13 F.2d 796 (1st Cir. 1926), 1910, Krentler-Arnold Hinge Last Co. v. Leman

Docket Nº:1910.
Citation:13 F.2d 796
Case Date:July 02, 1926
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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13 F.2d 796 (1st Cir. 1926)



LEMAN et al.

No. 1910.

United States Court of Appeals, First Circuit.

July 2, 1926

Appeal from the District Court of the United States for the District of Massachusetts; James Arnold Lowell, Judge.

For opinion below, see 300 F. 834.

Robert Cushman and James R. Hodder, both of Boston, Mass., for appellant.

Ellis Spear, Jr., of Boston, Mass. (Eiffel B. Gale, of Yonkers, N.Y., and Victoria Lowden, of Jamaica Plains, Mass., on the brief), for appellees.

This is a bill in equity brought in the federal District Court for Massachusetts, September 12, 1923, by the Krentler-Arnold Hinge Last Company, a Michigan corporation, against George E. Belcher, a resident and citizen of Massachusetts, for infringement of the Krentler patent, No. 842,319, issued January 29, 1907, for a last, and of the Carl patent, No. 969,244, issued September 6, 1910, also for a last.

November 24, 1923, Belcher filed an answer,

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denying, among other things, the validity and infringement of said patents, and set up a counterclaim for infringement of the Peterson patent No. 1,195,266, issued August 22, 1916, alleging ownership of a half interest in the patent, and an exclusive license under the other half interest, which Peterson had empowered him to protect. March 13, 1924, the plaintiff filed a motion to strike from defendant's answer the second clause, the second, third, and fourth paragraphs of clause 3, all of clause 6, and clauses 8 to 17, inclusive, the latter embodying the counterclaim under the Peterson patent, as improper and unwarranted. At the same time the plaintiff filed affidavits, in support of its motion, to the effect that it did not manufacture or use lasts; that it held patents, and issued licenses to manufacturers who might wish to make, sell, and deal in lasts covered by its patents.

On April 14, 1924, after hearing, the motion was denied. Thereafter, on April 22, 1924, the plaintiff filed an answer to the counterclaim in which, among other things, it denied the validity and infringement of the Peterson patent. On June 2, 1924, the day before the case came on for trial upon the merits, and to facilitate the trial, counsel for the respective parties filed a stipulation as to the following matters: (1) For a stenographer and how he should be paid; (2) for the use of printed copies of letters patent; (3) that Belcher was a licensee under a written license from the plaintiff from May 3, 1902, to March 5, 1919, when the license was canceled, but that the defendant thereafter continued to buy hinge parts and make lasts employing plaintiff's B.B. hinges with plaintiff's consent; and (4) that each party concedes the title of the other party's letters patent as good and sufficient for the purpose of the present suit. They also agreed upon what were correct copies of plaintiff's and defendant's patents, and that certain exhibits claimed to be infringements of plaintiff's patents, represented lasts manufactured by the defendant, and that certain exhibits, claimed to be infringements of defendant's patent, represented lasts manufactured by authority of the plaintiff both within and outside the district of Massachusetts.

The trial occurred on the 3d, 4th, and 5th days of June, 1924. The case was argued on July 18, and on July 24, 1924, the court handed down an opinion holding (1) that Belcher did not infringe the Krentler patent; (2) that the Carl patent was invalid; and (3) that the Peterson patent was valid and infringed by the plaintiff.

August 28, 1924, and before a decree was entered, Belcher died. Thereupon one Leman was appointed administrator with the will annexed of Belcher's estate, and on October 30, 1924, having had the counterclaim revived, was substituted in Belcher's place as a party defendant and counterclaimant.

It is agreed that on April 1, 1924, Belcher executed and delivered to the George E. Belcher Company, a corporation which he had organized to take over and carry on his last business, a contract wherein, after setting out the parties, it was agreed:

'(1) The grantor hereby gives, grants, bargains, sells, assigns, transfers and sets over unto the company, its successors and assigns forever, the real estate, buildings, machinery, tools, automobiles and equipment, merchandise, raw, wrought or in process, supplies, office equipment, tangible personal property of all kinds, and cash now used by said grantor in the last, stretcher, and fastener businesses conducted by him under his name at Stoughton, Mass., to the extent and as specifically set forth in the statement thereof dated April 1, 1924, a copy of which is attached hereto.

'(2) The company agrees to pay one hundred fifty (150) dollars in cash, and to issue forthwith to the grantor or his nominee or nominees four thousand nine hundred ninety-seven $4,997) shares of its common capital stock without par value, in consideration of the transfer to it of the aforesaid property. Of the assets to be transferred to the company, two hundred forty -nine thousand eight hundred fifty (249,850) dollars shall constitute payment in full for the four thousand nine hundred and ninety-seven (4,997) shares of the common capital stock of the company without par value to be issued as above set forth, being at the rate of fifty (50) dollars per share, and the excess thereof over said two hundred forty-nine thousand eight hundred fifty (249,850) dollars and said one hundred fifty (150) dollars to be paid in cash shall constitute a paid-in surplus of the company available for its general corporate purposes, and so far as permitted by law available for dividends in the discretion of its board of directors.

'(3) The real estate set forth in said statement is to be transferred by separate deed to the company, and so far as the property described in this agreement is concerned said deed is confirmatory hereof. Attached

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hereto is a schedule of such real estate, giving a description of the land, together with the area thereof, which is to be conveyed to the company.

'(4) The grantor hereby constitutes the company his agent and attorney to receive, collect, enforce, and sue for any of the property and rights hereby granted and assigned, either in his name or in the name of the company, as his legal attorney thereunto duly authorized, but for the use of the company.

'(5) The grantor hereby further agrees that he will, and his heirs, executors, and administrators shall, at any time and from time to time, at the request of the company, execute and deliver to it any new or confirmatory instrument, and all other and further instruments necessary or convenient, or which the company may request, to vest in the company full title, right, or interest in or to any of the property hereby conveyed, or to enable the company to realize upon or otherwise enjoy any such property, or to carry into effect the intent or purpose hereof.'

The statement referred to in the first paragraph of the above contract reads as follows:

George E. Belcher, Stoughton, Massachusetts.

Consolidated Statement, Last, Stretcher, and

Fastener Business, April 1, 1924.

Cash .............................. $ 10,000.00
Power plant and machinery ........... 72,704.34
Automobiles ......................... 10,503.00
Patents .............................. 1,000.00
Models and patterns .................. 5,000.00
Good will ........................... 15,000.00
Inventory .......................... 112,491.52
Wooden buildings .................... 35,692.29
Brick buildings ..................... 27,910.67
Miscellaneous equipment ............. 26,526.19
Tenements A, B, D ................... 11,435.15
Land ................................. 5,050.00
Total assets ................... $333,313.16
Reserve for depreciation:
Machinery ........................ $ 39,107.50
Automobiles ......................... 6,235.46
Wooden buildings ................... 11,867.69
Brick buildings ..................... 4,640.15
Miscellaneous equipment ............ 14,688.68
Tenements ........................... 3,802.14
Geo. E. Belcher capital ............ 252.971.54
Total liabilities and capital .. $333,313.16
And then follows a schedule of the real estate. The existence of this contract was not made known to the court at the time of the trial, and was not known to the plaintiff or its counsel until some time in January, 1925, and apparently was not known to Belcher's counsel at the time of the trial. At the time of the trial Belcher was sick and unable to be present. He was afflicted with the malady from which he soon died. It is further agreed that on December 15, 1924, Leman, administrator of Belcher's estate, executed and delivered to the Belcher Company the following assignment:

'Assignment of Belcher One-Half Interest under the Peterson Patent, No. 1,195,266, to George E. Blecher Company.

'Whereas, under an assignment dated the 2d day of March, 1915, and recorded in the United States Patent Office in Liber L-97, page 156, of the transfer of patents, Otto A. Peterson, of Stoughton, Massachusetts, conveyed, transferred, and assigned a one-half interest to George E. Belcher, of Stoughton, Massachusetts, in, to, and under an invention relating to shoe lasts by Otto A. Peterson, covered in an application for patent filed March 3, 1915, serial No. 1,195,266, which issued on said application; and

'Whereas, said George...

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