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of invention, prior use, no adjudication, no infringement, and ability to respond in damages. This is allowable by statutory provision. 29 Stat. c. 391; Bates, Fed. Eq. Proc. 331.
The ground upon which a preliminary injunction was granted is thus set out in the opinion of the court, which counsel say was delivered by the trial judge before he left the bench:
"This is a motion for a preliminary injunction by the Phoenix Pad Company against the American Coat Pad Company and Louis Bouchat for the infringement of letters patent No. 359,441. There has been no adjudication of the patent, but the motion is based upon public acquiescence and estoppel against the defendants. There are many circumstances which show acquiescence. The patent is one that has been in use now since 1887, and under its protection its various owners have established and maintained a business that has been acquiesced in by the competitors of the owner of the patent. There were two suits on the patent begun, but neither was brought to a final hearing. It is said the validity of the patent has been denied by the same persons who are now asserting it. They have been defendants in the previous suits; but I take it that those were the formal defenses; that the real defense in the Marcus case and the case brought against the Phoenix Coat Pad Company by the Eureka Coat Pad Company was noninfringement. Of course, counsel advised that other defenses should be made, and no doubt thought there was ground for them. But that was the answer made under advice of counsel, who made all the defenses that could reasonably be made. The circumstances of these cases tend to show an acquiescence. It is true there has been no adjudication, which is required in many cases, but that which appeals most strongly to the conscience of the court is the circumstance which tended to show that Louis Bouchat, one of the defendants here, was a stockholder of the Eureka Company, which owned this patent; and I understand it to have been admitted at the hearing that he was the superintendent or general manager of the company at the time that it was making and selling coat pads under this patent and asserting it as valid, and at the time at which the Eureka Company sued the Phoenix Coat Pad Company, charging infringement of it. It is shown that he is the principal stockholder and manager of this new company. He was an important officer of some sort in the Eureka Company, which brought the former suit. It was settled by the defendant company, the predecessors of the present complainant, by buying all the stock. The patent was a valuable asset, and Bouchat received four times the original cost of the par value of the stock for his share of this patent. Now that he should immediately start up a competing business and an infringing business (and the infringement is not denied), I think, makes out a very strong case of estoppel and of unfair competition in business. I therefore grant the application."
From the order granting the temporary injunction defendants below appealed, and there are in the record 15 assignments of error. Many of these it would not now be proper to consider. In the suits referred to, both the counsel, the plaintiff below, and Bouchat, defendant below, it seems, occupied reverse positions as to the Goldman letters patent from those now occupied by them. The suits were settled. How is not disclosed. There was no adjudication in either; hence. these suits can have no bearing on the case at bar, unless there is something in the pleadings to act as an estoppel or acquiescence.
The defendant corporation was created in 1901. It was not a party to either suit, was not in existence. Hence it cannot be estopped by either suit or the pleadings therein. It is a legal entity. Nor could it have acquiesced in what occurred before it came into existence. The other defendant below, Bouchat, owned one share of stock in the
Eureka Company, and it is said it was admitted at the hearing was the superintendent of the company at the time it asserted the validity of the patent. It does not appear what his duties were or that he had any control of the corporate entity. He was not a party of record. A mere stockholder is not bound by the acts of a corporate body or for which he labors as an employé. Machine Co. v. Woodward, 27 C. C. A. 69, 82 Fed. 97. If he were a party, then counsel and the assignor of plaintiff below occupied different relations to the patent from those which they now occupy. Those now asserting its validity then denied it, and vice versa. If the pleadings in those suits, in which nothing was decided, nothing settled, as bearing on the validity of the patent or the present controversy, can act as an estoppel on the one, they are equally an estoppel on the other. On this score the parties would be left on equal footing,-like the soldiers of Franklin, each Idead on the other's spear. Bouchat was not a party to either suit. That he was an employé and stockholder in the corporation which asserted the validity of the patent cannot act as an estoppel against him. Suits instituted, but not decided, can have no more effect as an estoppel and acquiescence than the allegation that counsel have represented different parties in such futile litigation. Neither decides principles, affects facts, nor acts as an estoppel. Counsel change their views upon further investigation of a subject. Others may do he same. Even if Bouchat had been a party, formal admissions or allegations in pleadings made by one party to a litigation are not sufficie to bind him in another suit between different parties, involving the same subject-matter. United States Gramophone Co. v. National Gramophone Co. (C. C.) 107 Fed. 129. Bouchat was not even a formal party to the suits set up as an estoppel. He was only an employé of one of the party litigants, an owner of one share of stock. He sold his stock and lost his job. In the case above cited, the facts were very similar to the one at bar. Complainant's patents were unadjudicated. No public acquiescence was sufficiently proven, and the motion for an injunction was based upon admissions made by the defendant, under oath, as to the validity of the patents. Circuit Judge Gray refused a preliminary injunction. Where the validity of the patent and the infringement are denied, and defendant sets up valid defenses, there should be strong proof of acquiescence to warrant the issuing of an injunction. Smith v. Britannia Co. (C. C.) 92 Fed. 1003; Consolidated Fastener Co. v. American Fastener Co. (C. C.) 94 Fed. 523. That plaintiff below alleged, under oath, the patent had been in use by it and its assignors for several years, is not sufficient to prove public acquiescence. This is denied under oath; it is an issue of fact; to decide it, there must be proof. Nor is it sufficient that one of the defendants below knew the patent had been used,-had been an employé of a company using it, though he is now a stockholder in, and an officer of, the other defendant.
That other defendant has rights. If Bouchat had permitted a decree pro confesso to have been entered against him, and this corporation, which was the original defendant, had answered, and had set up an available defense, such defense would inure to the benefit of both defendants. Frow v. De La Vega, 15 Wall. 552-554, 21 L. Ed. 60;
Andres v. Lee, 21 N. C. 319; Bates, Fed. Eq. Proc. § 327, and authorities cited.
But the trial judge seems to put his conclusion on another ground, unnoticed by counsel in the argument or brief,-unfair competition in trade. What is above said applies to this point in the opinion. Defendants seem to be acting in good faith, and allege their ability to respond in damages, which is not questioned. Louis Bouchat believes he has made an improvement in coat pads entitling him to a patent. He has obtained letters patent therefor. This cost something, and a company has been organized to manufacture coat pads under these letters patent. Is this unfair competition in trade? If so, no improvement in a patented article could ever be made by one versed in the art. Louis Bouchat had worked at the trade of making coat pads, became familiar with the art, experienced in the business, and knew the demands of the trade. True, this was when he was a stockholder, owner of one share, and an employé of a corporation using the Goldman patent, when he probably saw the defects in the coat pads manufactured under that patent, and devised what he conceived to be an improvement in coat pads. He applied for and obtained letters patent for such improvement. Is the fact he was such stockholder and employé of a corporation using a patent to deprive him of the benefit of a supposed inventive genius? If so, no one would probably ever make any improvements on patented articles. The purposes of the patent laws would fail. Persons not familiar with the manufacture of patented articles do not and cannot make improvements. It must be done by an artisan. This is reason, and ratio legis vitæ est is as true now as when first written in Coke on Littleton. To entertain a suit for infringement of a patent, the plaintiff must not only allege, but prove, he is the inventor or owner of the patent, and that it has been infringed. Bates, Fed. Eq. Proc. § 331. The allegations are made; they are denied. The relief depends on the proof.
It seems then the preliminary injunction was improvidently granted by the circuit court, the defendants below being able to respond in damages, there being no threatened irreparable injury, no estoppel, no sufficient acquiescence, and no unfair competition in trade ants should have been required to give bond for an accounting, and the temporary injunction refused.
There is error. Reversed.
(113 Fed. 634.)
LARNED v. JENKINS.
(Circuit Court of Appeals, Eighth Circuit. March 3, 1902.)
1. MINING CLAIM-LOCATOR ABANDONS RIGHTS BEYOND LOCATION.
One who discovers and locates a lode mining claim under the act of 1866 thereby renounces and abandons all rights and privileges to follow his lode on its course beyond the exterior lines of his patented claim, when he locates it upon the surface of the ground, enters it, and accepts a patent for it under the law.
2. SAME-LOCATOR CANNOT FOLLOW VEIN BEYOND HIS BOUNDARIES ON ITS STRIKE.
The act of July 26, 1866, does not grant to the patentee of a lode mining claim the right to follow on its strike his vein, with its dips, angles, and variations, beyond the boundaries of his location. It permits him to follow it beyond those boundaries on its dip or descending course only.
TOWN SITE-EXCEPTION OF MINE.
It is mines known to exist at the time a town-site patent is issued, and those only, that are excepted from its grant by section 2392 of the Revised Statutes.
TOWN SITE-DEED OF CITY AUTHORITIES IMPERVIOUS TO COLLATERAL ATTACK.
The deed of the city authorities authorized to convey lots in a town site is presumptively valid, and it cannot be collaterally assailed in an action at law for a failure of the authorities to require the preliminaries or perform the requirements antecedent to its execution.
5. ESTOPPEL-ADVERSE CLAIM CREATES NONE AGAINST EJECTMENT BASED ON PRIOR TITLE.
An action of ejectment based upon a patent issued prior to the initiation by the defendant of a mining claim for which he has applied for a patent is not inconsistent with a claim adverse to that application, under section 2326 of the Revised Statutes, and such adverse claim does not estop the plaintiff from maintaining his action.
(Syllabus by the Court.)
In Error to the Circuit Court of the United States for the District of Colorado.
See 109 Fed. 100.
This is an action of ejectment. The court below rendered a judgment for the plaintiff on a demurrer to the answer of the defendant. The writ of error challenges this judgment. The property in controversy is an irregular tract of land adjoining the Cook lode mining claim on the north, and it has a length of 357 feet on one side and 283 feet on the other, and a width of 25 feet on one end and 101 feet on the other, measured upon the diagonal lines which form its ends. This tract of land was patented to the city of Central on July 10, 1876, as a part of its town site, was subsequently vested in its successor, the city of Blackhawk, and that city on September 9, 1897, conveyed it to the plaintiff, John C. Jenkins. He set forth this chain of title in his complaint, alleged that the defendant had wrongfully entered upon the premises; that this action was brought in support of an adverse claim filed in the land office against the entry of this land by the defendant, William Larned; that he had disbursed $30 for plats, abstracts, and copies of papers. and $50 for a counsel fee, in preparing his adverse claim; and he demanded judgment for the possession of the premises, $1,000 damages, and $80 expended in support of the adverse claim. The answer of the defendant is voluminous, but, so far as it relates to any errors assigned in the action of the court below, this is the state of facts which it presents: The patent to the town site and the conveyance under which the plaintiff claims were made as he alleges. On October 8, 1870, a patent was issued to the Cook
lode, which grants a territory 790 feet in length by 50 feet in width, adjoining the tract here in dispute on the south. The Cook vein for the distance of about 120 feet deflects on its strike from the north side line of the Cook mining claim into the tract of land here in controversy, but the deflection of the apex from the north line of the Cook claim does not exceed 7 or 8 feet, and the dip of the vein is at all points slightly to the south, so that where it is deflected from the Cook claim it enters it on its dip 15 or 20 feet below the surface of the ground. Six shafts were sunk, which exposed this vein within the patented territory of the Cook mining claim, and there was a well-known mine thereon before the patent of the disputed territory to the city of Central was issued. This disputed territory was mineral land of great value, and known to be of great value, and there was in fact a mine of gold-bearing quartz, whose top or apex was partly within and partly without this tract, when the patent to the city of Central was issued. In the year 1871 the patentee of the Cook lode mining claim conveyed it to the defendant. On June 7, 1897, one William Rogers discovered a vein of gold on the tract of land in controversy, located a mining claim thereon, called the "Cook No. 2 Lode," applied to the city of Blackhawk to be allowed to purchase the land before the deed therefor was issued to the plaintiff, and on July 14, 1897, conveyed this mining claim to the defendant. The defendant thus holds a deed from the grantee of the Cook lode mining claim, patented in 1870, and another from the locator of the Cook No. 2 lode mining claim, which was located in June, 1897. The court below held that the town-site patent and the deed under it to the plaintiff must prevail over the title which the defendant pleaded, and this is the ruling which is challenged
Willard Teller and Harper M. Orahood, for plaintiff in error.
Before CALDWELL, SANBORN, and THAYER, Circuit Judges.
SANBORN, Circuit Judge, after stating the case as above, delivered the opinion of the court.
The title of the defendant in error Jenkins consists of a patent to the city of Central, and a regular conveyance from its successor, the city of Blackhawk, to himself. On its face this title is regular and sufficient. Counsel for the plaintiff in error assail it on the grounds (1) that the patent to the city of Central was void and ineffectual to convey this property, because it was reserved from conveyance as a part of a town site, under sections 2386, 2392, Rev. St.; and (2) because the conveyance from the city of Blackhawk was made to Jenkins while Rogers, the grantor of the plaintiff in error, was in possession of the property, and entitled to the deed from the city.
The provisions of sections 2386 and 2392 relevant to this issue are that "where mineral veins are possessed, which possession is recognized by local authority, and to the extent so possessed and recognized, the title to town lots to be acquired shall be subject to such recognized possession and the necessary use thereof," and that "no title shall be acquired under the foregoing provisions of this chapter to any mine of gold, silver, cinnabar or copper; or to any valid mining claim or possession held under existing laws.'
Prior to the issue of the patent to the town site the grantor of the plaintiff in error had located his claim to the Cook lode upon a tract of land 790 feet long and 50 feet wide, had marked the exterior boundaries of this claim, had entered it and received a patent for it. These acts constituted a notice to the government and to the public