Jonathan Mills Mfg. Co. v. Whitehurst

• Decision Date: 04 February 1896
• Docket Number: 331.
• Citation: 72 F. 496
• Parties: JONATHAN MILLS MANUF'G CO. v. WHITEHURST et al. [1]
• Court: U.S. Court of Appeals — Sixth Circuit

72 F. 496

JONATHAN MILLS MANUF'G CO. v. WHITEHURST et al. ^[1]

No. 331.

United States Court of Appeals, Sixth Circuit.

February 4, 1896

The action in the court below was in equity to enjoin the infringement of a United States patent, No. 267,098, issued to Jonathan Mills, November 7, 1882, upon an application filed June 30, 1882, for an improvement in a device for bolting in flour mills, known as the 'centrifugal bolt or reel.' The bill averred that the complainant, by direct and mesne assignments, in writing, had become the sole and exclusive owner of the letters of patent sued on. The bill was filed against M. C. Whitehurst, C. D. Whitehurst, and G A. Whitehurst, and prayed an injunction, an accounting of profits, and damages. In the original answer, the defendants did not deny the sufficiency or validity of the assignments by which complainant traced its title from the original patentee. Subsequently, however, an amendment to the answer was filed, denying that the complainant was the sole and exclusive owner of the patent in suit. At the original hearing, the court below sustained the validity of the patent, and complainant's ownership of the same, and directed that a decree in accordance with this finding should be entered. 56 F. 589. Before the final decree was entered, a petition for rehearing was filed, on the ground of newly-discovered evidence showing that the complainant had not title to the patent. The court granted the rehearing (60 F. 81), and additional evidence was taken by both sides on this issue. It appeared from this evidence that, after Mills received his patent, on November 7, 1882, he assigned upon January 28, 1883, his patent to the Phoenix Foundry & Machine Works, of Terre Haute, Ind., and that this assignment was recorded June 21, 1884; that the Phoenix Foundry & Machine Works assigned the patent, December 18, 1883, to Myron W Clark, and that the assignment was recorded June 21, 1884. This assignment was recited to be 'in consideration of $1,000 cash in hand, and for a note for $1,000, due in six months, made by Jonathan Mills to the Phoenix Foundry &amp Machine Works. ' The assignment included several contracts, interests in patents, and applications, as well as the patent here in suit, together with a lot of personal property. The assignment contained this provision:

'The said Clark agrees to sell the said property, and to apply the proceeds--First, to the payment of said Mills of one thousand dollars; and, second, to the payment of the said notes made by said Mills; and, third, any balance shall be paid to said Mills. And it is not intended that any liability shall attach to the said Clark, except the accounting for moneys received from the sale of the above-mentioned properties, and the said Phoenix Foundry & Machine Works, in assigning said property, guaranties no value thereto.'

Accompanying the assignment was this declaration of trust, which was also recorded:

'The property named in the above contract is held by Myron W. Clark as trustee for Jonathan Mills, and as security for the payment of one thousand dollars due him by said Jonathan Mills, which sum the said Mills hereby acknowledges as due and owing, and said Mills hereby authorizes said Clark to retain said sum from the proceeds of sale of same, which sale shall not be made for six months from the date hereof, without the consent of said Mills.

'(Signed) Jonathan Mills.

'Myron W. Clark.'

'I hereby consent to the substitution of Geo. T. Smith in place of Myron W. Clark in the above agreement, and hereby release and discharge said Myron W. Clark from all liability on account of the trust above created.

'Jonathan Mills.'

Upon December 20, 1883, Myron W. Clark made an assignment to George T. Smith of all his right, title, and interest in the patent, and this was also recorded on June 21, 1884. On August 15, 1892, for the consideration of the sum of $1 and other valuable considerations, George T. Smith assigned the patent to Charles Wardlow, and this assignment was duly recorded August 23, 1892. On the 16th day of August, 1892, Wardlow assigned the patent to the complainant, the Jonathan Mills Manufacturing Company, and this assignment was also recorded on the 23d of August, 1892. On July 1, 1891, there was recorded an assignment, undated, from Jonathan Mills, the original patentee of the patent, to the Jonathan Mills Manufacturing Company. In this writing of assignment occurs the following recital:

'And this assignment is in revocation, and made, for the further purpose than those herein above specified, to annul and set at naught a certain assignment by said Mills to Myron W. Clark, dated December 18, 1883, which said assignment was given as collateral security for a loan of one thousand dollars, and said patent now supposed to be held by the Smith Purifying Company, or its assigns; and provided, further, and this assignment gives full, absolute, and complete authority to the Jonathan Mills Manufacturing Company to secure, at its own expense, said patent.' At the rehearing (65 F. 996), the defendant introduced a certified copy of a decree in equity of the circuit court for the county of Wayne and the state of Michigan. The record was certified by William May, the registrar of the court, under the seal of the court. The decree was introduced to show that, at the time that George T. Smith made his assignment to Wardlow, in 1892, he had nothing but the naked legal title, and that the real equitable interest and ownership was in the George T. Smith Middlings Purifier Company, of all of which the complainant had notice. George T. Smith was a party to the Michigan decree, and the defendant introduced an assignment-- dated June 7, 1893, executed by Eliza B. Smith, George T. Smith, and George W. Weadock, executor of the last will and testament of Charles H. Plummer,-- of a number of patents and patent interests, including among others the patent in suit, to Rufus H. Emerson and Zenas C. Eldred, receivers of the George T. Smith Middlings Purifier Company, executed, as recited in the assignment, in accordance with, and in obedience to, the decree already referred to. This assignment was recorded June 16, 1893.

The complainant, for the purpose of attacking the validity and effect of the decree, introduced a certified copy of the bill, answers, and other proceedings of the court in the same cause, together with the decree, making the claim that, in so far as the decree found that George T. Smith acquired and held title to the Jonathan Mills patent, here in suit, in trust for the George T. Smith Middlings Purifier Company, and directing a conveyance or assignment by him to the receivers of that company, it was outside of the issues made by the pleadings in the cause, and was coram non judice, and void. The record shows that the bill was filed August 18, 1880, by Rufus H. Emerson and Zenas C. Eldred, receivers of the George T. Smith Middlings Purifier Company, against Charles H Plummer, Eliza B. Smith, George T. Smith, and the George T. Smith Middlings Purifier Company. The bill averred that the George T. Smith Middlings Purifier Company was a corporation, organized April 20, 1878, under the laws of Michigan, for the purpose of manufacturing middlings purifiers and other milling machinery relating to the new process milling, and to procure, use, and purchase improvements, inventions, and patents relating to that system of milling; that the original stockholders, of whom George T. Smith was one, by contract, in writing, in consideration of the sum of $250,000, assigned and transferred to the George T. Smith Middlings Purifier Company certain named patents, and 'all other inventions and improvements relating to milling and mill machinery for which said George T. Smith should thereafter obtain letters patent,' whereby said George T. Smith Middlings Purifier Company became vested with the entire title to all said letters patent, and to all inventions and improvements covered thereby, together with the right to have assigned and transferred to it all other patents which said George T. Smith should thereafter procure for improvements in milling and mill machinery; that said contract was afterwards, on the 12th day of September, 1878, filed for record in the patent office of the United States, and duly recorded; that said George T. Smith was, or claimed to be, the inventor of a portion of, if not all of, the improvements embraced in all of said letters patent, and an expert in milling and mill machinery; that it was regarded by the parties to the contract as essential, in order to secure to said corporation the full benefit of said letters patent, to secure to it all letters patent which might thereafter be obtained by said George T. Smith for improvements affecting the business which it was incorporated to carry on, and the agreement that all such letters patent obtained by said George T. Smith should belong to said corporation was an important consideration in the making of said contract; that, by reason of said agreement, said George T. Smith Middlings Purifier Company became entitled to all letters patent obtained thereafter by said George T. Smith, and during the term of the existence included in the letters patent so assigned and transferred to said corporation or affecting or pertaining to the business which said corporation was organized to engage and carry on; that Smith, after the making of the first contract named, obtained a number of patents, which are named in the bill,-- some of them patents for inventions of his own, others which he obtained in connection with other patentees, and one other, issued to another person, and assigned to him; that, in addition to the letters patent of the United States so obtained by Smith, he had...