entees, is now estopped from denying to the appellant the right to the full enjoyment of the privileges professed to be granted by its license and contract, notwithstanding the exercise of such privileges would infringe the Morrison patent, of which the appellee was and continues to be the owner, and notwithstanding the latter patent has been adjudged to be superior to the former, and, further, that the appellee is bound to execute the stipulations of Gerard and Lawrence in the contract which accompanied their license to the appellant. Can this contention be maintained? The decree in the former suit conclusively established, as between this appellant and the appellee, that at the time of its rendition the appellant had no right to use the Gerard and Lawrence patent under its license from those patentees in such a way as to infringe the Morrison patent, which belonged to the appellee. It was an adjudication that the Gerard and Lawrence patent conferred no right, as against the Morrison patent, so long as the term of the latter should endure. A subsequent assignment to a third person by Gerard and Lawrence could not have enlarged the right of the appellant. The status of the patent was already fixed, so far as the appellant was concerned, and the assignee would be incapable of improving the licensee's position. It appears there was a contract on the part of Gerard and Lawrence to furnish couplings to their licensee, or that in case of their failure the licensee should have the right to manufacture them. They also undertook to protect their licensee and its customers in the sale and use of the couplings, and to save the licensee harmless from any suit for infringement. It is alleged in the bill that the contract as well as the license was assigned to Case, and that an undivided one-half interest in both was assigned by him to Gerard. But it is not alleged that anything more than the patent itself was assigned to the appellee. The rights of the parties here are therefore not affected by the stipulations of the contract, except as they may affect the title to the patent. No doubt, the general rule is that the assignee takes the title subject to the equities of other parties who have acquired rights therein, of which he had notice, express or implied. But he takes no other burden. He comes under no affirmative obligation to make good the previous contracts of his assignor. The claim of the appellant is that it is let into the enjoyment of the Morrison patent by a transaction which it had no right either to compel or prevent. The appellant has been put in no worse situation by the transfer. What equity has supervened in its favor since the decree in the former suit? The appellee owed it no duty, and has not prejudiced the appellant. Nor has it acquired any right which it has not paid for, or which, owing no duty to the appellant, it had not equal right to purchase with any other person.

3. But there is another reason why this bill cannot be maintained, even if it were possible to hold that the appellee was affected by some positive duty of the licensor toward the licensee. It is not averred in the bill that the Gerard and Lawrence patent is void, or that the court has held it so. For aught that appears, it may be for an improvement upon the Morrison patent, or may be used in connection with other forms so as not to involve that patent. In such circumstances, there would be no breach of the guaranty of validity resulting from the decree complained of in the bill. In Noonan v. Athletic Club Co., 39 C. C. A. 426, 99 Fed. 90, a bill was filed by the assignee of certain pat

ents, complaining of the infringement thereof by his assignor, who was the patentee. The latter denied infringement. The complainant insisted that the defendant was estopped to deny the validity of the assigned patent, when construed in accordance with the full import of its terms. Upon this subject, Judge Lurton, in delivering the opinion of this court, said:

"It seems to be well settled that the assignor of a patent is estopped from saying his patent is void for want of novelty or utility, or because of anticipation by prior invention. But this estoppel, for manifest reasons, does not prevent him from denying infringement. To determine such an issue, it is admissible to show the state of the art involved, that the court may see what the thing was which was assigned, and then determine the primary or secondary character of the patent assigned, and the extent to which the doctrine of equivalents may be invoked against an infringer. The court will not assume, against an assignor and in favor of his assignee, anything more than that the invention presented a sufficient degree of utility and novelty to justify the issuance of the patent assigned, and will apply to the patent the same rule of construction, with this limitation, which would be applicable between the patentee and a stranger. Babcock v. Clarkson, 11 C. C. A. 351, 63 Fed. 607; Ball & Socket Fastener Co. v. Ball Glove Fastening Co., 7 C. C. A. 498, 58 Fed. 818; Cash Carrier Co. v. Martin, 14 C. C. A. 642, 67 Fed. 786; Chambers v. Crichley, 33 Beav. 374; Construction Co. v. Stromberg (C. C.) 66 Fed. 550; Clark v. Adie, 2 App. Cas. 423, 426.”

That decision has been confirmed in subsequent decisions of this court. Smith v. Ridgely, 43 C. C. A. 365, 103 Fed. 875; Stimpson Computing Scale Co. v. W. F. Stimpson Co., 44 C. C. A. 241, 104 Fed. 893. Smith v. Ridgely was a case in which the suit was brought by the licensee of the patent against his licensor for infringement, and the question arose in regard to the extent of the estoppel resting upon the defendant. In regard to this we held (referring to the Noonan Case) that he was "precluded from denying the validity thereof [the patent] to the same extent, and to the same extent only, that a third person would be, subject to the limitation, however, that he could not allege the total invalidity of the patent; the result being that he is still left at liberty to show that, assuming his patent to be valid, it is nevertheless subject to the limitation of the prior art." In respect to the Gerard and Lawrence patent, the Morrison patent was a part of the prior art, and the former was restricted by it. However this might affect the undertaking to save the licensee harmless from infringement suits, it is clear that no ground for an estoppel is shown, arising out of the granting of the license or the authority to manufacture couplings. We think that the appellee acquired by its purchase only the right to manufacture couplings under the Gerard and Lawrence patent during the term thereof; that it had not the right of sale thereof, for the reason that such right had been carved out of it by the license of the patentees to the appellant; and that upon the termination of the Morrison patent the appellant will have the right, unrestricted by that patent, to sell couplings manufactured under the Gerard and Lawrence patent. Probably, it will also have the right to manufacture the couplings for its use after the Morrison patent has expired. And it has at all times the right to practice the Gerard and Lawrence invention, provided it does so in such a way as not to infringe the Morrison patent. The bill does not allege that any of these rights of the appellant are denied. The decree of the circuit court will be affirmed, with costs.

(113 Fed. 669.)

BURGET v. ROBINSON.

(Circuit Court of Appeals, First Circuit. January 24, 1902.)

No. 404.

CORPORATIONS-SUIT BY RECEIVER TO ENFORCE PERSONAL LIABILITY OF StockHOLDERS-SET-OFF.

By well-settled rules, the individual liability of a stockholder in a Minnesota corporation is not to the corporation, but to its creditors; and hence, in a suit against such stockholder to enforce such liability, the defendant cannot set off an indebtedness due from the corporation to him.

In Error to the Circuit Court of the United States for the District of Massachusetts.

John Corcoran and William B. Sullivan (Crosby & Nixon, on the briefs), for plaintiff in error.

Stiles W. Burr (John W. Saxe, on the briefs), for defendant in error. Before COLT and PUTNAM, Circuit Judges, and WEBB, District Judge.

PUTNAM, Circuit Judge. This suit was brought to enforce the liability of the defendant below as a stockholder in a corporation organized under the laws of Minnesota. The judgment of the circuit court was against him, and thereupon he sued out this writ of error. With the exception of a single particular, the case involves questions disposed of by us in Hale v. Hardon, 37 C. C. A. 240, 95 Fed. 747, and is determined by it.

It is not necessary to consider the proposition made by the defendant below that certain legislation of Minnesota, subsequent to his acquiring the stock in the corporation in question, is ineffectual, because, independently of that, the principles asserted in Hale v. Hardon are sufficient to sustain the judgment, unless the defendant below is entitled to an offset as a general creditor of the corporation. He is admittedly a general creditor for a larger amount than that claimed from him as a stockholder. Nevertheless, in order to lay the foundation of a right of set-off, either at law or in equity, the claims pro and con must be in the same interest. A trustee, enforcing a claim in behalf of his trust, is not subject to set-off of the claims of the debtor of the trust against the trustee individually. In the present case, the plaintiff below stands as the representative of the creditors of the corporation, and not of the corporation itself, so that the cross demands are not in the same interest within the rules applicable to set-offs. The underlying principle which applies in this respect has been so many times, and so thoroughly and broadly, stated by the supreme court, that it is not necessary for us to explain them further.

The judgment of the circuit court is affirmed, with interest, and the costs of appeal are awarded to the defendant in error.

(113 Fed. 865.)

THE NATHAN HALE.

THE DORIS.

(Circuit Court of Appeals, Second Circuit. January 7, 1902.)

No. 82.

1. COLLISION-OVERTAKING VESSELS-PRESUMPTION OF FAULT.

Under article 24 of the navigation act of 1890, which provides that "every vessel overtaking any other shall keep out of the way of the overtaken vessel," where a tug with a tow saw a schooner a quarter of a mile ahead, on nearly the same course, and overtook and passed her, but the tow, which was on a 200-fathom line, did not see the schooner until within 200 feet, and struck her directly astern, negligence must be inferred on the part of both tug and tow, unless there is evidence to warrant a finding that the schooner in some way brought about the collision.

2. SAME EVIDENCE CONsidered.

Evidence considered, and held not to sustain a claim made by a tug and tow that a schooner which they overtook, not seeing the tow, changed her course after the tug had passed and ran into its wake, thus causing by such act a collision between her and the tow, which struck her directly astern.

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

This cause comes here upon appeal from a decree of the district court, Eastern district of New York (108 Fed. 552), holding the tug and the barge both liable for damages sustained by the schooner Florence Shay in consequence of a collision with the barge while in tow of the tug about 3 a. m. of August 22, 1900, in Hampton Roads. The stem of the barge struck the schooner directly on the stern, and, the schooner coming around after the impact, her bow also came in contact with the barge. The following excerpt from the brief of the counsel for the tug briefly indicates the principal facts which are not in dispute: "The Florence Shay was a small, threemasted schooner, laden with coal, bound into Hampton Roads for an anchorage on account of the strong N. E. wind outside. The Nathan Hale was returning to the roads with the barge Doris in tow for the same reason. The hawser between the tug and tow was about 200 fathoms in length, the tide was turning flood, the night good for seeing lights, and the wind moderate from the N. E. The steam tug, after passing Old Point Wharf on a course S. W. by W., and steering for the light on the Middle Ground, sighted the schooner a little upon her port bow, and about a quarter of a mile away. The schooner also sighted the stean tug over her starboard quarter, the tug showing her red and towing lights, when about a quarter of a mile away. When the steam tug observed the schooner, her course was changed to half a point to starboard, and the schooner's course was changed to half a point to port; the steam tug having the light of the Middle Ground just over her port bow, and the schooner having the same light just over her starboard bow. The tug passed the schooner on her starboard side at a distance variously estimated at from 300 feet to 300 yards. The collision occurred off Hampton Bar, the stem of the barge striking the stern of the schooner. The schooner at the time had up all her lower sails."

Samuel Park, for the Nathan Hale.

Le Roy S. Gove, for the Doris.

Nelson Zabriskie, for appellee.

Before WALLACE and LACOMBE, Circuit Judges, and TOWNSEND, District Judge.

PER CURIAM. The opinion of the district judge will be found in 108 Fed. 552. It contains an exhaustive discussion of the evidence, which it seems unnecessary to reproduce here. Some of the propositions of fact which he found are controverted, and it is contended that in working out suggested movements of the vessels he overlooked some elements which should have been considered; e. g., that a luffing up by the schooner when she was going almost before the wind would have increased her speed, and that a barge as heavy as the Doris could not have swung far out of the wake of the tug without changing the tug's heading. But these minuter details of the argument contained in the opinion need not be considered. The funda

mental ground for the decision is found in the opening statement of the opinion:

"The first obvious fact is that a schooner, which had been seen by those on a tug 1,500 feet away, was struck squarely in her stern by the tow, which did not see the schooner until within about 200 feet of her. From this fact negligence should be inferred both on the part of the tug and the barge, unless there is some fact which should modify or avoid that conclusion."

Article 24 of the act of 1890, as it stood when the collision happened, reads as follows:

"Notwithstanding anything contained in these rules every vessel, overtaking any other, shall keep out of the way of the overtaken vessel.”

Whether the distance at which the tug passed was greater or less, whether the courses were diverging or converging, whether or not the tug failed to warn its tow to follow the slight change to starboard which it made, whether the tow swung more or less out of the wake, is not material to the question presented here. The tug saw the schooner a quarter of a mile off, and saw in what direction she was going. The tow failed to see her till within 200 feet. Both tug and tow were overtaking vessels, and the latter ran squarely into the schooner's stern. In view of the rule, the only question seems to be, is there evidence which will warrant the finding that the schooner in some way brought about this catastrophe? There is some suggestion of an insufficient light astern, but, if she had none at all there, that circumstance would be immaterial, since it was so light that the schooner was visible a quarter of a mile away. That, when she sighted the tug, she changed a half point to port, is not charged as a fault. It was a change in avoidance of collision greater than she was required to make. All the rule asked of her was that she should keep her course. The tug and barge claim that the "schooner changed her course to starboard in order to approach the anchorage grounds, not having observed the barge." There is no evidence to support this proposition. The witnesses from the schooner testify that she made no such change, No witness called by either party asserts that he saw her on any such course. She was not on it when the tug passed her, nor when the tow sighted her, nor when she was struck. It is a theory advanced to account for the collision, under the assumption that the tug passed at a safe distance, and that the barge kept in her wake. The mere fact of collision, however, equally well supports the inference that claimants' witnesses are mistaken as to both these propositions. And in