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Appeal from the Circuit Court of the United States for the Eastern District of New York.

This was a suit for infringement of patents. From a decree in favor of complainant, defendants appeal.

The opinion filed below, and here reprinted from 11 Fed. 902, was in full as follows:

THOMAS, District Judge. The bill is filed to enjoin the defendants from infringing two certain letters patent, one of which, to wit, No. 462,065, issued October 27, 1891, is alone the subject of present controversy. The defendant is a business corporation, formed by Willard W. Sawyer, Robert A. Stewart, Thomas H. Boss, and George T. Holihan, who own all the stock of such corporation, and are its sole officers and directors. Previous to the formation of the corporation, all of such persons, either directly or indirectly, concurred in the sale of said letters patent to the complainant, and by reason of such sale, or by participation in the consideration received therefor, are estopped from averring the invalidity of the patent. Rob. Pat. 787, 984, 1021; Curran v. Burdsall (D. C.) 20 Fed. 835; Underwood v. Warren (C. C.) 21 Fed. 573; Purifier Co. v. Guilder (C. C.) 9 Fed. 155; Barrel Co. v. Laraway (C. C.) 28 Fed. 141 ; Woodward v. Machine Co., 8 C. C. A. 622, 60 Fed. 283. The defendant corporation is estopped by this act of the persons who created, direct, and own its capital stock, and are its sole di-rectors and officers. National Conduit Mig. Co. v. Connecticut Pipe Mig. Co. (C. C.) 73 Fed. 491. Thus all the persons interested in the sale and in privity with the assignor are estopped, as against the assignee. Daniel v. Miller (C. C.) 81 Fed. 1000; Parker v. McKee (C. C.) 24 Fed. 808..

The remaining question relates to the defendants' infringement. The device is a numbering machine. The defendants' construction, as regards claim No. 2, is identical with that of the complainant, and is as follows:

"(2) In a stamp, the combination of a main frame, a longitudinally movable rod fitted thereto, and carrying similarly spaced numbering wheels, slots in said rod, a cross pin connected to the main frame, and passing through said slots, and an enlargement in one of said slots for receiving an enlarged portion of said pin to lock the rod in its depressed condition, substantially as specified."

In view of the validity of the patent as herein ascertained, infringement of that claim must be declared without further discussion. Claim I is as follows:

"(1) In a stamp, the combination of a main frame, a series of similarly spaced numbering wheels, corresponding ratchet wheels, detents for these numbering wheels and ratchet wheels operating radially within a support, pawls for inparting motion to said ratchet wheels, a movable yoke sustaining the numbering and ratchet wheels, a frame-like lever carrying the pawls and pivotally connected to said yoke and also to the main frame, and an inking lever fulcrumed to the main frame, and pivotally connected between its ends with the said lever which moves the pawls, substantially as specified.”

In the defendants' machine the construction is such that the inking bad and the operating pawls are both on the same side of the machine, while in the complainant's device they are upon opposite sides. The argument, as regards this claim, relates chiefly to the words, "a frame-like lever carrying the pawls, and pivotally connected to said yoke, and also to the main frame.” The specification indicates that the frame-like lever should be of such shape as would carry the inking pad to the side of the machine away from the actuating pawls. The defendants have changed the shape of such lever so as to carry the inking pad to the same side of the machine as the actuating pawls. This is a mere change in the shape of the lever, whereby the inking pad is changed from one side of it to the other. There is no change in the mode of operation or the results attained. It is considered that this claim is valid, even when considered in connection with the Reinhardt patent, No. 425,581, and that the defendants should be enjoined from infringement thereof by the construction of their present device.

51 C.C.A.-38

H. A. West, for appellants.
Henry Schreiber, for appellee.
Before WALLACE and LACOMBE, Circuit Judges.

PER CURIAM. Affirmed, on opinion of the circuit court.

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(Circuit Court of Appeals, Second Circuit. February 23, 1902.)

No. 91. 1. SHIPPING-DAMAGE TO CARGO-LIMITATION OF LIABILITY

A provision of a bill of lading exempting the carrier from llability for loss or damage occasioned by unseaworthiness, provided the owners had exercised due diligence to make the vessel sea worthy, leaves upon the owners the burden of proving such due diligence, wbich includes

thorough and careful inspection. 2. SamE-INSPECTION OF PIPES.

A cargo was injured by sea water which entered the vessel through a hole which had been worn and eaten by corrosion through the iron bottom of a valve chest three-eighths of an inch thick. The peculiat liability to corrosion of iron in such place was well known, and, while there was evidence of inspection, it was not specific as to manner in which such in. spection was made, and it did not appear that the valve chest had ever been removed for examination since it was placed in the ship nine years before, or even that the valve itself had been taken out. Held, that such evidence did not show reasonably careful inspection, such as was incum. bent upon the owners under a provision of the bill of lading requiring them to exercise due diligence to make the vessel sea worthy, in order to exempt them from liability. Appeal from the District Court of the United States for the Southern District of New York.

This was a libel to recover damages for injury to cargo. From la decree for libelants, respondent appeals.

The opinion filed below, and here reprinted from 104 Fed. 99, was in full as follows:

BROWN, District Judge. On a voyage of the Friesland from Antwerp to New York in October, 1898, four shipments of libelants' goods were damaged by sea water, which gained access through a leak in the valve chest through which one of the steerage closets was discharged. The libel was filed to recover the damages. The evidence shows that the bottom of the valve chest, which was of cast iron and three-eighths of an inch thick, had become worn away by the combined action of corrosion and the play upon it of the valve, so that a circular hole about three-eighths of an inch in diameter was made, through which the sea water came in and did the damage. The chest was made fast to the side of the vessel inboard and had an opening to the sea. The valve inside of the chest, and about four inches inboard, was of brass, oblong in shape, and weighed about eight pounds. It was supported by brass pivots or pintles, which rested in cast iron sockets or pockets near the top of the valve chest. The valve swung outward from the pipe, so as to permit the discharge of the contents of the waste pipe; but at the bottom it swung back against a shoulder or stop, so as to prevent ingress of sea water into the pipe beyond the valve. There was originally about a quarter of an inch of free space between the bottom of the valve and the iron chest. Through the combined effects of corrosion and wear it was found on examination that the pintles had dropped fully half an inch in their original supports, permitting the valve to drop that distance from its original position until a liole was worn through the bottom of the chest, as above stated.

The iron chest was so placed that examination of the interior was difficult. There was a cap upon the top of the chest, which could be easily removed, and through this the valve could be taken out, and when that was done some examination of the inside of the chest could be made showing the wearing of the pockets and the dropping of the valve; and the bottom of the chest could then be seen through the pipe from the outside of the ship. The chest could also be detached from the side of the vessel. It was the habit of the respondent to make an inspection of all the steerage closets upon each voy

Once a year there was a general overhauling. The vessel had been running about nine years. The chest and valve are the same that were originally put in. The bill of lading contains the following among its exceptions:

"It is also mutually agreed that the carrier shall not be liable for loss or damage occasioned by

any latent defect in hull or machinery or appurtenances

or by unseaworthiness of the ship at the time of shipment or the commencement of or any period of the voyage, provided the owners have exercised due diligence to make the vessel seaworthy."

Assuming the validity of this stipulation (The Carib Prince, 170 U. S. 655, 18 Sup. Ct. 753, 42 L. Ed. 1181) the question presented is, whether the evidence shows the exercise of due diligence by the respondent to make the steamer seaworthy as respects the condition of the valve chest.

The question involved has been several times before this court in different forms. The burden of proof, it has been held, is upon the shipowner. The exemption in the shipowner's favor is in derogation of the shipper's ordinary rights and remedies; it respects losses over which the shipper can exercise no control, but which are to a certain extent within the control of the carrier by the exercise of the requisite care and diligence in inspection. In the case of The Edwin I. Morrison, 153 U. S. 199, 215, 14 Sup. Ct. 823, 38 L. Ed. 688, it was held to be the duty of the owner to make such necessary and proper inspection from time to time as might give assurance of the seaworthiness of the vessel; and in The Phoenicia (D. C.) 90 Fed. 116, affirmed in 40 C. C. A. 221, 99 Fed. 1005, the absence of a thorough and careful inspection, it was held, made the ship chargeable with the loss. See, also, The Majestic (D. C.) 56 Fed. 244, affirmed in 166 U. S. 375, 17 Sup. Ct. 597, 41 L. Ed. 1039; Dobell v. Steamship Rossmore Co. (1895) 2 Q. B. Div. 408, 413, 415,

The stipulation in the bill of lading releases the shipowner from responsibility for absolute seaworthiness, provided due diligence is exercised; but it does not release him, nor does it profess to release him in the least from his previous obligation to make such careful inspection as the circumstances require.

In the present case the evidence seems to me not to show such reasonably careful inspection of the interior of the valve chest as was incumbent upon the respondent under his obligation to exercise "due diligence,” and to afford a corresponding reasonable protection of the shipper's goods. The special liability of iron to the effects of corrosion in the circumstances of this chest and valve was well known. On account of this liability, the employment of iron chests in British usage had been for many years discarded, and brass required instead. It is evident that the corrosion and wear in this case, in order to have gone through the bottom of the chest threeeighths of an inch in thickness, must have been in gradual progress for a very considerable time. There was no unusual occurrence on this voyage, no heavy weather or strain, which could have produced any sudden rupture in the bottom of the chest; nor was the hole of that description. The corrosion went on with the lapse of years until the bottom was worn and rusted out. It is evident that this is not consistent with any actual careful inspection of the interior of the chest for some years preceding. The evidence taken by commission as respects the kind of inspection made is brief and unsatisfactory. It does not appear that the chest was ever taken out for examination from the time it was put in some nine years previous to this damage, or that the valve itself was taken out for the purpose of seeing better how great was the wear at the bottom. The removal of the cap alone was sufficient to make visible the very · considerable dropping of the pintles in the pockets that supported the valve; and if the difference in the construction of the different chests and valves was such as to make the great depth of the pintles in the pockets no certain indication of unusual wear or dropping from the original position, the necessity of an occasional removal of the chest from the side of the vessel for careful examination is the more evident.

On the whole I cannot resist the conviction that there had long been a failure to make any such real and careful examination of the

interior of these chests as their known liability to corrosion reason-
ably required, and that consequently there was not such "due dili-
gence" exercised as the condition of the bill of lading required.

Decree for the libelants, with costs.
H. G. Ward, for appellant.
Wilhelmus Mynderse, for appellees.

Before WALLACE, LACOMBE, and TOWNSEND, Circuit
Judges.

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PER CURIAM. We concur in the conclusion reached by the court below that the claimant failed to exercise the due diligence required by the condition of the bill of lading. Although the peculiar susceptibility of cast iron chests thus used in connection with closets was so well known that brass valve chests are now generally substituted therefor in steamers of this class, the claimant had elected to retain and continue the use of these cast iron chests in the Friesland during a period of nine years. The usual examination was made previous to this voyage, but it was not sufficient to determine whether the defect which caused the damage existed. Claimant's chief excuse for such inadequate inspection, that the valve chest was so situated that examination of the interior was difficult, only serves to emphasize the fault. The cause of the difficulty was the adjustment of two pipes in one space between two frames, whereby the opening in the top of the valve chest was so crowded as to prevent exterior visual examination. There were, however, other practicable methods of examination, as pointed out by the district judge in his opinion, none of which were followed. The decree is affirmed.

(113 Fed. 1019.)

MCALLISTER et al. v. SOUTHERN PAC. CO.
(Circuit Court of Appeals, Second Circuit. March 10, 1902.)

No. 133.
SHIPPING-Loss OF CARGO-NEGLIGENT UNLOADING OF LIGHTER.

A lighter was loaded with 100 barrels of cement in the hold and a large number of rolls of bagging, weighing 253 tons, piled upon the deck. It was the duty of respondent to transfer the load to a steamer; and when a portion of the bagging had been unloaded, all of which was taken from the side next the steamer, the lighter listed to the other side, and a portion of the bagging was thrown overboard, and lost or damaged. The load was unusual in weight and height, but not to an extent to endanger it if properly handled. It was properly loaded, and the lighter had been brought with it a considerable distance in safety. Held, that the fact of its unusual height required that in unloading the removal should be distributed as evenly as possible over the whole load, which was also shown to be the usual way, and that the negligent manner of unloading was the cause of the vessel's listing, and rendered respondent liable for the

damage. Appeal from the District Court of the United States for the Eastern District of New York.

This was a libel to recover for loss of cargo. From a decree foi libelants, respondent appeals.

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