every day, and as quick as it comes I will express it to you." It is true he couples the admission that he had marked the Sheffer catalogue with the qualification that he had marked the price of his own goods in it; but this is not inconsistent with the fact that he had marked the prices contained in plaintiff's secret catalogue, as he was a customer of plaintiff, and was then in possession of a copy made from one of plaintiff's catalogues intrusted to Meech, and he subsequently took great pains to obtain a bill of sale of this catalogue from Shefler. Why these efforts and this haste to get another catalogue before he returned the first copy marked by him if he did not require it in which to make another copy? We are of the opinion that there is no substantial conflict in the evidence, and that upon the facts the court below should have retained the catalogue in question in the hands of the receiver.

It is contended on the part of respondents that the catalogue in controversy was the absolute property of defendants, and that the court, under the established rules of equity, was not authorized to take it from them, and place in the hands of a receiver. It may be conceded, as claimed, that the Shef ler catalogue in its original condition was the absolute property of defendants; but the catalogue in controversy had been changed from its original condition by the defendants by incoporating therein the private code or system invented and prepared at great expense by the plaintiff. The original catalogue was of itself of but trifling value, but with the private code or system of plaintiff marked therein it was of great value. That such a code or system as was invented and used by plaintiff in its business, and described in its complaint, was its property is well settled both at common law and under our own code: Comp. Laws, sec. 2676. It was the product of the skill and labors of the plaintiff, and, as such, is property, and is entitled to the protection of the law; and when the injury threatened would 495 be irreparable, and the remedy at law is inadequate, a court of equity will interfere to prevent a party who has wrongfully obtained possession of the secret from using it or disclosing it to others.

And when, as in this case, a party has not only obtained knowledge of the secret code or system, but has wrongfully made a copy of the secret system, a court of equity will, in furtherance of justice and to prevent the party from fraudu lently making a disclosure of the secret, not only enjoin him,

but will, we apprehend, take into its possession, by means of a receiver, who is an officer of the court, such copy, so wrongfully made, to prevent fraud; and if on the trial the facts alleged are established, the court will be authorized to place such copy in the hands of the plaintiff, or at least see that plaintiff's secret marks therein shall be erased or canceled. This accords with the spirit, if not with the letter, of our code: See Comp. Laws, secs. 3213-3221. These sections embody the rules of the civil law upon the doctrine of accessions to personal property, except perhaps section 3219, which is a rule of the common law: Silsbury v. McCoon, 3 N. Y. 379, 53 Am. Dec. 307. That courts do not hesitate to grant injunc tions in such cases is well settled by the adjudged cases. In Yovatt v. Winyard, 1 Jacob & W. 394, the court granted an injunction against one who had obtained a knowledge of a secret by a breach of trust. In Morison v. Moat, 9 Hare, 241, the court restrained the defendants from using a secret in compounding a medicine, surreptitiously obtained. In Peabody v. Norfolk, 98 Mass. 452, 96 Am. Dec. 664, the court held that an injunction to restrain a party from communicating a secret imparted to him in the court, of his business, was proper: See 2 Story's Equity Jurisprudence, sec. 952. The court was therefore clearly right in granting and continuing the tempory injunction, and this being so, we are unable to see any legal reason why the court should not have retained in the hands of the receiver the marked catalogue in controversy in this action. The powers of courts of equity over property, the title to which is involved in litigation, is broad and comprehensive, and its power to take into its possession, through its receiver, any property that is the subject of litigation, is ample and unquestioned.

496 The contention of defendants that, as they were the owners of the catalogue of trifling value, into which they have copied plaintiff's valuable secret code or system, it cannot be taken into its possession by a court of equity, through its receiver, and held pendente lite we cannot assent to. One of the grounds upon which a receiver will be appointed is that there is no other adequate remedy. In this case the remedy by injunction is not adequate to accomplish the ends of justice. The plaintiff, by its complaint and affidavits, shows that its business extends over a large number of states and territories, in which it has many customers. Enjoining a party, therefore, from using or communicating the plaintiff's secret code

or system, while effective so long as the defendants are within the jurisdiction of the court, would yet be of little efficacy in case defendants should go beyond the jurisdiction of the court, and take with them the copy, where they might use this secret by communicating it to plaintiff's customers, to the irreparable injury of the plaintiff. The flexible nature of the equitable jurisdiction of courts of equity enables that court to so mould and administer its remedies as to prevent such fraudulent and wrongful use of the catalogue in question, by at once placing it within the control of the court, and thus placing it beyond the power of the defendants to make any improper disposition of it pending the suit, by taking it beyond the jurisdiction of the court. We are clearly of the opinion that under the established jurisdiction of courts of equity the power exists in that court to take into its possession this catalogue, and we think under the evidence it was clearly the duty of the court to do so, and that its modification of its order of March 1st was an abuse of its judicial discretion. The modified order, so far as it directed the return of the catalogue to defendants, is reversed. All the judges concurring.

RECEIVERS.-DISCRETION OF COURT IN APPOINTING: See the extended note to Cortleyeu v. Hathaway, 64 Am. Dec. 482.

INJUNCTION TO RESTRAIN INFRINGMENT OF TRADEMARK: See the notes to Liggitt etc. Tobacco Co. v Reid Tobacco Co., 24 Am. St. Rep. 316. One who by unfair means discovers the mode of manufacturing an article or the formula for compounding a medicine will be enjoined from using it himself or imparting it to others to the injury of the proprietor: Tabor v. Hoffman, 118 N. Y. 30; 16 Am. St. Rep. 740, and note; Peabody v. Norfolk, 98 Mass. 452; 96 Am. Dec. 664, and note.

GRISWOLD LINSEED OIL Co. v. LEE.

[1 SOUTH DAKOTA, 531.]

Judgments-Vacating Defaults—Evidence.—On the hearing of an appli cation to set aside a judgment rendered by default, and for leave to answer, the evidence is confined to the question whether or not the judgment has been taken through the inadvertence, mistake, surprise, or excusable neglect of the defendant. He is not required to make more than such a prima facie showing on the merits as arises from his own affidavits; and evidence to controvert the merits of his defense is irrelevant to the issue, and inadmissible. JUDGMENTS-VACATING DEFAULTS-RELIEF When Granted.-A judgment by default should be opened and leave given to answer upon prompt application therefor, and a good and sufficient showing of mistake, inad.

vertence, surprise, or excusable neglect, together with an affidavit of merits stating that the applicant prima facie has a good defense and makes the application in good faith. JUDGMENTS-VACATING DEFAULTS-DISCRETION OF COURT.-The granting of applications for relief from judgments by default is entirely within the discretion of the court to which application is made. JUDGMENTS-VACATING DEFAULTS-IMPOSING TERMS.-A court may, upon opening a judgment rendered by default, impose, in addition to costs as terms, that the judgment stand as security for any judgment finally recovered, in the absence of a good and sufficient bond for the payment of such final judgment.

JUDGMENTS-VACATING DEFAULTS-IMPOSING TERMS.-A court can modify a default judgment by depriving it of its ordinary character as res judicata and leave it in full force as a lien, or collateral security, for any judgment finally recovered.

Keith, Bates, Winsor, and Kittridge, for the appellant.

McMartin and Carland, for the respondent.

533 CORSON, P. J. This action was instituted by the plaintiff to recover the sum of seven hundred and fifty-nine dollars and fifteen cents, alleged to be due from defendant for money advanced under a certain contract entered into between plaintiff and defendant on July 13, 1887, and for the sum of four thousand three hundred and seventy-two dollars and fifty-eight cents, for profits received by defendant on resale of flaxseed alleged to have been purchased by defendant for account of plaintiff, interest, etc., under the terms of said contract. The summons and complaint were personally served upon the 534 defendant in Minnehaha county on the twenty-fifth day of March, 1890, and, defendant failing to serve an answer within the thirty days allowed by law, judg ment was entered against him April 26, 1890, for the sum of four thousand six hundred and forty-three dollars and twenty cents, an execution was issued thereon, and a levy made thereunder on the property of the defendant. On May 6, 1890, the defendant obtained from the court below an order requiring plaintiff to show cause why the judgment should not be vacated and set aside, the execution and levy set aside, and the defendant have leave to serve an answer in the action. This order was made upon the affidavit, affidavit of merits, and proposed verified answer of defendant, and the pleadings and proceedings had in the action. The grounds upon which the application was based were inadvertence, surprise and excusable neglect on the part of the defendant. On May 9th a hearing was had, an order made discharging the order to show cause, and the application of defendant

denied. From this order and the judgment entered in the action, the defendant appeals to this court.

Appellant assigns several errors, which may be condensed and briefly stated as follows: 1. That the court erred in discharging the order to show cause, and denying to defendant the relief applied for; and 2. That the court erred in entering judgment for the plaintiff, said judgment not being supported by the allegations of plaintiff's complaint. Preliminary to the discussion of the first assignment of error is a question as to the relevancy and admissibility of certain evidence. On the hearing of the order to show cause, in the court below, the respondent introduced and read in evidence. the affidavits of Mr. Carland, Mr. McMartin, and several letters written by defendant to the law firm of McMartin and Carland, tending to controvert the affidavit and proposed answer of defendant as to the merits of his defense, and also tending to show that the defendant's failure to answer in time was not excusable, and that his application was not made in good faith. Counsel for appellant contend that the evidence controverting the merits of defendant's defense was not admissible, and that such evidence should not have been considered by the court below. 535 But, as no objection was taken to this evidence in that court, counsel for respondent insist that it is now too late to make the objection in this court, and cites Warder etc. Co. v. Ingli, 1 S. D. 155 (decided by this court), as authority for their position.

We held in that case that, where incompetent but relevant evidence was admitted in the court below without objection, an objection to it could not be taken in this court, but this opinion went no further. On the hearing in the court below the only issue properly before the court was whether or not there was inadvertence, surprise, or excusable neglect on the part of the defendant in failing to serve his answer in time; and evidence to controvert the merits of defendant's defense was entirely irrelevant to the issue. Mr. Freeman, in his work on Judgments, in section 109, states the rule of evidence applicable to such a hearing as follows: "The hearing of evidence is confined to the question whether the judgment has been taken through the inadvertence, mistake, surprise, or excusable neglect of the defendant. The applicant is not required to make more than such a prima facie showing on the merits as arises from his own affidavits. The code did not intend that there should be two trials on the merits.