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place in a group of answering jacks corresponding to an annunciator in one group of annunciators, and every answering jack corresponding to an annunciator in the same place in the other groups will be found in the same relative position in every corresponding group of answering jacks. This uniform correspondence in the relative positions of the groups and the members of which they are composed, the defendants have taken and preserved. Their combination involves the principle, uses the means, and, by the operation of that principle and the use of those means, performs the function of the improvement patented to the complainant.
The history of this art shows that this is a case in which many men have contributed, not only the skill of mechanics, but the genius of inventors toward reaching the high state of efficiency which it has now attained. The advance has not been made in a single leap, but step by step. Many inventors have formed differing combinations which accomplished the desired result with varying degrees of success. Many of these inventions are limited in their character and their operation. The invention described in the patent to Seely was one of them. It differs from all others, and he is entitled to its use and its protection. Many other combinations are open to free use by the defendants, but that of Seely is not. When the advance toward the desideratum is gradual, and several inventors form different combinations which accomplish the desired result with varying degrees of operative success, each is entitled to his own combination so long as it differs from those of his competitors and does not include theirs. National Hollow Brake-Beam Co. v. Interchangeable Brake-Beam Co., 106 Fed. 693, 712, 45 C. C. A. 544, 563; Railway Co. v. Sayles, 97 U. S. 554, 556, 24 L. Ed. 1053; McCormick v. Talcott, 20 How. 402, 405, 15 L. Ed. 930; Stirrat v. Manufacturing Co., 61 Fed. 980, 981, 10 C. C. A. 216, 217, 27 U. S. App. 13, 42; Griswold v. Harker, 62 Fed. 389, 391, 10 C. C. A. 435, 438, 27 U. S. App. 122, 150; Adams Electric R. Co. v. Lindell R. Co., 77 Fed. 432, 440, 23 C. C. A. 223, 231, 40 U. S. App. 482, 498.
The decree below must be affirmed, and it is so ordered.
(113 Fed. 705.)
BOARD OF COM'RS OF STANLY COUNTY et al. v. COLER et al.
(Circuit Court of Appeals, Fourth Circuit. February 4, 1902.)
1. FEDERAL COURTS-FOLLOWING State Decisions-CoxstruCTION OF STATUTES.
A decision of the supreme court of a state construing a valid statute, and holding invalid bonds of a county which had been previously issued thereunder and placed in the market, and had been sold to bona fide purchasers, where none of the bondholders were parties to the action, is not binding on a federal court in an action subsequently brought by bondholders against the county, but it is the duty of such court to de
termine the question independently.1 2. COUNTIES-POWER TO AID RAILROADS—NORTH CAROLINA STATUTE.
Code N. C. 1883, $ 1996, first enacted in 1869, and re-enacted in the Code in 1883, provides that “the boards of commissioners of the several counties shall have power to subscribe stock to any railroad company or companies when necessary to aid in the completion of any railroad in which the citizens of the county may have an interest.” The succeeding sections require the submission of the question of the proposed subscription to the voters of the county. The constitution of 1868 (article 5, $ 4) expressly provides that the state shall give aid to railroads only when authorized by a direct vote of the people, or “to aid in the completion of such railroads as may be unfinished at the time of the adoption of this constitution, or in which the state has a direct pecuniary interest." Held, that in view of the difference in the language of the two provisions, as well as of the plain and ordinary meaning of the words of the statute relating to counties, it could not be construed as limited in application to cases where railroads had been commenced and were unfinished at the time the constitution was adopted, and in which the counties, as such, had a direct pecuniary interest, but that it conferred power on counties to subscribe for stock, in the manner prescribed, in any railroad company which had been duly incorporated to build a projected road in which the citizens of the county, as a body, have a general interest because of the supposed benefits to be derived
from it. 3. SAVE-VALIDITY of Boyds-EFFECT OF RECITALS.
Where a county issued negotiable bonds, as authorized by such statute, in payment for stock subscribed in a railroad company which built its road into the county as agreed, and the county received and continued to hold the stock, taxed the road, and for a number of years paid the interest on the bonds, it is estopped by recitals therein that they were issued by authority of such statute, as against a bona fide holder for value, to deny that the subscription was necessary to aid in the completion of the road, or that the citizens of the county had an interest therein, both of which were facts precedent to the right to exercise the power conferred by the statute.?
Goff, Circuit Judge, dissenting.
On Rehearing. For former opinion, see 37 C. C. A. 484, and 96 Fed. 284.
A. C. Avery and James E. Shepherd (Avery & Avery, Schenck & Schenck, and Shepherd & Busbee, on the briefs), for appellants.
Charles Price (John F. Dillon and Harry Hubbard, on the briefs), for appellees.
i State laws as rules of decision in federal courts, see notes to Griffin v. Wheel Co.. 9 C. C. A, 518; Wilson v. Perrin, 11 C. C. A. 71; Hill v. Hite, 29 C. C. A. 553.
2 Bona fide purchasers of municipal bonds, see note to Pickens Tp. v. Post, 41 C. C. A. 6.
Before GOFF, Circuit Judge, and MORRIS and BOYD, District Judges.
MORRIS, District Judge. The opinion expressing the conclusions of this court on the first hearing of this case was filed August 1, 1899. 37 C. C. A. 484, 96 Fed. 284. Upon the appellees' petition for a rehearing the whole case has been fully reargued in connection with the appeal in Wilkes Co. v. Coler, decided at this term, and in connection with the answers of the supreme court of the United States to the questions certified in that case. 180 U. S. 506, 21 Sup. Ct. 458, 45 I.. Ed. 642. The bonds in question are as follows:
"County of Stanly Six Per Cent. Bond. "Stanly county, state of North Carolina, is indebted to the bearer in the sum of five hundred dollars payable,
etc. "This bond is one of a series of eighty of the denomination of one thousand dollars each, and forty oi the denomination of five hundred, making a total of one hundred thousand dollars, issued by authority of an act of the general assembly of North Carolina ratified the third day of March, A. D. 1887, entitled 'An act to amend the charter of the Yadkin Railroad Company,' and of sections 1996, 1997, 1998, and 1999 of the Code of North Carolina, and authorized by a majority of the qualitied voters of Stanly county at an election regularly held for that purpose on the 15th day of August, A. D. 1889, duly ordered by the commissioners of Stanly county. This series of bonds is issued to pay the subscription of one hundred thousand dollars made by Stanly county to the capital stock of the said railroad, known as the Yadkin Railroad Company.
“In testimony whereof, the chairman of the board of county commissioners of Stanly county hath hereunto subscribed his name for and on behalf of said board, and the clerk of the superior court of Stanly county hath countersigned the same and affixed thereto the seal of said superior court this fourth day of July, A. D. 1890."
The recitals of present interest are (1) that the bonds are issued by authority of the act of March 3, 1887; and (2) of sections 1996, 1997, 1998, and 1999 of the Code; and (3) are authorized by a majority of the votes of the county.
The act of March 3, 1887, the supreme court of North Carolina has decided, never became a law of North Carolina, so far as it undertook to give authority to issue the county bonds, for the reason that it was not passed with the special formality required by section 14 of article 2 of the North Carolina constitution of 1868, which declares that no law shall pass, authorizing a county to raise money on its credit, or impose a tax, unless the bill be read three several times in each house of the general assembly, and pass three several readings on different days, and the yeas and nays on the second and third reading of the bill are entered on the journals. The recital of the invalid enactment of March 3, 1887, however, does not invalidate the bonds, if there was in force at the time the bonds were issued other valid legislation which gave power to Stanly county to issue them; and it is urged upon us by counsel for the bondholders that the recited sections of the Code, reasonably construed, and applied as understood at the time the bonds were issued, gave sufficient power and authority. County Com'rs v. Beal, 113 U. S. 227, 5 Sup. Ct. 433, 28 L. Ed. 966; Commissioners v. January, 94 U. S. 202, 24 L. Ed. 110; City of Evansville v. Den
3 51 C. C. A. 399, 113 Fed. 725.
nett, 161 U. S. 434, 443, 444, 16 Sup. Ct. 613, 40 L. Ed. 760; Knox Co. v. Ninth Nat. Bank, 147 U. S. 91, 13 Sup. Ct. 267, 37 L. Ed. 93; Wilkes Co. v. Coler, 180 U. S. 506-524, 21 Sup. Ct. 458, 45 L. Ed. 642. These sections of the Code were originally enacted as chapter 171 of the laws of North Carolina of 1868-69, and were reenacted as sections 1996, 1997, 1998, 1999, and 2000 of the Code of 1883, with all the formality required by section 14 of article 2 of the constitution with regard to a law allowing counties to pledge their credit and impose à tax for that purpose. Commissioners v. Snuggs, 121 N. C. 394-401, 28 S. E. 539, 39 L. R. A. 439.
The following are sections 1996 and 1997: Section 1996 of the Code of North Carolina: "The boards of commissioners of the several counties shall have power to subscribe stock to any railroad company or companies when necessary to aid in the completion of any railroad in which the citizens of the county may have an interest."
Section 1997 of the Code of North Carolina: “The board of commissioners of any county proposing to take stock in any railroad company shall meet and agree upon the amount to be subscribed, and, if a majority of the board shall vote for the proposition, this shall be entered upon the record, which shall show the amount proposed to be subscribed, to what company, and whether in bonds, money or other property, and thereupon the board shall order an election, to be held on a notice of not less than thirty days, for the purpose of voting for or against the proposition to subscribe the amount of stock agreed on by the board of county commissioners. And, if a majority of the qualified voters of the county shall vote in favor of the proposition, the board of county commissioners, through their chairman, shall have power to subscribe the amount of stock proposed by them and submitted to the people, subject to all the rules, regulations and restrictions of other stockholders in such company or companies. Provided, that the counties, in the manner aforesaid, shall subscribe from time to time such amounts, either in bonds or money, as they may think proper."
The bonds were duly authorized by a majority of the qualified voters of Stanly county, and were dated July 1890, and were issued from time to time as the railroad was built, and were placed on the market and sold; and for four years a tax was levied and collected by the county, and the interest coupons paid. When the tax for the fifth year had been collected, the superior court of Stanly county, in 1897, at the instance of the commissioners of the county and certain taxpayers, held the bonds to be invalid, and enjoined the treasurer of the county from paying the interest; and on appeal the supreme court of North Carolina affirmed the ruling. Commissioners v. Snuggs (1897) 121 N. C. 394, 28 S. E. 539, 39 L. R. A. 439. The supreme court of North Carolina (Chief Justice Faircloth dissenting) held that Stanly county had no power or authority, under the aboverecited sections of the Code, even with an affirmative vote of the qualified voters of the county, to issue bonds, and levy a tax for their payment, in aid of a railroad not begun before the adoption of the state constitution of 1868.
When this case was first heard in this court the argument of the counsel for the bondholders was largely devoted to the effort to show that the decision of the supreme court of North Carolina against the validity of the act of March 3, 1887, amending the charter of the Yadkin Railroad Company, and authorizing Stanly county to subscribe for its stock and issue these bonds, and declaring that act invalid because not passed as required by the state constitution, was a ruling which this court ought not to follow. That question has been settled in favor of the county by the supreme court of the United States. Wilkes Co. v. Coler, 18o U. S. 506, 21 Sup. Ct. 458, 45 L. Ed. 642. The other question,-how far this court was bound to follow the rulings of the supreme court of North Carolina in its construction of the sections of the Code recited in the bonds, was not fully discussed, and this is the question we are urged to re-examine upon this rehearing.
The articles of the Code, 1. ut enacted in 1868-69 (chapter 171), and re-enacted as part of the Code in 1883, before the Stanly county bonds were authorized or issued, does, in the broadest terms, by section 1996, declare that "the boards of commissioners of the several counties shall have power to subscribe stock to any railroad company when necessary to aid in the completion of any railroad in which the citizens of the county may have an interest.” The supreme court of North Carolina declared in Commissioners v. Snuggs (1897) that this language was to be held to mean that the railroad must be an unfinished one, which had been begun before the subscription was made, and that it must also be a railroad in which the county had a direct pecuniary interest. The question now to be re-examined is whether that construction is one to which, as a proposition of law, we can assent; and, if not, are we bound to follow the decision of the supreme court of North Carolina ?
The case of Commissioners v. Snuggs was not a case to which any bondholder was a party. The county commissioners and certain taxpayers of the county were the plaintiffs, and the defendant was the county treasurer, who was the appointee of the county commissioners, had no personal interest to resist the plaintiffs, and represented no bondholder. The bonds had been sold as negotiable securities, and had been over four years on the market, and had been purchased by widely scattered investors. The railroad into Stanly county had been built and was in operation, and for over four years the authorities of the county had recognized the bonds as valid obligations of the county, and had paid the interest. The case was, in effect, a direct attack upon the property of bona fide holders of the bonds, in which they had no hearing It seems, therefore, to be a case in which it is our duty to examine the question independently, with, however, an earnest dispos:tion to lean towards the conclusion arrived at by the supreme court of North Carolina. Folsom v. Township Ninety-Six, 159 U. S. 611, 627, 16 Sup. Ct. 174, 40 L. Ed. 278; Burgess v. Seligman, 107 U. S. 20, 33, 34, 2 Sup. Ct. 10, 27 L. Ed. 359; Loeb v. Columbia Tp., 179 U. S. 472-493, 21 Sup. Ct. 174, 45 L. Ed. 280.
Was there anything in the constitution, laws, or decisions of North Carolina which should have given warning to purchasers of the bonds that the power given to counties by section 1996 of the Code was not applicable to the Yadkin Railroad Company in Stanly county? As to state aid, the constitution clearly said (article 5, $ 4) that it should only be given, unless submitted to a direct vote of the people of the state, "to aid in the completion of such railroads as may be unfinished at the time of the adoption of this constitution, or in which the state has a direct pecuniary interest." The language used by the framers of the