survey which assembled at Fort Lyon, C. T., by virtue of the following order, viz.:

'HEADQUARTERS, FORT LYON, C. T.,

'July 31st, 1865.

[Special Order No. 145.]

'A board of survey is hereby ordered to meet at the commissary building to-morrow morning, at 9 o'clock, or as soon thereafter as practicable, to examine and report upon the quantity and condition of certain commissary and quartermaster stores being received by Lieutenant C. M. Cossett, Acting Assistant Quartermaster, and A. C. S. 'Detail for the Board.

'First Lientenant J. A. Cramer, veteran battalion, First Colorado Cavalry.

'First Lieutenant Henry Gronheim, Fifteenth Kansas Cavalry.

'By order of Theo. Conkney, captain, commanding post.

'JAMES OLNEY,

'Second Lieutenant and Post Adjutant.

'FORT LYON, C. T.,

'August 1st, 1865.

'The board met pursuant to the above order.

'Present: First Lieutenant J. A. Cramer, veteran battalion, First Colorado Cavalry, and First Lieutenant Henry Gronheim, Fifteenth Kansas Cavalry, and proceeded to examine the supplies delivered by freight contractor W. S. Shrewsbury, in contractor's train No. 124, Fort Lyon, No. 5, a d find as follows:

'Packages all correct, and in good order, with the exception of nine sacks of corn deficient; weight agreeing with the bill of lading with the exception of 4240 pounds of corn deficient.

'The board, therefore, recommend that the deficiency of corn be charged to the freight contractor, and that Lieutenant C. M. Cossett, Acting Assistant Quartermaster, be permitted to drop said deficiency from his return.

'The board then proceeded to other business.

These minutes were signed in form by the officers composing the board.

In pursuance of the foregoing recommendation Shrewsbury was charged by the quartermaster department for the loss of 9 sacks of corn, and in addition to the 9 sacks of corn with the 3171 pounds of difference in weight of the remainder of the corn before mentioned, and for this difference $449.61 was deducted from his account. He had never been paid this balance. A general account was stated between the parties showing the amount allowed and deducted, entitled:

'An account for the transportation of military stores from Fort Leavenworth, Kansas, to Fort Riley, Kansas, under contract with the United States, dated March 27th, 1865, as per the accompanying bills of lading, receipts, and proceedings of boards of survey, to wit.'

The claimant was paid the total of the amounts allowed, and at the foot he gave the following receipt:

'Received, at Fort Leavenworth, Kansas, the 23d of October, 1865, of Captain H. L. Thayer, Assistant Quartermaster, United States Army, the sum of $91,243.60, in full of the above account.

'W. S. SHREWSBURY.'

At the time of receiving payment Shrewsbury protested against the deduction, and notified the quartermaster who made the payment that he should look to the United States for a corrected adjustment and full payment.

The Court of Claims, upon the foregoing facts, decided as conclusions of law:

That as to the shrinkage of corn and difference of weight, the proceedings of the board of survey did not conform to the terms of the contract, inasmuch as the board did not investigate the facts nor report the apparent causes, nor state whether the loss was attributable to neglect or the want of care on the part of the contractor, or to causes beyond his control; and that for the amounts thus withheld the claimant should recover.

Nott, J., in delivering the opinion of the court said:

title: United States v. Shrewsbury


text: Talk:United States v. Shrewsbury

title: Talk:United States v. Shrewsbury


text:
United States v. Shrewsbury/Opinion of the Court

'The sacks of corn averaged 118 3/4 pounds per sack. It is, therefore, apparent that the nine missing sacks (for which no claim is made by the contractor) could not have weighed 4240 pounds when received at Fort Leavenworth, and that if 'the packages' were all correct and in good order, as found by the board, the deduction ordered was an arbitrary deduction, which any clerk could have made by a simple comparison of the two weights, and which involved the exercise of no real examination or discretion.

'But the rule which the parties established for themselves by their agreement was, that in case of 'deficiency' the board of survey should 'investigate the facts and report the apparent causes and assess the amount of loss or injury, and state whether it was attributable to neglect or the want of care on the part of the contractor, or to causes beyond his control.' In none of these particulars do the proceedings of the board in any manner carry out the intent and terms of the contract. The board did not investigate the facts, it did not report the apparent causes, it did not state whether the loss was attributable to neglect or to the want of care of the part of the contractor, or to causes beyond his control. As to all of these particulars the contractor had the right to receive the investigation of the board, and the contract was so rigid in assuring him of that right, that it provided that if the other party, who alone had the right to convene a board, should fail to do so, he should be deemed to have 'delivered all the stores, as specified in the bill of lading, in good order and condition, and be paid accordingly.' We do not mean to say that the failure of a board to investigate after it has been property convened will work the same result in favor of a contractor, but we do think that when a board is convened it must carry out the intent of the agreement in its investigations, or else that its proceedings will not be conclusive and binding upon the contractor.'

The judgment of the court was that the claimant recover. The United States took this appeal.

Mr. G. H. Williams, Attorney-General, and Mr. John Goforth, Assistant Attorney-General, for the appellant:

1. The reports of the board of survey contained everything made necessary by the terms of the contract. The condition of the stores was reported, the deficiency in weight noted, and the liability of the contractor for damages and deficiencies, contained in the recommendations of the boards. The exact form of report was left to the judgment of the boards.

2. If there were any informalities in the reports of the boards of survey, the claimant waived them by acquiescence in the conclusions of the reports, and acceptance of payment on the vouchers or bills of lading, which included the deductions ordered by the boards, as in full of all services of the various trains against which the boards had charged deficiencies. The agreement was to submit the questions of the condition and quantity of the stores transported by the claimant to boards of survey, and their reports were to be conclusive as to the payments to be made on the bills of lading or vouchers. Boards were ordered, and they not and examined the transported stores, and their proceedings were attached to the bills of lading. No protest or objection was made to the composition, the proceedings, or reports of the boards, nor any charge made of informity in the proceedings of reports. The claimant accepted the conclusions of the boards, as in full payment of all services rendered, and then protested against the deductions made by the boards. The boards were in the nature of an arbitration, acting for both parties.

Where there is a submission to arbitration, after a ratification of an award and execution of its requirements, it is too late for the parties to set up any defect in the proceedings or in the award.

3. The taking of the amount allowed by the boards of survey appointed pursuant to the contract, i. e., by the act of both parties, and giving the receipts as in full payment for all services rendered by certain trains, bring the case within the ruling of the Supreme Court in the cases of Justice, of Mason, and of Sweeney, notwithstanding a promise on the part of the claimant to look elsewhere for the amount of the deductions. In fact this case is more favorable for the United States than those quoted, because it is an acceptance of an award which the contract says shall conclude all payments on the bills of lading.

1. It was optional with the government whether a board of survey should be called in any case. Its proceedings were to be all for the benefit of the defendant, its action and proceedings were ex parte, and it was composed entirely of government officers. On these accounts it is the more imperative that the contract be construed strictly. If no board should be called, it was to be considered that no deficiency existed, and that full payment should be made.

The contractor consented that the officers constituting the board of survey might, for the purpose of ascertaining whether he had done his duty, do certain things, viz.:

1st. Examine the quantity and condition of the stores transported, and in cases of loss, deficiency, or damage,

2d. To investigate the facts.

3d. To report the apparent causes.

4th. To assess the amount of loss or injury.

5th. To state whether it was attributable to neglect o want of care on the part of the contractor or to causes beyond his control.

These five points were to be passed upon by the board, if the government questioned his claim to full pay; but if they undertook to act at all, they were to act in the way prescribed.

The court below, whose conclusions of fact cannot be appealed from, says truly:

'The board did not investigate the facts; it did not report the apparent causes; it did not state whether the loss was attributed to neglect or the want of care on the part of the contractor, or to causes beyond his control.'

The board, therefore, ended the investigation where it should have begun it. Having ascertained that there was a deficiency, and the amount of it, then the issue arose as to whom it should be charged. For this purpose they were required to go on and investigate the facts concerning the deficiency, to report the apparent causes of the deficiency, and to state whether, in their judgment, it was attributable to neglect or want of care on the part of the contractor, or to causes beyond his control.

The proceeding which was provided for secured a body in the nature of arbitrators. Now, it is settled that the power and authority of an arbitrator is derived entirely from the submission; he must therefore make his award strictly in pursuance and in conformity with the submission. It is a general rule that unless the arbitrator makes his award of all matters submitted to him the award is entirely void.

2. It is next said that if there were any informalities in the reports of the boards of survey, the claimant waived them by acquiescence in the conclusions of the reports and acceptance of payment on the vouchers or bills of lading.

The argument proceeds upon the misapprehension that the contractor obtained an award in his favor, and received the money. Such is not the fact. The board of survey had no jurisdiction over the matter of freight-money; that was definitely fixed by the contract, there was no controversy concerning it. There was no award, and could be none, as to the moneys earned by the contractor, but the report had reference solely to the counter charges claimed by the United States. The moneys received by the claimant had no reference to the matters considered by the board, and they were both paid and received with an explicit understanding that it was not to be a final adjustment.

The two cases cited on the other side in support of an opposite view, are based upon the principle that a party cannot take the benefits of an award without accepting its disadvantages. There is no such principle involved here. The claimant took that which had no relation to the controversy, submitting for the time to the reduction, but giving notice that he would claim the amount withheld.

3. The final ground of defence is that the claimant is concluded by the acceptance of the money and the receipt he signed.

The gist of the inquiry is whether the money was paid and accepted as a satisfaction. Undoubtedly, if it was, there is an end of the case. If it was not, the right of action remains.

This court has had occasion to repeatedly consider the precise question, under what circumstances will the payment and receipt of money be held as sufficient evidence of this satisfaction? Of course the intention of the parties must govern, not the secret intentions or mental reservations, but the intention as evidenced by their acts and plain declarations. There is nothing in any of the cases cited by the other side-neither Justice's, nor Mason's, nor Clyde's-which deny this.

Even upon the extreme view taken by the Attorney-General, that the board of survey passed upon the whole claim, and that the claimant accepted the money under its award, it was only required in order to preserve all of his rights that he should protest at the time of receiving the money that it was not in satisfaction of the whole claim. If after such protest the officers saw fit to pay him, his status was not affected by such payment.

Mr. Justice SWAYNE delivered the opinion of the court.

The counsel for the appellee maintains that the Court of Claims in holding as it did for nought the findings and recommendations of the board was right, because the agreement was, that in case of deficiency, the board should 'investigate the facts and report the apparent cause, and assess the amount of loss or injury, and state whether it was attributable to neglect or want of care on the part of the contractor, or to causes beyond his control,' and that their proceedings failed to carry out the intent and terms of the contract in these particulars. This is too narrow and technical a view of the subject. The provision of the contract touching the board was important to the government. The points of delivery were in the wilds of the West. If there was any failure by the contractor, the time and place of delivery were the time and place to ascertain the facts, and to put the evidence in an effectual shape. Afterwards it might be impossible for the government to procure the proofs, and if it were done, the expense might greatly exceed the amount of the items in dispute. At the delivery, the bill of lading spoke for itself. The teamsters and guards who accompanied the train were present, and could readily be examined. It is said by the Court of Claims, in their conclusions of law, that the board failed to make the requisite investigations of the facts. To do this was one of the most important duties devolved upon them. It is to be presumed they discharged it. They did not say, in terms, that they had done so, but they reported conclusions carrying with them the strongest implication that what was recommended rested on a basis of ascertained facts. The board, as honest men, could not have announced such results without the proper previous examination. The means were at hand, and the work was easy. A formal and technical instrument was not to be expected from military men acting under such circumstances. We think the reports were sufficient, and that they conform in every substantial particular to the requirements of the contract.

It does not appear that the contractor objected either as to form or substance when the reports were made, nor that he disclosed any objection subsequently until the time of payment. Nor did his objections then assume a definite shape. He notified the quartermaster that he should claim 'a readjustment and full payment.' The reasons and grounds of the claim were not stated. The payments were made at a distant point and after the lapse of several months. The witnesses were then scattered and gone. Most of them doubtless were difficult if not impossible to be found. As the contractor was silent when he should have spoken, he cannot be permitted to speak at the later period, in the altered condition of things, which then existed, as regards the other party. He must be held to have waived any exception which he might have taken at the proper time, and to have been, when the payments were made, finally concluded.

JUDGMENT REVERSED, and the case remanded, with directions

TO DISMISS THE PETITION.

Mr. Justice FIELD dissented.


text: Talk:United States v. Shrewsbury/Opinion of the Court


text: The Tremolo Patent

title: The Tremolo Patent


text: Talk:The Tremolo Patent

title: Talk:The Tremolo Patent


text:
The Tremolo Patent/Opinion of the Court

ON cross appeals from the Circuit Court for the Southern District of New York.

Hitchcock & Co., owners by assignment of a patent to one Carpenter, which had been twice reissued to themselves, filed a bill in the court below against Tremaine and others, vendors of organs generally and other musical instruments, to enjoin their sale of what was known as a 'tremolo attachment,' an appendage sometimes made to organs; the purpose of which is to make a tremolo or vibratory note, preserving at the same time, as far as possible, its smoothness, fulness, and power.

This tremolo attachment was no necessary part of an organ; but, as its name declared, an attachment;' an optional device, used or not used at pleasure.

The defendants, who, as already said, were venders of organs generally, and who bought different sorts of organs from the different makers of them, had and sold organs with the attachment (buying them from persons not licensed), and organs without the attachment. For those containing the attachment they paid an additional price, and they sold them also for more than those which did not have the attachment.

The defendants answered the bill, and the case having been heard, and they decreed guilty of infringement, it was referred to a master to take an account of profits, the order of reference directing—

'That the permit the defendants to prove the general expenses of their business incurred alike to effect the sale of all goods (i. e., not specifically incurred in reference to any particular class or kind), said general expenses to be apportioned by the master, and a part of the same, bearing the same proportion to the whole that the gross sum received from sales of the infringement bears to the gross sum received by the defendants from all sales in their said business, to be added to the expense of the infringing tremolos, and allowed to the defendants.'

In taking this account, the master did accordingly allow the defendants to prove the general expenses of their business incurred in effecting the sales of all musical instruments, and deduct a ratable proportion from the profits made by the sale tremolo attachments. To explain, he reported thus:'1st. That the gross sum received by the defendants from all sales in their said business, during the period specified, was $91,165.32.

'2d. That the gross sum received by the defendants from sales of the infringement was $3913.96.

'3d. That the general expenses of their business incurred alike to effect the sales of all goods was $16,868.93.

'4th. That the proportion of such general expenses applicable to the tremolo, pursuant to said order, is $729.22.

'5th. That if said proportionable part of the expenses be added to the expense of the tremolo, or deducted from the profits previously reported, to wit, $1238.48, the profit derived by the defendants from the infringing tremolo will amount to the sum of $509.26.'

No detailed statement of general expenses was offered before the master on the part of the defendants, nor did they prove specific items of general expense, except the items of rent, salaries, freight, and cartage, advertising, insurance, gas, and fuel. They made a general statement, however, and introduced their books in cross-examination. Both parties submitted analysis of these books. The master adopted the figures of the defendants' analysis except, where he considered them at variance with the previous sworn testimony, and he allowed as general expenses certain sums and items, including:

And disallowed eight various large items.

1st. To the deduction from the profits made on the sale of the tremolo attachments of a ratable proportion of the general expenses of the defendants' business.

2d. To the way in which the master ascertained the general expenses.

The court, however, confirmed the master's report, and a decree was entered accordingly.

Soon after this was done, it was discovered that the case had been tried on issues not made in the pleadings; that the complainants in taking their proofs had put in evidence a reissue different from and later than the one which they had set out in their bill as the ground for their complaint, and that the bill had never in any way been amended.

As to this new matter now brought up after decree made, the case was thus:

The bill set forth that a patent for the 'attachment' had been granted on the 27th day of June, 1865, to one Carpenter; that subsequently he assigned the letters- atent to the complainants; that on the 18th day of May, 1869, they surrendered the patent, and obtained a reissue to themselves (No. 3444), and that the defendants had been guilty of infringing their rights under the patent.

To the complaint thus exhibited the defendants answered, admitting the grant of the letters to Carpenter, but denying all knowledge as to the truth of the allegations that Carpenter had at any time assigned his interest to the complainants, or to any one or more of them; and, therefore, denying that the complainants had any interest in the said letters-patent or to the reissues of the same as set forth in the bill of complaint. The answer further averred that Carpenter was not the original inventor of the tremolo attachment, but that it was known and was in use before his alleged invention was made. It denied that the defendants had infringed upon the rights and privileges granted by the patent dated June 27th, 1865, 'or by ANY of the reissues of the same.'

To this answer a general replication was put in and the parties went to trial, when the complainants gave in evidence, without objection, reissued letters-patent No. 3665, dated October 5th, 1869, which had been granted on the surrender of the first reissue No. 3444. This second reissue was not set out in the bill, but it was obvious enough that both parties supposed it was, through all the progress of the trial. As already said, the answer denied infringement, not of the single reissue mentioned in the bill, but of any of the resissues. No other reissue than No. 3665 was put in evidence. The decretal order to account mentioned it in terms. The evidence taken by the master under the order of reference related only to attachments sold by the defendants after the second reissue was granted. In the exceptions taken by them to the master's report no intimation was made that the rights of the complainants under the reissue No. 3665 were not on trial, and not even when the final decree was made was it suggested that the parties had been trying the case on an issue not made by the pleadings.

After the final decree had been made, the complainants applied to have the bill of complaint amended by inserting in it a declaration on the reissued letters-patent which were decreed to be valid, and the court below made an order containing a recitation of alleged facts to authorize the order amending the bill as prayed for.

There was no allegation that the bill of complaint ever contained the allegation as to reissue No. 3665, prior to the judgment. The motion and the order were not made 'to conform the bill to the proofs.'

Both parties appealed; the complainants because of the confirmation of the report in the face of their two exceptions to it; the defendants because of the amendment allowed in the bill after a final decree made.

Mr. F. H. Betts, for the complainants below:

1. No part of the general expenses are justly allowable to the defendants.

The method of computation of profits was erroneous. It forgot that the patent is not for the tremolo itself, but for the combination of the organ and tremolo.

If an extra price is received for the combination, without any additional expense being incurred, the whole of that extra price is obtained by the addition of the combination.

It does not avail the defendants to charge a portion of their general expenses against the tremolo, one member of the combination, for in so doing they take off the exact amount from the other member, the organ. The profit on the whole combination is still equal to the exact amount by which the extra price received by reason of the making of the addition exceeds the amount received for the organ alone. This, for example, is expressed in figures thus:

Cost of organ, $100; received for organ, $200. Cost of tremolo, $12.50; received for tremolo, $25. Amount of general expenses apportioned to each organ, $50; no additional amount incurred by reason of tremolo.

If all, $50 i charged against organ alone. Profit on tremolo alone is $12.50. If $45 is charged on organ and $5 on tremolo, we still have $12.50 as the profit received for the combination; i. e., $7.50 on tremolo itself and $5 on organ, by reason of adding tremolo.

The same result follows from any apportionment.

Any other rule than this would enable an infringer to add patented devices to his instrument, charge extra prices for them, and thereby increase his profit on his instruments by the exact amount of the proportion of his general expenses that his sales of the infringing device bear to his general business. In other words, the more he infringes the more of the general expenses he diverts from the main instrument, and thereby the more profits he makes without being accountable for it.

The true rule is, if the infringing devices are an integral part of the whole instrument, without which it is incapable of use, and for which a single charge is made, then in determining profits on a part of the organization general expenses are to be apportioned according to cost, or by some other equitable rule.

But when the infringing device is an optional one, used or not, at pleasure, and an extra price is charged and received for it when used, the true profit made is the extra sum received for the addition, only such expenses being allowed as are incurred by reason of the addition.

It may be urged that as the tremolos induced the sale of organs, and as the sale of organs involved expense, therefore the tremolo must bear its proportion of such expense. This is a plausible position, but in this case the sales of organs produced a profit beyond the profit of the tremolo. Every sale of an organ which was induced by the presence of a tremolo, instead of creating an expense which lessened that part of the profit measured by the difference between the cost and sale price of the tremolo, not only wholly paid such expense, but added additional profit for the organ. If it be the fact, as it doubtless was, that the presence of the tremolo combination increased the sales of organs, so far from the tremolo combination being charged with anything on that account, it ought to be credited, not only with the difference between its cost and sale price, but also with the additional net profit on the whole instrument whose sale was thereby effected.

If it would have been impossible to have sold any organs without the tremolo, the whole net profit would have been properly credited to the tremolo.

If half the sales were due to the tremolo combination, to the tremolo is due the profit caused by its own extra price plus one-half of the balance of net profit on the whole instrument, and if the addition of the combination produced no effects, yet still in fairness it ought to be credited with its own extra profit, and not charged with any part of expenses it contributed nothing to incur.

The contingency of the presence of the tremolo having retarded sales is not supposable in this case; but if it were, it should still be credited with its own profit and charged with any loss on sales of the whole instrument.

2. 'The master erred in that he has allowed as part of the expenses of business, to be apportioned as general expenses, and has credited a part thereof to the defendants, against the said infringement, the following items:

"1st. Stationery and printing,. $1405. 28.

2d. Telegraphing,............. 47. 28.

3d. Office furniture and fixtures,. 239. 35.

4''th. Expenses,.................'' 28. 12.

'Whereas he ought not to have credited the defendants, or taken into the account any portion of said sums, because said defendants did not prove what part, if any, of said expenses were allowable under the order of reference.'

If a proportion of the general expenses are o be deducted, then the defendants must bring themselves within the order, and, in regard to that order, the following things are to be noted:

1. A division of expenses is to be made into 'general' and 'particular.'

The 'general' expenses being those incurred for all goods alike, such as rent, clerk hire, general advertising, &c., the particular expenses being those caused by certain particular goods, and not by reason of selling all the goods, such as cartage on particular instruments, commission of particular sales, &c.

2. The burden of distinguishing between these two classes is upon the defendants. To them alone were the facts known, and it was just and proper that they, and not the complainants, should be required to prove them.

The defendants, by the order, were to be permitted to prove their general expenses, as distinguished from the particular ones. Unless they showed, therefore, what their 'general' expenses were as distinguished from 'particular' ones, the master had nothing to do but to report as before.

The defendants show generally that they had incurred certain items of expense, i. e., stationery, printing, telegraphing, expressage, labor, &c.

Now, each and all of these items may be items of general expense, or they may be particular expense, or they may be part one and part the other.

The defendants have failed to show what part of these expenses is 'general' and what part 'particular;' they have failed to do this, and therefore the itmes should be disallowed.

3. The amendment even after final decree was properly made.

It is perfectly plain from the statement of the case that all parties, complainants, defendants, and court proceeded upon an assumption that the bill was founded on the reissue No. 3365. To defeat a suit in such a case would be acting quite too technically.

If the complainants showed a title to the reissue on which the bill was founded, it would be worth while to consider the two exceptions which they make to the master's report; and to show, as we easily could, that the master's report was made on right principles, and the deductions allowed by him in our favor rightly allowed. But the complainants show no title at all under the reissue No. 3444, on which they base their bill. It had been surrendered. The surrender is a solemn declaration that that reissue was void. It has not been and could not be put in evidence. On the other hand, an issue which has been put in evidence is not relied on in the bill, nor indeed so much as referred to in it. A final decree is made on the unproduced, non-existent, and void reissue set forth in the bill, and after final decree the bill is amended so as to let in the proofs. Such an amendment is in the face of all rules and all practice in equity.

It was not an amendment of mere form, but was an amendment of substance, inasmuch as a separate and distinct subject-matter of litigation was introduced.

No matter what the amendment sought, inasmuch as it was sought after replication, the complainants were not at liberty to amend except on affidavits reciting, among other things, that 'the matter of the proposed amendment could not with reasonable diligence have been introduced sooner into the bill.'

In the absence of special rules, it is well-settled law that a bill in equity cannot be amended after the cause is set down for hearing, in any other respect than by making parties.

In this cause the amendment was not asked for until after judgment, and the defendants were deprived of the absolute right which they had to file an amended answer or plea.

Even if it were urged that the defendants did litigate the patent No. 3665 on its merits, and were not prejudiced by the amendment, the answer is that the re ord shows no such state of facts. All the proofs taken by the defendants applied to the reissue No. 3444.

The defendants were not required to object to the introduction of reissue No. 3665. By their answer they required the plaintiffs to prove their title to reissue No. 3444, and when the plaintiffs put in evidence the reissue No. 3665, it proved the defendants' case for them, because it recited on its face that reissue No. 3444 had been surrendered.

Mr. Justice STRONG delivered the opinion of the court.

We think that the order of the court directing that the record be amended by inserting in the bill an averment of the second reissue was properly made, under the circumstances of the case, though made after the final decree. For practically the rights of the complainants under the second reissue, and the defendants' infringement thereof were in issue under the answer and the replication. The amendment deprived the defendants of no rights which they had not enjoyed during all the progress of the trial. It may well be denominated only an amendment of form, because it introduced no other cause of action than that which had been tried. It is true that an amendment which changes the character of the bill ought not generally to be allowed after a case has been set for a hearing, and still less after it has been heard. The reason is that the answer may become inapplicable if such an amendment be permitted. But in this case the defendants were not prejudiced. They had every advantage they could have had, if the bill had originally averred the second reissue. The case is undoubtedly anomalous, but we think justice would not be subserved by denying to the Circuit Court the power to order such an amendment as was made, after the cause was tried precisely as it must have been tried if the bill had originally contained the averment inserted by the amendment.

We come then to the errors assigned by the complainants. They relate to the estimate of profits reported by the master and confirmed by the court. The defendants were vendors of musical instruments, including organs and melodeons, which they purchased from the manufacturers. Some of these instruments contained the tremolo attachment, and others did not. For those containing such attachments they paid an additional price and they sold them also for an increased price. In the ascertainment of the profits made by them from the sales, they were allowed to prove the general expenses of their business incurred in effecting the sales of all musical instruments, and deduct a ratable proportion from the profits made by the sale of tremolo attachments. It is of this allowance the complainants now complain. It is said the patent infringed was not for the tremolo itself, but for the combination of the organ and tremolo, and it is argued that if the defendants obtained an extra price for the organ combined with the tremolo without incurring any additional expense, the whole of that extra price was obtained from the addition of the combination. And it is further insisted that the true rule in cases like the present is that if the infringing device is an integral part of the whole instrument, without which it is incapable of use, and for which a single charge is made, then in ascertaining profits on a part of the organization general expenses are to be apportioned according to the cost, or by some other equitable rule. But when the infringing device is an optional one, used or not at pleasure, and an extra price is charged and received for it when used, the true profit made is the extra sum received for the addition, deducting only such expenses as are incurred by reason of the addition. We think such a rule, even if it may sometimes be just, is inapplicable to the present case. We cannot see why the general expenses incurred by the defendants in carrying on their business, such expenses as store rent, clerk hire, fuel, gas, porterage, &c., do not concern one part of their business as much as another. It may be said that the selling a tremolo attachment did not dd to their expenses, and therefore that no part of those expenses should be deducted from the price obtained for such an attachment. This is, however, but a partial view. The store rent, the clerk hire, &c., may, it is true, have been the same, if that single attachment had never been bought or sold. So it is true that the general expenses of their business would have been the same, if instead of buying and selling one hundred organs, they had bought and sold only ninety-nine. But will it be contended that because buying and selling an additional organ involved no increase of the general expenses, the price obtained for that organ above the price paid was all profit? Can any part of the whole number sold be singled out as justly chargeable with all the expenses of the business? Assuredly no. The organ with a tremolo attachment is a single piece of mechanism, though composed of many parts. It was bought and sold as a whole by the defendants. It may be said the general expenses of the business would have been the same if any one of these parts had been absent from the instrument sold. If, therefore, in estimating profits, every part is not chargeable with a proportionate share of the expenses, no part can be. But such a result would be an injustice that no one would defend. We think it very plain, therefore, that there was no error in the rule adopted for the ascertainment of the profits made by the defendants out of their infringement of the complainants' patent.

We think also the master's report, confirmed by the court, was correct in its ascertainment of the general expenses. At least there is nothing before us to show that it did not conform to the second decretal order. The defendants submitted analyses of their books, from which it is to be presumed the master distinguished general from particular expenses.

It follows that neither the appeal of the defendants nor the cross appeal of the complainants can be sustained.

DECREE AFFIRMED; the costs of each appeal to be paid by the appellants.

title: The Tremolo Patent/Opinion of the Court


text: Talk:The Tremolo Patent/Opinion of the Court


text: Collar Company v. Van Dusen

title: Collar Company v. Van Dusen


text: Talk:Collar Company v. Van Dusen

title: Talk:Collar Company v. Van Dusen