Weston Electrical Instrument Co. v. Empire Electrical Instrument Co.

• Decision Date: 11 February 1909
• Citation: 166 F. 867
• Parties: WESTON ELECTRICAL INSTRUMENT CO. v. EMPIRE ELECTRICAL INSTRUMENT CO. et al.
• Court: U.S. District Court — Southern District of New York

166 F. 867

WESTON ELECTRICAL INSTRUMENT CO. v. EMPIRE ELECTRICAL INSTRUMENT CO. et al.

United States Circuit Court, S.D. New York.

February 11, 1909

Kenyon & Kenyon (William H. Kenyon and Richard Eyre, of counsel) for complainant.

Griggs Baldwin & Pierce (Franklin Pierce and Charles H. Studin, of counsel), for defendant Cooke.

RAY District Judge.

In December, 1901, the complainant, the Weston Electrical Instrument Company, filed its bill in equity against the defendants, the Empire Electrical Instrument Company, Charles D. Cooke, president, George M. MacWilliam, secretary, and the F. A. La Roche Company, for infringement of certain United States letters patent, and charged infringement by all the defendants in that the defendants 'jointly make, use, and vend to others to be used' the patented invention describing it, and that 'they still continue so to do and that they are threatening to make large quantities of the said shunts for electric light and power stations, and to supply the market therewith, and to sell the same all in infringement,' etc. The bill also charged:

'That the said defendants have made and sold and used, and are making, using, and selling, large quantities of said infringing shunts for electric light and power stations, and have large quantities on hand which they are offering for sale, and that they have made and received large profits and advantages therefrom, but to what extent and how much exactly your orator does not know, and prays discovery thereof.'

The bill of complaint demanded an injunction and an accounting in the usual form.

To this bill the defendants filed their answer, in which we find the following:

'But these individual defendants, Charles D. Cooke, president, and George N. MacWilliam, secretary, aver that they have acted merely as agents of the said defendant corporation the Empire Electrical Instrument Company, and not for themselves or on their own behalf, wherefore they * * * aver that they should not be required to make other or fuller answer to the bill.'

They also denied infringement. A large amount of evidence was taken in the usual manner, and the case was brought to a final hearing before his honor, George C. Holt, and resulted in an interlocutory decree of this court made June 22, 1904, in which it was adjudged that the letters patent were good and valid in law, etc., that the complainant was the owner thereof, and that 'the said Empire Electrical Instrument Company and F. A. La Roche Company, the defendants herein, have infringed upon the claims,' naming them, and also in what the infringement consisted; and it was in such decree thereupon 'ordered, adjudged, and decreed that the complainant do recover from the defendants Empire Electrical Instrument Company and F. A. La Roche Company all the gains, profits, and advantages which the said defendants have derived,' etc., and 'that the said complainant do also recover, in addition thereto, any and all damages which complainant has sustained' by reason of such infringement.

It was referred by such decree to Samuel M. Hitchcock as master to take an account of such profits, damages, etc., arising out of the infringement by the defendants found to have infringed, and the decree directed that a perpetual injunction issue against the defendants Empire Electrical Instrument Company and F. A. La Roche Company, and that the complainant recover costs, etc., against the said defendants.

This is the only decree entered in the cause, and the court upon the issues framed and on the trial thereof has never found infringement by the defendant Charles D. Cooke, and it has never directed a reference to ascertain profits, damages, etc., arising from any infringement of the patent in question by said defendant Cooke. On this interlocutory decree the matter went to a hearing before the said special master, and much evidence was taken, and thereupon the master made his report dated November 19, 1906, in and by which report the master found:

'I find, therefore, that the complainant is entitled to recover against the said Empire Electrical Instrument Company as damages on account of infringing shunts sold to persons other than the F. A. La Roche Company the sum of $2,347.07.

'I find that complainant is entitled to recover from the F. A. La Roche Company as damages on account of infringing shunts installed and sold by it, other than those made by the said Empire Company, to be the sum of $11.61.

'I find that complainant is entitled to recover as damages from the said Empire Electrical Instrument Company, and the F. A. La Roche Company, jointly, for shunts manufactured by the said Empire Company, and sold and installed by the said F. A. la Roche Company, the sum of $576.76.'

In that report the master also said:

'The testimony of MacWilliam is so evasive and self-contradictory as to be utterly unreliable, and it is incredible that Cooke, in view of his large business experience, his large financial interest in the defendant companies, and the activity he has shown to have manifested in their affairs, should have been so ignorant of the dealings and transactions of the Empire Company as he claims to be; and when I consider that Mr. Cooke testified that he did not remember when he became a stockholder in the Empire Company, and he is then shown to have been one of the original incorporators, I conclude that his testimony is not entitled to great weight. * * *

'I am obliged, also, to discredit the testimony of Mr. Rypinsky and Mr. Cooke, as being, to say the least, exceedingly prejudiced and entirely conjectural, and they were the only other witnesses representing the defendants whose testimony tends to show the cost of this item.'

On this report of the special master the matter came on for hearing before Judge Holt on a motion to confirm and for a final decree, and on that hearing Judge Holt wrote an opinion in which he said:

'I am satisfied that this was a case of deliberate and intentional infringement by all the original defendants, who knew that they had no right to manufacture or deal in the Weston shunts, and that they have defended the suit with the purpose of protracting the litigation as much as possible while they continued to infringe, and of ultimately transferring the assets of the Empire Company, if judgment should go against them, and thus, if possible, render any recovery nugatory.

The defendants' conduct on the accounting appears to have been equally blameworthy. They have pursued a policy throughout the proceedings on the accounting of obstruction and concealment of the facts, and in my opinion this is a proper case to impose upon the defendants triple damages. I do not think that the statute permits the court to impose triple costs. The fact that in the interlocutory decree no judgment was entered against the defendant Cooke prevents, in my opinion, any recovery against him on the case as it now stands; but as the facts elicited on the accounting make it appear probable that Cooke was an actual party to the original infringement and to the proceedings by which the Empire Company parted with its assets, I direct that the case be referred back to the master, if the complainant so elects, with instruction to take any additional testimony which the defendant Cooke or any of the parties may desire to offer, and to report upon such testimony and all the other testimony already taken in the case whether judgment should be entered in this case against the defendant Cooke as well as against the two companies held liable upon the interlocutory decree. If the complainant does not elect to take further proceedings before the master against the defendant Cooke, final judgment may be entered confirming the master's report, and for triple damages, and the costs as taxed against the two companies held liable by the interlocutory decree.'

Thereupon March 1, 1907, an order was made by Judge Holt directing as follows:

'Ordered, that this case be referred back to the master, Samuel M. Hitchcock, Esq., to take testimony relative to the question whether judgment should be entered in this case against the defendant Charles D. Cooke, as well as against the two companies held liable upon the aforesaid interlocutory decree, and to report to this court with all convenient speed upon such testimony and on the other testimony already taken in the case as to whether judgment should be entered in case against the defendant Cooke as well as against the two companies held liable upon the interlocutory decree; and it is

'Further ordered, that the complainant, on such further reference to the master, shall have the right to cause an examination of the defendants, or either of them, ore tenus, or otherwise, and also the production of the books, vouchers, exhibits, statements, documents of said defendants, or either of them, as the said master may direct, and that the said defendants and each of them attend for such purpose from time to time as the said master shall direct.'

This order having been entered, the complainant elected to proceed under it, and brought the matter on for a hearing before the special master. The defendant Cooke appeared specially for the purpose of objecting to the jurisdiction of the master to take testimony under the last-mentioned order, and entered the following objections, the substance only being given: (1) That the action was not against Cooke individually, but only in his official capacity, and that judgment against him personally cannot be rendered; (2) that the bill does not charge Cooke with personal infringement or wrong; (3) that by the interlocutory decree it is solemnly adjudged by the court that the Empire Electrical Instrument Company and the F. A la Roche Company are the...