Confectioners' Machinery & Mfg. Co. v. Racine Engine & Machinery Co.

• Decision Date: 15 June 1908
• Parties: CONFECTIONERS' MACHINERY & MANUFACTURING CO. v. RACINE ENGINE & MACHINERY CO.
• Court: U.S. District Court — Eastern District of Wisconsin

163 F. 914

CONFECTIONERS' MACHINERY & MANUFACTURING CO. v. RACINE ENGINE & MACHINERY CO.

United States Circuit Court, E.D. Wisconsin.

June 15, 1908

This is a final hearing in equity. The bill is based upon letters patent No. 449,668, alleges infringement of claims 1, 2, 3 and 4, and prays an injunction and an accounting. The patent has expired during the pendency of the suit, but jurisdiction is retained under the authority of Beedle v Bennett, 122 U.S. 71, 7 Sup.Ct. 1090, 30 L.Ed. 1074. The bill also sets up a prior adjudication in the district of Massachusetts, wherein all seven claims of the patent were decreed to be valid, and wherein the question of infringement was determined, which adjudication is alleged to be final and conclusive of all questions raised in the present litigation and that the present defendant is thereby estopped from asserting its present contentions. The answer is in effect a general denial.

The title to the patent in suit was acquired by a Minnesota corporation of the same name as the defendant in 1891. September 22, 1900, a new corporation was organized under the laws of the state of Delaware, having the same name as the present plaintiff, and expressly organized for the purpose of taking over the assets, property, and good will, and continuing the business, of such Minnesota corporation. The parties in interest were the same and the officers were the same as in the Minnesota corporation. The patent in suit was transferred with other assets. Thereafter the plant and factory of said corporation were transferred to Springfield Mass., for business reasons, and in October, 1905, a third corporation was organized with the same name, under the laws of the commonwealth of Massachusetts, for the purpose of acquiring the property and transacting the business of its predecessor. All the property, choses in action, and assets of every name and nature, including the patent in suit, were transferred by the Delaware corporation to the Massachusetts corporation; the persons in interest and the officers remaining the same. One Page has been the president and general manager of these three corporations. The business has been carried on without change or interruption, and has covered the manufacture of machines under the patent in suit.

The history of the defendant corporation and the various successions in interest may be stated as follows: Thomas Kane & Co. was a copartnership carrying on the business of manufacturing machinery at Racine, Wis. Mr. Peil and Mr. Kane owned the controlling interest in the firm, and have continued to be in control of such business during the successive changes in organization. About September, 1902, the partnership was merged into a corporation known as the 'Racine Machinery Manufacturing Company,' and the present defendant, a corporation, is the successor of such former corporation. Mr. Peil, the president of the present corporation, owned or controlled 96 per cent. of the stock of the defendant corporation. Mr. Naylor, the secretary and treasurer of defendant, was an officer of the first corporation, and was an employe of the copartnership. The same line of business has continued without interruption; the machines alleged to infringe being one of its products. On April 3, 1903, the Delaware corporation, then being the owner of this patent, filed a bill in equity in the Circuit Court of the United States for the District of Massachusetts against a concern known as Kibbe Bros. Company of Springfield, Mass., charging infringement of the patent in suit, and praying for relief by way of injunction and an accounting, etc. Kibbe Bros. appeared and filed an answer on the 26th day of May, 1903; Richard P. Elliott, Esq., appearing as defendant's solicitor. A replication was filed June 29, 1903. The case went to final hearing before Judge Lowell, whose opinion is in evidence herein. The final decree in that case adjudged, first, that the patent in suit, No. 449,668, as to all its claims, seven in number, is a good and valid patent; second, that Neal A. Clecher was the original and first inventor of the invention described and claimed in said patent; third, that the complainant, the Confectioners' Machinery & Manufacturing Company, is the lawful owner of said letters patent; fourth, that the defendant Kibbe Bros. Company has infringed the claims of said letters patent and upon the rights of the complainant under the same; fifth, that the complainant recover of said defendant its costs of the suit; sixth, that a perpetual injunction be issued against the defendant Kibbe Bros. Company, its officers, attorneys, agents, etc., according to the prayer of the bill. The answer of the Kibbe Bros. Company put in issue the validity of the patent and complainant's title thereto, and denied infringement. In pursuance of such decree a perpetual injunction was issued and served upon Kibbe Bros. Company, and is still in force. The machine involved in the Kibbe Bros.' suit was made by Thomas Kane & Co., and by it sold to Kibbe Bros. Company in March, 1902. In October, 1902, the first Racine corporation undertook and agreed with Kibbe Bros. Company to take charge of any suit that might be brought for infringement. After the filing of the bill in that suit, the first Racine corporation April 16, 1903, wrote Kibbe Bros. that they had taken over the management of the suit, and would pay all expenses of such litigation. The entire conduct and control of said suit was assumed by the first Racine corporation, and continued until the dissolution of such corporation. The defendant corporation on the 17th of January, 1906, paid the costs taxed against Kibbe Bros. Company in such suit. The fees and charges of Mr. Elliott, defendant's solicitor were also paid partly by the first corporation, and partly by the second. Kibbe Bros. sustained none of the expenses and had nothing to do with the management of the litigation. Mr. Peil, as president of both Racine corporations, appears to have had charge of the defense throughout. Under the advice of Mr. Elliott, the defendant's solicitor, no appeal was taken. No evidence appears to have been offered on the hearing in that suit by the defendant on the question of infringement.

The present suit was brought January 9, 1907. The present complainant employed Mr. Quinby as its solicitor to bring this suit and draft the bill for it. He inadvertently described the corporation complainant as being organized under the laws of Delaware, whereas, in truth and in fact, the patent in suit was then the property of the Massachusetts corporation; the names of the two corporations being identical. The mistake was not discovered until the proofs of title were offered. At the close of the complainant's prima facie case, Mr. Page, the president of the complainant, and Mr. Quinby, made affidavits explaining how the mistake was made, and thereupon complainant asked leave to amend the bill by striking out the words 'State of Delaware,' and by inserting in lieu thereof 'Commonwealth of Massachusetts,' with certain other corresponding changes. Such motion was resisted by defendant, but was granted by the court upon the condition that it recall for further cross-examination any witness or witnesses who gave evidence for the complainant in the prima facie case that defendant might desire to have produced.

Thereupon the defendant asked leave to amend its answer, which leave was granted, and the parties proceeded to complete their proofs and prepared the case for final hearing.

William Quinby, for complainant.

Winkler, Flanders, Bottum & Fawsett (F. E. Dennett, of counsel), for defendant.

QUARLES, District Judge (after stating the facts as above).

The defendant, having duly excepted to the order allowing the amendment of the bill of complaint, renews its contention that the legal effect of such amen...